FROM THE APRIL 2, 2014 ISSUE
What lies ahead for Costa Rica's next president?
Ricans go to the polls on April 6 to select the country's next president. Ruling
party candidate Johnny Araya abandoned his campaign on March 5, paving the way
for leftist anti-establishment candidate Luis Guillermo Solís to be elected.
What are the biggest challenges facing Costa Rica's next leader? What types of
policy changes can be expected from a Solís administration? To what extent will
Solís succeed in working with Costa Rica's business community?
Antonio Muñoz, partner at Arias & Muñoz in San José: "Getting his party to rally behind him and establishing a working
relationship with Costa Rica's productive sector are Luis Guillermo Solís' big
challenges after confirming his electoral win on April 6. Of these, the largest
challenge is for Mr. Solís to get confirmation of party loyalty and unswerving
support. For establishing a framework of work and understanding with the
country's business sector, Mr. Solís has no choice. He is certainly left of
center, but he does not campaign against existing institutions. He campaigns
for better governance and accountability, and he absolutely needs the working
support of Costa Rica's productive sector. Solís' challenge to govern, if
elected, is threefold: to maintain the vibrancy of Costa Rica's productive
sector, to find the right political and government figures to lead the
administration, and to either find a working arrangement with Congress or to
neutralize it. The easier task for the new president will be to seek and obtain
the support of the business community. This, in turn, would facilitate the
other two. Costa Rica's public-sector entities would profit from more
professional management and systems than drafting from the private sector would
afford. The Congressional minority of Mr. Solís' party in the future Congress
can only become a working majority by the endorsement of pro-business
representatives in the PUSC and PLN contingents. Only from the private sector
can Mr. Solís generate safe and sound income to manage the fiscal deficit and
fund his distributive social programs. And should the factional future Congress
prove to be unmanageable for the new president, Mr. Solís would need the
financial security and stability that only private economic expansion can
create. The big premise, though, will remain unanswered until after the run-off
election: can he garner overwhelming support from within his own party?"
Casas-Zamora, secretary for political affairs at the Organization of American
States and former vice president of Costa Rica: "The challenges that await Luis Guillermo Solís are complex,
and he's been given a weak hand to play. The first one is to build a viable
majority in a legislature in which his party controls only one-fifth of the
seats and has no obvious partners to forge a stable coalition. The second one
is to appoint a credible economic team that can soothe the anxieties of
domestic and foreign investors. The third one is to rein in a deteriorating
fiscal situation, which calls for a tax reform that Solís has pledged not to
pursue in the first 2 years of his administration. All this is a tall order for
a leader that lacks any previous executive or legislative experience, a solid
political base of his own and a team with deal-making and policy-making depth.
Solís will also have to deal with an institutional set-up riddled with veto
points and able to frustrate the best intentions. It is likely that a Solís
administration will try to compensate for these difficulties and its lack of a
strong popular mandate by quickly adopting many symbolic measures to signal its
commitment to austerity and probity. This may soon increase its popularity
among a citizenry that appears eager for a change. Alas, such gestures alone
cannot durably protect Solís from headwinds if economic growth, which has been
good and steady in the past four years, decelerates, legislative gridlock
worsens and the expectations of the more radical sectors of his party's base
(notably public sector trade unions) go unmet. As of today, all these outcomes
appear probable. There are few doubts that Solís is a smart, moderate, decent,
well-intentioned leader. Yet, his glaring political vulnerability may soon
start to exact a toll. Costa Rica may be in for a rough ride." MORE
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