Wednesday 18 May 2022

[OP-ED] Please Educate Me, Why?

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18 May 2022 - At The Banks - BCCR

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I guess this could be re-titled what goes through their minds when making decisions, any decision. From the legislators (Asemblea) to every minister and autonomous leader…you really have to wonder what and hell they are thinking? Certainly it is not the best interest of our little country.

From those most important decision makers to the day worker (obrero), we all agree that Costa Rica is in a critical economic stage, one that has avoided a complete economic collapse only by its borrowing power within the global market place. A market place becoming more and more expensive for us since two of the major credit agencies sort of said to global investors, “look out.”

How is it that our prices for gasoline go up when every indicator in the world has them drop; significantly?

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Oil is at a six year low, so four or five U.S. refineries are on a six week strike, the fact is that in the U.S. alone there is literally not much room left for more oil storage. The news there keeps reiterating that there has been so much oil stored, it could last for years and at a price below $50/barrel. Some even guess it might hit $20/barrel which is bad for exporters of crude but great for importers, like us.

Are our gas prices going down? Not at all, in fact to the opposite: up! How about electricity costs and fees which have been singled out why some companies are leaving Pura Vida while others are just simply cutting back employment to a bare bones operation? Again, cost of business is only going up!

The cost of living in CR should logically be dropping since the colon has been artificially propped up by the Central Bank who has spent millions, perhaps billions of USD to keep the colon strong. Internationally, as of this writing the USD is almost parity with the euro ($1.05) and it is expected that soon parity of 1:1 will be reached. The colon is revealed stronger than any other foreign currency in the world and consumers just are not receiving any favorable benefits. Our cost of living keeps on climbing and I would like to know why?

So tell me why the costs of living in CR has only one direction, up? Is it the ease of taking profit in a small country with limited resources and limited competition, not to mention non-existent retail/wholesale price fixing laws and an even more limited mind set for what is “good” for the country is also good for business? Is it really the costs of doing business such as transport and duties since most finished goods are imported or have a windfall profit with re-nationalization and the mentality is, “because I can?”

If an expat has not much to do, go to the Internet and compare grocery prices in the U.S. Canada and Europe compared to our own. It can be an eye opener.

It is apparent that this administration misled us in its campaign promises or is amusingly naïve in management sciences. Either way, we consumers are losing and I do not know why?

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Make sure I am not dense: Solis, et al have raised the national expense (budget) by 15% and wants to raise our sales taxes 15% instead of cutting expenditures and maintaining our current ratio of taxation.

To make sure some taxes are paid, the collector (Hacienda) is taking from 1.7% to 2% of every credit card purchase which pure hostage. Considering the cut in profit for business, the practice is almost or perhaps is diabolical.

Does this sound to you the right way to put an 11% of the people in unemployment back to work, to attract Foreign Direct Investors, or even maintaining the current 5.7% of fiscal deficit?

Many economists, which might or not be trusted as knowledgeable, feel the deficit is really 6.7% of fiscal income and that the only way to cover those losses is with “jobs”. And jobs pay taxes, purchase both goods and services each which are currently suffering from a mini, soon to be major, economic crisis for Costa Rica.

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Juan Sebastian Campos
An expat from the U.S., educator and writer in English and Spanish since 1978 with a doctorate in business administrations (DBA) from the United States and Germany. A feature writer for ABC News, Copley Press and the Tribune Group with emphasis on Central America.

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