As I write this, Costa Rica is celebrating the changing of the guard. Laura Fernandez has been sworn in as our new President. Three days earlier, on Tuesday, she introduced her cabinet in a setting that was part reality TV show, part sporting event.
Fernandez stood center stage, backed by two large screens so those in attendance could get a better look at the team that will run the country for the next four years. One by one they were introduced, each of the 37 highly paid ministers entering to applause while the screens behind showed previously recorded clips of each as if they were participants in a World Cup soccer match, even doing the familiar pose of looking to the camera while confidently crossing arms in a stance that suggests, “We mean business!”
The only one that really mattered was the last one introduced. Outgoing President Rodrigo Chaves didn’t outgo very far, as he is now Minister to the President. Given Chaves’ outsized ego, it is safe to presume that he will be wielding nearly the same power as when he was the actual president.
For many that is a good thing. Laura Fernandez got over 48 percent of the vote in a field of twenty candidates, in what was essentially a referendum on Chaves’ previous four years. Their party, El Partido Pueblo Soberano (Sovereign People’s Party), delivered some good results, with increased investment, low inflation and a reduction in unemployment and poverty.
However the murder rate hit record numbers each of the four years Chaves ruled. He has been quick to attribute most of these murders to gangs, even dismissing it as primarily criminals killing other criminals. The PPS has pushed the construction of a prison modeled after El Salvador’s gangbanger penitentiary, but the situation here is not nearly as dire as El Salvador faced. There, large well-armed gangs controlled major portions of the country. Nor is the extreme method of rounding up anybody with a gang tattoo and asking questions later likely to gain favor here.
The Fernandez/Chaves team haven’t time to waste. The murder rate continues unabated. The economy has been shaken by events half a world away. The dollar has fallen over 30 percent against the colon since Chaves took office in 2022. Some of that was due to the overinflated value of the dollar during the tail end of the pandemic. Even so, it is now 10-15 percent lower than it should be, and much of this is due to Chaves’ own economic policies.
The effects are felt by any businesses involved in exports and tourism, which accounts for a fair portion of the private sector economy. Coffee farmers are getting hammered. This week over 800 banana company workers lost their jobs as their company shut down. The unfavorable exchange rate was called out as a principal culprit in their decision.
Chaves entire career has been spent as an economist, with over two decades in the upper echelon at the World Bank, which makes his public indifference to the looming crisis puzzling. Or maybe not. The average Jose, working for a living here gets paid in colons and makes his purchases in colons, and dollars are a luxury rarely seen or used. As long as inflation is kept in check and employment stays steady, a lower exchange rate is acceptable as a trade-off.
Chaves cast himself as an outsider and a populist, and capitalized on the public’s dissatisfaction with the status quo. His endorsed successor is now in office. He will have an active and visible seat next to her at the table. The constitution of Costa Rica prohibits anyone from serving two consecutive terms as president.
So congratulations to Laura Fernandez, our president for the next four years, while the final line of an old song by the Who echoes through my head: “Meet the new boss, same as the old boss…”
Read more of Don Mateo’s writing from his newly published ebook.
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