Friday 27 January 2023

President Rodrigo Chaves will not have the traditional “honeymoon” due to urgent needs of the country

Unemployment of 330,000, the reactivation of the economy, the "hacking" of the Treasury and the high cost of fuel that has the country in crisis cannot wait 100 days

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27 January 2023 - At The Banks - BCCR

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QCOSTARICA – The country’s many urgent needs would cancel the traditional “honeymoon” for incoming President Rodrigo Chaves, who will be sworn in as the 49th president of Costa Rica at noon on Sunday.

The honeymoon is a period of transition and accommodation, nuanced with a certain complacency, close to 100 days in which the new president receives few criticisms and demands.

Rodrigo Chaves was declared the winner in the presidential runoff on April 3

However, the truth of the matter is that when Chaves is sworn in as president this Sunday, he will have to deal with a major fire, so to speak, in addition to other emergencies.

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This includes the hacking of several of the Ministerio de Hacienda (Treasury of which he was minister for a brief period in 2019) websites which threaten to paralyze trade, increase the price of goods and services and worst of all, exacerbate the unemployment problems that already affect 330,000 Costa Ricans.

The hacking has gone beyond the Treasury, a number of other government institutions have reported their systems breached by the Conti ransomware, with no clear solution in sight.

“For each extra day of storage we must pay about a thousand dollars more and the situation worries us because the ports and airports are already collapsed and in the next few days, 10 thousand more containers are expected to arrive, which will generate more problems. The declaration of an emergency in customs is urgent for multiple sectors”, said José Antonio Salas, president of Crecex.

On the other hand, businessmen complain about the prices of gasoline and electricity, which reached record figures due to the pressure that is being generated by the war between Russia and Ukraine, and the dollar exchange, while road maintenance contracts are slowed down as a result of the case of alleged corruption known as “Cochinilla” since the middle of last year.

Read more: Changes in the way of calculating fuel prices does not guarantee reductions

To this, we must add that the law of digital nomads cannot be put into practice due to the lack of a simple regulation and that there is much expectation that the 5G frequencies will finally be released after two PAC governments prevented it.

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To all these demands, it must also be added that Chaves would have the obligation to declare education a national emergency, since, in the last two years, the pandemic has exacerbated educational problems and drove thousands of students away from the classrooms, by not having the technological resources, nor the Internet to receive virtual classes.

“The main challenge for the next government is to generate formal and stable employment conditions, without increasing the size of the state. The healthy generation of employment is the result of economic growth, investment attraction, the birth of new companies and the facilitation of conditions so that all of the above can be carried out without excessive red tape and cumbersome bureaucracy,” said Julio Castilla, president of the Chamber trade.

Urgent demands

After eight years of two consecutive PAC governments, the country has serious lags and for this reason, the business sector urges the government of Rodrigo Chaves to implement a series of actions in just 100 days. Among them:

  • Declare a national emergency due to hacking of Treasury systems
  • Intervene public education
  • Lower cost of electricity
  • Review fuel formula to mitigate impact of war between Russia and Ukraine
  • Approve regulations for digital nomads to attract this type of tourist
  • Rebalance social charges to attract more contributors and curb informality
  • Generate formal and stable employment conditions
  • Promote the exploration and exploitation of gas
  • Do not increase the size of the civil service
  • Encourage the attraction of investment
  • Apply dual education law as soon as possible
  • Free up 5G spectrum to improve connectivity
  • Availability of water and sanitary sewage for the development of the country
  • Reactivation of contracts for road maintenance
  • Start road projects that have been on hold for several months and years
  • Facilitate access to credit for middle-class housing
  • Stop the unfair participation of ICE and UNOPS in consulting, design and construction activities of public works
  • Reduce public spending

With the change of government there are many expectations, as well as urgent demands.

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For Silvia Castro, Chairwoman of AmCham, the generation of conditions to facilitate the creation of new sources of employment must be addressed immediately. Costa Rica has one of the highest unemployment figures in the OECD.

In addition, initiatives related to social charges and improve the socioeconomic conditions of Costa Rican families should be carried out.

Henry Egloff, President Chamber of Industries, said the government begins with the challenge of facing the effects of the Russia – Ukraine war, which is causing increases in the prices of raw materials, oil, and which is added to the high costs of international freight and international logistics problems caused by the pandemic. , which will ultimately affect economic growth, job creation and the cost of living for Costa Ricans.

“It is important that in the first 100 days, signals are provided that generate confidence in the productive sector, which allows attracting and increasing both national and foreign investment,” said Egloff.

 

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