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These stories were published Wednesday, March 10, 2004, in Vol. 4, No. 49
Jo Stuart
About us
New immigration bill moves toward a vote
By the A.M. Costa Rica staff

A new immigration law has been reported out of a legislative committee and is headed for a vote in the full Asamblea Nacional.

A release from the Ministerio de Gobernación, Policía y Seguridad Pública said the bill that was reported out of committee was about the same as the measure that was presented to lawmakers Feb. 19, 2003.

The Comisión de Gobierno y Administración took the action. Although the full legislature has the option of making changes or defeating the bill, a high probability exists that the measure will be passed and become law.

If the measure is basically the same as that presented by the administration a year ago, the category of rentista will be eliminated as a way in which individuals can immigrate to Costa Rica. This point was not addressed in the statement from the ministry, but immigration and ministry officials are anxious to eliminate that category.

A rentista applicant can be of any age and simply shows that he or she has $60,000 on deposit here or elsewhere that can be changed into colons at the rate of $12,000 a year. Officials believe that this category has been abused by persons who obtain money from dubious sources.

The category of pensionado never was in 

danger. That is a person who can demonstrate a pension from a recognized source.

By eliminating the rentista category, the government will be all but eliminating an important way someone younger than retirement age can obtain residency here.

However, the ministry statement suggested that the legislative committee did not accept competing legislation that would have jacked the amount needed to be a pensionado from $600 a month to $3,000. That proposal had been put forth by a single legislator several months after the adminstration proposal had been submitted.

An aspect of the legislator the administration considers important is the establishment and professionalization of the Policía Especial de Migración. Thanks to a Sala IV decision, this police force was legally in limbo.

The legislation also would punish those who traffic in illegal immigrants.

The law also establishes other categories of visas, for example for sports players and musicians, who are coming here for profit and not as tourists.

Marco Badilla, director de Migración y Extranjería, was at the session Tuesday when the committee wrapped up the discussion of the measure. He was reported to be pleased by the approval of the omnibus legislation.

Pro-tourism pair are against playing with exit tax amount
By the A.M. Costa Rica staff

Legislators were warned not to kill the goose that lays the golden egg by two representatives of the tourism industry who spoke Tuesday against a hike in the exit tax.

The two were Alfredo Aguileta, financial director of Alterra Partners de Costa Rica, which operates Juan Santamaría Airport, and William Rodríguez of the Cámara Nacional de Turismo.

Costa Rica has the most expensive taxes to leave the country and this means serious consequences to the tourism industry and a reduction in travel by Costa Ricans, the two men said.

The exit tax for Costa Ricans and foreign 

residents now is $43, but that amount is supposed to fall to $26. Lawmakers want to extend the higher tax to do, among other things, rebuild the Estadio Nacional in la Sabana. 

The original idea was to standardize what tourists and residents pay to $26.

Exit taxes of other countries, such as Guatemala, El Salvador and Nicaragua fluctuates between $18 and $26 the men said. They were speaking before the Comisión de Asuntos Hacendarios.

It was Aguileta who used the golden egg metaphor, but Rodríguez said that the tourism industry pays $154 million in taxes each year, some seven times its total investment. He said his association is emphatic in its opposition to this extension of the tax.

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Flurry of deaths even touched Pacheco's family
By the A.M. Costa Rica staff

Deaths over the last two days have reached even into the family of the nation’s president. In all, five other violent deaths have been reported.

The death of Carlos de la Espriella Mendiola, a maternal cousin of president Abel Pacheco, is being treated as a bathroom accident. The 59-year-old man died in his downtown home due to a head wound, investigators reported Tuesday. An autopsy has been scheduled to determine the exact cause of death.

There have been these other killings:

A man named Rándel Ulloa González, 34,  died Monday about 8 p.m. when someone stuck a knife into his chest. The murder happened in a park in San Carlos. The man, a distributor for a retail company, rear-ended a taxi near the park, and the driver of the other vehicle got out and stabbed him, agents said. They are seeking the taxi driver.

In San Joaquín de  Flores, Heredia, Zeneida Vega Víquez, 72, was found dead Monday in her home. Someone tied her up and beat her to death. Investigators have a suspect.

Also Monday about 7 a.m., a woman, Claudia Flores Guadamuz, 18, was found dead near San Isidro de Alajuela in the middle of a road. Investigators initially could not find out why she died, but during an autopsy, physicians found that she had been shot twice.

Tuesday in Hatillo 6, a southern suburb of San José, agents found the remains of a woman. They are seeking her identity.

In Guápiles, also Monday, investigators revealed the a law officer was the principal suspect in the death of Douglas Roberto Novoa  Balmaceda, who died when he took a bullet in the back Feb. 29. The dead man was believed to have been surprised in the middle of a robbery of a home where the girlfriend of the investigator lived.

Arias says Saénz
has a bad memory

By the A.M. Costa Rica staff

Oscar Arias, the former president and current presidential candidate, came to the legislature Tuesday and said that his friend, Guido Saénz simply had a bad memory.

The image of the Nobel-prize winning politician is such that members of the commission that are investigating possible irregularities in the courts at first decided to interview Arias in his home. But then they decided that the legislature was the place for an interview.

The issue is whether Arias engaged in some kind of influence peddling to try to sway the votes of magistrates of the Corte Suprema de Justicia. The constitutional court had been asked to rule if a constitutional provision forbidding re-election of presidents was in itself unconstitutional.

Arias had an interest because the court was to rule on this question in time for him to be a candidate in 2002. However, the court decided that the limitation of presidents to one term was constitutional.

Saénz, now the minister of Cultura, Juventud y Deporte, wrote in his memoirs that Arias was upset when he heard about the court decision and said that one of the magistrates had betrayed him.

Saénz recounted this in his book "Piedra Azul: Atisbos de mi Vida." But when the book prompted a suggestion that Arias was engaged in influencing a court decision, Saénz came to the same commission and chalked up his works to editorial license.

Arias Tuesday simply attributed the passages in the  book to a bad memory.

The discussion at the commission took off on another tact when Movimiento Libertario party members asked Arias about pollution caused by private generating facilities in which he is a partner and a concession that he has managed to obtain from the Instituto Costarricense de Electricidad for cellular service.

A debate ensued in which commission members who belong to the Partido Libertación Nacional, the party of Arias, said the former president was brought to the commission only to answer questions about the book.

This debate took so long that Arias was asked to return next Tuesday to continue the discussion.

Seatbelt bill studied
by legislative group

By the A.M. Costa Rica staff

The astonishing seatbelt decision by the constitutional court is under study in the legislature.

The Sala IV ruled last month that lawmakers could only require the driver of a vehicle to keep a seatbelt fastened but that they could not require others in the vehicle to do likewise. That included children.

The decision took the Asamblea Nacional by surprise because deputies were ready to pass the seatbelt measure on final reading.

The Comisión de Consultas a la Constitucionalidad is studying the Sala IV decision to see if there is a loophole.

Gerardo Villanueva, who heads the commission said the court made an error when it made its decision.

Letter to editor
Reader says VAT
affects everyone

Dear A.M. Costa Rica:

I was truly amazed to read the A.M. Costa Rica staff article about VAT which said that most expatriates won't feel the effect.

I assume that the staff thinks that all expatriates fall into the category of rich since the article says that the greater impact will be on the less well off and alude that the rich (expatriates?) won't feel the effect.

The article further states that "there is also a danger that the retail customer will be paying tax on taxes."

I lived in Europe most of my adult life and the VAT affected EVERYONE that bought anything or used services. As regards the consumer paying tax on taxes, just who does your staff think pays for the taxes — the consumer naturally.

Further, I have not read or heard anyone mention the fact that as the cost of goods and services increase, there is a decrease in the consumption of those goods and services. Therefore it is doubtful that the the increase in revenues will be as high as anticipated. Further, it will serve to deprive the lower income levels of goods and services that they presently are just able to afford. 

Additionally, it will most likely have a negative impact on small business that are not highly profitable since they usually are not in a position to economize and absorb some of the increases in the cost of goods by lowering their profit margins.

If your staff has visited Europe they should be aware that the cost of living there is rather high in relation to the standard of living. Guess why!

William M. Lilly 
San Jose, Costa Rica
Rotary to celebrate
36 years of service

               By the A.M. Costa Rica staff

Rotary International in Costa Rica is celebrating the   36th anniversary of the presence of the service club   here.

The first club here was the Rotary group in Heredia   that was chartered in 1968. Now there are clubs in   Alajuela, Belén, Escazú, Heredia, San José, northeast   San José, San Pedro, Curribadat and Puntarenas, the   group reported in a news release.

Both the Heredia and San José clubs have special   events planned for March 13, the anniversary date.    The organization can be reached through Andrea   Hangen, 368-4668, e-mail: aihangen@hotmail.com   and Esteban Seravalli, 821-3765, e-mail:   sersys@racsa.co.cr

The service club brings together professionals and   business people to promote service to the   community. There are more than 30,000 Rotary   Clubs in 162 countries. 
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Big hike seen in cash sent home to Latin lands
Special to A.M. Costa Rica

WASHINGTON, D.C. — An explosive rise is occurring in the amount of money transferred by immigrants from the United States to their home countries in Latin America and the Caribbean, according to a new study by the United Nations.

The study found that these money transfers — known as remittances — are the region's second-largest source of external financing after foreign direct investment. About $25 billion in remittances was sent to the region in 2002, according to the study.

This phenomenon is taking place despite the fact that most funds sent by immigrants to their families barely exceed $200 per month. The study also warns against the "syndrome of dependence" on income sent home by immigrants, and cautions that countries receiving a very high volume of remittances could greatly revalue their currencies, adversely affecting their exports.

The study by the U.N. Economic Commission for Latin America and the Caribbean also discussed the high expense of sending remittances. The agency said financial intermediates charge well above marginal costs for these transfers.The commission said the international market for sending remittances is "concentrated and not very competitive."

To remedy that situation, the U.S. government is actively promoting ways to lower the cost for immigrants to send money home. Wayne Abernathy, assistant secretary for Financial Institutions at the U.S. Treasury Department, said in U.S. congressional testimony in October 2003 that his department is working to promote competition in remittances "as the most effective means of reducing costs while improving services."

This effort, he told the House Financial Services Committee, involves promoting competition in the United States for the origination of remittances, promoting competition in the recipient countries for the receipt and distribution of remittances, and — where appropriate — improving the links between the U.S. financial system and the financial systems in recipient countries.

Abernathy said that in December 2001, the Treasury Department and the U.S. State Department began working collaboratively with the government of Mexico under the auspices of the "Partnership for Prosperity" program to promote competition in the U.S.-Mexico remittances market.

"In the months since, we have seen several major banks enter the remittances market, expand their product offerings in the market, and reduce their fees," said Abernathy. The U.S.-Mexico Partnership for Prosperity, referred to by Abernathy in his testimony, is designed to promote economic development in those parts of Mexico where growth has lagged and where economic stagnation has fueled high levels of U.S. migration.

Underlying U.S. efforts to facilitate the purchase of remittances, Abernathy said, "is a constant effort to ensure that effective anti-money laundering and anti-terrorist financing safeguards are in place to prevent the abuse of remittance services for criminal or terrorist ends."

The new U.N. study reported that remittances provide additional benefits to local economies because they complement national savings and the incomes of middle- and low-income families. The study is entitled "Remittances by Emigrants: Issues and Evidence." 

Since the early 1980s, the study found, the funds immigrants send back home rose by an annual average of 12.4 percent, the highest growth rate in the world. Countries in Latin America and the Caribbean received 3.3 percent of all remittances flowing into developing countries, said the report,

Another U.N. study estimated that almost 20 million Latin Americans and Caribbean nationals live outside their country of birth. Half of these people emigrated during the 1990s, mainly to the United States and, to a lesser degree, to Europe. Remittances are the "financial counterpart" of this emigration, said the report.

Worldwide, a group of 20 countries accounts for almost 80 percent of remittances to developing countries. In 2001, the main receiver was India, with inflows of $10 billion, followed by Mexico, with $9.9 billion, and the Philippines, with $6.4 billion. Others in this list include the Dominican Republic ($2 billion), El Salvador ($1.9 billion), Colombia ($1.8 billion), Brazil ($1.5 billion) and Ecuador ($1.4 billion).

In his congressional testimony, Abernathy said that remittances are "quickly becoming the central source of new foreign capital for many countries," adding: "It is funding that almost by definition gets into the hands of those who need it most, the families of those whose hard work earned the money. We are working with the private sector and the governments of recipient countries to promote competition in financial services, especially remittances. . . ."

U.S.-backed panel in Haiti picks a prime minister
By the A.M. Costa Rica wire services

PORT-AU-PRINCE, Haiti — A U.S.-backed advisory panel has chosen a new prime minister for Haiti. The move comes as multi-national troops in Haiti say they will soon begin disarmament operations. 

Gerard Latortue, a former political refugee and foreign minister in Haiti, is his country's new prime minister. Latortue, was chosen after five days of deliberations by the so-called council of wise individuals, a panel selected to choose a new prime minister after the departure of President Jean Bertrand Aristide.

Latortue, will join interim President Boniface Alexandre to select a government to run Haiti until elections can be held. Latortue is an academic who fled the regime of Francois "Papa Doc" Duvalier. He served as foreign minister in a government that was overthrown by a military coup in 1988. He has taught at universities and served as a senior official of the United Nations Industrial Development Organization. 

Anne Marie Issa, one of the council members who selected Latortue says his experience will be needed for a difficult task. "He is someone who has a vision and is someone who can put everybody together," he said. "You know a uniter of the nation. Also to promote the development of the country, because that person will have a lot to do, so that is why we think that person (Latortue) is a good choice."

Multi-national troops in Haiti say they will soon begin an aggressive effort to disarm armed gangs and other groups and individuals who have been behind a wave of violence over the past several weeks. U.S. Marine Col. Mark Garganus, who heads the multi-national troop force in Haiti, says the effort will depend on cooperation from the Haitian public.

"What we are requesting is that the Haitian population assist us in this, just by laying down their arms or turning them into us," he said. "We will be happy for them to turn them into the police or turn them into the multi-national force. That will greatly accelerate the promotion of stability which is again the main reason we are here."

Garganus says multi-national troops will work with the Haitian police to disarm groups and individuals behind the violence but he gave few details of how the plan will work.

A senior team of United Nations experts in Haiti will also focus on disarmament efforts as a main objective behind the U.N. authorized peacekeeping mission.

Looting and violence continues in Port-au-Prince with a warehouse and industrial district close to the Port-au-Prince airport the main target. 

Multi-national troop commanders say they have stepped up patrols in the area to try and bring the looting and violence under control. 

Argentina again makes deal to avoid defaulting on loans
By the A.M. Costa Rica wire services

BUENOS AIRES, Argentina - News reports say Argentina will avoid defaulting on billions of dollars in debt owed to the International Monetary Fund Tuesday. 

The reports say Argentina has agreed to make the $3.1 billion payment, ending the threat to lapse into default for a second time in six months. 

A default could have cut off one of Argentina's last avenues of financial assistance and further isolate it from world markets. Last year, Argentina defaulted on a nearly $3 billion International Monetary Fund loan, but eventually paid it after reaching a new long-term deal with the lender. 

Argentine officials had threatened to withhold payment if fund officials failed to give a clear indication they will approve an upcoming report on Argentina's economic progress. Approval of the report is a key condition for Argentina to receive a new $13 billion loan. 

The fund has been pressing Argentina to move quickly to restructure the nearly $100 billion in defaulted debt incurred in January 2002, during a period of economic and political turmoil in the country. 

Argentine officials say they want creditors to accept a 75 percent reduction in the face value of the country's foreign debt, a proposal that has been strongly rejected by many creditors.

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Zoellick says he sees progress in world trade talks
Special to A.M. Costa Rica

WASHINGTON, D.C. — Prospects for restarting the global trade talks, which stalled last September in Cancun, Mexico, will likely depend on World Trade Organization members' willingness to focus on a "core agenda" of market access for agriculture, manufactured goods and services, U.S. Trade Representative Robert Zoellick says.

In testimony Tuesday to the Senate Finance Committee, Zoellick said his recent push to restart the trade talks appears to be making progress.

"The initial response to this initiative has been encouraging both from overseas and among domestic constituencies," he said in prepared remarks covering overall 2004 U.S. trade strategy. 

Zoellick said that in a January letter to fellow World Trade Organization ministers and in follow-up meetings with representatives of more than 40 countries he urged a "common sense" approach to the trade talks known as the Doha Development Agenda.

The critical next steps for the talks are agreement on a framework for agricultural trade reform and abandoning three of the four contentious "Singapore issues": competition policy, investment and transparency in procurement, Zoellick said. Under the U.S. approach, negotiators would focus exclusively on the fourth Singapore issue, trade facilitation such as customs reforms.

Zoellick told senators that movement on agriculture would require all countries to agree to eliminate export subsidies, reduce trade-distorting domestic subsidies, end state-trading monopolies, and discipline food aid in a way that permits countries to meet humanitarian needs.

"I believe we are regaining some momentum, although the road ahead is marked by risks," he said.

On another issue, Zoellick said the Bush administration in 2004 would focus on shortcomings in China's compliance with its World Trade Organization obligations. 

Areas of concern include intellectual property rights enforcement, market access for agriculture and financial services, misuse of standards to impede U.S. exports, and China's promises to grant full and timely trading and distribution rights to U.S. companies, he said.

Zoellick identified as problems China's adoption of discriminatory tax policies on products such as semiconductors and its use of wireless encryption standards to block U.S. market access.

"We are pressing China to resolve these disputes promptly," he said.

The administration, he said, will press for China's full compliance with the World Trade Organization standards and "will not hesitate to take action to enforce trade rules."

Zoellick also reviewed progress made by the United States and its partners in negotiating regional and bilateral agreements as well as other trade and investment arrangements, including the Free Trade Area of Americas, U.S.-Central America Free Trade Agreement, Enterprise for ASEAN Initiative, and a Middle East Free Trade Area.

Regarding the needs of developing countries, Zoellick said that the United States will continue to aid developing countries in boosting their trade capacity and integrating trade into their development strategies.

The Bush administration remains committed to an "ambitious" trade agenda and to the pursuit of multiple trade initiatives at the global, regional and bilateral levels to create a competitive environment for greater liberalization worldwide, Zoellick said.

Jo Stuart
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