

Currently released so far... 12404 / 251,287
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Adana
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Melbourne
Embassy Nicosia
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Naples
Consulate Naha
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Of Spain
Embassy Port Louis
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
USUN New York
USEU Brussels
US Office Almaty
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
ASEC
AE
AF
AM
AR
AJ
AU
AORC
AG
AEMR
AMGT
APER
AGMT
AL
AFIN
AO
AMED
ADCO
AS
ABUD
ABLD
ASUP
ASECKFRDCVISKIRFPHUMSMIGEG
APECO
AID
AND
AMBASSADOR
AN
ARM
AY
AODE
AMG
ASCH
AMCHAMS
ARF
APCS
APEC
ASEAN
AGAO
ANET
ADPM
ACOA
ACABQ
AORL
AFFAIRS
ATRN
ACS
AFSI
AFSN
ADANA
ASIG
AA
AX
AUC
AC
AECL
AADP
AGRICULTURE
AMEX
ACAO
ACBAQ
AQ
AORG
ADM
AINF
AIT
ASEX
AGR
AROC
ATFN
AFGHANISTAN
AFU
AER
ALOW
AZ
AVERY
BA
BY
BU
BR
BE
BL
BO
BK
BM
BILAT
BH
BEXP
BF
BTIO
BC
BBSR
BMGT
BTIU
BG
BWC
BB
BD
BX
BP
BRUSSELS
BN
BIDEN
BT
CW
CH
CF
CD
CV
CVIS
CM
CE
CA
CJAN
CLINTON
CIA
CU
CASC
CI
CO
CACM
CDB
CN
CMGT
CS
CG
CBW
CIS
CR
CONDOLEEZZA
CPAS
CAN
CWC
CY
COUNTER
CDG
CL
CT
CIC
CIDA
CSW
CHR
CB
CODEL
COUNTERTERRORISM
CTR
COM
CICTE
CFED
CJUS
CKGR
CBSA
CEUDA
CARSON
CONS
CITEL
CLMT
CROS
CITT
CAC
CVR
CDC
CAPC
COPUOS
CBC
CBE
CARICOM
COE
COUNTRY
CLEARANCE
CACS
CTM
CNARC
ECON
EFIN
ETRD
EUN
EFIS
EG
ETTC
EZ
EPET
EAID
EAGR
ENRG
ECUN
EU
ELAB
ECPS
EAIR
EINV
ELTN
EWWT
EIND
EMIN
EI
ECIN
ENVR
ELECTIONS
EINVEFIN
EN
ES
ER
EC
EUC
EINT
EINVETC
ENGR
ET
EK
ENIV
ETRDEINVECINPGOVCS
ECONOMY
EAP
EFTA
EUR
EUMEM
EXIM
ERD
ENERG
EUREM
ESA
ERNG
EXTERNAL
EPA
EINVECONSENVCSJA
ECONOMICS
ELN
EINN
EFINECONCS
ENNP
EEPET
ETRDEINVTINTCS
ENVI
ETRO
ESENV
ECINECONCS
ECONOMIC
EAIDS
EDU
ETRA
ETRN
EFIM
EIAR
ETRC
EAIG
EXBS
EURN
ECIP
EREL
ECA
ENGY
ECONCS
ECONEFIN
ETC
ETRDECONWTOCS
EUNCH
EINDETRD
IR
IZ
IS
IAEA
INRB
IRAJ
IQ
IN
IT
IMO
INTERPOL
ICAO
IO
IC
ITALY
ITALIAN
IRAQI
ICTY
ID
IPR
IWC
ILC
INTELSAT
IL
IBRD
IMF
IA
IRC
ICRC
ILO
ITU
ITRA
IV
IDA
IAHRC
ICJ
ISRAELI
IRS
INMARSAT
ISRAEL
ISLAMISTS
INDO
IZPREL
ITPHUM
ITPGOV
ITF
IBET
IEFIN
INR
IACI
INTERNAL
IDP
IGAD
IEA
ICTR
IIP
INRA
INRO
IF
KJUS
KSCA
KNNP
KU
KCOR
KCRM
KDEM
KTFN
KHLS
KPAL
KWBG
KACT
KGHG
KPAO
KTIA
KIRF
KWMN
KS
KG
KZ
KN
KMDR
KISL
KSPR
KHIV
KPRP
KAWK
KR
KUNR
KDRG
KCIP
KGCC
KTIP
KSUM
KPKO
KVIR
KAWC
KPIN
KGIC
KRAD
KIPR
KOLY
KCFE
KMCA
KE
KV
KICC
KNPP
KBCT
KSEP
KFRD
KFLU
KVPR
KOCI
KBIO
KSTH
KMPI
KCRS
KOMC
KTBT
KPLS
KIRC
KREL
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFLO
KBTS
KSTC
KTDB
KFSC
KX
KFTFN
KNEI
KIDE
KREC
KMRS
KICA
KPAONZ
KCGC
KSAF
KRGY
KCMR
KRVC
KVRP
KSEO
KCOM
KAID
KTEX
KNUC
KNAR
KNUP
KNNPMNUC
KLIG
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KCRCM
KHDP
KGIT
KNSD
KOMS
KWMM
KPAI
KHSA
KTLA
KO
KMFO
KRCM
KCSY
KSAC
KTRD
KPWR
KID
KWNM
KRIM
KPOA
KCHG
KOM
KSCI
KFIN
KMOC
KESS
KWAC
KMIG
KSEC
KIFR
KDEMAF
KPRV
KBTR
KERG
KTER
KDDG
KPAK
KRFD
KHUM
KDEV
KCFC
KWWMN
KWMNCS
KJUST
MARR
MOPS
MU
MTCRE
MNUC
MY
MASS
MCAP
MOPPS
MAR
MPOS
MO
ML
MR
MASC
MX
MD
MP
MA
MTRE
MIL
MCC
MZ
MK
MDC
MRCRE
MAPS
MV
MI
MEPN
MAPP
MEETINGS
MAS
MTS
MLS
MILI
MTCR
MG
MC
MARAD
MIK
MILITARY
MEDIA
MEPI
MUCN
MEPP
MT
MERCOSUR
MW
MASSMNUC
MQADHAFI
NZ
NATO
NG
NI
NO
NATIONAL
NU
NPT
NIPP
NL
NPG
NS
NA
NGO
NP
NSG
NDP
NAFTA
NR
NC
NH
NE
NSF
NPA
NK
NSSP
NRR
NATOPREL
NSC
NT
NW
NORAD
NEW
NV
NSFO
NAR
NASA
NZUS
OTRA
OVIP
OPRC
OPDC
OSCE
OAS
ODIP
OIIP
OFDP
OVP
OREP
OFFICIALS
OSAC
OEXC
OPCW
OIE
OIC
OFDA
OSCI
OPIC
OBSP
OECD
ON
OCII
OHUM
OES
OCS
OMIG
OPAD
OTR
PGOV
PREL
PHUM
PINR
PTER
PSOE
PINS
PARM
PK
PBTS
PEPR
PM
POLITICAL
PARTIES
PREF
PBIO
PROP
PA
PSI
PINT
PO
PKFK
PL
PAK
PE
POLITICS
PINL
POL
PHSA
PU
PF
POV
PFOR
PHALANAGE
PARTY
PARMS
PRGOV
PNAT
POLINT
PRAM
PMAR
PG
PAO
PROG
PRELP
PPA
PCUL
PSEPC
PSA
PREO
PAHO
PGIV
PREFA
PALESTINIAN
PAIGH
POSTS
PTBS
PGOVLO
PORG
PGOVE
PLN
PINF
PAS
PUNE
POLICY
PDEM
PDOV
PCI
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PBT
PHUMPGOV
PMIL
PNG
PP
PS
PHUH
PECON
POGOV
PY
PHUMPREL
PHUS
PRL
PGOC
PNR
PGGV
PROV
PTERE
PGOF
PHUMBA
PEL
RS
RU
RW
REGION
RP
RICE
ROBERT
RSP
RUPREL
RM
RO
RCMP
RSO
RELATIONS
REACTION
REPORT
RIGHTS
ROOD
RF
RFE
RIGHTSPOLMIL
SP
SA
SY
SF
SYR
SENV
SCUL
SOCI
SNAR
SO
SU
SG
STEINBERG
SHUM
SW
SMIG
SR
SZ
SIPRS
SI
SAARC
SPCE
SARS
SN
SYRIA
SANC
SL
SCRS
SC
SENVKGHG
SAN
SNARCS
SHI
SWE
SNARIZ
SIPDIS
SEN
SNARN
SPCVIS
SEVN
SSA
SH
SOFA
SK
ST
TPHY
TU
TRGY
TI
TX
TS
TW
TC
TFIN
TD
TSPA
TH
TT
TIP
TBIO
TSPL
TZ
TERRORISM
TRSY
TN
THPY
TINT
TF
TL
TV
TK
TO
TP
TURKEY
TNGD
TBID
TAGS
TR
UP
US
UNSC
UK
UZ
UE
UNESCO
UV
UNGA
UN
UNMIK
UNO
UY
UAE
UNEP
UG
UNHCR
UNHRC
USUN
UNAUS
USTR
USNC
USOAS
UNCHR
UNCSD
UNDP
USEU
USPS
UNDC
UNDESCO
UNCHC
UNFICYP
UNC
UNODC
UNPUOS
UNCND
UNICEF
UNCHS
UNVIE
USAID
UNIDROIT
Browse by classification
Community resources
courage is contagious
Viewing cable 08SANJOSE444, SCENESETTER FOR COMMERCE DAS WALTER BASTIAN'S AND TREASURY
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08SANJOSE444.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
08SANJOSE444 | 2008-05-27 21:09 | 2011-03-02 16:04 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy San Jose |
Appears in these articles: http://www.nacion.com/2011-03-02/Investigacion.aspx |
VZCZCXYZ0001
PP RUEHWEB
DE RUEHSJ #0444/01 1482152
ZNR UUUUU ZZH
P 272152Z MAY 08
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 9768
INFO RUEHMU/AMEMBASSY MANAGUA 5323
UNCLAS SAN JOSE 000444
SENSITIVE
SIPDIS
DEPT FOR WHA/CEN, WHA/EPSC, WHA/PPC AND EEB
PLEASE PASS TO USTR DOLIVER/AMALITO
PLEASE PASS TO TREASURY SGRAY
MANAGUA FOR DAVID KRZYDA: PLEASE PASS TO DAS BASTIAN AND DAS ONEILL
E.O. 12958: N/A
TAGS: CS ECON ETRD PGOV PREL
SUBJECT: SCENESETTER FOR COMMERCE DAS WALTER BASTIAN'S AND TREASURY
DAS BRIAN O'NEILL'S TRIP TO COSTA RICA
REF: A. SAN JOSE 410
¶B. 07 SAN JOSE 1926
¶1. (SBU) SUMMARY: Embassy San Jose warmly welcomes Commerce DAS
Walter Bastian and Treasury DAS Brian O'Neill. Both visit Costa
Rica as the effort to implement CAFTA progresses through the final
stages of modifying Costa Rican laws to conform to commitments made
under CAFTA. The Arias administration remains deeply committed to
CAFTA, and is slowly making progress. The government's pro-CAFTA
coalition remains fragile. Eight of 13 CAFTA-related bills have
been completed; five others remain in progress, including those
covering controversial intellectual property (IP) and insurance
issues. Apart from the CAFTA debate, the Costa Rican economy
continues to post positive figures: foreign direct investment (FDI)
remains high, tourism numbers have been stable or increasing, and
exports have been growing (now exceeding USD 8 billion). Also in
the backdrop of the all-consuming CAFTA saga are positive reforms
underway within the Ministry of Finance. Treasury's Office of
Technical Assistance (OTA) programs have contributed to the GOCR
increase in tax collections (36 percent in 2007) and an increasingly
more sophisticated approach to budgeting. END SUMMARY.
-------------------
THE CAFTA SCORECARD
-------------------
¶2. (U) As of May 27, the national assembly (Asamblea) had completed
over half the CAFTA legislation (eight of 13). A ninth bill (on IPR
reforms) was bounced by the Supreme Court for constitutional
questions (see para 5 below). The four remaining bills (on
modernizing telecommunications, opening the insurance market, making
additional IP changes, and ratification of various standing CAFTA
amendments) are in varying stages of action:
COMPLETED BY ASAMBLEA:
Signed into law: 6
Pending signature: 2
WORKS IN PROGRESS AT THE ASAMBLEA:
Returned by Supreme Court: 1 (Asamblea to correct and vote
again)
Under debate: 4
TOTAL 13
---------------------------------
THE NEVER ENDING CAFTA CHALLENGES
---------------------------------
¶3. (SBU) The Asamblea made more progress on CAFTA legislation in the
four months from November 2007-February 2008 than its predecessor
had in the previous four years, but momentum dissipated after the
EIF extension was granted. The leaders of the 38-seat pro-CAFTA
coalition well understand the need to keep moving, but have found
this challenging.
¶4. (SBU) The principal challenge is maintaining and managing the
government-led coalition of 38 members (the G38). This is important
because a two-thirds majority (precisely 38) is needed to form a
quorum, to set rules, and to manage most legislation. Several weeks
ago, Christian Unity Party (PUSC) member Bienvenido Venegas, tried
to parlay his vote into a political trade for more attention and
resources from the central government for his home district
(Puntarenas). Though the GOCR cooperated to a point, Venegas's
support has remained elusive. Now, the Libertarian Movement (ML)
party is challenging the GOCR by delaying action on legislation. ML
has not cooperated with the G38 to grant fast track authority --
needed in order to meet the October deadline -- to the remaining IP
bill and a bill comprised of CAFTA's amendments. The current
impasse prompted Foreign Trade Minister Marco Vinicio Ruiz to
publicly comment on the inaction and state his deep concerns that
the inaction "is counter to the interests of the nation and
achieving FTA approval prior to the October 1 deadline." Privately,
COMEX officials describe a frustrated ML party that desires a higher
profile for its cooperation with the GOCR on CAFTA but feels
short-shrifted. Also, ML may recognize that its ultimate party
fortunes are limited and the current situation best defines a moment
of pivotal power -- and one to exploit -- for the party.
¶5. (SBU) An ongoing challenge for concluding the CAFTA deal is the
Supreme Court, specifically the Constitutional Chamber (Sala IV),
which reviews most legislation between the required first and second
votes of the Asamblea. The opposition has ensured that all CAFTA
bills are reviewed by the Sala IV, delaying the legislative process,
but only one bill has been bounced for corrections to date. COMEX
and USTR recently met in Costa Rica and discussed changes to the
returned IP bill. Progress was made but discussions between the two
parties will continue the first week of June in Washington. The
Asamblea is to begin action on these corrections as soon as COMEX
completes its modifications to the IP bill in consultation with
USTR.
¶6. (SBU) Political distractions constitute another challenge. A
special committee has been taking testimony on allegations that the
Colombian FARC had ties to some political figures, including
legislators, in Costa Rica. To date there have been no significant
revelations. Another new focus has been the Arias Administration's
decision to propose two major extraordinary budget items to
reinforce public security in the country and address the issue of
food security.
¶7. (SBU) Although the political situation may seem totally consumed
by the CAFTA debate, there are horizons beyond CAFTA which pose
still another challenge: changing post-CAFTA political alliances.
Portions of the Arias Administration's likely post-CAFTA agenda are
attractive to the current opposition party, Citizens Action Party
(PAC), and anathema to some members of the current CAFTA coalition
(G38). For example, the Arias Administration has long advocated an
increase in taxes in order to invest in better government and is
currently promoting an extraordinary budget of about $88 million to
promote food production and subsidize food consumption. It appears
likely that the five ML legislators will oppose significant aspects
of these proposals, although at the moment the ML are quasi-members
of the G38. PAC, on the other hand, promotes state-orientated
solutions and is likely to support the administration's post-CAFTA
proposals to some degree. The danger for the GOCR lies in the
transition period when the G38 must be maintained in the face of
potential political re-alignment.
----------------------------------------
A COMMITMENT, YES. . .BUT WITH A CAVEAT?
----------------------------------------
¶8. (SBU) Despite these challenges, the Arias Administration remains
committed to completing the legislation and implementing CAFTA.
President Arias (and by implication, his pushing to complete CAFTA)
remains popular. He received a 50 percent good or very good rating
in a UNIMER poll released March 24 with the lowest negative rating
(14 percent) since taking office. The public and most political
parties are tired of the protracted CAFTA debate and want to close
this chapter and move on to other important issues on the horizon.
¶9. (SBU) The GOCR claims to understand that the extension to October
1 was a one-time exception. Yet, we still sense the hidden
expectation by GOCR that intractable aspects of the remaining
legislation, for example, IP or insurance, might be resolved through
last-minute, high-level political bargaining. This is an
unrealistic expectation on the part of GOCR since USTR is obligated
by its Congressional mandate to implement CAFTA as negotiated and
ratified. In his April visit, AUSTR Eissenstat clearly defined
USTR's mandate in ensuring that the new laws and regulations are
CAFTA compliant (Ref A).
-----------------------------------
THE NEAR TERM SIGNIFICANCE OF CAFTA
-----------------------------------
¶10. (U) Without CAFTA, the textile and the tuna sectors are at risk
due to the short-run possibility of the loss of Caribbean Basin
Trade Promotion Act (CBTPA) trade preferences on October 1 and the
long-run risk that Costa Rica will not have permanent, tariff-free
access to the U.S. market. For Costa Rica, both risks would portend
a competitive disadvantage with its CAFTA neighbors. Business
leaders predict 20,000 jobs in the tuna and textile sectors are at
stake.
¶11. (U) In the intensely competitive textile industry, buyers want
price certainty which Costa Rican companies currently cannot
provide. Indicative of the uncertainty, the industry contracted
from $730 million in 2002 to $557 million in 2006. The Costa Rican
textile industry is heavily reliant on the U.S. market and the
preferential treatment it receives under the CBTPA (Ref B). The
U.S. accounted for 86 percent of its total textile exports in 2006
and CBTPA lowers the U.S. tariff from 18 percent to zero for most
textile products. Thus, without an implemented CAFTA, industry
uncertainty has reached critical levels as producers openly talk
about moving production outside of Costa Rica.
--------------------------------
ARE THERE OTHER ECONOMIC ISSUES?
--------------------------------
¶12. (U) In spite of the anticipation of a downturn, the Costa Rican
economy continues to post positive economic indicators. The economy
registered 6.8 percent growth in 2007 and is projected to grow by
3.8 percent in 2008. Other highlights include:
- FDI remains high. From 2000 to 2007, FDI grew from $409 million
to an estimated $1,885 million in 2007. The U.S. contributed
roughly 60 percent of FDI in recent years, while the European
Community contributed roughly 15 percent.
- Tourism numbers have been stable or increasing. Annual tourist
visits to Costa Rica doubled in the ten year period from 1998 to
2007 from 943,000 to 1,900,000 (estimated) in 2007. For the first
quarter of 2008, the media reported a 17 percent increase in visits.
- Export totals have been growing. Costa Rica's exports totaled
$8.2 billion in 2006. Costa Rica's economy is relatively open to
world trade, with exports accounting for 37 percent of GDP in that
year. While the traditional agricultural exports of bananas,
coffee, sugar and beef are still the backbone of export trade, a
variety of industrial and specialized agricultural products have
broadened export trade in recent years.
¶13. (U) On fiscal affairs, the Finance Minister, Guillermo Zuniga,
and the Central Bank President, Francisco de Paula Gutierrez,
demonstrate prudent management of the economy and a commitment to
reform. In 2007, the GOCR experienced its first fiscal surplus in
50 years. Plus, the Finance Ministry (the Hacienda) has initiated
several new reforms through the assistance of Treasury's OTA.
Problematic is the lack of a terrorist finance law in Costa Rica --
one of many bills in the queue behind CAFTA legislation and key to
Costa Rica's future participation in the Egmont Group -- and the
lack of regulatory oversight of international transactions with
specific regard to money laundering.
¶14. (U) Currently, the OTA operates three programs in Costa Rica of
which two -- tax administration and budget -- are well underway and
a third, debt management, just launched in February 2008. Both of
the established OTA programs have contributed to instituting
reforms. All three are summarized below:
- The OTA's tax administration project started in spring of 2005.
The OTA interacted mainly with the Internal Revenue Directorate, but
has also engaged at the Ministerial level and in Customs
Administration. The project has primarily focused on improving
planning and management and technical and management assistance
which resulted in the improvement of collections (up 36 percent in
2007) and audit and taxpayer assistance operations. At the Ministry
level, work is underway to assist the implementation of an Internal
Affairs organization through which to investigate allegations of
misconduct and corruption by Ministry officials. Finally, the OTA
will provide an independent source of advice and managerial
monitoring for a major private initiative to modernize the
technology infrastructure of tax administration. The OTA project is
scheduled to conclude in the fall of 2008.
- Finance Minister Zuniga requested OTA technical assistance in the
areas of budget policy and management. Supported by Embassy San
Jose and commencing in December 2006, the OTA's work has resulted in
key reforms, including the implementation of a medium term budget
forecast for the GOCR. The budget project also improved the quality
and quantity of information available to decision-makers and
constituents regarding the effectiveness of GOCR programs in
utilizing budget resources to meet Government objectives. The OTA
has provided support in the areas of budget execution, audit, and
control. The budget policy and management technical assistance
program is scheduled to conclude in late-2008.
- The OTA and the Hacienda launched the Government Debt Issuance and
Management Assistance (GDIM) project February 2008. The project
will provide technical assistance in debt management, focusing on
staff capacity building; risk analysis and management; cash flow
forecasting; debt sustainability; domestic market development
(institutional and retail) for government and central bank
obligations; and fiscal/monetary policy and operations coordination.
The initial work has focused on improving the secondary market for
government securities since Costa Rican wholesale financial markets
are virtually non-existent. This effort will also support the
Central Bank as it makes the difficult transition to a more flexible
exchange-rate and an inflation-targeting regime which will require
the creation of new markets for managing system liquidity.
BRENNAN