A.M. Costa Rica

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These stories were published Monday, July 26, 2004, Vol. 4, No. 146
Jo Stuart
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OAS envoy stresses value of property rights
By the A.M. Costa Rica staff

WASHINGTON, D.C. — Strong property rights are a prerequisite for investment and economic development in the Americas, according to a high-ranking U.S. diplomat.

"Secure property rights are one of the basics of a functioning economy and society," said the diplomat, John Maisto, because "access to capital depends on a robust and stable property rights regime, so that individuals and businesses have collateral for taking out new loans that allow them to reach new goals."

Maisto is the U.S. envoy to the Organization of American States. his comments came at a talk here Friday.

"In many countries in our hemisphere, the lack of secure property rights is a big barrier to getting credit, and a big barrier to development," Maisto warned. According to  Peruvian economist Hernando de Soto, Maisto said, "the total amount of unregistered assets, or

'dead capital,' in Mexico alone amounts to some $315 billion." Others "may or may not agree with de Soto's estimate, but I think they'll agree that whatever the cost" a society incurs for property of disputed or uncertain ownership, "it is enormous," he added.

A.M. Costa Rica has been reporting for four months on the property rights situation in Costa Rica.  Articles, mainly by Garland M. Baker, have shown that recent registry legislation has provided opportunities for crooks to steal property. He also has shown that possession is frequently recognized as a stronger right than legal ownership, thereby encouraging invasions of property.

A scandal involving the new contralor general de la República shows that lawyers frequently do not follow the law when notarizing real estate documents. Alex Solís, the contralor general, is in trouble with the Asamblea Nacional that appointed him because he has admitted signing other people’s names to legal documents and then notarizing them.

Uncle Sam wants her for the Army — again!
By the A.M. Costa Rica staff

A Costa Rican native who served 20 years in the U.S. Army is returning to active duty. She is Ileana M. Guerra, who is well-known to U.S. veterans in the area because she is associated 

American Legion Post 16 photo
Ileana M. Guerra
with the American Legion and the Veterans of Foreign Wars.

A Legion spokesman said that Ms. Guerra retired from the U.S. Army in 1986 as a sergeant first class. She had served as a senior personnel sergeant, drill sergeant, language specialist and a special projects non-commissioned officer evaluating the position of women in the service.

When she retired she returned to Costa Rica and her family in San José. She had acquired U.S. citizenship in 1969.  She has worked as a translator and interpreter since.

She has been service officer for the Sergeant First Class Raymond Edison Jones Jr. American Legion Post 16. She is a life member of VFW Post 11207.

Ms. Guerra reports for duty a week from today at the Army’s Human Resources Command, Casualty and Memorial Affairs Division, in Alexandra, Va., said the Legion report. The U.S. military services have been shorthanded due to the Iraq war and other security commitments both at home and abroad.

Cops grab trio in Alajuela as suspects in armed carjacking
By the A.M. Costa Rica staff

Police arrested three men who are suspects in robbing a motorist of his car at gunpoint. The arrests happened Friday night after a motorist lost his car to gunmen on the Carretera Bernardo Soto about 10 p.m.

The vehicle was quickly located in Montserrat de Alajuela behind the Mall Internacional. The 

driver took off at high speed when he saw police but drove into a street without an exit, officers said.

The men, identified by their last names of Villalobos Zumbado, Miranda Delgado, and Herrera Solís, are part of a larger gang who prey on motorists who stop at traffic lights or otherwise leave themselves vulnerable to gunmen, said police.


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Who’s minding
the kitchen?

Even the chefs showed up among the 43 employees of the Hotel Corobici who met Friday for a workshop on the recognition and prevention of commercial exploitation of children. María Teresa Guillon of the private Fundación PANIAMOR was the lead presenter. The workshop is one of many being set up for the tourism industry here.

Saray Ramírez Vindas/A.M. Costa Rica

Pacheco blames 'powerful group' for tax plan delays
By the A.M. Costa Rica staff

President Abel Pacheco blamed small but powerful egotistical groups for financing a campaign of deputies who have placed obstacles in the path of approving his proposed fiscal reform package.

Pacheco said that those in the Asamblea National opposing the package of new taxes claim they do not want to give more resources to the government. But Pacheco said the government was not asking for anything for itself but for schools, roads and housing for poorer citizens.

Pacheco made his comments at the traditional meeting of his cabinet in Nicoya to commemorate the decision 180 years ago by Guanacaste officials to join the territory to Costa Rica. The session was in the Parque Central de Nicoya.

He was speaking on the same day that a survey published by La Nación, the Spanish language daily newspaper, showed that more Costa Ricans think that their lives have gotten worse and that corruption is rampant.

Costa Rica, today after 180 years, has made itself greater, richer and more beautiful thanks to what he called a noble decision, said Pacheco, speaking of the annexation of the territory.

Pacheco also announced that he was establishing a new layer of government, a regional council that will be one of five that will cover the country.

The idea, said Pacheco is to rescue and restore the regional structure and create a way to coordinate action within the area by local governments and businesses. The Ministerio de Planificación Nacional y Política Económica will oversee the council.

Pacheco was on a weekend swing in Guanacaste. Saturday he visited a housing project in Palmira where he also pushed for passage of the new tax package. The measure is estimated to raise $500 million a year in new revenue for the government.

The plan is stalled in the assembly because some deputies have appealed the manner in which it has been considered to the Sala IV constitutional court. Although the final decision rests with the legislature, the executive branch has embarked on a publicity campaign to win public approval.

Pacheco has stated repeatedly that it is only fair that the rich pay more. His comments were directed mainly at the Movimento Libertario, which has opposed the new taxes and has used parliamentary procedures to slow the approval process.

In his talk Sunday, Pacheco said these obstructionists were saying no to national development.

The tax package raises rates, imposes a value added tax instead of a sales tax, strengthens the tax collecting agency and seeks to tax income of residents regardless of where the money is generated, so called global taxation.

Dominican Republic
to sign on Aug. 5

Special to A.M. Costa Rica

WASHINGTON, D.C. — A signing ceremony has been scheduled here for Aug. 5 so the Dominican Republic can officially join the Central American Free Trade Treaty. U.S. and Dominican officials  will join trade ministers from Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua for the event.

The U.S. Trade Representative Robert Zoellick made the announcement Friday.

The United States concluded a free-trade agreement with the Dominican Republic March 15. Under the new agreement the Dominican Republic will be added to the Central American Free Trade Agreement, known as DR-CAFTA.

"Adding the DR to the CAFTA also adds to the compelling economic logic of the CAFTA, by expanding the size of the market covered by the agreement by more than one-third," Zoellick said.

"Our DR-CAFTA trading partners make up the second-largest market for U.S. exports in Latin America, behind only Mexico," Zoellick added.

Combined total goods trade between the U.S. and the original five Central American countries was $23.6 billion in 2003. The addition of the Dominican Republic represents an additional $8.7 billion in annual two-way trade, for a combined total trade relationship of approximately $32 billion. Some 80 percent of Dominican Republic  imports already enter the United States duty free under the Caribbean Basin Initiative, Generalized System of Preferences and Most Favored Nation programs. The country will provide reciprocal access for U.S. products and services.

The Central American treaty still needs approval by the U.S. Senate as well as the legislative bodies of the other countries involved.

All roads leading
to Cartago soon

By the A.M. Costa Rica staff

The Fuerza Pública will be reinforced by two helicopters as part of the plan to provide protection for pilgrims to Cartago.

The pilgrims already are hitting the roads in the far reaches of Costa Rica and other points in Central America timing their departures so they can arrive at the Basilica de la Virgin de los Angles a week from today. The big rush will come next Saturday.

The Fuerza Pública started its security plan Saturday. In all some 1,300 Fuerza Pública officers will be involved along with other agents from the Ministerio de Gobernación, Policía y Seguridad Pública. Ministry officials outlined their plans Friday.

They join some 400 transit officers working for the Ministerio de Obras Públicas y Transportes. Also on the job are firemen, Cruz Roja rescue workers, the Comisión Nacional de Emergencia and the Systema 911.

The Fuerza Pública alone will field some 35 vehicles and 40 motorcycles along the various routes to Cartago. The helicopters will be used mainly to airlift any injured. During a typical pilgrimage, several persons will be hit by vehicles.

Rogelio Ramos, minister of Seguridad Pública, said that the effort will cost 21.1 million colons, some $48,000.

Ramos cautioned pilgrims to protect their children and to leave valuables and cash at home. He also suggeted they walk in groups and avoid deserted areas.

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There are clues to economic future
Those who do not remember history are . . . . 
By Walter Fila*

Why is it that certain countries think the laws of economic gravity don’t apply to them? A.M. Costa Rica’s July 22nd analysis of the news brings to the fore just how much the Costa Rican politicians, labor leaders and people are suffering from delusions of merry economic times ahead. 

The slippery —  and dangerous — slope of spending more than you have coming in applies to individuals, businesses and countries alike. It’s an economic law. Unlike individuals and businesses, when countries go broke, millions of persons get economically hurt and hurt bad. Everybody knows that. So why is it that Costa Rica thinks it is the exception to the rule? 

A response from a reader

Do the Ticos have such a short memory that they forget what happened to the worth of their currency in the early 1980s when it was devalued 500 percent because the administration at the time refused to put the house in economic order to make the country eligible for international bailout loans. 

How would you describe your feelings, if, within a two-year period, your savings were worth only 1/5 of what they were before that period and it took fives times as many colons of your salary to buy something imported. You’d be unhappy and suffering . . . and you would remember! Strange how short memories have people going down the same rocky road more than once.

How would describe someone who watches his neighbor’s house burn to the ground and takes no precautions to avoid the same happening to his? As they would say in the hill country of West Virginia, "That fella ain’t got much good sense in his haid." 

It was there for the whole world to see, including the Costa Ricans, when Argentina’s economic house recently burned almost to the ground for spending more than it could afford and indebting itself much beyond its capacity to pay. Before, the value of the Mexican peso had plummeted for the same reason. "Sabadazos" were much feared common events by the people in those days. Friday afternoon the currency exchange rate closed at a certain figure, Saturday (Sábado) a new rate went into effect, 

always considerably higher to buy U.S. dollars than the day before. 

What makes otherwise intelligent human beings act so foolish, so blindly? Whatever it is, the Ticos are afflicted by it. A recent editorial in one of the major local papers dealt with the consequences of the affliction, pointing out that unless sound tax reform legislation is passed and the government gets a handle on expenses, meaning the fiscal deficit is reduced, an economic disaster looms ahead.

When the total government debt reaches 50 per cent of the Gross Domestic Product, the slippery slope is no longer a slope; it is a straight down precipice. Costa Rica is on the brink with red lights flashing everywhere. What would be your company’s economic situation — or yours personally — if you had to pay more than a third of your hard earned colons, dollars, euros or shekels just to meet your debt obligations? Not very healthy, right? 

Costa Rica’s debt service, according to the treasury minister, requires 36 percent of its revenue. On top of that, add 32 percent for government salaries plus another 14 percent for pensions, and the remaining 18 percent of the revenue doesn’t go very far toward meeting other government needs. No wonder the roads are bad, the jails are woefully overcrowded, the public schools have three shifts a day, the Foreign Office takes money from Taiwan to cover certain salaries, and the country is de facto dollarized. 

Is revenue generated from a tax reform going to pay down on the debt? Is the lid on the spending pot going to be kept on in order that the country not go through another crisis time like in the 80s and not have to dig among the ashes like Argentina and Mexico did to economically rebuild? 

"Never," says the head of the public employees union . . . with a lot of congressmen echoing the same sentiment. These enlightened leaders want the Costa Ricans to live with dignity, no humiliating belt tightening for the people. Why not? In Costa Rica economic laws don’t apply. Slippery slopes don’t exist and precipices go out straight, not down. The West Virginia hillbillies got it right . . . "Them fellas ain’t got much good sense in their haid . . . nor much memory neether."

*Mr. Fila is a reader from Ciudad Colon.

When all the saints go marching out on you
Today we have two sayings because I feel they are related. 

Quedarse sin el Santo y sin la limosna: being left with neither the saint or the collections box for the saint. 

And Atengase al Santo y no le reze: trust your saint, and do not give him a prayer. 

We use these two mostly to illustrate that even if someone thinks he or she is very smart by hiding a secret, in the end s/he could end with nothing. And, of course, you must pay tribute to those who help you before, so they will continue to help. 

Example: a man with two girlfriends. He may think he is very smart, but when the truth comes out, he will be left alone. Cover-up does not pay. 

Life likes to play games on us. We try to cover too much, and at the end it's hard to enjoy it all. When my friends and family from the States come to visit, they want to do one million things in one week, go to the beach, the maintains, the volcanoes, the water rapids, etc. 

Other friends tell me "Don't worry we'll take the bus to the beach in the morning and be back by the evening." Although that is possible, they will spend at least two hours on the bus to get there and two hours more coming back. That’s four hours out of six sunny hours, plus they would like to rinse the salt off their bodies before they get to the bus. 

When I explain all of this [mostly to those who have never been in Costa Rica], they say "But the country look so small on the map." I suggest spending three days in every spot. One day to drive to get there, rest because, as we all know, driving in Costa Rica is a test for any tranquilizer in the market. Enjoy one full day, and the next day move to the other spot. 

That way you will have the best vacation and not atengase al Santo y no le reze. Be prepared to encounter a Pepsi truck full of bottles in the road, 

way we say it

By Daniel Soto

or worse, an oil tanker that is turned over and no one can go around. 

So no se quede sin el Santo ni la limosna. Always have an extra day to rest before you get back to where ever is home. I always have another plan at hand, but it's too complicated to be able to write it down here. But since I know Costa Rica quite well, as soon as I see the presa de carros, the line of cars, I take the map out and study an alternative route to get to my destination. But you need a good car and a good driver for that. 

Sometimes we are so sure things will go our way that we are not prepared for any variation. But, if things do not come out the way they should be, then you have trusted too much in your saint and not given him enough attention by praying. S/he did not make the miracle. Now you have neither the saint nor the collection box that came with the saint.

So my advice is be sure you give enough attention to your saint, because you certainly will like to have the little collection box for a rainy day.

Daniel Soto divides his time between Indiana and Costa Rica, where he owns a home in Santo Domingo de Heredia.

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First step
for hotel

Heavy equipment cleaned out a spot last week for a new Casino Club Colonial hotel just south of Avenida 3 between Calles 9 and 11.

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Downtown San José may be getting new casino hotel
By the A.M. Costa Rica staff

The Casino Club Colonial has begun to move dirt for a downtown hotel, although the mangement is not anxious to outline plans.

The spot is just north of the existing casino structure. Older homes were demolished for the project. 

The action shows optimism in the downtown area which has struggled with the diversion of tourists to the Daniel Oduber Airport in Liberia, plus the worldwide economic downturn. 

The nearby Hotel Del Rey has shelved  plans for its hotel at Avenida 1 and Calle 9.

The Colonial has had troubles with municipal officials for other projects. A refurbished restaurant-casino across Avenida 1 from the front entrance to the casino remains closed due to what employees call permitting problems.

And the casino was targeted by municipal officials who closed down its sportsbook during the afternoon of Superbowl Sunday. The sportsbook remains closed, and bets are being taken by telephone, according to a sign posted on the desk.

Judge refuses to issue warrant for former Mexican president 
By the A.M. Costa Rica wire services

MEXICO CITY, México — A judge has refused to order the arrest of former President Luis Echeverria on charges that he ordered the massacre of students in 1971. 

Media outlets in Mexico City report the judge dismissed the charges because the alleged crime occurred more than 30 years ago, beyond Mexico's statute of limitations. 

Echeverria was indicted Friday by a special prosecutor appointed by President Vicente Fox to investigate the killing of protesters during a peaceful demonstration in Mexico City. 

Echeverria, in office from 1970 to 1976, faced the prospect of becoming the first Mexican president to face criminal charges. The 82-year old former president says he is innocent. 

Prosecutors say they may appeal.

World Bank says rural development project was looted in Bolivia
By the A.M. Costa Rica wire services

The World Bank says Bolivian courts have convicted 15 people for corruption on a rural development project that was financed by the bank. 

In a statement, the bank says its officials first discovered evidence of fraud on the nearly $63 million project in 2001 and informed Bolivian authorities. 

It accused project officials, bid evaluators and 

contractors of being involved in manipulating bids, requesting bribes and paying for work that was not completed. 

The bank statement also quoted Bolivia's attorney general, Oscar Crespo, as saying the investigation shows Bolivia does not ignore corruption.  Another 15 people are awaiting trial in the case. 

The World Bank says the project was intended to boost rural development in the departments of Beni, Tarija, Potosi, Cochabamba and La Paz.

Jo Stuart
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