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### Viewing cable 05SANJOSE1904, COSTA RICA SCENESETTER FOR SENATOR ARLEN SPECTOR

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05SANJOSE1904 | 2005-08-17 23:11 | 2011-03-03 16:04 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy San Jose

Appears in these articles:
http://www.nacion.com/2011-03-03/Investigacion/NotasDestacadas/Investigacion2697430.aspx
http://www.nacion.com/2011-03-03/Investigacion/NotaPrincipal/Investigacion2697496.aspx
http://www.nacion.com/2011-03-03/Investigacion/NotasSecundarias/Investigacion2697489.aspx
http://www.nacion.com/2011-03-03/Investigacion/NotasSecundarias/Investigacion2697532.aspx
http://www.nacion.com/2011-03-03/Investigacion/NotasSecundarias/Investigacion2697535.aspx
http://www.nacion.com/2011-03-03/Investigacion/NotasSecundarias/Investigacion2701964.aspx
http://www.nacion.com/2011-03-03/Investigacion/Relacionados/Investigacion2701965.aspx

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    UNCLAS SECTION 01 OF 02 SAN JOSE 001904

    SIPDIS

    SENSITIVE

    DEPARTMENT FOR H, JCOOPER; CARACAS FOR JSPEAKS

    E.O. 12958: N/A
    TAGS: ASEC CS ECON OVIP PGOV PREL VE
    SUBJECT: COSTA RICA SCENESETTER FOR SENATOR ARLEN SPECTOR

    ¶1. (SBU) SUMMARY:  Embassy San Jose warmly welcomes Senator
    Arlen Spector.  Your trip comes in the heat of the campaign
    for the February 2006 general election.  The political
    establishment is still struggling to recover from large
    scandals that resulted in two ex-Presidents awaiting trial
    under house arrest, and contributed to the fragmentation of
    Costa Rica's two traditional political parties.  The
    executive and legislative branches are both widely viewed as
    inept and unable to do their jobs. To many observers,
    President Pacheco lacks the vision and political clout to
    govern effectively.  He has so far refused to send the
    U.S.-Central American-Dominican Republic Free Trade Agreement
    (CAFTA-DR) to the legislature for ratification, despite
    explicit calls from the legislature for CAFTA-DR's submission
    issued in the wake of U.S. congressional approval of the
    treaty.  Bilateral relations between the U.S. and Costa Rica
    are friendly.  The GOCR is a close ally on U.N. cloning and
    human rights issues.  End Summary.

    -------------------------------
    Friendly Bilateral Relationship
    -------------------------------
    ¶2. (U) The U.S. and Costa Rica enjoy a productive
    relationship based on shared values in the areas of democracy
    and human rights.  President Pacheco, defying public opinion,
    gave moral support to the U.S.-led coalition on Iraq.  In
    September 2004, however, the Constitutional Court ruled that
    Costa's Rica participation in the Iraq Coalition was
    unconstitutional (on the grounds that it was against the
    country's traditional neutrality), forcing the GOCR to ask to
    be removed from the list of Coalition countries.  This was a
    purely symbolic move; Costa Rica abolished its military in
    1949 and did not contribute any resources to the Coalition.

    --------------------------------------------- --------
    Corruption Scandals Discredit Political Establishment
    --------------------------------------------- --------
    ¶3. (U) Last year's unprecedented corruption scandals have
    contributed to a feeling of crisis and political malaise in
    the country.  Ex-president Miguel Angel Rodriguez (1998-2002)
    faces charges of corruption related to a major
    telecommunications contract negotiated during his
    administration.  Another ex-President, Rafael Angel Calderon
    (1990-1994), is awaiting trial on corruption charges related
    to his role in a healthcare equipment deal that allegedly
    included several million dollars in bribes.  A third
    ex-President, Jose Maria Figueres (1994-1998), has come under
    fire for failing to disclose earnings of $900,000 in
    "consulting fees" received from a French telecom company.
    Figueres refuses to return to Costa Rica to testify before
    the Legislature.  As of mid-August, Calderon and Rodriguez
    (who both belong to the ruling Social Christian Unity Party
    (PUSC)) remain under house arrest.

    ¶4.  (U) Additional scandals erupted following the
    catastrophic fire of July 13, which killed 19 people and
    destroyed a large portion of the Calderon Guardia Hospital.
    Subsequent investigations show that the hospital failed
    numerous fire safety inspections, but failed to modernize
    their fire control systems.  Considering that the health
    ministry has been at the center of many recent scandals, this
    further embarrassment only served to further reduce public
    faith in the system.

    ¶5.  (U) A number of new parties have formed in response to
    the public's mistrust and dissatisfaction with the
    traditional political options.  Dozens of new political
    parties are now officially registered as the country prepares
    for February 2006 general election.  Former President Oscar
    Arias is the clear front-runner in early polls.  Arias has
    built his platform on free trade, though polls also suggest
    that average Costa Ricans are more concerned about crime than
    economic issues.

    -------------------------------------------
    Executive Branch Muddling Through Till 2006
    -------------------------------------------
    ¶6. (SBU) The current president, Abel Pacheco, was elected in
    the country's first-ever run-off election in April 2002.  His
    approval rating, however, has fallen steadily since 2002.
    Nearly 20 ministerial-level officials have resigned or have
    been dismissed from Pacheco's cabinet since he took office.
    Pacheco's government has weathered strikes by public school
    teachers, telecommunications workers, dockworkers, and air
    traffic controllers, but the President has been criticized
    for caving in too easily to demands from powerful public
    sector unions.  The President is widely viewed as lacking the
    necessary vision and political clout to govern effectively
    and shape the future direction of the country.  Pacheco has
    also been subjected to close scrutiny for alleged campaign
    finance irregularities and various minor ethical violations
    which, coming on the heels of so many presidential scandals,
    have further deteriorated his public standing.

    -----------------------------
    Legislative Branch: Paralyzed
    -----------------------------
    ¶7.  (U)  Deputies representing five parties were elected to
    the Legislative Assembly in 2002.  Eleven of the 57
    Legislative Assembly Deputies have since broken away and
    either formed new parties or declared themselves independent.
    There are now at least nine parties and three independent
    legislators struggling to function within a legislative
    structure that traditionally has had only two parties.
    Political analysts widely refer to these splits as the
    "atomization" of the Legislative Assembly and the traditional
    two-party system.  The Legislative Assembly is widely viewed
    as unable to get anything done. While some of the problem is
    institutional (poorly designed rules that procedurally savvy
    minority parties exploit fully), political analysts opine
    that the Assembly's main problem is a lack of leadership that
    can forge consensus. Currently, in their opinion, the
    Assembly is an assortment of at least a dozen different
    groups that are unaccountable to any party or electorate and
    that are mainly focused on
    posturing for the upcoming 2006 general election.

    -----------------------------
    CAFTA-DR Ratification Delayed
    -----------------------------
    ¶8.  (SBU) The Costa Rican Ministry of Foreign Trade was
    expected to submit CAFTA-DR to the Costa Rican legislature
    shortly after its signing, but, citing the inability of the
    legislature to pass a fiscal reform package, President
    Pacheco has not yet introduced the bill to the Legislative
    Assembly for approval.  Most observers believe the real
    reason for Pacheco's reluctance to present CAFTA-DR to the
    legislature is his fear of threatened labor strikes and
    public unrest.  Pacheco recently convoked a "Commission of
    Eminent Persons" to review CAFTA-DR and render their opinion
    on its potential for benefit or harm.  The five-person panel
    is expected to submit its report in mid-September.  Pacheco's
    commitment to delay has spawned havoc within the trade
    ministry, with several high-ranking officials resigning or
    being fired for disagreeing with the president's stance.
    Recent polls show strong public support for CAFTA-DR.

    ------------------------------------------
    GOCR Saddled With Large Public Sector Debt
    ------------------------------------------
    ¶9. (U) One of Costa Rica's most serious macroeconomic
    problems is the fiscal deficit.  More than 90 percent of the
    GOCR's income is used to pay government salaries, pensions,
    and interest payments on the national debt.  The government's
    fiscal deficit in 2004 was equal to 2.5 percent of GDP, a
    decrease from 3.0 percent from the previous year.  At the end
    of 2004, Costa Rica's public sector debt topped USD 10.5
    billion.  The GOCR's deficit is largely financed by
    government borrowing and the surpluses generated by some
    state-owned monopolies (which include telecommunications,
    electrical power, insurance, and petroleum distribution).  In
    late 2004, the GOCR, unable to attract investors on the open
    market, resorted to forcing parastatal service providers to
    take on government debt to allow the GOCR to meet its
    end-of-year payment obligations.
    FRISBIE

`