Will nationalizing gas mean more money for Bolivia? A scary e-mail
May 092006

Greetings from the airport in San José, Costa Rica. It’s Tuesday morning, and I’ve been in the country since Saturday afternoon to attend the inaugural of President Oscar Arias.

Arias was president of Costa Rica from 1986 to 1990, and he won the Nobel Peace Prize in 1987 for his efforts to bring Central America’s conflicts to a negotiated end. He used the prize money to start a San José-based foundation for peace, where I worked in 1994-95 before joining CIP.

Using the same dogged persistence that made his peace plan successful, Arias helped convince Costa Rica’s Congress to change the country’s constitution to allow re-election; he ran for, and won, a second term in February elections. Like many U.S. and Canadian employees and interns who passed through over the years, I happily accepted an invitation to Arias’ inaugural.

It is interesting to have a former boss now serving as leader of a foreign country. It’s at least as interesting to have a former co-worker – Kevin Casas, who was a fellow program officer at the foundation when I was there – now serving as second vice-president and minister of planning. Kevin is only 38. (I admit I had trouble treating Kevin with the deference his new position requires. In retrospect, saying “hey man, you’re Costa Rica’s Dick Cheney now” was probably over the line.)

“Don Oscar” not only invited all of us former employees to the inaugural, but hosted a lunch for us at his house on Sunday, the day before the inauguration. Arias told reporters that the lunch “lightened his day.”

(Could the contrast with the United States be any greater? A president about to be inaugurated spends three hours of his pre-inaugural day with a bunch of twentysomething and thirtysomething gringos who used to work for him. Meanwhile Arias – not a press secretary – would emerge from his house, on a busy corner in a wealthy neighborhood, every so often to talk to the reporters gathered outside. For its part, the house was guarded only by one or two armed police, and none of us was so much as patted down as we entered. For someone who spends much time in security-obsessed Washington and Bogotá, the contrast was incredibly profound.)

The inauguration was, well, ceremonial. Laura Bush was among the foreign leaders there; she arrived the night before and left a couple of hours after the ceremony. Hugo Chávez canceled at the last minute. Álvaro Uribe was there, and received a loud round of applause from the specially invited audience of wealthy and well-connected Costa Ricans (“Now he’s the one that I really like,” an elderly woman seated behind me told her husband as the crowd applauded Uribe.)

In his inaugural speech, Arias promised to govern in line with many of the values his foundation sought to promote. He promised to spend 8 percent of GDP on education. He called for improving basic infrastructure and access to technology, to modernize the country. To cheers, he called for strengthening the national healthcare and social welfare system, and to pay for it with an increase in progressive income taxes. He called for a foreign policy based on human rights, peaceful conflict resolution, promoting demilitarization, “human development,” and reliance on the United Nations. He said that Costa Rica should be a “moral power” in the world, and its “brand” should be “peace and love for nature.”

This all makes Arias sound like another center-left leader who will quickly run afoul of the Bush administration (just as Arias, for his efforts to end Central America’s wars peacefully, ran afoul of the Reagan administration twenty years ago). But that’s not likely. Arias is not only an admirer of the United States at heart (he is particularly fond of John F. Kennedy), he is a fierce defender of a free trade agreement with the United States. The Bush administration – no doubt anxious to hold on to its dwindling number of friendly leaders in the region – has promised “full cooperation” with Arias, and that’s why they sent Laura to represent the United States instead of, say, the deputy secretary of transportation.

Arias’ pro-CAFTA stance, however, has made Costa Rica no exception to the deeply divisive neoliberalism-versus-statism debates that have swept through Latin America lately. Of all Central American countries, Costa Rica – with its educated workforce and economy less dependent on agriculture – probably stands to gain most from a free-trade agreement with the United States. But the issue is hugely controversial within Costa Rica, and the rather emotional debate has left the country more polarized than it has been in decades.

At the heart of Costa Rica’s free-trade debate is the requirement that the country open up its telecommunications sector to foreign competition (and perhaps its electricity and insurance sectors too). This would likely mean privatizing the Costa Rican Electricity Institute (ICE), the mammoth government electricity and communications monopoly that controls everything from power lines to Internet connections.

Like a lot of state-owned enterprises, the ICE is undercapitalized and bureaucratic; when I reported there in 1994 to try to get a phone line connected to my apartment, they told me that the waiting list would take three years. (It was there that I first heard the word “trámite,” a terribly bureaucratic word meaning “process,” but really meaning “abandon all hope.”) The wait has since been apparently cut down to about six months.

Despite these problems, many Costa Ricans consider the ICE to be a national treasure, a living symbol of the state-led development model adopted after a brief civil war and restoration of democracy in 1948. This model brought the nation much prosperity since then, and made Costa Rica a majority middle-class country. The fear is that privatizing ICE would be a huge step toward dismantling this model, deepening class divisions in a society that, despite recent increases in income inequality, is very egalitarian by Latin American standards.

Those who want to preserve the 1948 model are joined in opposition by students and labor leaders, who fear that opening up public utilities to globalization will lead to rising rates and worsening conditions for the poorest Costa Ricans. These groups do not view Oscar Arias as a center-left figure at all: they see a wealthy politician trying to open up the national patrimony to the world’s wealthy capitalists. The graffiti seen around San José, including on the walls of the Congress – “Down with Arias, the country is not for sale,” “Arias fascista” – show how the free-trade debate has divided society and coarsened the political culture. (Though José María Figueres, the president during my time in Costa Rica, was quite unpopular, I rarely saw critical graffiti on San José’s walls.)

The debate was so bitter that Arias – who ten years ago, polls consistently showed, was the most popular figure in Costa Rican public life – nearly lost the February election. Ottón Solís, a third-party politician who vociferously opposed a free-trade agreement, was only beaten by a margin of 40.92 percent to 39.80 percent, after a three-week re-count. Solís carried most urban areas, while Arias dominated the Costa Rican equivalent of the “red states.” The campaign was nasty by Costa Rican standards; Solís charged Arias with selling the country to the highest bidder and harming the poor, and Arias charged Solís with seeking to keep the country backward and underdeveloped.

Even little Costa Rica has not been immune to Latin America’s deepening polarization. Even a dovish social democrat like Oscar Arias has ended up being seen, in the eyes of many, as a plutocrat doing the gringos’ bidding, in the same category as Álvaro Uribe or El Salvador’s Tony Saca. It was plain from his words with us that this perception really bothers Arias, and it worries Kevin Casas too. They now face the difficult task of smoothing the deep divisions that have emerged in their traditionally peaceful country. I hope they can do it.

P.S.: A note on re-election: Oscar Arias, like Álvaro Uribe, supported a constitutional change that allowed him to run for office again. During Colombia’s re-election debate, I was often asked whether I thought re-election would be a good idea for Colombia. (Why the opinion of a U.S. organization would matter is unclear to me, but never mind.) My response was that I did not oppose re-election, but that I thought it was usually not good for democracy if the constitutional change allowed a very popular sitting president (Fujimori, Menem, Chávez) to run for a consecutive term. In the case of Oscar Arias, not only was he not a sitting president, he was out of power for sixteen years between his first and second terms.

P.P.S.: If you’re ever in Costa Rica for work but have a morning free, rent a car and drive to the Carara National Park about an hour and forty-five minutes away from San José. In two or three hours of walking in the jungle you’re virtually guaranteed to see monkeys, scarlet macaws, coatis, agoutis and those colorful little tree frogs. Don’t forget to peer over the highway bridge right before the park entrance to see huge crocodiles in the Tárcoles River.

One Response to “Notes from Costa Rica”

  1. steven Says:

    Do you have additional published sources on C.R. opposition to ICE privatization/CAFTA/Arias?

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