LatinFinance - March/April 2013 - Costa Rica Supplement - 6
Costa Rica | President interview
As Costa Rica’s president Laura Chinchilla enters her final year in office, she talks
to LatinFinance about her remaining ambitions – and her legacy
A matter of time
groups of legislators, as well as individual citizens, can ask the
courts to review bills, causing endless delays. The need to secure
near-unanimity for changes has stymied many reform efforts.
Yet as she enters her final year in office, Chinchilla remains
hopeful that vital reforms can still be pushed through – not only on
the fiscal side, but also to boost competitiveness and cut red tape.
Ultimately, it is the security of the country – both economic and
physical – that she hopes to be remembered for.
LatinFinance sat down with the president in February in her
office in San José. The following is an edited transcript of the
interview.
Chinchilla: focusing on security
L
aura Chinchilla’s fiscally conservative administration has built
on the country’s strengths of security, stability and an open
economy. Foreign investment has soared to record levels
and, under her watch, the country has made a well-timed return to
the international bond markets.
Now Chinchilla, who has continued broadly with the policies of
her predecessor, Óscar Arias, is seeking to revamp the country’s
infrastructure – long a source of frustration for local businesses,
and especially so now as the country attempts to build a more
sophisticated economy.
But for the longer-term, much depends on the government’s
ability to increase tax revenues, a goal that has so far proved
elusive amid stiff popular resistance.
Meanwhile, the ruling National Liberation Party has not been
having all its own way. Chinchilla’s left-leaning party won less than
half of the 57 seats in the parliament. Its closest rival, the Citizens’
Action Party, won 12 seats. Under Costa Rica’s constitution, small
6
A Supplement
to
LF: You have been seeking to pass a fiscal reform. What is the
main rationale behind the reform?
Chinchilla: When we decided to tackle the fiscal issues, we put
many different laws on the table. Some sought to improve fiscal
administration, the collection and control of tax revenues. In
this area we succeeded: we were able to bring in reforms in the
customs system and fiscal collection; we were able to make the
system more transparent.
However, in attempting to close the deficit, we were not able to
get the necessary approval. We got the votes and succeeded in
the political negotiation.
But our cumbersome legislative procedures impeded the
final approval as the constitutional chamber decided that there
were some unconstitutional aspects. We have been working in a
consistent way in restricting spending.
As for the law, we are trying to start a process of consulting
different groups, productive, social and political sectors to see
which text, based on the original law, will be most viable. We will
try to modify the two basic taxes: we will need to do something with
income tax and moving from a sales tax to a value-added tax.
LF: How do you sell the idea of tax increases to the public?
Chinchilla: We tried to sell this and the impact on my political
capital was impressive with a nearly 40 point impact. The politicians
in Congress understand that. It was not that we were not able to get
the votes, it was a question of formalities in the procedures.
Since this is an electoral year it will be very difficult to get the
votes. If we are at least able to negotiate a new text, probably just
after [next February’s] elections we can find a period for the law to
be approved by the outgoing Congress. It’s an inter-regnum that
could create conditions for approval.
LatinFinance | March/April 2013
Table of Contents for the Digital Edition of LatinFinance - March/April 2013 - Costa Rica Supplement
Latin Finance - March/April 2013 - Costa Rica Supplement
Contents
Getting it right
Securing the future
Making the leap
Finding space
A hard currency
Trading up
Green credentials
LatinFinance - March/April 2013 - Costa Rica Supplement - Latin Finance - March/April 2013 - Costa Rica Supplement
LatinFinance - March/April 2013 - Costa Rica Supplement - Cover2
LatinFinance - March/April 2013 - Costa Rica Supplement - Contents
LatinFinance - March/April 2013 - Costa Rica Supplement - Getting it right
LatinFinance - March/April 2013 - Costa Rica Supplement - 3
LatinFinance - March/April 2013 - Costa Rica Supplement - 4
LatinFinance - March/April 2013 - Costa Rica Supplement - 5
LatinFinance - March/April 2013 - Costa Rica Supplement - Securing the future
LatinFinance - March/April 2013 - Costa Rica Supplement - 7
LatinFinance - March/April 2013 - Costa Rica Supplement - Making the leap
LatinFinance - March/April 2013 - Costa Rica Supplement - 9
LatinFinance - March/April 2013 - Costa Rica Supplement - 10
LatinFinance - March/April 2013 - Costa Rica Supplement - 11
LatinFinance - March/April 2013 - Costa Rica Supplement - 12
LatinFinance - March/April 2013 - Costa Rica Supplement - 13
LatinFinance - March/April 2013 - Costa Rica Supplement - Finding space
LatinFinance - March/April 2013 - Costa Rica Supplement - 15
LatinFinance - March/April 2013 - Costa Rica Supplement - A hard currency
LatinFinance - March/April 2013 - Costa Rica Supplement - 17
LatinFinance - March/April 2013 - Costa Rica Supplement - Trading up
LatinFinance - March/April 2013 - Costa Rica Supplement - 19
LatinFinance - March/April 2013 - Costa Rica Supplement - 20
LatinFinance - March/April 2013 - Costa Rica Supplement - 21
LatinFinance - March/April 2013 - Costa Rica Supplement - 22
LatinFinance - March/April 2013 - Costa Rica Supplement - 23
LatinFinance - March/April 2013 - Costa Rica Supplement - Green credentials
LatinFinance - March/April 2013 - Costa Rica Supplement - Cover3
LatinFinance - March/April 2013 - Costa Rica Supplement - Cover4
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