QCOSTARICA – At the end of the year, Costa Rica will have the seventh highest level of growth in Latin America, more than 13 countries, including Mexico, Colombia and Chile, called “examples of the region,” and better than several of the most industrialized nations of the world.
Costa Rica does not suffer problems of inflation or falling prices of export products.
However, in everyday life, we feel that the country is sinking, and it moves away more and more of what was once believed.
Why does this phenomenon occur?
The root of the answers is in a single issue: growth is not the same as development.
While both variables are related, the fact is that the growth reflects the increased production, while development concerns the welfare of the population.
Costa Rica maintains acceptable levels of growth, however suffers from paralysis in vital areas that directly affect the quality of life.
1- Employment
Unemployment is around 10%, stagnant since 2010, and neither the dynamics of the economy or the half-hearted efforts of governments have been able to improve this indicator.
Costa Rica is the second highest in Latin America.
As if that were not enough, there are about 38.000people who want to work and are not counted because they were not actively seeking.
For young people, the prospects are even more discouraging, because one in four is unemployed.
Another indicator remains paralyzed since at least 2010, is labor informality, which reaches 51% of private workers
2- Infrastructure
As each year around 70,000 vehicles are added to the roads that accentuates the collapse. Successive governments have failed to extend even one highway.
The road to San Ramon has been expected for 18 years, the Circunvalacion norte (north portion of the ring road) is a project that has been underway for half a century, and the electric train, which would help decongest the GAM (Greater netropolitan Area of San Jose), whose original design also dates back to the 1980s, remains a distant dream.
Meanwhile, Costa Ricans lose at least one hour a day in traffic that, with an efficient system, could be in minutes.
In a year, ten days is what every person loses in traffic congestion.
3- Poverty
Costa Rica has made tremendous progress in various fields, however, poverty is a still only a priority, because except a brief period – one in five households has been below the poverty line since 2004.
In addition, one of every three poor families are in extreme poverty, that they do not even have access to minimum food basket, much less to higher education, increasing inequality.
4- Social Security
The cost of medical care has increased and this has worsened, according to a recent report by the Caja (Caja Costarricense de Segudo Social – CCSS).
In numbers, the cost of outpatient service in an Ebais (local clinic) had a real increase of 62% in the last seven years.
In 2014, double that of 2005 was spent, while total number consultations (patient visits) has increased by only 19%.
Meanwhile, 600,000 people are on waiting lists, expecting to get an appointment with a specialist, an operation or a medical exam.
The situation is so critical that some hospitals are scheduling appointments in 2021.
5- Inequality
Costa Rica is the only Latin American country in the last decade that seen an increase in inequality.
On the one hand, (tax) evasion and avoidance maneuvers on the part of companies and individuals denied to the state treasury an amount equivalent to 8.2% of Gross Domestic Product (GDP), according to Hacienda (Ministry of Finance).
On the other hand, public sector employment is at the centre of discussion for their high salaries compared to the average of the country and is designated by the Organization for Economic Cooperation and Development (OECD) as one of the causes of inequality.
It (the public sector employment) is only 13% of workers, which have increased in difference with private wages in the last five years, up to 166%.
Spending on wages, coupled with tax evasion, leaves a state with a large and growing debt over the coming years.
Source LaRepublica.net
In my opinion, it is the 116% increase in Public Sector wages over the past five years that is doing the most damage to the Costa Rica Economy. The Public Sector provides an administrative function only. There is no factor of production, or wealth generation, which is purely the preserve of the Private Sector to achieve. Taxing the Private Sector to death, to pay Public Sector wages, will only “kill the goose that laid the golden egg”.
Monopolies and restricted distribution create a lack of competition that is distorting prices. A two litre carton of Dos Pinos milk in Panama costs half as much as it does in Costa Rica. The same is true for petrol and dozens of economic staples. When you have California prices with an average wage of 1500 colones per hour you only create poverty and stagnant growth. If this country wants to succeed economically it needs to promote a middle class, raise wages, increase competition and improve infrastructure. Public sector wages and benefits should be inline with those in the private sector once private sector wages stabilize and become competitive.
JSP is right. Don’t understand how Panama buys their Electric from C.R. and we pay 20 cents and they pay 9 cents. Plus what JSP said? How is that the Government can get away with this crap? ICE is a major government Mafia/ Monopoly??? Driving Americans back to the USA and then less jobs for the C.R. They just don’t have any common sense at all.
Very interesting post from Ginger Morris and JSP.
Why can’t we get answers from the government regarding selling electricity to Panama for 9 cents when we pay 20 cents and the high cost of Dos Pinos products,petrol etc.
Evidently for whatever reason those in power want it this way??? Want to keep the poor people poor? It all doesn’t make any sense to me. How can the poor even average Costa Ricans even survive on these “California Prices”