A.M. Costa Rica

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These stories were published Tuesday, May 4, 2004, in Vol. 4, No. 87
Jo Stuart
About us
Ambassador in Taiwan will ignore telephoned threat
By the A.M. Costa Rica staff

The call was like something out of a B movie. The anonymous voice spoke Mandarin and warned the ambassador to stay away from the inauguration of the new Taiwanese president.

The recipient of the call was Costa Rica’s ambassador to Taiwan, Oscar Alvarez. But he says he is going anyway to the inauguration of Chen Shui-bian May 20.

The Costa Rican foreign ministry, the Ministerio de Relaciones Exteriores y Culto, 

released the information about the threat Monday.

Costa Rica and the Republic of China enjoy 60 years of friendship, peace and cooperation, said Roberto Tovar, the foreign minister. 

Meanwhile, Taiwanese security officials are investigating.

Taiwan has been generous with Costa Rica, building bridges and roads and making other investments. The new Friendship Bridge over the Tempisque is one such gift.

Expats sweat out decline in bond funds at banks
By the A.M. Costa Rica staff

Certain investment funds run by national and private banks have taken a nosedive in the last six weeks, and the president of the Banco Central is asking investors to remain calm.

The Súper Fondo of Banco Nacional, the BCR Crecimiento Dólares of the Banco de Costa Rica, among others, and several dollar-denominated funds of private banks have taken a beating. Investors noticed the drop in the yield into negative numbers and began pulling their money out.

The funds are not very diversified and hold only Costa Rican government bonds issued by the Central Bank and the Ministerio de Hacienda.

Bank sources estimated that from mid-March to the end of last week some 8,000 investors pulled out some $680 million dollars. The funds were believed to hold about $2.2 billion put in by about 40,000 investors. Banco Nacional said it was the market leader with 30,000 investors.

Several expats living here expressed concern to A.M. Costa Rica Monday. They said they had purchased the funds at the bank from bank employees because they thought they would have security and high yield.

A Banco Nacional graphic shows that the yield of the Súper Fondo fell from 4.47 percent in February to -7.81 percent in March. A year ago the fund was yielding as high as 14.42 percent. 

Banco Nacional reported on its Web page that as of the weekend, the Súper Fondo had a negative yield of 18.64 percent over the last year and a dramatic negative 76.55 per cent yield in the last 30 days.

The RediFondo and the CreciFondo, both denominated in dollars, posted similar negative yields.

The negative yield represents a loss in capital to investors. The exact amount of the loss depends

Banco Nacional graphic

 on when the investor purchased his or her interest in the fund.

The funds are sort of like mutual funds in that the banks pool investor money and use it to buy bonds. 

Government and private banks have many such funds. The Súper Fondo and similar funds are having trouble because their value is directly tied to the value of Costa Rican bonds on the world market.

The banks have other funds, including money market accounts and long-term investments. These have not been affected. Nor have funds in colons.

Francisco de Paula Gutiérrez, the Central Bank president, said that investors should look at the long term. The current situation is cyclical, he said.

Much of the dollars pulled from the funds were reinvested in other banking instruments and not sent out of the country, officials said.

The Súper Fondo and similar investments attracted a lot of expat dollars after the collapse of several high-yield investment companies here in 2002 and early 2003. Investors who still had money looked around for the best interest they could get.

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Costa Rica stays off
intellectual property
black list in U.S.

By the A.M. Costa Rica staff
and special reports

Costa Rica still is on the U.S. watch list for intellectual property violations, but so are 51 other countries. And Costa Rica managed to stay off the "priority watchlist" that is reserved for major international violators.

The designations are contained in a report by the U.S. Trade Representative to determine if developing countries are implementing their anti-counterfeiting obligations under various trade agreements.

The trade representative placed Costa Rica and 32 trading partners on the "watch list" for intellectual property violations: Azerbaijan, Belarus, Bolivia, Bulgaria, Canada, Chile, Colombia, Croatia, Dominican Republic, Ecuador, Guatemala, Hungary, Israel, Italy, Jamaica, Kazakhstan, Latvia, Lithuania, Malaysia, Mexico, Peru, Poland, Romania, Saudi Arabia, Slovak Republic, Tajikistan, Thailand, Turkmenistan, Uruguay, Uzbekistan, Venezuela and Vietnam.

Another U.S. 16 trading partners are on the "priority watch list," which entails greater scrutiny. Eleven of these, Argentina, Bahamas, Brazil, the European Union, India, Indonesia, Lebanon, Philippines, Poland, Russia and Taiwan, were on last year's priority list. The other five, Egypt, Korea, Kuwait, Pakistan and Turkey, were moved this year from the watch list to the priority list.

This is the third year in a row that Costa Rica avoided the stigma of being on the priority watch list. Costa Rica got off that list in May 2002. 

The trade representative again designated China and Paraguay for special monitoring. That means the trade representative can move directly to the application of trade sanctions against either country if monitoring shows a slippage in enforcement of bilateral intellectual property rights agreements.

The most serious violator is the Ukraine, said the trade representative. The United States' annual review of global intellectual property rights violations once again cited that former communist country for its continued failure to protect media products such as compact discs and digital versatile discs (DVDs) from piracy.

The U.S. will keep in place some $75 million in sanctions against the Ukraine.

Counterfeiting of such a broad range of products on a global scale affects more than just the companies that produce legitimate products, said the trade representative’s announcement. While it has a direct impact on the sales and profits of those companies, counterfeits also hurt the consumers who waste their money and sometimes put themselves at risk by purchasing fake goods, it said. 

Piracy and counterfeiting of copyrighted products in digital, print and other formats, as well as counterfeiting of all types of trademarked products, have grown to such a scale because these illegal activities offer enormous profits and little risk for the criminal  element of society, said the announcement. 

Criminals can get into the counterfeiting business with little capital investment, and even if caught and charged with a crime, the penalties actually imposed in many countries are so low that they offer no deterrent, it said.

Legion to get out vote
for both GOP and Dems

American Legion Post 16 will be trying to get out the vote Tuesday, May 11, when the organization holds a luncheon in Heredia.

All Americans and friends are cordially invited, according to Howard L. Singer, commander. Democrats Abroad and Republicans Abroad will have representatives there to help people apply for absentee ballots so they can vote in the November U.S. presidential elections.

The luncheon will be at Oporto Restaurant at 1 p.m.

Also on hand will be Robin Mortiz, the consul general at the U.S. Embassy here. She will speak on voting and on living safely in Costa Rica, said a legion announcement.

If someone cannot attend to apply for an absentee ballot, the American Legion will be glad to assist him or her at a time of their convenience, said Singer, adding that all the person has to do is call 266-0089 for assistance.

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U.S. praises México, Perú for stand against Castro 
By the A.M. Costa Rica wire services

WASHINGTON, D.C. — The United States Monday came down solidly on the side of Mexico and Peru in their diplomatic dispute with Cuba over the Fidel Castro government's human rights record. The comments came as the Bush administration was given proposals for increasing U.S. pressure on Cuba. 

The Bush administration is hailing Mexico and Peru for being "willing to stand up for the truth" about Cuba's human rights record, and it says their decision to recall their ambassadors from Havana in the face of verbal attacks by the Cuban leader is "entirely appropriate."

Mexico and Peru incurred the wrath of Castro last month when they supported a U.S.-backed resolution critical of Cuba that was narrowly approved by the United Nations Commission on Human Rights at its annual meeting in Geneva. 

The Cuban leader verbally assaulted the two governments in a marathon May Day speech Saturday, in which he said they had voted in Geneva under U.S. pressure. Mexico and Peru recalled their ambassadors from Havana in response, and Mexico also expelled the Cuban ambassador in Mexico City.

At a meeting in Washington of the private Council of the Americas, Secretary of State Colin Powell rejected the notion of U.S. pressure, saying the two countries are free and independent, and had "made their own choice" to properly condemn Castro and his regime. 

Later, State Department spokesman Richard Boucher said Peru and Mexico were attacked for pointing out the truth about human rights in Cuba. "Cuba has resorted to such actions before, retaliating against countries and organizations that dare to criticize the Castro regime. The decision to withdraw their ambassadors obviously rests with the Mexican and Peruvian governments, but given the nature of the Cuban statements, the Mexican and Peruvian government actions appear to be entirely appropriate," he said.

The comments came as a panel of experts headed by Powell conveyed to the White House a list of recommendations aimed at hastening a democratic transition in Cuba, and for providing U.S. aid to a post-dictatorship government.

President Bush announced the establishment of the Commission for Assistance to a Free Cuba in a policy speech last October, and it was tasked to complete a report by May 1.

The recommendations were not made public, but they are understood to include calls for increased support for Cuban dissidents, and for countries to distance themselves politically from the Castro government.

One key issue before the panel was whether to recommend a reduction in the maximum amount, currently $1,200, that Cuban-Americans can remit each year to families and friends in Cuba.

Boucher, declining to give details of the report, said President Bush would decide which recommendations will be implemented, and when.

Costa Rica congratulates Panamá on successful vote
By the A.M. Costa Rica staff
and wire reports

Costa Rica praised the people and the government of Panamá Monday for the demonstration of democracy evident in the operation of Sunday’s presidential elections.

A statement from the foreign ministry also congratulated Martín Torrijos on his victory.

The statement also said that Costa Rica wanted to continue its traditional relations of friendship solidarity and mutual cooperation with its southern neighbor.

Torrijos, the son of former Panamanian dictator Omar Torrijos, easily won the election.

Electoral officials in Panama declared Torrijos the winner late Sunday, as still incomplete results showed he had a commanding lead over his main challenger, former president Guillermo Endara.

In a victory speech, Torrijos thanked the 

Panamanian people and declared the beginning a new phase in the country's history. 

He said his administration will fulfill his campaign promises to forge new opportunities, social justice and solidarity for the people of Panama.

Torrijos campaigned on a platform of promises to fight corruption and crime, attract investment, and negotiate free trade agreements. 

He will replace outgoing President Mireya Moscoso, who was constitutionally barred from seeking another term.

Former dictator Omar Torrijos negotiated the 1977 treaty with the United States that bound Washington to hand over control of the Panama Canal to the Panamanian government in 1999.

The new Torrijos administration may oversee a proposed expansion of the Panama Canal at an estimated cost of at least $5 billion. An independent panel will decide on the proposed expansion later this year.

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Central Amrican treaty a 'building block'
U.S. trade rep sees double challenge for Latins 
Special to A.M. Costa Rica 

WASHINGTON, D.C. — Promoting trade and opening markets in Latin America is of great importance to the Bush administration as well as to the nations of the Western Hemisphere, according to U.S. Trade Representative Robert Zoellick.

In remarks Monday to the Council of the Americas conference here, Zoellick said that opening markets and promoting trade in the Americas is central to the Bush administration's vision of a world that trades in freedom.

Because many of the hemisphere's democracies are fragile, and struggling with populism or legacies of civil war or dictatorship, he said, the expansion of trade, openness and opportunity is important across the Americas as well.

"Never has there been a more important time to unite the Americas in open trade and growing prosperity," the U.S. trade representative said.

Zoellick noted that Latin America must not only confront domestic challenges, but must also confront global competitors, particularly India and China. He encouraged the nations in the region to prepare themselves to compete globally.

"I am pleased that the signs of continuing strong growth in the United States should create a better context for gains throughout Latin America . . . yet will Latin America be well positioned to benefit fully?" he asked. "Latin America needs to be positioned to seize the opportunity of the next upswing in global growth while also contending with global competition."

He outlined the benefits accrued by both the United States and Chile under the recently implemented U.S.-Chile Free Trade Agreement, including increased exports and jobs. To extend the benefits of trade throughout the hemisphere and globally, the Bush administration has worked to advance a three-pronged trade agenda, Zoellick said. The three tracks, he explained, are efforts to open markets through the World Trade Organization (WTO), the Free Trade Area of the Americas (FTAA), and bilateral or subregional trade talks.

Advancing this three-track trade agenda, Zoellick said, fosters competitive liberalization and increases the chances of each track moving forward.

In assessing prospects for progress in FTAA talks scheduled to conclude later in 2004, he noted that the United States has adopted a practical approach, as outlined in a Miami meeting of trade ministers in November 2003. Under the Miami framework, Zoellick pointed out, a common set of rules and obligations will be established for all 34 hemispheric democracies. More ambitious nations may also seek greater liberalization within the FTAA framework.

He acknowledged that it will take some time to work through different issues and define a common set of obligations. Once these issues are resolved, he said, "I expect the process will elicit a new dynamic to become a driver of trade, economic reform and development through the Americas."

In the meantime, he stressed that the United States is not standing still.

Instead, he said that through the North American Free Trade Agreement (NAFTA), the U.S.-Chile Free Trade Agreement, the recently negotiated U.S.-Central America Free Trade Agreement (CAFTA) (with Costa Rica, Honduras, Nicaragua, El Salvador, Guatemala, and the Dominican Republic), and the beginning of trade talks with Panama and Andean nations, the United States is creating the building blocks for the FTAA.

A.M. Costa Rica file photo
Zoellick speaks during a visit here

Zoellick said the United States is "exceptionally proud" of the CAFTA agreement. He added that it represents an opportunity to break from a cycle of civil and economic breakdown in the region, and U.S. neglect until these crises emerge.

"We can break this cycle," he said. "We must break this cycle by enacting CAFTA."

Zoellick said he is also "exceptionally pleased" to announce, at the council conference, that Peru and Ecuador will join Colombia in free-trade negotiations beginning May 18.

The USTR said the United States has been working intensively with officials from Peru and Ecuador to address a range of preparatory issues, particularly regarding investment disputes and workers' rights.

Although some important work remains, he indicated that "we are now positioned to welcome all three countries to the negotiating table."

Zoellick said that the United States hopes to add Bolivia to the U.S.-Andean free-trade talks in the future, and is working with that nation to improve its readiness.

Once the Andean trade talks conclude, he said, the United States will be well along a path to open trade with nations representing two thirds of both the hemisphere's population and non-U.S. gross domestic product.

The trade representative stressed the importance of increasing the capacity of hemispheric nations to ensure that they fully benefit from these agreements. 

He noted that capacity-building is an important component of the CAFTA agreement and will be a core element of U.S.-Andean trade talks. He cited the work of the Inter-American Development Bank, the World Bank, the Organization of American States, the Business Coalition for Capacity Building and others for their capacity-building efforts.

In addition to assisting the Americas to compete better globally, the United States is working to enhance the global economic environment, Zoellick said.

Zoellick said the United States has made a "determination to be optimistic" about the prospects for advancing the hemispheric trade agenda.

"The tasks are far, far from finished and there will be setbacks," he said. "Yet, with our neighbors' help, we are clearing the pathways to expanding trade, opportunity and hope throughout the Americas."

Treasury's Snow says Latin economy is improving
Special to A.M. Costa Rica

WASHINGTON, D.C. — U.S. Treasury Secretary John Snow says economic growth in Latin America is improving along with the recovery in the global economy, with the region's gross domestic product expected to grow 3.5 to 4 percent in 2004, after being flat to sluggish in the two preceding years.

Snow hailed the improving economy as "terrific news" in a speech to the Council of the Americas' annual conference here.

Central banks in Latin America have "wisely used the opportunity to increase their accumulation of foreign reserves to provide a cushion against future market turbulence," he said.

In addition, Snow said Latin American authorities have pursued "sound fiscal and monetary policies," pointing out that six of the seven largest economies in the region, Brazil, Argentina, Colombia, Mexico, Chile, and Peru, successfully 

increased primary budget surpluses to bring down debt levels over time and reduced or maintained low inflation in 2003.

Snow singled out Brazil and Argentina for special recognition for their achievements in monetary policy. Both countries, he said, experienced large currency depreciations in 2002, but "good monetary management prevented these depreciations from turning into inflationary spirals."

But even with such progress in improving economic stability in Latin America, Snow said, there are barriers that stand in the way of "higher long-run economic growth" in the region.

For instance, he said, government polices in the United States allow for the startup of a business in about four days, but in Latin America the average startup takes 70 days. Reducing the time for starting a business provides an enormous incentive for creating new jobs, he said. 

Jo Stuart
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