Saturday 30 September 2023

“No Hay Plata” – No Free Lunch In Costa Rica!

Government announces suspension purchases of goods and services as it deals with "serious liquidity problems".

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Dollar Exchange

¢534.47 BUY

¢542.35 SELL

30 September 2023 - At The Banks - Source: BCCR

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“No hay plata. No hay plata” (there isn’t any money) was the slogan voiced by a Lora (Parrot) years ago in a promotion by a prominent retailer of its low prices. The government of Luis Guillermo Solis could probably not even afford the slogan as it faces serious liquidity problems. Photo for illustrative purposes.

After recognizing the serious liquidity problems, last week the government of Luis Guillermo Solis has announced it will borrow another US$1 billion dollars for a hearty lunch that others government will pay for tomorrow.

This week, in its attempt to cut spending (not costs), Solis ordered ministers to suspend all tender processes for vehicles, equipment, and supplies, rental of buildings and consultancies that have not yet been executed.

In the case of contract processes that are already underway, it will be up to head of each Ministry to decide whether to suspend them or consider them indispensable for the operation of the Ministry.

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“…According to the presidential order, any purchase process that has not started must be suspended, regardless of whether it is a direct contract or abbreviated public or international tender,” reports La Nacion.

In this meme found in the social media, President Solis is asked about the “liqudity problem of the government?”, to which he answers “I hate it, also”. The image is from Solis’ eating a wasp in mid speech a couple of months back.

“… The order does not include contracts that are financed by international loans. Such is the case of schools and colleges that will be built with a loan from the Inter-American Development Bank (IDB) or the extension of the Limonal-Cañas section of the Interamerican Norte (ruta 1).”

The measure will take effect once it has been published in the official government newsletter, La Gaceta, scheduled for next week.

In a television address to the nation on the evening of August 1, Solis announced that the government “… faces liquidity difficulties in paying its obligations and guaranteeing the operation of essential services.”

Related: ‘Nobody Wants Costa Rica To Be Another Greece’, President Solis

In his announcement, the President said among the measures his government plans to take in the short term, in addition to insisting that the Legislative Assembly approve the reforms to sales and income taxes, by way of decrees, put the brakes on budgetary modifications that represent an increase in expenses; Put a stop on the purchase and rental of properties for the Government with public resources, except for those buildings destined for infrastructure works; A moratorium not to issue new declarations of public interest that represent tax exemptions; and, Repeal of the Law to Decrease the Entry of Capital, in order to promote the entrance of investments to the country.

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"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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