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These stories were published Friday, Nov. 28, 2003, in Vol. 3, No. 236
Jo Stuart
About us
New tax on rentals 
and health care
on the agenda today

By the A.M. Costa Rica staff

Although nothing is final yet, the Costa Rican government probably will levy a 6 percent taxes on house and apartment rents and also on private medical care.

But tuition to private schools probably will be exempt.

That’s some of the high points of the proposed fiscal plan being finalized in the Asamblea Nacional. The special commission studying the measure has until Sunday to report its findings.

One of the centerpieces of the plan is a value added tax that would cover most economic activities in the country. The plan would raise far more money than the current sales tax and would be invisible in most transactions.

Value added taxes are assess on the change in value of a product at each step of the production process. and the end-user pays the tax but usually as a higher cost for the product.

Legislators plan a 13 percent value added tax that would be far broader than the current sales tax, which does not cover professional services or rents.

The special deal on rents is a reduced amount, some 6 percent, and only would cover rents in excess of about $360 a month., However, since the amount is expressed in colons, each month more and more rental contracts will become subject to the tax due to currency depreciation.

The legislature, top-heavy with lawyers, is expected to exempt the legal profession from the value added tax, too.

Certain basic foods, transportation and certain medical devices are listed as being exempt. But this, too, could change. Some of the decisions are political in that taxing taxi fares would result in some angry protests from taxi drivers.

The tax plan in some form is likely to  pass because most political parties favor it, although negotiations on specific points continue. For expats who rent, passage would mean an immediate 6  percent jump in housing costs because most foreign residents occupy properties where the rent is higher than $360 a month.

Figuring the change in utility costs is more difficult because the current tax would be eliminated and the new tax applied. Some proposals exist to exempt basic telephone service and certain utility amounts from the tax..

The tax on imported goods will be a complex matter resolved only by the fine print.

The commission also has to decide if it will go along with the government and assess an income tax on money earned outside the country by persons living here, the so-called universal tax.

How about RACSA?

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Living in Costa Rica

. . .Where the living is good

By Jo Stuart

Some thoughts about food
and Thanksgiving 

This is the week that some North Americans celebrated Thanksgiving. (Canadians celebrate their Thanksgiving the second Monday of October.) 

For most people Thanksgiving means Feast. It is a time when we all eat a traditional meal, which for many is turkey with dressing, cranberry sauce, often sweet potatoes, mashed potatoes and gravy and several desserts, usually pies. This, legend has it, is what the Pilgrims in the New World shared with the native Indians.

Traditional food is important to people all over the world. Especially if they find themselves in a foreign country and are feeling a bit homesick. Traditional food is comfort food. Eating what we ate back home is about the last thing any expat gives up, if they ever do. I have heard Costa Ricans say that Ticos have not eaten until they have had their rice and beans.

When I was studying anthropology I was interested in if and how the different foods people ate and how it was served, influenced their behavior and view of life. In tribal societies feasts were an important part of life, sometimes taking days to prepare by the elders, men and women alike and just as long to consume. 

In countries like France and Italy, shopping and preparing food and then enjoying it, is still an important time-consuming part of every day. The important meal is often at midday. In the United States (where people work longer hours and get fewer vacation days than in Europe), lunch is often a "grab a bite to eat" affair prepared by teenagers in a fast food restaurant.

With immigration, people in different countries have been exposed to foods from around the world. The influx of immigrants to a country usually means ethnic restaurants and the inclusion of new foods in one’s diet. This has happened mainly in the industrialized countries of the Western World to where the refugees of the world’s disasters flee.

In Costa Rica in the past, the most popular foreign restaurants have been the fast food restaurants imported from the United States, with a few exceptions, mainly Chinese. Tin Jo’s, a long-time restaurant here, was once exclusively Chinese. Today one can sample dishes from all over Asia. 

Now Globalization is bringing a variety of foods into countries that once offered a somewhat limited local diet. I had an interesting conversation with another expat, a gentleman from France. He is involved in holding gourmet dinners and introducing people to French food and wines. Many of his clients are Ticos, working people who want to expand their experience and knowledge of the food and wines that are now available. (Upper class Costa Ricans, who can travel extensively, have long enjoyed the fruits of the world.)

So this was the week of Thanksgiving, and by the time you read this, I hope I shall have enjoyed a lovely stuffed turkey and all the trimmings now available in Costa Rica. I will also be thinking about all of the things I am thankful for in this complicated world. 

Would that life were more simple and elsewhere enemies could still put down their weapons, smoke a peace pipe and share a true Feast of Thanksgiving.

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U.N. Assembly acts to ban
practice of shark finning

Special to A.M. Costa Rica

NEW YORK, N. Y. — The United Nations General Assembly has formally adopted a resolution that highlights the depletion of the world’s shark population and takes steps to ban the practice of shark finning. The resolution approved this week contains the strongest language to date to address the practice of shark finning internationally.

U.S. negotiators, including representatives from the State Department’s Bureau of Oceans and International Environmental and Scientific Affairs and the Department of Commerce, proposed in July that the U.N. promote shark conservation.

Shark finning is a wasteful practice that involves killing sharks for their fins and discarding the carcass. Shark fins are used for a traditional Asian soup that can cost as much as $100 a bowl.

The resolution urges countries to adopt conservation and management measures to ensure the long-term survival and sustainability of sharks, and to consider banning the practice of catching sharks solely for the purpose of harvesting shark fins. It also encourages a global assessment of shark stocks.

The resolution comes as shark populations are dwindling worldwide. Shark populations are particularly vulnerable to overfishing because of their slow growth, late maturity, and small number of offspring. As a top predator, sharks play a key role in equalizing marine ecosystems.

 The resolution adopted today is in keeping with the Shark Finning Prohibition Act, a U.S. law that bans the practice in federal waters and directs the U.S. to work toward international finning restrictions and increased shark research worldwide.

Anthropology congress
begins Tuesday here

By the A.M. Costa Rica staff

The III Congreso Costarricense de Antropología, a gathering of archaeologist and anthropologists, opens Tuesday in San José.

The event runs until Thursday and features round, presentations of academic work and discussions.

The event will be at the Museo Nacional, The preliminary program says that topics as diverse as soccer football, ethnicity and prehistoric rock art will be discussed.

The free trade treaty negotiations and a look back at accomplishments in archaeology also are on the program.

Two found dead
after landslide hits

By the A.M. Costa Rica staff

Police and rescue workers found a 42-year-old man and his 31-year-old companion dead Thursday, the apparent victims of a landslide at Playa Azul near Golfito.

The victims were identified as Rodolfo González and Yamileth Lobo Rodríguez.

Officers from the Estación de Guardacostas and the Fuerza Pública used a boat to travel the estimated 10 kms. (6 miles) from Golfito to respond to the report that a slide had destroyed a dwelling. The spot was an isolated one.

U.S. sends out experts
to find hepatitis origin

By the A.M. Costa Rica wire services 

A team of specialists from the U.S. Food and Drug Administration is traveling to Mexico in an attempt to find the cause of a deadly hepatitis A outbreak in the United States. The outbreak is blamed for the deaths of at least three people and the sickening of hundreds of others in four states. 

A significant part of the investigation will focus on four suppliers of green onions, which have failed to meet stringent health regulations. Dr. Javier Trujillo who is the health director at Mexico's Agriculture Ministry explains that three of the companies are owned by U.S. citizens. 

Although the contaminated onions have not been traced to the four firms, Mexican authorities are inviting an FDA team to work with Mexican specialists to find the source.

Trujillo explained why conditions did not meet standards at the four packing houses in question: 

"The misses were, quality of water for washing the onions in order to get rid of the dirt," he said. "And secondly the quality of the water in order to produce the ice in order to pack the onions."

Although nothing has yet been proven, Mexican onion growers and exporters are witnessing a large decline in their sales as hundreds of orders are canceled. 

Following the recent bi-national commission meeting in Washington, Mexico is pledging to further tighten its health checks system and create disease free, certified zones for its agricultural produce. 

Argentina bracing
for terror attacks

By the A.M. Costa Rica wire services 

BUENOS AIRES, Argentina — Security agencies here are on high alert for a possible terrorist attack. Officials who issued the warning say U.S. and European interests could be targeted. 

Argentine Defense Minister Jose Pampuro confirms that Argentina has received intelligence from national and international agencies warning of a possible terrorist attack. 

Pampuro told local radio that the attack could affect American, British or Spanish interests. All three countries have strong business, political, and cultural ties with Argentina.  Argentina did not send troops to join the U.S. and British-led invasion of Iraq this year, but Spanish soldiers are serving there. 

 Embassies throughout the capital here are taking precautions against possible attack and security has been stepped up at border crossings throughout South America's second-largest country. Argentina shares the lawless "tri-border" region with Paraguay and Brazil, an area that the United States has long suspected of harboring Islamic militants. 

 Argentina experienced two deadly terrorist attacks in the 1990s. A bomb exploded at the Israeli Embassy in Buenos Aires in 1992, killing 29 people. Two years later, a car bomb destroyed a Jewish Community Center leaving 85 dead. 

 Argentina suspects Iran was involved with the Jewish Center attack, an accusation that Iranian officials deny. Both terrorist attacks remain unsolved. 

Angel of Love is topic
of theater open house

By the A.M. Costa Rica staff

The Angel of Love Foundation will be the topic at the open house of the Little theatre Group Monday.

The foundation supports the Tom and Norman Home for Unwanted Adults in Guápiles. A documentary about the home will be shown at the open house.

The open house is at the group’s theater in Bello Horizonte and runs from 7 to 9 p.m. More information is available at 289-3910.
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Resident arrested here is wanted in United States
By the A.M. Costa Rica staff

A man arrested Nov. 11 in a domestic violence case is really a drug trafficker wanted in the United States, according to investigators.

They identified the man as Ricardo Armenta, but said that he had been living in Costa Rica as a Peruvian with the name of Richard Giovanni Aldana Villegas.

The man came into police hands in San Pedro de Montes de Oca when he was held for investigation of attempted murder and threats against his female companion, said a release from the Ministerio de Gobernación, Policía y Seguridad Pública.

Officials said an  extensive investigation was needed to link the arrested man to the person wanted in the United States. The Judicial Investigating Organization, the International Police Agency (INTERPOL), the U.S. FBI and the U.S. Drug Enforcement Administration were involved.

Armenta is of Colombian birth but a naturalized U.S. citizen, investigators said. He is wanted to face a charge of conspiracy to possess 24 kilos (55 

pounds of cocaine) with intent to distribute. The case is in federal court in the eastern district of Louisiana, officials said.

The investigation showed that under the identity of Richard Aldana the man entered Costa Rica in 1995 
Ricardo Armenta
with a Peruvian passport.  That same year he sought residency on the grounds that he was married to a Costa Rican. He became a Costa Rican citizen Aug. 11, 2002, officials said.

Investigators are contacting Peruvian authorities to try to learn how the man came to have a passport from there.

The United States began the extradition process 

Thursday in the Juzgado Penal of the Tribunal Penal of the Primer Circuito Judicial. Meanwhile, the man is in jail for three months of preventative detention on the San Pedro charge. That decision was made Nov. 12.

Chavez issues warning in advance of petition drive
By the A.M. Costa Rica wire services

CARACAS, Venezuela — President Hugo Chavez has warned opposition groups he will not tolerate any attempts to stir unrest during an upcoming petition drive seeking a referendum on his rule.

During a speech Wednesday, President Chavez said he is prepared to call in the armed forces if he detects any attempts to promote violence or subversion. He also said the government would take over any television stations he felt were supporting such activities.

Chavez noted that his government has evidence 

that dissident military officers and others may be plotting a coup attempt.

Opposition members will begin a four-day campaign today to collect 2.4 million signatures which would force a referendum vote next April on Mr. Chavez's presidency. 

Opponents accuse the president of attempting to establish a dictatorial regime and say he has mismanaged the economy. 

Chavez denies the allegations, accusing his adversaries of trying to grab power to regain lost privileges rather than to improve living conditions.

Boring euro turns out to be a sleeper of sorts
By the A.M. Costa Rica wire services

There was an uproar in European financial circles this week when France and Germany evaded punishment for breaking rules governing the euro currency. But the euro remains very strong, despite the controversy. 

The euro recently hit an all-time high value of $1.20. That is a striking increase from a value of just 88 cents when the euro first became a hard currency last year.

The euro has risen, despite slow economies in the countries that use it, and despite budget deficits in its two most powerful countries, France and Germany. Their deficits have exceeded the 3 percent limit for the past two years, with no sign of improvement next year. 

Experts offer several reasons for the euro's strength.

One is what former president of the German Central Bank Hans Tietmeyer calls the collective structure of the eurozone, which gives it protection. He says, in the past, an economic slowdown or large budget deficit in one country would have hurt its currency. But with 12 countries sharing the euro, problems in one or two countries can be compensated for by strengths in the others.

"With their own currencies, they would be punished," he said. "That was the case in previous times. And that was the case that the pressure from the market came, and they had to do their job. Today, there is no pressure from the market."

Other reasons for the euro's strength include the weakness of the U.S. dollar, due to a slow economy and low interest rates in the United States, and a new trend in many Central Banks around the world to hold euros as part of their foreign currency reserves. Economist Daniel Gros, director of the Center for European Policy Studies in Brussels, explains:

"Foreign central banks have not used the euro to the extent that I would have anticipated, especially central banks in Asia, and that has certainly been a factor behind the strength of the dollar on average still over this period," he said. "That seems to be about to change. Now it will not change overnight and very quickly. But if the new trend one has seen over the last year continues over the next years, then I think that would mean that, slowly, the preeminence of the dollar as the sole global currency will be eroded."

Gros warns that the euro countries need to enforce their own rules, if the euro is to continue to be strong and in-demand. In particular, he says, France and Germany must be forced to abide by the budget deficit rules, rules that Germany insisted on imposing. 

"The problem we have right now is that the weakness is in the core, in France and Germany, and these two countries both have excessive deficits, and agree, basically, among themselves, that they will not punish each other," he said. "Then it is not possible to actually implement sanctions and the measures foreseen in the stability pact. I do not think that will last forever, because France and Germany will see that if they continue to have large deficits, then they lose power within the European Union."

Another problem for the euro countries is that their strong currency makes their exports expensive.

"It is now too strong for our business," said Ralph Wiechers, chief economist of the German Engineering Federation, the largest industry branch association in Europe, representing 3,000 companies, many of which export industrial machinery. 

"We have a relationship of about $1.20 to one euro and it is too high for our export business. And in the long run, we had an exchange rate around $1.10. So, this is the borderline where it becomes more and more difficult for a lot of companies to compete on export markets."

Wiechers says exporters in the euro zone have been saved by strong demand from China, which has compensated for reduced orders from the United States and other countries, where importers do not want to pay the high euro prices.

Despite such problems, economist Gros says, the euro and the countries that use it are in a strong position for the future. "We know that currency markets are extremely difficult to predict, that currencies sometimes go down and up for no good reasons," he said. "And a bit of that happened to the euro during the first years. The euro area economy seemed so weak compared to the U.S. economy that people thought, 'Oh, we can just buy dollars, and it will always be a good bargain.' 

"But now, people see the euro area might be slow, slow in terms of growth. It might have some problems with fiscal policy. But it is not about to disappear. And it has one advantage over the U.S., which is that it does not have a very large current account deficit [includes budget and trade deficit]. So, people start to think maybe the euro is a boring currency, but is a pretty safe bet over the long run."

Meanwhile, the euro is slowly becoming a more important currency in the world economy. 

Gros estimates that foreign central banks have about 10 percent of their foreign currency reserves in euros. He predicts that during the next decade that could increase to 50 percent, which would put the euro on a par with the dollar as one of the world's most important currencies. 

Jo Stuart
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