Caribbean & Central America - January 2015 (ISSN 1741-4458)

As China and Latin America’s love affair deepens, San José is one of the many suitors seeking to woo Beijing. In early January, President Luis Guillermo Solís travelled there for an hour-long meeting with Chinese President Xi Jinping to discuss the creation of a special economic zone on Costa Rican soil. The two leaders signed an agreement to authorise a study on the viability of the idea, as well as a deal to facilitate the export of Costa Rican lobsters to the massive Chinese market.

Costa Rica’s affection for China is relatively recent. Until 2007, the Central American country was an ally of Taiwan and had no diplomatic relations with Beijing. “In these years our links have grown and have shown, beyond a shadow of a doubt, that the free trade agreement (in place since 2011) was fundamental to the development of our relationship,” Solís said.

The planned special economic zone follows a Chinese development model. In the 1980s, China designated a number of areas as such, granting them a degree of economic autonomy from the central government. One of the most successful areas is Shenzhen, the city neighbouring Hong Kong, where many of the world’s most popular electronic gadgets are now assembled.

While in China, Solís visited Tianjin, an area dedicated to “technological development” around 200km from Beijing. The Costa Rican government is looking to establish an industrial and economic base away from San José and the more prosperous interior of the country, in an effort to develop the country’s poorer coastal regions. Two flagship projects designed to do just that have run into problems. The development of the Moín port terminal, on the Caribbean coast, has been delayed by legal disputes and industrial protests, while the construction of the highway to Limón has also been beset with difficulties.

Tourism

President Solís also used his visit to China to promote Costa Rica’s tourism industry, by meeting the head of the China National Tourism Authority, Li Jinzao. Solís told the press that he had asked the Chinese for more information about the preferences of the typical Chinese tourist in order to make Costa Rica a more appealing destination. A new Costa Rican consulate has been opened in the city of Shanghai. Government officials also signed an agreement to increase the teaching of Mandarin to Costa Rican tourism operatives and discussed the possibility of direct flights between the two countries.

Energy cooperation

Another result of Solís's trip to China was an agreement to set up a feasibility study on the construction of an oil refinery in Limón. Costa Rica’s National Oil Refinery, Recope, is due to oversee the project, following the cancellation of a previous US$1.5bn joint venture over a conflict of interest by the comptroller-general’s office. A subsidiary of the Chinese National Petroleum Corporation (CNPC) had carried out the original feasibility study. According to Sara Salazar, the president of Recope, the new refinery would produce biofuels and would refine gasoline and diesel. At present, Recope does not refine any fuel for the national market. Ahead of any construction work, Salazar promised an “exhaustive” review of Soresco, the Chinese-Costa Rican Reconstruction Corporation, the joint partnership between the CNPC and Recope formed to build the new refinery.

Opposition legislators rally to thwart Solís labour reforms

In late December, Sala IV, the constitutional chamber of Costa Rica’s supreme court, agreed to study a request by 21 opposition legislators to annul a presidential decision. Earlier that month, on 12 December, President Solís lifted a veto signed by his predecessor, Laura Chinchilla (Partido Liberación Nacional, 2010-2014), on a bill to reform the country’s labour procedures law. Solís, and his supporters, argue the bill updates Costa Rica’s antiquated labour laws; his opponents claim it will hand power to trade unions and terrify foreign investors.

Speaking at a press conference on 12 December Solís argued that the current labour laws were seven decades old and that, “by lifting the veto on this law we are coming to terms with our times,” adding that the bill would not become law until May 2016, giving legislators plenty of time to ensure it was fit for purpose.

Among the bill’s articles are provisions to speed up labour disputes, which can drag on for up to ten years, and greater protections for pregnant women and vulnerable workers. But when it was originally approved by congress in 2013, Chinchilla justified her veto by saying the bill would create a loophole for legalizing strikes in essential services, such as public health care, public security and transportation.

To allay these fears, Solís has signed an executive decree reiterating his administration’s pledge to ensure essential services are maintained. But the group of opposition legislators seeking to challenge the constitutionality of the bill argue that such a decree is “unworkable”.

Mario Redondo, a deputy from the Alianza Demócrata Cristiana, said, “President Solís’ action constitutes an interference by the executive branch of the legislative branch. He’s in a huge mess and now he doesn’t know how to get out of it.”

Many of those who supported the bill at the time have now cricitised Solís’s decision, arguing that as it stands the text will “bring destabilisation”. Some of the loudest voices come from Costa Rica’s business leaders who fear that the bill will facilitate strike action and hurt the country’s competitiveness.

Speaking on 12 December, Francisco Lobet, the president of Costa Rica’s chamber of commerce, said, “the country’s situation will worsen because the government’s decision will increase instability for the business sector”.

• Environmental monitoring

Costa Rica’s national technical environmental secretariat (Setena) has approved the licence to build the container terminal at the port of Moín, in the Caribbean coastal province of Limón. The work on the port, to be carried out by a Dutch consortium APM Terminals, is due to begin on 19 January. The company has also been obliged to put down a US$10m deposit against environmental damages. Setena insists it will closely monitor the project.