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

In late June, the leaders of the ruling Partido Acción Ciudadana (PAC), the Frente Amplio (FA) party and the trade union umbrella group, Patria Justa, signed an agreement entitled: “The Patriotic Agenda for the Common Good”.

The document sets out shared objectives on public sector jobs and pay, as well as their opposition to further private sector involvement in the energy sector and support for granting the Costa Rican tax office the power to seize goods and freeze bank accounts without recourse to a judge. While the agenda is broadly consonant with the government’s aims, there are some differences. President Luís Guillermo Solís has said he is “neither for not against” the new alliance.

Costa Rica is expecting to post a fiscal deficit this year of 6.7%. To try to bring this under control, the government is trying to increase its tax take, by fighting fraud and tax evasion, transforming the current sales tax into a value-added tax, modifying income tax and ending some fiscal exemptions. It is also looking at ways to reduce spending, with one of the ideas mooted being the reduction in bonuses paid to public sector employees. However, given the weakness of the executive’s representation in congress, with the PAC controlling only 13 of the 57 seats in congress, it is limited in its freedom to govern.

The signatories to the agenda are firmly supportive of the government’s initial plans to strengthen the power of the tax office. This may help strengthen the finance ministry’s hand as it is currently developing a new deal on this issue following opposition from the Partido Liberación Nacional (PLN) and the Partido Unidad Social Cristiana (PUSC). The signatories also support the government’s plans to reduce the number of industries benefiting from tax breaks. However, elsewhere there are big differences, with the new grouping declaring itself opposed to a bill on public employment which would reduce salary benefits and another bill on electricity generation which would increase the permitted participation of private sector companies in energy projects from 15% to 30%.

• Recent drug hauls point to rising trend

US and Costa Rican coast guard agents seized more than one tonne (t) of cocaine from two Costa Rican fishing vessels on 23 June. Both boats were stopped off the country’s Pacific Coast, close to the border with Panama. It follows another major seizure of cocaine on 9 June in waters near the small town of Golfito, also on Costa Rica’s South Pacific coast.

According to the US State Department’s International Narcotics Control Strategy Report, released in March 2015, cocaine seizures increased by more than 30% in Costa Rica over the first nine months of 2014 from the same period of 2013, to nearly 26t. This is in line with long term trends: between 2000 and 2005, Costa Rican authorities seized an average of five tonnes a year; between 2005 and 2012, that average rose to 17t. In 2013 as a whole, Costa Rica seized 20t of the drug, according to the United Nations Office on Drugs and Crime (UNODC). A 2012 report by the Organization of American States (OAS) found that Costa Rica’s per capita cocaine use is double that of Brazil’s, the world’s second-largest consumer market.

Costa Rica is widely believed to be increasing in importance as a transit route for drugs for both Mexican cartels and ‘maras’, Central American street gangs. A recent report by Costa Rica’s judicial investigation body (OIJ), shows that the country is also hosting a steadily increasing number of gang members from the Northern Triangle of Honduras, El Salvador and Guatemala. Though their number and impact is still relatively trivial when compared to their countries of origin, the OIJ report suggest their presence is starting to spur the growth of well-armed local gangs. An uptick in violence in Costa Rica last year was attributed to a battle for distribution routes among local criminal organisations.

• Miss Universe to miss Costa Rica

On 1 July the Costa Rican broadcaster Teletica announced that it would not be sending the winner of its Miss Costa Rica contest to participate in the Miss Universe contest due to the xenophobic comments of the competition’s part owner, US business tycoon, Donald Trump. In the announcement of his bid to run for the US presidency, Trump declared that Mexican immigrants to the US were “bringing drugs, bringing crime. […] They’re rapists”.