President Abel Pacheco went to the nation Sunday night in his bid to win approval of his fiscal plan now in the Asemblea Nacional. This time he brought help.

Pacheco introduced Ronulfo Jiménez, who did the bulk of the talking. For every 100 colons that the Costa Rica government brings in, it spends 130, said Jiménez, coordinator of Pacheco’s economic council. 

Jiménez is the point man for the effort by the executive branch to get an emergency fiscal plan and a permanent fiscal plan through the deputies.

Jiménez said that the government was acting responsibly in urging fiscal reforms. He said honesty and austerity was the first of a three-pronged approach to the problem.

The problem is critical because nearly all observers agree that Costa Rica is insolvent with a high internal and external debt and an unbalanced budget due to ambitious social programs.

The second tactic being applied by the government is to increase the collection of taxes, said Jiménez. The third step is the fiscal plan, he said.

Jiménez said that the government was seeking not to raise the cost of living or interest rates.

The key element of the emergency and permanent fiscal plans is a value-added tax to replace the
 

Jiménez told television viewers that the value added tax would cover transactions that are not now subject to taxation. He stopped short of telling them that they would pay the tax. 

Pacheco signed off his weekly television spot by saying he did not doubt that deputies would approve the plan.

The government is trying to win support among the Costa Rica people for the fiscal plan which has run into some criticism among national deputies. Pacheco gave a pessimistic interview that La Nación published Saturday in which he said that unless the plan was approved Costa Rica could face bankruptcy.

Here are some reports on financial conditions in other Latin countries:

Colombia says it will need to raise about $4 billion next year to meet its debt and interest payments. 

Deputy Finance Minister Alberto Carrasquilla told investors and analysts Friday that Bogota hopes slightly more than half of the money will come from international lenders, with the rest to be raised from international markets. 

Carrasquilla said contingency plans call for tapping state enterprises, such as the oil industry, or raising the money on the local debt market. Colombian officials also say they are considering the sale of so-called "war bonds" in coming years to finance President Alvaro Uribe's promised crackdown on leftist rebels. 

México says its economic output expanded from April to June, pushing the sluggish economy into positive territory for the first time in 12 months. 

Finance ministry officials said Thursday that the gross domestic product, the value of all goods and services produced within a country, rose slightly more than 2 percent in comparison with the same period of 2001. 

Officials said the boost was due to four additional working days in the second quarter compared to last year's calendar, because the Easter holidays fell in March this year instead of April. Mexican officials say they expect the country's growth to be around 2 percent for the entire year.

RIO DE JANIERO, Brazil — Foreign investors continue to view Brazil's economic future with apprehension, despite a huge loan from the International Monetary Fund, announced earlier this month. Investor nervousness stems not just from the uncertainty surrounding the October presidential election, but also concern that Brazil may be unable to meet its debt obligations.

Brazil's risk assessment by foreign brokerage companies remains high, and the value of the Brazilian currency against the dollar continues to fall. Meanwhile, many foreign banks are restricting short-term credit lines to Brazilian companies. All these are signals of the growing crisis of confidence in Brazil's economic future.

The $30 billion IMF loan unveiled earlier this month was aimed at alleviating market concerns. But most of the IMF money will only be disbursed next year, if the new government that is elected in October maintains the current economic stabilization policies.

Foreign investors apparently consider this a big question mark, given the possibility that Brazil's next president may be a candidate of the left. Two left-wing candidates, Luiz Inacio "Lula" da Silva of the Workers Party and Ciro Gomes of a Workers Front coalition, are ahead in opinion polls. Both have strongly criticized the economic policies of President Fernando Henrique Cardoso, who will leave office at the end of this year, after eight years in power. 

Market hopes had been centered on the government party's presidential candidate, Jose Serra, as the man most likely to continue the stabilization policies favored by investors. But these hopes have dimmed, as Serra remains a distant third in the surveys. 

Political analyst David Fleischer said he tells foreign investors there seem to be few prospects that Serra can recover. He compares the Serra campaign to the 1968 presidential election in the United States.

"A lot of people are saying 'cut the umbilical cord, cut loose from Fernando Hernando Cardoso and begin showing your own program and your own ideas with some criticism of what's happened over 

the last 7.5 years.' It's very similar to Hubert Humphrey who was so loyal to [former US President] Lyndon Baines Johnson in 1968, that he only cut loose in October, too late to really win the election and beat Richard Nixon," Fleischer said. 

But investor apprehension over the outcome of the election is not the only factor affecting the markets. There is growing concern that Brazil may not be able to meet its debt obligations, especially as the cost of borrowing new money rises. Brazil's interest rate spread over U.S. Treasury bonds has risen to almost 23 percentage points because of market uncertainty. If that level persists, a Financial Times editorial warned this week, Brazil will be "insolvent and will default."

This gloomy view is becoming widespread. Mike Conelius, who manages the Emerging Market Bond Fund for the T. Rowe Price investment company, said Brazil and other Latin American countries simply have too much debt. 

"Brazil has a debt problem, and the IMF loan is debt, and debt has never solved problems. These countries have just far too much debt, and they have not done enough to try to reduce that debt stock or ease that burden over the years, and they're paying the price for it," Conelius said.

Brazil's debt is $250 billion, of which the government owes $75 billion to foreign private sector creditors.

President Cardoso maintains Brazil's economy is fundamentally sound, and that the current crisis is the result of market speculation, fueled by uncertainty over the October election. Cardoso told TV Globo this week that, if the new government continues his economic stabilization policies, there will be, as he put it, "nothing to fear." 

But the continuing market pessimism over Brazil's prospects seems increasingly hard to shake off. As the world's 10th largest economy, a financial collapse of the South American giant would be devastating internationally, something market analysts are very well aware of.

Conservation organizations in the United States and 25 Latin American and Caribbean countries will receive $3 million in grants for neotropical migratory bird conservation, according to the U.S. Fish and Wildlife Service.

About $318,000 of the money will go to five projects in or related to Costa Rica.

The service said that there are 341 species of migratory birds that breed north of the Tropic of Cancer and winter south of that line, including pelicans, cranes, bluebirds, owls and orioles.

Steve Williams, U.S. Fish and Wildlife Service director, said that migratory birds are essential to the maintenance of regional ecosystems.

The grant money will be used "to protect, research, monitor and manage these birds' populations and habitats, as well as in areas of law enforcement and community outreach and education," said the service.

The projects involving Costa Rica are, according to the service’s announcement:

1. The Organization for Tropical Studies at Duke University in Durham, N.C., will receive $58,135 to restore a wetland of international importance in Palo Verde National Park.  The park is astride the Tempisque River basin south of Liberia.

2. The Asociación BioGuanacaste, based in Liberia, Guanacaste, will receive $130,000 to purchase neotropical migratory bird habitat in the Area de

3. The Tirimbina Rainforest Center based in Milwaukee, Wisc., will receive $19,600  to protect and enhance habitat in the Rojas Forest extending from the Tirimbina Rainforest Reserve near Sarapiqui.

4. The Rainforest Alliance, based in New York, will receive $62,500  to build awareness of neotropical migratory birds, offer technical assistance to farmers and promote conservation through communication in the Bocas/Talamanca complex in Panamá and Costa Rica. The alliance will do the same in the Gulf of Honduras, Gulf of Fonseca and the Miskito Coast of Honduras and Nicaragua.

5. Research and Preservation for Costa Rica, based in Atlanta, Ga., will receive $47,645  to assist with neotropical migratory bird conservation by providing managers with technical tools, principally geographical locating devices.

The U.S. Fish and Wildlife Service is the principal federal agency responsible for conserving, protecting and enhancing fish, wildlife and plants and their habitats. The service manages the 95-million-acre National Wildlife Refuge System which encompasses nearly 540 national wildlife refuges, thousands of small wetlands and other special management areas. 

All of the grants involving Costa Rica require the recipient organizations to come up with at least an equal amount of money from other sources. In some cases, the U.S. contribution is about 10 percent of the project cost.

The Caribbean coast dodged the bullet this time with considerably less damaged caused by rain than had been expected.

Officials from the Ministerio de Obras Publicas y Transporte said they were waiting for river waters to drop further before they estimated the damage. But they said that major roads between Caribbean slope towns and the Central Valley had never been closed.

They urged motorists to be on the lookout for landslides and to travel in the daytime if they could.

Damage caused by three days of heavy rain, Starting Wednesday, were concentrated mostly in the Limón, Siquirres, Turrialba and San Carlos regions,. said the ministry. Officials also said that the highway from Limón to Sixaola was the most affected.

A bridge over the Río Bananito suffered structural damage, as did a bridge at Playa Negra in Cauita, said the ministry.

In the case of Turrialba Canton, the community of Santa Teresita suffered a partial loss of the dike holding back the Río Lara. Similar reports of damage came from Siquirres, where problems happened with the dikes.

The Río Pacuare and the Chirripó, Barbilla, Cimarrones, and Aguas Zarcas flooded and cut off some populated areas. However, the situation was no where near that of May 7 and 8 when millions of dollars of damage hit the Caribbean coast and the Turriabla area.

GUATEMALA CITY, Guatemala — The three judges of the 12th Criminal Court of Guatemala who were to try Casa Alianza's director for defamation Friday have excused themselves from the case, the child welfare organization reported. 

The trial has been suspended until the Supreme Court decides whether new judges in the 12th Criminal Court will proceed with the case or to transfer the case to a new court, an announcement said.

According to Casa Alianza, the legal impasse started at the beginning of August when lawyers representing Bruce Harris, the Casa Alianza's regional director for Latin American programs, presented arguments to illustrate that the defamation case against Harris by Susana Luarca should be held in a civil court rather than a criminal court. 

The 12th Criminal Court rejected the arguments and stated, in an August 7th ruling, "freedom of expression is only for journalists," said Casa Alianza. 

The fact that the judges stated their position before the trial had begun called their impartiality into question and so Harris' lawyers requested that the judges recuse themselves from the case, said Casa Alianza.

The magistrates refused Harris' request but then announced that they would in fact excuse themselves from the case citing the accused's questioning of their impartiality, said Casa Alianza.

Meanwhile, The U.N. High Commissioner for Human Rights, Mary Robinson, "urged Guatemala to implement international obligations to protect freedom of expression" in Guatemala. Proceedings against Harris appear to be the result of an overly restrictive interpretation of the right to freedom of expression in the country, she said in a statement posted to the U.S. Web site.

The case was opened in 1997 following a press conference where Harris named Susana Luarca as an individual involved in the trafficking of Guatemalan and Mexican babies for adoption in other countries. 

The woman lawyer, who at the time was married to the president of the Supreme Court, brought defamation charges against Harris. His lawyers have argued that the case should be heard in a special printer’s court where the penalties are much less.

Central American tv
on ministers’ agenda

Foreign ministers from Central American states will be meeting in San José Friday to discuss plans to establish a television station for the area, according to Roberto Tovar, Costa Rican foreign minister or chancellor.

This will be the first meeting of ministers since Costa Rica assumed the presidency of the Sistema para la Integración Centroamericana in July. The ministers also will discuss support for candidates to international bodies by politicians from Central American states, according to the announcement by Tovar.

Anti-terror school
raided in New Mexico

U.S. federal agents say they have seized over 2,000 small, unregistered military missiles at an independent counter-terrorism school training students from the United States and Arab countries. 

Authorities also announced Sunday that they had arrested the school's director earlier this week. The man, Canadian citizen David Hudak, was detained Thursday on federal explosives and immigration charges. 

The missiles that were seized are designed to penetrate through light-armored vehicles and bunkers. Investigators also found 450 kilos of explosives at the school in the U.S. state of New Mexico. The school is known as HEAT, which is an acronym for High Energy Access Tools. 

Students from Yemen and the United Arab Emirates are cooperating with the investigation. Many of the students were training to become counter-terrorism agents. Officials from the school say their activities have never been secretive. 

A U.S. official from the Bureau of Alcohol, Tobacco and Firearms says he doesn't believe the school was involved in terrorist activities. 

Polish diplomat to visit

The Polish vice minister of foreign relations will be visting Costa Rica Tuesday, according to Elayne Whyte, vice chancellor in Costa Rica. The topics include possible technical cooperation between the two countries and commercial themes, she said.

LIMA, Peru — Peruvian First Lady Eliane Karp has resigned her $10,000-a-month bank consulting job after a newspaper story about the undeclared contract with the bank triggered a public outcry.

Ms. Karp sent her resignation letter to Banco Wiese Sudameris Thursday, saying she is the victim of political harassment. The first lady also maintained the contract was legal.

An opposition newspaper recently revealed Ms. Karp's consulting job, setting off a political firestorm. The contract has raised suspicions of influence peddling, charges she denies. 

Last Monday Peruvian President Alejandro Toledo made an emotional plea for citizens to respect his Belgian-born wife and her right to work. President Toledo also condemned criticism of his wife as politically motivated. 

Ms. Karp says she has had no salary since her husband took office last year. The first lady also says this is the first time she has had to rely on her husband's income. 

The first lady left her consulting position at the urging of Banco Wiese Sudameris chief Eugenio Bertini. Peru's jailed former spy chief, Vladimiro Montesinos, is said to have had accounts at the bank. 
 

Costa Rica ratifies
Kyoto accords

Costa Rica has become the 79th country to ratify the Kyoto Protocol with the publication of its position in the official publication of the United nations.

The protocol is an important instrument "that shows a decision by our country for the defense and protection of the environment for the benefit of humanity," said Roberto Tovar, chancellor.

The protocol sets goals for the reduction of gas emissions that have been linked to global warming. Some 84 countries have signed the document and five still await ratification. 

The United States, one of the main consumers of petroleum products in the world has decided not to support the protocol.

Earthquake hits nearby

A 4.5 magnitude earthquake struck about 4:19 p.m. Thursday just off the Nicaraguan coast in the Caribbean at a point just north of the border with Costa Rica, according to the U.S. Earthquake Information Center. 

The quake was about 44.7 kms. deep (about 28 miles), said the center.
 

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