Tag: costa rica

Costa Rica’s Growth Paradox

Can a country enjoy a relatively high growth rate for a quarter of a century and still be unable to reduce its poverty rate? That’s the case of my homeland, Costa Rica, which happens to have a critical presidential election on February 2.

For over 25 years Costa Rica’s growth rate has averaged 4.7 percent a year – one of the highest in Latin America – and yet the country’s poverty rate has been stuck at around 20 percent since 1994. Even worse, Costa Rica is one out of only three Latin American countries where inequality has risen since 2000.

Today, I’ve published a study looking at some of the causes. Even though Costa Rica has undergone a substantial liberalization process since the mid-eighties, the country’s economic model is still in significant ways based on a mercantilist system that is biased in favor of certain sectors of the economy at the expense of the poor. You can read the paper here.

New Study on Mexico’s Drug Cartels and the Global War on Drugs

Yesterday, Juan Carlos Hidalgo pointed out that Colombian president Juan Manuel Santos became the latest world leader to recognize the need to rethink the prohibitionist policies that allow powerful drug traffickers to flourish. Santos called for a new approach to “take away the violent profit that comes with drug trafficking” and that governments around the world, including the United States, the United Kingdom, and the European Union, need to debate legalizing select drugs, such as cocaine.

From Colombia to Mexico, the drug war rages on. Despite two decades of U.S.-aided efforts to eradicate drug-related violence in Colombia, the problem persists. Indeed, the trickle-down effects from Mexico southward now threaten to engulf Guatemala. Costa Rica, Honduras, and El Salvador are all experiencing alarming homicide rates at least partially related to drug trafficking. To address these spikes in violence and stem the flow of drugs, the United States has spent billions of dollars in Mexico and throughout Latin America. Sadly, there is little evidence that this policy has been successful, and the evidence mounts that it has been an outright failure.

A new policy is needed to stem the violence and consequences of the Mexican drug cartels pervasive power. In a new study released today, Ted Galen Carpenter, senior fellow, argues that the only lasting, effective strategy for dealing with Mexico’s drug violence is to defund the Mexican drug cartels. “The United States could substantially defund these cartels,” says Carpenter, “through the full legalization (including manufacture and sale) of currently illegal drugs.”

The new study, “Undermining Mexico’s Dangerous Drug Cartels,” is available here.

A Glance into Costa Rica’s Health Care System

Costa Rica – my home country – has suddenly become part of the health care debate after celebrity radio talk show host, Rush Limbaugh said that he would move to Costa Rica go to Costa Rica for health care if  ObamaCare were approved by Congress the federal government gets too involved in health care in the next few years.

Soon after Sunday’s vote in the House of Representatives, a website was set up to buy Limbaugh a one-way, first-class ticket to Costa Rica. Liberals were quick to point out that my country has a socialized health care system that is among the best in Latin America.

People claim that in Costa Rica health care is a right, not a commodity. The problem surfaces when you actually need to exercise your “right.”

Last July, La Nación newspaper carried a report about one hospital that had 5,000 people on a waiting list for surgery, some waiting up to a year. Among those on the list, 900 patients waited months to have possible cancerous tumors extracted. According to the head of the Oncology Department, “We know that 85% to 90% will be cancer cases based on previous medical tests.” For many of these patients, the wait is the equivalent of a death sentence.

Stories like this are common in the Costa Rican press.

Unfortunately, the current nationalized health care system and the state-owned monopoly in health insurance stifle the development of a viable, dynamic private health care system. Thus, many Costa Ricans can’t imagine life without “free” health care. That’s too bad since there’s nothing free about mandatory monthly contributions from workers and nothing just about being forced to pay for deadly delays in health care attention.

Libertarian Candidate May Force a Runoff in Costa Rica

A new poll published today by Costa Rica’s daily La Nación shows that Libertarian presidential candidate Otto Guevara has 30% of support among likely voters, trailing the candidate of the incumbent social democrat party Laura Chinchilla, who has 43% support. The news here is that in just two months, Guevara has increased his share of the vote by 18 percentage points, while Chinchilla’s share has collapsed by 20 percentage points during the same period.

The elections are scheduled for February 7th, and if neither of the candidates reaches the 40% threshold, there would be a runoff on April 4th. Given the trend, it is very likely that Guevara might force a runoff with Chinchilla in April. However, if Chinchilla’s rapid decline continues and Guevara captures more independent and undecided voters, he could still pull a surprising victory in February.

Guevara is a capital “L” Libertarian. His main issue during the campaign has been to get tough on crime (Costa Ricans’ main concern, according to polls). His economic platform is consistently free market: he proposes to abandon the colón and adopt the U.S. dollar as the official currency, he wants to unilaterally liberalize trade, he is calling for the implementation of a flat tax, and promotes an aggressive deregulation agenda. Moreover, he wants to introduce more competition in health care (currently a government single payer system) and education. On the international front, he has said that he would use international pulpits such as the UN and the Organization of American States to criticize Washington’s War on Drugs and propose sensible alternatives to international drug policy.

It’s still too early to call this election. Two months is also an eternity in Costa Rican politics. But things are certainly getting interesting in my home country.