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(506) 223-1327        Published Thursday, Aug. 10, 2006, in Vol. 6, No. 158       E-mail us    
Jo Stuart
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Tactical units moved to prevent Limón unrest
By Saray Ramírez Vindas
and the A.M. Costa Rica staff

The labor situation in Limón and Moín is coming to a head, and a union leader said the Caribbean coast city is flooded with policemen in anticipation of trouble.

The situation is important because the docks of Limón and Moín handle much of the country's exports, including bananas, fresh fruit and other produce.

The members of the dock worker's union fear that the Arias administration will turn the ports over to private hands the same way the Pacific port of Caldera is being taken over by a concessionaire. They also want nearly $1 million that was promised to them in 2005 by the Abel Pacheco administration the last time there was trouble at the port.

The Arias administration said Wednesday that it will be happy to pay the money once a legal way is found to do so. The budget watchdog, the Contraloría General de la República, cut the funds from the Junta de Administración Portuaria y de Desarrollo de la Vertiente Altántica, which runs the docks now. In addition, a recent Sala IV constitutional court
decision has voided much of the 2005 agreement.

Dock workers have been engaged in a work slowdown, called in Spanish tortuguismo after the actions of turtles. Government officials fear highway blockades and a complete strike. That would cost shippers millions.

The union leader, Frederick Patterson, said that reporters overheard Arias discussing the privatization of the docks last June 2 when he was visiting Germany. The union wants ports, airports and the control of food production to remain in the hands of the state, he said.

Patterson said that some 60 to 70 tactical squad officers had been shifted to Limón by the government.

The union leader also complained that the government has not made sufficient investment in the ports for years and that port tariffs have not kept pace with inflation.

A Colombian-Costa Rican firm is taking over the grain and port facilities in Caldera on the Pacific this week. The company is expected to make massive investments to modernize the port.

A.M. Costa Rica staff/Saray Ramírez Vindas
From TV
to politics

Mishelle Mitchell Bernard, the former news anchor on Channel 7 Teletica, provides backup for President Óscar Arias Sánchez. She is the administration's new press spokesperson.

Arias says critics of his peacemaking have small, stingy spirits
By Saray Ramírez Vindas
of the A.M. Costa Rica staff

A growing concern among Costa Ricans surfaced Wednesday when a radio reporter dared to ask the president if he cared to comment on criticism that he should spend more time at home solving national problems instead of trying to be the world's peacemaker.

The president, Óscar Arias Sánchez, replied that his critics have to have a small, stingy spirit to label him for fighting to save lives anywhere. War, most of the time, doesn't have any sense, and no one is going to win, he said. If he had the opportunity to save human lives, the president said, he will take that opportunity. And, he said, he really doesn't care what his critics think.

Arias, a Nobel Peace Prize winner, had just finished talking to reporters about his weekend trip to Colombia. He went there for the inauguration marking the start of Alvardo Uribe's second term as president.

Arias said then that he was ready to help the Colombians end their five-decade civil war. He also had plans to meet with a Cuban official to
encourage Raúl Castro to enact democratic reforms, according to his Casa Presidencial. That second meeting did not take place because the Cuban official wanted to restrict the topics to be discussed. Arias said Wednesday he did not want people putting conditions to dialog.

The Arias administration also have been quick to criticize the war between Israel and Hezbollah and to push for worldwide controls on small arms.

Arias also has been working on a proposal to have developed nations forgive debts of developing countries if the developing countries agree to reduce military spending and apply the savings to social needs.

Meanwhile, Rodrigo Arias. the president's brother and minister of the Presidencia, issued a statement expressing pleasure at the results of an opinion poll on the first three months of the Arias government.

The poll, done by CID-Gallup for La República newspaper and the Repretel television group said that 44 percent of those polled thought the Arias administration was doing a good or very good job.

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San José, Costa Rica, Thursday, Aug. 10, 2006, Vol. 6, No. 158

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Bet on Sports case in U.S.
likely to be a long one

By the A.M. Costa Rica staff

The BetonSport Internet gambling case in the U.S. State of Missouri is going to be a long one.  Although a hearing to produce evidence is scheduled for Aug. 21, even U.S. Magistrate Judge Mary Ann L. Medler has said that the date is unrealistic.

The U.S. prosecutors asked that the case be ruled a complex one giving them more time for discovery. Lawyers for the defendants who were represented did not object to this ruling last week.

Prosecutors still are trying to figure out how to serve notice of charges on BetonSports because the company is physically located here and has administrative headquarters elsewhere. It says it employed 2,000 persons.

BetonSports, the corporation, did not appear at a hearing before U.S. District Judge Carol E. Jackson. The Department of Justice said that Steve Cohen, a lawyer who had been retained to advise BetonSports PLC said that his client had declined to appear at that time.

David Carruthers, the former BetonSports general manager has been fired by the company. This is presumably a strategic move to prevent service of a  summons and complaint. Until he was fired, Carruthers was a director of the company and in custody. He could have been served with the legal papers.

U.S. prosecutors are seeking a judicial ruling to determine if they have already made service on the company or if they have to do so via diplomatic channels.

Carruthers is expected to seek bail soon. A temporary restraining order against the company prohibiting it from taking Internet and telephone bets from the United States is in effect until Monday.

The complex 22-count criminal indictment against against 11 individuals and four corporations, including BetonSports, was unsealed July 17. Most have pleaded not guilty and have been released on bail.

Gary Kaplan, the founder of the company who lived in Costa Rica, has not been served with legal papers or arrested. He is believed to have left Costa Rica.

The broad racketeering conspiracy indictment alleges that the defendants agreed to conduct an enterprise through a pattern of racketeering acts, including repeated mail fraud, wire fraud, operation of an illegal gambling business and money laundering.

In a parallel action, a federal judge, responding to a civil injunction request, ordered four U.S. telephone companies to cut off telephone calls to BetonSports here in Costa Rica and told the gambling firm to return to U.S. bettors money held on their behalf. The civil injunction also told the company to put notices on its Web sites telling U.S. residents they could not place bets or gamble.

The U.S. government also is seeking $3.3 billion in back taxes on wagers taken from the United States and $4.5 billion more from Kaplan and other defendants.

The BetonSports case is being watched closely by the many other Internet gambling operations here.

New immigration law
turns into big mess

By the A.M. Costa Rica staff

Legislators are trying to figure out what to do with the immigration bill.

The measure is supposed to go into effect Saturday. The executive branch wants to change the effective date until December 2007. But there is not enough time to get that small change passed into law.

Lawmakers and Fernando Berrocal, the security minister, have been talking about the change for weeks, but the legislature would have to take two votes on non-consecutive days to approve the change.

Even if lawmakers pass a measure stating a new effective date next week, some lawmakers wonder if this action changes the status of a law that is already in force,

Meanwhile the proposal to delay the measure has met some resistance in the Asamblea Legislativa, mainly from the deputies of the Partido Unidad Social Cristiana, which passed the bill during the last session.

Berrocal, who has the immigration department in his ministry, argues that the government does not have the resources to enforce the law. President Óscar Arias Sánchez said some parts are draconian.

The law certainly cracks down on persons here illegally. It also would criminalize the act of being a coyote, that is a trafficker in illegal aliens. Trafficking is not a crime in Costa Rica now.

The new law also gives expats the legal right to apply for residencia sin limite after living in Costa Rica legally for three years. The official interpretation of the current law does not allow that. Residencia sin limite would entitle the holder to work. Pensionado and rentista statuses do not.

The new law also empowers the immigration police to enter workplaces to seek out illegal employees and it establishes fines for hiring illegal workers.

Berrocal was at the legislature Wednesday trying to arrange a deal. Lawmakers said he was receptive to a shorter delay in having the law go into effect.

Some lawmakers are suspicious of the executive branch's motives. Illegal workers, human trafficking and other activities made illegal by the new law are exactly the practices used by big agriculture producers and industrialists who exploit foreigners, mostly from Nicaragua.

The Roman Catholic Church also has come out against the new law because church leaders fear immigration raids of shelters that the church runs for illegal immigrants.
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San José, Costa Rica, Thursday, Aug. 10, 2006, Vol. 6, No. 158

A guest editorial
Analyst senses a stiff correction in real estate market

By Christopher Walraven*
Special to A.M. Costa Rica

The Costa Rican real estate sector over the next 18 months is going to go through a major correction, and will leave many foreign and local investors wondering what happened.

This sector was based on speculation and the belief was the market will continue growing unabated and at great multiples. Thus, again as everyone dreamed of making it rich or at least living a comfortable lifestyle hopes got ahead of the numbers.

Several things clouded most real estate speculative investors rational thinking and allowed for today’s current overbuilding. The housing market was moving along okay, but when the 2002 stock market correction happened this really changed the whole dynamics of the real estate market. The investor with money now needed a new place to park his or her cash, and of course real estate was the next answer. This opportunity also allowed small and new investors to enter the speculative market with interest rates at a 40-year low. To help matters, the industry introduced several new types of real estate loans to match any investor's needs. Thus the gold rush was on!

Capitalism worked great in this instance. It allowed many to get in early and flip the real estate investment, and the rewards were great. The problem is most are still holding on hoping for even greater returns, and, of course, some have just entered not knowing the cycle was nearing the downward spiral.

Why when it comes to money are humans so irrational? Did investors believe the market had no boundaries and would continue for years to come. The data was available for everyone to make a rational decision from rising interest rates, the median family income, to the labor and housing department data, consumer debit ratio, supply/demand, planning commissions, and sentiment on the street concerning personal finance (Michigan consumer sentiment index).

The speculation in markets like Miami and Las Vegas just shows how easy it is for one to lose sight of rational behavior. It was very evident that the market was providing too much supply and hoping for demand to continue. These markets have thousand of units just waiting for someone to purchase.

The many months to come will be a great time to be a buyer of real estate here in Costa Rica. The problem is that the seller in some instances will take 

What do the numbers say?

a terrible bath in the process. Win-win is best, but that just isn’t possible in most situations.

Mortgage companies also will begin to feel the pain. Foreclosure rates for this year alone vs. last year in the U.S. market are worth a look. Also new construction starts and the publicly trade home builder stocks are vital indicators.

With the fear of increasing inflation (oil) and the uncertainty with the current geopolitical situations popping up around the world, one worries about placing one's assets. The baby boom generation still has disposable income available for investing purposes, but the wealth effect they once felt has eroded, thus leaving them unsure of what to do next.

The market here in Costa Rica even as this is being written has seen large land transactions take place by foreign investors mostly from the United States. They are currently taking big risks to continue growth in their portfolio. The best advice now is to wait and see how tourism moves forward and what potential exists for new real estate transactions.

Costa Rica will see a flattening or decrease in tourism flow from the United States this upcoming season, which, of course, places even more burden on the market. This isn’t all bad. The market here in Costa Rica was getting way ahead of itself with housing prices, and this correction will allow for a future with real estate values more in line with similar properties elsewhere.

*Mr. Walraven, a San José businessman, has academic training in economics and is an observer of the regional financial scene. See another analysis HERE!

Relics of 17th century French saint will be venerated at cathedral
By the A.M. Costa Rica staff

Relics of a 17th century French saint will be coming to San José today and will be venerated at the Catedral Metropolitana.

The saint is St. Margaret Mary Alacoque, and she is not just an ordinary saint. She is the woman who popularized devotion to the Sacred Heart of Jesus.

According to her biography in the Catholic Encyclopedia, she experienced multiple visitations from Jesus, who encouraged her to promote the annual feast of the Sacred Heart.

She was a believer in corporal mortifications and injured herself so badly in her youth that she was
bedridden for four years, said the encyclopedia.

The relics, said to be two ribs, two clavicles and other body material will remain in the country until Aug. 17.  She died in 1690 and was canonized a saint in 1920.

The Catholic Church accepts many items as true relics of the saints, the Virgin Mary and Jesus. The precious metal contains in which the Virgen de los Angeles resides in Cartago is also said to contain a sliver of the true cross on which Jesus was crucified. Many Catholics here believe that, even though the creation of relics was a major industry in the Middle Ages.

Many believers say that persons can be cured of illnesses in the presence of the relics of saints.

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San José, Costa Rica, Thursday, Aug. 10, 2006, Vol. 6, No. 158

Venezuelan opposition parties agree on single candidate to face Chávez
By the A.M. Costa Rica wire services

Venezuela's main opposition parties have agreed to back a single candidate to challenge President Hugo Chavez in December elections.

The opposition Wednesday selected Manuel Rosales as its top choice to face the Venezuelan leader.  Other opposition leaders who had declared their candidacies agreed to step aside so anti-Chavez forces could stand a better chance.

The move to back Rosales, governor of the western Zulia state, prompted the cancellation of a primary
vote that was scheduled for this Sunday to select a single opposition candidate.

Earlier this year, Chávez threatened to call a national referendum on remaining in office until 2031 if opposition parties boycotted the December elections.

Rosales told a cheering crowd he will be the president of all Venezuelans regardless of their differences.  He has accused the president of spending the nation's oil wealth abroad to promote his leftist agenda, while many Venezuelans face hunger and poverty at home.  Chavez has said he is working to improve the lives of the nation's poor.

New bomb plot results in tougher rules for airline passengers
By the A.M. Costa Rica wire services

British police say they have disrupted a major terrorist plot to blow up aircraft in mid-flight using explosives hidden in hand luggage.

A statement released Thursday by British police headquarters says anti-terrorism squads arrested several people in the London area overnight as part of an intelligence operation that lasted several months.
Officials say they believe terrorists were planning to attack flights from Britain to the United States.

Authorities have dramatically stepped up security measures at British airports, causing considerable delays. Airline passengers are not being permitted to take any hand baggage with them onto planes. Airport staff are requiring passengers to check-in everything except for bare essentials such as passports and wallets.

Cuban officials begin the hunt for illegal satellite dishes that get U.S. TV
By the A.M. Costa Rica wire services

Cuba's Communist Party newspaper is signaling a crackdown on black-market satellite dishes used by citizens to get news from the United States.

The newspaper Granma said satellite television programming from the United States carries out the objectives of those who want to destroy the spirit of Cuba's 1959 Communist revolution.

As the official voice of the Havana government, such
articles in the past have signaled imminent government action.  The French news agency AFP quotes witnesses as saying a government hunt for some of the clandestine dishes has already begun.

Last week, Cuban President Fidel Castro, 79, provisionally surrendered power to his brother, Raúl, after undergoing what has been described as stomach surgery.  The Cuban population has since been eager for information.

Neither Castro has appeared in public since.

López Obrador supporters block international banks to push recount
By the A.M. Costa Rica wire services

Supporters of the man who narrowly lost last month's Mexican presidential election, Andrés Manual López Obrador, have blocked offices of three foreign banks in an effort to demand a full recount of the vote.

Demonstrators in México City blocked the offices of U.S.-based Citigroup's Mexican unit, Banamex, as well as the British bank HSBC and Spain's Bancomer.
Mexican electoral officials Wednesday were to begin a partial recount of votes from the July 2 election. The nation's top electoral court ordered a recount in 9 percent of Mexico's 130,000 voting stations.

López Obrador and his supporters are demanding a full recount of last month's election, in which he lost to conservative rival Felipe Calderón by six-tenths of one percent. The electoral court has until Sept. 6 to officially declare a president-elect.

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