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A.M. Costa Rica

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These stories were published Friday, April 15, 2005, in Vol. 5, No. 74
Jo Stuart
About us
National strike
promised over pact

Opponents of a free trade treaty with the United States promise a continual national strike if the measure is sent to the Asamblea Nacional.

They brought that message to the Asamblea Legislativa Thursday.

Our story is BELOW!

A.M. Costa Rica photo

Two types of homes highlight the variety here
This past week I have had the opportunity to spend some time in two very different homes which gave me a chance to get a sense of what an incredible variety of lifestyles are available here. 

One house is in a mountainous community about 35 minutes from San José. It is a simple home. The daytime living area is essentially, one very large room about 20 feet by 40 feet. The kitchen is at one end, separated by a counter from the dining area and then the living room area, which in turn opens on to an enclosed patio overlooking a large garden and hillside. The bedrooms and baths are on either side. 

It is a dream kitchen for someone who loves to cook (and both of the people who live there are good cooks), not because it has a lot of modern conveniences, but because it has a six burner gas stove and everything is in a logical place and convenient. The design of the house would be perfect for one person who likes to entertain and be a part of the party while she is preparing dinner. 

The house never needs artificial light until it actually grows dark outside, thanks to the two skylights over the dining area in the cathedral ceiling. I heard recently that in the United States people want houses without formal living rooms but rather open areas like this.

The other house is in Moravia — a suburb of San José. This house is on level ground and is very large, elegant, spacious, and brand new. It, too, has cathedral ceilings with windows reaching to the roof. It, too, is light and cheerful. There is a curving staircase that leads to the second story that is part balcony. Besides all the various rooms it has a rock garden visible from most of the rooms, an indoor lap pool cleaned by ionization and heated by solar energy. 

Something I really fell in love with were the 

Living in Costa Rica

. . .Where the living is good

By Jo Stuart

walk-in closets off every bedroom. Like many of the apartments and houses in Costa Rica, my apartment has very little closet space, probably because when they were built Costa Ricans didn’t need big closets. 

The house in Moravia is beautifully finished with lovely architectural touches that makes it amazing that it was built in just eight months.

Of course, the reason I am so interested in living spaces is because I am looking for a different place to live. But so far, having seen only a few apartments, I am convinced the grass is greener right where I am. My downstairs neighbors were also considering moving — to Escazú. They tell me that the lovely-on-the-outside newly built apartment buildings they looked into had tiny apartments that could not compare to what they now have, which includes a garden and covered patio that is almost as large as their living room. And the rents are twice what they are paying. 

The places I looked at were either very small or very dark. It looks like if you want space and light you have to build it yourself or find something that is more than 20 years old. Unfortunately, many of the big older houses in San Jose have been converted into offices. Too bad they didn’t turn them into apartments. 

Some of the most interesting apartments I have lived in have been in remodeled houses. As for the homes I mentioned — it is nice to have friends with such lovely, interesting homes that I am invited to from time to time. 

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More reader opinions 

Only Ticas worry him

Dear A.M. Costa Rica: 

I can't believe you folks talking about crime in CR. It's all over the world. I was in Turrialba and San José on two different trips, and I felt safe, plus I never saw any crime to anyone. As for Colombia well let me tell you I was in Bogota five different trips, and I had to carry my money in my shoes and never did I wear any jewelry of any type. Not even a watch. 

The only fear I had in CR was the Ticas because they saw American dollars, and one got me for some. But that was my fault. Chill out, readers, and for sure I'll visit CR again and maybe move there.

Ed Fulmer 
Where tourist have problems 
as well as the people living here

Problem of being a Nicaraguan

Dear A.M. Costa Rica: 

It was a pleasure to read the opinions expressed by your readers in the April 14th issue. Dyan Goodman reminded us how warm and generous our Costa Rican hosts are; Eric Scheuer helped to put unfortunate instances of crime into perspective; Mike Hankins shared some ideas on responsible and balanced journalism, and Bob Morgan suggested safer routes to Isla Colón. All were constructive pieces. 

Thank you. As a former resident of Costa Rica (1998-2001), I enjoy reading your publication, especially Jo Stuart's columns and the reader opinions. 

In the same positive and constructive spirit of the readers I mentioned earlier, I would like to share (with permission) something our former (Nicaraguan) domestic employee recently wrote us. 

"I want to tell you about something very unpleasant that is happening to us. I don't know if you've heard the news of a recent and very horrible hostage-taking incident in Monteverde, that led to the death of 9 people. The perpetrators were Nicaraguan. We have felt so bad about this, and don't even want to go out. You know that we often experience discrimination here, and even more so since this horrible thing happened. 

"I understand that we are not always welcome or well liked, since people think that many Nicaraguans have come to Costa Rica with bad intentions. It isn't easy living with that, and sometimes my brother, his wife and I talk about going home. We know that we are not bad people, and that what happened in Monteverde is not our fault, but it is so hard to stay here when all Nicaraguans are blamed. 

"I even worry that some very patriotic people will seek reprisals against innocent people, just because they are Nicaraguan. I pray to God that won't happen, but this past week has been a very sad one, and I've had trouble sleeping at night because of the horrible images I've seen on television." 

I hope to write again soon, perhaps with some more light-hearted accounts of the wonderful Nicaraguan people I met in Costa Rica. In the meantime, maybe other readers can also share their stories of the Nicas who have helped them learn Spanish, kept their homes, cooked for and played with their children, and brought music into their lives. 

And perhaps we can all reflect on what we as immigrants to Costa Rica, whether North American or Nicaraguan, have contributed to this country. 

Javier Escobar 
Geneva, Switzerland

EDITOR’S NOTE: At least one of the three persons involved in the Santa Elena de Monteverde bank holdup and siege was a natural-born Costa Rican, although of Nicaraguan parents. 

Pope article was excellent

Dear A.M. Costa Rica:

Your article on the next pope this week was excellent. It brought to light a perspective that oftentimes we "First Worlders" seem to forget — that the vast majority of the world have a different outlook and frame of reference than do we. 

It is unfortunate that some (or at least one) of your readers fears viewpoints he doesn’t share. I would hope most faithful Catholics, liberal socialists or reactionary autocrats alike, would believe that the next pope should be a person of God and a pastor to the people no matter what other label each side uses. 

No news article (or editorial) can be expected to cover every angle of a story but yours did bring interesting information into the mix. It seems that some just can’t handle having the words progressive and Liberation in print. 

Pope John Paul II opposed a lot of things that many people, Catholics and others alike, support. Reporting on that does not make your article an editorial. I thought you did a good job of explaining that the opposition to these stands comes from the fact that they are not in step with the reality of the world today (and in some cases scripture). It seems that anytime the word PROGRESSIVE is used we have to watch out because some knee-jerk conservative becomes blind to what is actually written and assumes the talk is about wealth redistribution (horrors!) which your article never mentions. 

Death is the greatest wealth re-distributor around, and we all face it sooner or later, it’s how we manage the resources we have been loaned along the journey that really matters. It’s too bad that some can only look at the negatives and complain about what was left out rather than praise you for writing on a subject that gets little or no coverage elsewhere.

Thomas Ghormley 
Barrio Amon, Costa Rica

EDITOR’S NOTE: The article in question was published Wednesday. Although we would like to take credit for it, the piece was written by a wire service reporter based in Washington, D.C.

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Lawmakers suspect that it's a sin to duck sex tax
By the A.M. Costa Rica staff

The sin tax in Costa Rica is 56 percent, and lawmakers are miffed that two motels are sidestepping part of what may be due.

A legislative commission heard testimony on the matter Thursday. A motel in Costa Rica is a place for trysts, not temporary shelter for highway travelers. That’s why establishments less prone to rent their rooms by the hour call themselves aparthotels or some variation.

Thursday the lawmakers were talking about El Paraíso and El Edén, both operated by Llanos del Zurquí S.A. and both well known as sites for quick liaisons.

No one showed up from the motels, but tourism and tax officials did.

There is a special 40 percent tax recently approved for establishments that are mainly directed to the sex trade. This is in addition to the 13 percent sales tax and the 3 percent tourism tax paid to the Instituto Costarricense de Turismo.

Some 75 percent of the 40 percent sin tax goes to the Instituto Mixto de Ayuda Social. The remaining 25 percent goes to the Asociación de Fomento de 

Desarrollo Económico Laboral Femenino Integral.

However, officials said that operators of the two motels were dividing their billing between room rents on which they paid 56 percent tax and restaurant services, on which the sin tax did not apply. This resulted in a lower overall tax bill.

The group studying the situation was the Comisión Permanente Especial de Control del Ingreso y Gasto Público of the Asamblea Legislativa. This is the committee concerned about expenses and budgeting.

The original complaints on the matter were aired by Noticiero Eco News.

Flor Rodríguez, subdirector of Tributación, the tax collecting agency, said her auditors have an annual program to check out such payments.

Rodrigo Campos of the Instituto Mixta explained that his agency has sought an advisory opinion from the Procuraduría General de la República on the way the tax was being paid.

Officials also pointed out that the sin tax is the topic of several appeals to the Sala IV constitutional court where business owners argue the tax is excessive.

Appeals panel agrees tax does not exist
Tax decision favors boats used to carry tourists
By the A.M. Costa Rica staff

An administrative appeals court has thrown out a demand by tax collectors that the owner of a tourism boat pay an annual levy.

A spokesman for the company, Aventuras Turísticas Lohe Lani S.A., said the firm has been fighting the tax for seven years because the tax does not exist.

Tributación, the tax collecting arm of the Ministerio de Hacienda, appears to have agreed early that the tax did not exist but continued legal efforts to collect it.

The company had to pay $3,500 of the non-existent tax and now faces a long, uphill battle to get the money back from the government, the spokesman said.

The case was handled within the tax collecting agency, and the final decision on the tax was by the Sala II Tribunal Fiscal Administrativa or tax appeals court.

"Tax collecting people have a mandate" and they will collect tax regardless of the legal implications, said the spokesman, Garland M. Baker, who managed the appeal for the company. He is a contributor to A.M. Costa Rica. The lawyer on the case was Allan Garro of Cartago.

The tax goes back to 1998 and involves a series of legal complexities. Sports fishing boats and recreational boats are taxed in a manner similar to the marchamo assessed on motor vehicles and aircraft in Costa Rica. Commercial fishing boats and passenger craft are exempted from the tax. The problem is that the catamaran Lohe Lani was used for tourism and no classification existed in the law for that, said the Sala II decision.

Tax collectors argued that the vessel was recreational, but the tax appeals court said that Lohe Lani was listed in multiple documents as a passenger boat. The original 

File photo
The Lohe Lani in full sail

350,000-colon tax had increased over the years with interest and penalties.

Baker said that the decision is significant for operators of other similar tourism craft.

Assembly approves massive tax break for disabled
By the A.M. Costa Rica staff

Lawmakers gave a major tax break to about 10 percent  of the citizens Thursday. The net tax savings is in the hundreds of millions of dollars.

Lawmakers approved on second and final reading a measure that allows any person who is handicapped to import or purchase a vehicle here without paying any form of taxes.  Importation taxes on vehicles here frequently are as much as 85 percent of the estimated value.

The tax break applies to any person who exhibits severe and permanent physical, mental or sensory limitations that makes it difficult for them to move around or to use public transport.

The measure specifically eliminates any form of tax, customs duty or required stamps on imported automobiles or those acquired here.

The measure was promoted by Federico Vargas Ulloa, head of the Partido Unidad Social Cristiana in the assembly. He himself is confined to a wheelchair.

"This bill is going to benefit thousands of Costa Rican families, and we are going to give the opportunity to 

thousands of persons who are socially disadvantaged so they will be able to have a dignified life and have equality of opportunity," according to a summary from the Asamblea Legislativa.

Although aides estimated that the handicapped population in the country was about 10 percent, no one pegged a cost estimate on this mini version of free trade. If just 10 percent of this group, some 40,000,
persons, decides to purchase a vehicle, the net wavier of taxes would be $200 to $400 million, estimating a savings of $5,000 to $10,000 in taxes per vehicle. That does not count the savings in sales tax, now 13 percent.

The idea is that handicapped persons can use a vehicle to go to school or to work or to run a business or for recreation, according to Vargas.

The vehicle on which the tax is waived would have to be used exclusively by the handicapped person. Presumably the tax would become due if the owner gave away or sold the vehicle.

President Abel Pacheco has to approve the measure or send it back to the legislative chamber with a veto.

Costa Rica does not manufacture vehicles, so all come from other countries

In case you missed it:
A.M. Costa Rica, April 5, 2005
Our readership more than doubles in one year
By the A.M. Costa Rica staff

A.M. Costa Rica set another readership record in March when the newspaper registered 2.16 million hits. That was a 22.9 percent increase over February and a 106 percent increase over March 2004, the first month the newspaper exceeded a million hits.

Other statistics had similar increases.

Some 397,368 individual pages were viewed by 99,351 readers. And 45,435 of those readers were registered as unique, which means they were only counted once regardless of how many times they visited the pages in a single day. 

The statistics are maintained by the Internet service provider in the United States where A.M. Costa Rica is hosted. The hosting company keeps track of visits independent of A.M. Costa Rica.

The statistical programs screen out hits and visits by mechanical means, other computers and automated Web crawlers.

The statistics show that the average viewer sees about four pages at every visit to the paper. 

Said Jay Brodell, editor:

"Our dramatic increase in readership over the last three and a half years is no surprise to our advertisers who are getting more and more business from the wave of retirees and would-be retirees who are looking at Costa Rica as a new home and need solid, daily information.

"It’s a new world, and our progressive advertisers recognize that."

A.M. Costa Rica statistics are available on a page that is updated every month HERE!

Argentine steakhouse in Escazú offers other options
Isabel is a beautiful young woman from Argentina who lives with her husband, Scott, in Quepos. Although there are scores of Argentine steakhouses all over Costa Rica, when she gets to the Central Valley, she heads to San Telmo in Centro Comercial Paco in Escazú. 

For the steaks and chimichurri sauce? No. Her target is the rest of the menu, the other Argentine cuisine. Gabriel is also Argentinean. He gives San Telmo a thumbs up as well. I do enjoy an occasional churrasco or lomo and the assorted organ meats that grace all the parilla menus (parilladas), but it is the other dishes that fascinate me more. Beyond barbecued grass-fed beef there are many other culinary traditions in Argentina.

Want to try other meats? Lamb and goat from Patagonia, rabbit and venison are plentiful beyond the pampas. I wish we could buy Argentine corned beef in our markets. How about veal stew cooked in a pumpkin or butterflied flank steak, marinated in vinegar and herbs and stuffed with hard boiled eggs, carrots, olives, spinach and garlic then baked?

The large Italian community in Argentina has contributed to the cuisine in a way that is no longer typically Italian. The pizzas are less crusty and cracker-like than those in Italy or many upscale emporia in Costa Rica. They are more like thicker Chicago or New York pizzas where the dough is given time to rest and rise. The pasta sauces are richer and creamier. 

Gnocchi are popular and well made. Ubiquitous provolone slices are slathered in olive oil and sprinkled with oregano, then browned on both sides on a grill, or less often, melted in oven proof ramekins with some olive oil and oregano. 

Milanesas are hardly typical of Milan, but they are everywhere in Argentina. Thin slices of tenderized beef or veal are breaded and fried like a schnitzel in Vienna and may be served e.g. with yellow squash in cream sauce and salt roasted potatoes, or simply slapped between two slices of bread to make a sandwich. 

And oh, the empanadas. They are unique inside and out. The pastry reminds me of old-fashion pie crust made with lard, and for good reason. Grasa de pello, veal fat trimmings are rendered and filtered. The liquid is mixed with eggs and flour to make the dough. For the filling, veal is cubed into tiny morsels, hardly larger than a grain of rice and seasoned with enough paprika to please a Hungarian chef. More rustic varieties add onions and raisins to the meat.

Two final titillations from gaucho land are crepes called panqueques filled with caramelized milk and good, cheap (much less expensive there than here) Argentine wine.

So back to Isabel’s favorite restaurant, the menu is replete with many nice options beyond the steaks and grilled organ meats. Starters include carpaccios of beef, salmon and octopus, ceviche (all for a little less than ¢3,000 or $6.40 with an exchange of 469 colons to the dollar), an enormous cocktail of jumbo shrimp, avocado and hearts of palm (¢7,590), breaded and fried mozzarella, mixed seafood, fried calamari rings with 

Dr. Lenny Karpman

we eat


tartar sauce, soups, salads and a fine array of empanadas. 

The beef empanada (¢1,090) is a perfect rendition of the one described above. Provolone cheese grilled in a ramekin and dripping of oregano flaked olive oil is so rich and tasty, that it should be shared by at least two, if not four diners. The house special version, provoleta San Telmo, is topped with tomato, sweet red pepper, onion and bacon (¢3,240). 

Whereas most Argentine restaurants are hell for vegetarians, San Telmo’s choices include cheese and onion empanadas, grilled mixed vegetables, grilled portobello mushrooms or sweet peppers, cream soups of leek or asparagus, gnocchi with avacodo sauce, a variety of meatless ravioli dishes and spinach, Caprese or Positano salads.

The milanesas are fine. The meat is beef, not veal, but still quite tender. The slices are large, thin, browned well but not burned and not over-breaded. By its nature, as with schnitzels and breaded veal cutlets, it is a little dry. Many, myself included, like it that way, drizzled lightly with a squeeze of lime. For those who prefer sauce, try the Neopolitan version, tomato, mozzarella, a ham slice and oregano. There are also pork, lamb, chicken and fish options.

A never ending supply of loaves of warm-out-of-the-
oven bread, warm biscuits, eggplant dip, green aioli and ice water graced the table.

Leave room for dessert, but be forewarned that the crepe filled with caramelized milk, sugar glazed on top and served with a scoop of caramel flavored ice cream is addicting. You might not even notice the richness of the coffee.

The décor is friendly, two walls of windows and two walls of brick and gaucho accoutrements. The servers are very professional, soft spoken, friendly and helpful. Many are from Argentina. They are attired in black with burgundy aprons from waist to ankles.

The overview is dual. As a steakhouse, San Telmo is indistinguishable from at least a dozen others and a cut below Donde Carlos (see review) ´´, $$$-$$$$, but for other Argentine cuisine, very good, ´´´, $$$. My wife is anxious to return again soon.

Anti-free trade groups promise a national strike
By the A.M. Costa Rica staff

Opponents of a free trade treaty with the United States promise a continual national strike if the measure is sent to the Asamblea Nacional.

That was the promise of the Comisión Nacional de Enlace, a coalition of a number of political interests who oppose the treaty.

Opponents met in the Teatro Melico Salazar all day Thursday and then segments marched from that location north of Parque Central up Avenida 2 to the Asamblea Nacional building.

The group did not win any friends with motorists who were battling the evening rush. Avenida 2 was closed off for a time, and Avenida Principal was closed off in front of the assembly building for about 30 minutes while the group demonstrated.

"Huelga, Huelga, Huelga," shouted the crowd and they promised a strike. The day was organized in part by Albino Vargas Barrantes, general secretary of the Asociación Nacional de Empleados Públicos y Privados.

The group spent the day preparing a declaration against what they said were the neo-liberal influences in the government that supported a free trade treaty. The trip to the assembly was ostensibly to deliver a copy of the manifesto, but police blocked the entryway.

Estimates of the crowd varied. Some in the legislature estimated 2,000 persons. An estimate by a reporter was closer to 500.

Crowds in demonstrations have diminished since the government said it would not pay demonstrators who were supposed to be at work. 

Marchers were peaceful and finished their demonstration by singing the Costa Rican National Anthem.

In addition to the free trade treaty, known as TLC for its initials in Spanish, Oscar Aria Sánchez came in for criticism. Arias, the former president and Nobel Peace Prize winner, supports the treaty. He is the presidential

A.M. Costa Rica photo
Youthful Communists were among marchers.

nominee of the Partido Liberación Nacional. Elections are in February. He was not there.

Vargas and his Movimiento Civico were instrumental in road blockages that paralyzed the country last year.

President Abel Pacheco has not sent the free trade treaty to the assembly for possible action for several reasons, including his desire to avoid more street disturbances. He also is using the treaty, which is supported by most commercial interests, as a lever to obtain passage of his so-called fiscal reform package that would increase the tax burden by $500 million.

Demonstrators Thursday also carried signs against the fiscal reform package. Many demonstrators appeared to be of university age. Some carried red flags and banners with a hammer and sickle showing their allegiance to a Communist ideology.

In addition to students and some who are against the United States on principle, the treaty is opposed by many employees of state monopolies. They fear the loss of their jobs if outside competitive forces are allowed to operate in Costa Rica.

Some farmers fear the effect of U.S. agricultural imports, too, although the farming sector is divided based on the likely impact on individual crops. Sugar producers would win greater access to the U.S. market, for example. 

Minutemen on U.S. border take credit for slowing flow
By the A.M. Costa Rica wire services

NACO, Ariz. — Two weeks after their deployment along a 37-km. section of the Arizona/Mexico border, the civilian group calling itself the Minutemen is claiming success. The Minutemen take their name from a group of civilian volunteers in the 18th century U.S. war of independence. Group leaders say smugglers and immigrants are avoiding the border because of the volunteers' presence, but their critics disagree.

Every few hundred meters along the barbed wire fence that separates the state of Arizona's Cochise County from Mexico just east of the town of Naco, there are U.S. citizen volunteers sitting in lawn chairs or in pickup trucks keeping watch, day and night. 

For the past few weeks, human traffic through this area has slowed, and Minuteman leader Chris Simcox says this shows that the U.S. government could bring an end to illegal entries along the 3,000 km. (1,860-mile) border. "If Washington would fully fund Border Patrol and give them the manpower they need to follow the model we just set up, then it would stop," he said.

But Border Patrol spokesman Andy Adame says there may be other reasons why immigrant and drug smuggling activity has slowed in the past couple of weeks, including Mexican army activity on the other side of the line. "Any time the Mexican military begins operations in a certain area, it basically shuts down the border. We hardly get any intrusions and our apprehensions drop significantly. That is what is happening right now. It is hard to gauge if these civilians out here are having an impact on illegal immigration or if it is the military," he said.

The Minutemen dispute this notion and say that Mexican police and army have probably increased their activities in the area in response to their presence. 

Adame also expresses concern for the safety of the civilian volunteers. Some of the 700 or so Minutemen are armed with handguns and could find themselves in a dangerous situation if drug smugglers come into their area. Agent Adame says smugglers carry far more powerful weapons than handguns. He says smugglers recently fired from the Mexican side of the border at Border Patrol agents here in Naco.

"We were basically pinned down because they were probably using AK-47's [automatic assault rifles], that is what they use down there, and they had us all pinned down. It wasn't until we were able to get assault rifles 

out there from agents right here at the station that we were able to get them to move away from the border area," he said.

But Minuteman Chris Simcox says that incident only serves to prove the point his group is trying to make. "You mean the Department of Homeland Security has admitted that they have not been able to secure our borders? The Department of Homeland Security admits that, three years after September 11 that Americans are not safe on American soil? Mission accomplished," he said.

Civil rights and Hispanic groups on both sides of the border accuse the Minutemen of taking the law into their own hands and acting as vigilantes. "What the Minuteman Project is doing, and other vigilante groups, but particularly the Minuteman Project, is creating this false hysteria about what is happening on the border. They are distracting policy makers from real solutions to the failing border and immigration policies, which would be a comprehensive, real immigration reform proposal," said Jennifer Allen who represents the Border Action Network, based in Tucson.

Ms. Allen also is critical of government efforts to secure the border, noting that there has not been a single case of a terrorist trying to enter the United States by crossing the border from Mexico. She calls increased spending on border security ill-conceived. "From a border community perspective, they are just bombarding this region with more and more enforcement that is a waste of money and further erodes the basic human rights and civil rights of the people who live here and the immigrants who are coming into this country and sustaining the economy of this country," she said.

Recent polls show that most Americans support increased border protection. As for the Minutemen, reaction to their project has been mixed, even here along the border. Many ranchers and homeowners in the area applaud them for helping to prevent damage to their property and threats from criminals who normally frequent the border zone. Many other Arizonans, however, view the Minutemen as outsiders who should take their protest elsewhere.

Chris Simcox says that is what they plan to do. He says once the deployment here at the border wraps up at the end of this month, the Minutemen and other anti-illegal-immigration groups plan to picket companies that hire undocumented workers and put pressure on lawmakers in Washington.

Monetary Fund cites growth in Honduras and Panamá
Special to A.M. Costa Rica

WASHINGTON, D.C. —  The International Monetary Fund is reporting favorable economic news for Honduras and Panama.

In a report Wednesday about Honduras, the Monetary Fund said the country's economy performed robustly in 2004, reflecting sound policies and broadly favorable external conditions. The rate of growth rose about 5 percent, with a rebound across all sectors, including agriculture.

In addition, inflation stabilized at about 9 percent at the end of 2004, after moving higher during much of the year due mainly to high oil prices.

The Monetary Fund said the Honduran government's economic program included measures to consolidate public finances and strengthen monetary policy and the financial sector, address poverty with a focus on education and basic health care, and enhance growth prospects through infrastructure development, improvements in the private investment environment, and trade liberalization.

Over the last decade, growth in Honduras had been adversely affected by natural disasters and worsening terms of trade, exacerbated by a "difficult policy environment," said the Monetary Fund.

For Panama, the Fund said in a statement Tuesday that growth was strong in the country for the second consecutive year. In 2004, the value of goods and services grew by about 6 percent, led by a boom in construction and export services, said the Fund.

Unemployment in Panama declined "modestly" in 2004, despite high growth, said the Fund. Although 2004 was a year of high oil prices, inflation remained low in the country, as has been traditional, the Fund said.

In addition, Panama's banking system experienced a second year of recovery, after turmoil in financial markets in South America during 2002.

Panama remains focused on concluding free-trade agreements, said the Fund. After reaching agreements with Taiwan and El Salvador, Panama is now pursuing trade pacts with the United States, Costa Rica and Nicaragua.

Ex-president Mejia faces questions on links to drug trafficker
By the A.M. Costa Rica wire services

SANTO DOMINGO, Dominican Republic — Prosecutors have summoned former President Hipolito Mejia for questioning about his alleged ties with an accused drug trafficker facing trial in the United States.

Dominican officials say the former president, who left office last year, will be asked under oath about his relationship with former Army Captain Paulino Castillo, 

who was arrested late last year while allegedly transporting more than 1,000 kilograms of cocaine. 

He was extradited to the United States in February and is facing charges of drug trafficking and money laundering.

Dominican media have raised questions about Castillo's promotion to the rank of army captain under President Mejia.

Chavez tells Venezuelan reservists to safeguard sovereignty of nation
By the A.M. Costa Rica wire services

CARACAS, Venezuela — President Hugo Chavez has urged thousands of reserve troops to safeguard the country's sovereignty in comments marking the third anniversary of his return to power following a brief coup.

After Chavez addressed the reservists, thousands of his supporters gathered outside the Miraflores

Presidential Palace to remember the coup.

Venezuelan soldiers overthrew President Chavez three years ago this week, but loyal troops helped return him to power two days later.

Critics accuse the populist leader of trying to model the oil-rich country after Communist-led Cuba, but Chavez says he is working to improve the lives of the country's impoverished majority. 

Jo Stuart
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