Friday 14 May 2021

“Risky to say how much unemployment we are going to reverse with new measures”: Minister of Economy

(QCOSTARICA) Asked about the effectiveness of reactivating Costa Rica’s shared management model “Costa Rica trabaja y se cuida” (Costa Rica works and takes care of itself) strategy, Victoria Hernández, Minister of Economy, considered that it would be “risky” to predict how much it can reduce current unemployment, which is currently around 24%.

Minister of Economy, Victoria Hernández

“It would be risky to say that we are going to reverse unemployment when we are still working to maintain current employment,” the official replied at a press conference.

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The challenge will be to reduce “paperwork and informality,” according to Hernández.

The shared management model is the strategy chosen by the Government to deal with the COVID-19 pandemic during September, and this consists of a joint responsibility of people and businesses to reverse the contagion level, in the face of a greater opening of activities.

President Carlos Alvarado announced the measure last week, that would be in effect this month, explaining “We have to live with the pandemic, it (September) will be a month of transition. We are going to deepen a model that balances health and economic activities”.

At the core of the strategy is a “single vehicle restriction” for the entire country, and allowing hotels to operate throughout the country with a capacity of 100%, while the common areas must be kept at 50% capacity, regardless of whether it is an orange or yellow canton.

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Likewise are the beaches that can now open to 2:30 pm throughout the country.

The strategy also focuses more on municipal committees for the cantonal approach to the pandemic, as a complement to the macro strategy that the Government has been implementing based on health alerts and restrictions.

In a recent poll by the CIEP of the University of Costa Rica (UCR), 54% of Costa Ricans surveyed report that they or someone from their family nucleus lost their job in the last four months, due to the economic slowdown caused by COVDI-19.

However, the efforts of the Government to reduce unemployment may have an uphill climb as entrepreneurs willing to hire staff does not exceed 10%. According to the Survey of Business Expectations, of the University of Costa Rica, pessimism and current hardships mean that entrepreneurs do not have great projections of hiring personnel, according to what is shown by the

Among all sectors, there is an average that only 8% visualized increasing their payroll between July and September. This means that, compared to the average of the last ten years (for the third quarter), all sectors showed a lower level in the net employment expectation; understandable by the COVID-19 crisis.

What could happen is a return of workers with a suspended contract, as announced by Alonso Elizondo, executive director of the Chamber of Commerce.

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