Costa Rica Blogs - Newsfeeds

by Rod Hughes

The Catholic Church’s Episcopal Conference has been accused of shady financial dealings by the financial watchdog agency, Sugef. Sugef general superintendent Oscar Rodríguez told the courts that his agency’s investigation has turned up evidence of “illegal financial intermediation,” the daily La Nación reported Thursday. The conference consists of eight Costa Rican bishops.

The 292-page Sugef report, based on several weeks of investigation, turned up evidence of violations of Central Bank code that could entail, if conviction follows, penalties of three to six years in prison. However, it is unlikely that any cleric will go to jail. The Church does not choose its bishops on the grounds of their financial acuity and the conference denies any knowledge of illegal management of Church funds. (A good example of this was the plight of the Vatican Bank after the 1982, $35 billion collapse of Banco Ambrosiano in Italy, a near-disaster that had the Vatican scrambling for liquidity. The Vatican Bank is administered by the ollege of Cardinals.)

The violation of the code’s article 157 occurs, reported La Nacion, “when persons or organizations, without permission or controls of public financial authorites, acquire money from the public … with the aim of (selling) stocks or credit in some form.” In other words, the accusation is that they were acting like stock brokers without authorization of authorities. The Conference said in a press release that it is the victim, instead, of fraud.

In December, 2004, Sugef warned the Esiscopal Conference to stop acting as financial intermediaries. But April 11 of this year, a La Nación investigative report revealed that bank accounts of the Conference’s Pastoral Services continued to receive funds from local and foreign investors, destined for the Panamanian investment house Grupo Sama S.A. The conference owns 20% of Sama stock. The newspaper’s probing also revealed that money from Giovanni Bondaz had passed through the account. Bondaz is under investiagion by Italian authorities.

The case is complicated because the Pastoral Services administrator, Jorge Torres, died in June of last year. So he is unable to testify to why part of the funds he lent were to Anna Moscarelli, a Swiss businesswoman who, in the 1990s, managed funds for a high Mafia figures. Moscarelli’s company here administered three Costa Rican hotels and took out a loan for $3 million with Sama. But the flow of money from investors continued long after the Sugef warning, a Sugef investigation between April 21 and 30 this year discovered. Between March, 2005, and August of 2007, 168 deposits were made in the bank account.

One result is inevitable: it will take years before this cat’s toy of tangled financial dealings is finally sorted out and wound up in a neat verdict.

by Rod Hughes

Look out, soccer clubs! Costa Rican entrepenuer and the Liberia First Division club’s owner, Nario Sotela,has his checkbook out and is shopping for players long before the final championship match. And his specific target seems to be Alajuela.

He has just signed Minor Díaz of the Cartago club (13 goals in the 2007-8 season) and recently purchased the services of Luis Marín, 33, who comes off two seasons with the Maccabi Netanya club in Israel. He is awaiting arrival of French player Michel Gafau, a teammate of Jacques Remy in Strasbourg. But Sotela is also seeking the likes of Victor “Mambo” Núñez, Harold Wallace and Pablo Salazar, all of Alajuela. He told the daily La Nación that if Saprissa’s front office doesn’t want to renew the contracts of their veterans, he would gladly take them off their hands, as well.

He also let slip that he might contract Colombian head coach Carlos Restrepo recently fired by Heredia. It is obvious that he is out for veterans of all kinds and wants experience. None of the names he bandies about are novices. All this public shopping benefits players who have records and can demand a higher salary for contract renewals. Careful, Sotela the raider is out there!

Sportswriter Trashes Stadium

La Nación sportswriter José Luis Rodríguez reacted as if ST. Center in Aserrí, scene of Brujas’s recent triumph over University of Costa Rica, were a personal insult.He wrote Thursday that the stadium looks more like a small town park where kids play pick-up matches than a First Division stadium. Now, remember that Brujas has no really permanent home but plays many of its “home” matches there. Escazú is the franchise’s home but real estate prices there are sky high and the slope on which most of the town is built is hardly apt for a big stadium and its attendent parking lot.

Granted, the press box and the first class seats project nearly out on the pitch. And ST Center’s sidelines are perilously close to the cement walls. And there’s a lack of seating for a club that could conceivibly play in a championship match this year. They have played in the National Stadium in La Sabana Park but that will shortly be torn down to make way for the new 35,000-capacity, $72 million stadium financed by China. So the club is not likely to please critics like Rodríguez. Besides, Brujas was, previous to its franchise move to Escazú, the Guanacaste club based in the provincial town of Nicoya. Their old stadium was a mess and one year a section of the splintery wooden stands collapsed.

As we mentioned in a recent blog, the Brujas nomadic way of life has its upside. “Away” matches hold no terrors when you have no real home.

by Rod Hughes

Brujas of Escazú easily rolled over the University of Costa Rica side on its way to the semifinals of the Torneo del Verano, which is the 2008 half of the 2007-8 season. Brujas has no home pitch, since Escazú has no appropriate stadium, so all their matches are “away” and they were playing in Aserrí, a town south of San José for this match. Perhaps this was their advantage Wednesday for a 1-0 victory to follow up on their 3-2 win Sunday in the two-match elimination.

Earlier this year, UCR has looked extremely weak and Brujas had no problem holding them. But Alejandro Sequiera was not satisfied with a pasing grade as the fed the ball to Evance Benwell for the goal at minute 71. Earlier, Brazilian Ronnio Martins had directed a blistering shot at the UCR goal, stopped in a fine play by Argentinian goalie Osvaldo Quesada. So Brujas slipped past easily and is set for a two-match series with the faltering Saprissa, beginning Sunday.

Much has been written about the collapse of Saprissa this year, including by this reporter, so suffice it to say that Brujas looks like a strong adversary. Saprissa’s season beginning nine-match winning streak was capped by a losing streak and dropping of the CONCACAF regional championship to Pachuca of Mexico, plus the loss of a commanding lead in the First Division overall point standings to Alajuela. (The big purple “S” also won the opening half of the season.)

Perez Zeledon Dumps Heredia, 2-1

As this is written, Heredia fans are calling for the head of their club president Achille Alí upon seeing their club eliminated by a surprisingly strong Perez Zeledon. The warriors from the southern zone clearly out-played the much older club, Heredia, on its own pitch. As La Nación sportswriter Rodrigo Calvo noted, this hardly should have come as a surprise, since this is the third time P-Z has eliminated Heredia from the finals. Heredia was dumped from the opening tourney in 2004 and in a closely fought 2006 tourney Heredia was leading going into the second match 3-0 only to be trounced 4-1 in the second and to finally lose the penalty shootout 7-6.

This time, Heredia’s Carlos Angulo opened scoring at minute 39 with a free kick. Freddy Fernandez tied it up early in the second half on a pass from Luis Stewart Perez. Marco Herendez sealed it for P-Z at minute 70 with an assist from Tirso Guio who has been the backbone of the P-Z attack. (We note that Heredia coach Paulo César Wanchope is not under fire. Not only did he take over only lately, but he is an international soccer idol, Heredia’s favorite son.)

<strong>by Rod Hughes</strong>

Want to call ahead for reservations in Panama as you drive south on the InterAmerican Highway from San Jose to Paso Canoas on the Costa Rica-Panama border? Better make your call before you leave San Jose, even if you have your cell phone with you.

At least that is what a report by public services watchdog ARESEP indicates. The agency studied cell service in March and found that service, especially the GSM system, has deteriorated since October of 2006. Customer have serious problems getting a signal along the 350 kilometer stretch of highway, according to the daily <em>La Nacion.</em>

Only near major population centers such as Buenos Aires can one count on making a call. The worst appears to be the system installed by a subsidiary of the French firm Alcatel, the report indicates. But even the Ericcson system has suffered a slight deterioration, the report adds. Coverage of Alcatel dropped from 48% to 20% since 2006 while Ericcson declined from 45% to 39% during the same period.

Elberth Duran, spokeman for the telephone company ICE, blamed several factors, including vandalism by thieves who cut cables to steal the copper. usually to sell illicitly in order to buy drugs. In the case of Alcatel’s system, ICE had to assume the maintence role when it severed relations with the firm. ICE immediately began work to improve the Ericcson net, continued Duran, the moment the ARESEP report was passed to the phone company.

by Rod Hughes

The testimony of former Public Security Minister Fernando Berrocal before a special Legislative Assembly committee probing FARC penetration into the political culture has hardly produced the dramatic revellations lawmakers sought. But Berrocal apparently wanted to extend his 15 minutes of fame yesterday.

The former minister, a member of President Oscar Arias’s National Liberation Party, strongly criticized what he called “Arismo,” a manufactured word meaning undue influence of the president and his brother, Rodrigo, Minister of the Presidency, on the party’s functioning. Indirectly but clearly, he accused the president of dictating to the party the next election’s presidential nominee, current Vice President Laura Chinchilla.

Arias has indicated that he would not be displeased at having a woman president in 2010. This irked several party stalwarts including San Jose mayor Johnny Araya, who may have his sights set on the same goal although as yet unannounced. Chinchilla has tried to stay aloof from this bickering. But Berrocal, whose own political career has been sadly bent, predicts an “insurrection” within National Liberation “in the next few weeks” in response to Arias’s allegedly dictatorial influence.

Berrocal was Security Minister for nearly two years, compiling an admireable record of confiscated narcotics. Then, he announced that he expected Colombian authorities to find links between the Colombian guerrilla/narctoics traffickers/terrorists FARC and local politicians. This did not happen and his boss, the President, was highly peeved and indirectly accused his top cop of demoguery, firing him in a most abrupt way.

The Legislative Assembly named a committee to investigate Berrocal’s startling assertion, expecting him to name names, but have been disappointed. Without this concrete date, the committee appears at a dead end, although it may continue to meet for the remainder of its 30-day term, just for appearances’ sake.

by Rod Hughes

The value of the dollar against the colon continued its rise yesterday but the trading frenzy of Friday has calmed. Yesterday´s hike of 3.87 colones per dollar was only slightly higher than the Monday rise of 3.44 and much less than the sharp jump of 9.50 registered on Friday, according to the daily La Nacion..

Conxulted by the newspaper, economist and former Central Bank president Rodrigo Bolanos considers that speculators are expecting a devaluation of the colon and not a hike in its value as it experienced late last year. “People prefer to have more of their assets in dollars,” he said. This change in attitude effects the market.

Previously, La Nacion quoted a prominant economist as saying that the Central Bank had $5.9 billion in dollar reserves. (This was quoted again yesterday in this newsblog.) But it appears that the figure is inflated. In early May reserves were $4.945 billion but this dropped to $4.926 billion on May 9. However, the difference in figures would not alter the opinion expressed by the economist—the Central Bank has a comfortable reserve in dollars due to continuing foreign investment, exports and tourism. The reserves are important so the bank can confront such problems as petroleum prices and exchange speculation.

by Rod Hughes

Internet money speculators are playing hob with the value of the colon. Late last year, Costa Rica raised the value of its colon against the dollar and for a time only about 487 of the local currency was needed to buy a dollar. Last week, it went up to 501 but that was just the beginning.

Monday, Banco Nacional raised the colon value unlaterally and drastically, surprising even the Central Bank. The buying model jumped from 505 Friday to 517 on Monday and the sale from 511 to 523. Bank spokesman Luis Carlos Mora said the move was to foil currency speculators who used the Internet overnight to manipulate currencies. He promised that today the colon would lose value by 5 colones.

Central Bank manager Roy Gonzalez commented, “It seems strange to us that Banco Nacional would adjust the exchange rate more drastically than the variation in Monex.” (Monex is the world currency market.) Economist Juan Munoz told the daily La Nacion, “The exchange rate shouldn’t be so elevated especially when Banco Central has $5.9 billion in reserve.”

Volume of trading colones vs. the dollar was a brisk $71 million on Friday but only $8 million yesterday. “Today, things were calmer,” said Gerardo Gonzalez of BAC of the trading Monday, “We don’t find any explanation for what happened.”

by Rod Hughes

It may not be any threat to Boeing yet, but a new consortium, Costa Rican Aerospace Alliance (Coraal), has signed a contract with Ad Astro Rockets to build a platform on which to test Dr. Franklin Chang’s plasma rocket engine, the daily La Nacion reported late last week.

Made up of six Costa Rican businessmen, the new firm will build a rectangual table-like structure to unite the rocket engine, its electrical and cooling systems and tie them in with the International Space Station still under construction. The engine, designed to free space rockets from costly and bulky chemical fuels, is the brainchild of Chang, a Costa Rican astronaut and physicist. The Coraal project will initially employ 187 persons.

The plasma engine prototype has been deveoped at Ad Astra’s facilities in Guanacaste province near Liberia. Chang told the press that, once the engine is tested in a vacuum at Ad Astra’s facilities in Houston, it would be ready to be hoisted up to the space station with a conventional rocket. Essentially, the engine heats a gas to such a temperature that an electron is released.

By being freed from the tyranny of chemical fuels, the engine will not only be cheaper to run but will accellerate more rapidly and make interplanetary (and later interstellar) flight more feasible. Chang thinks the more immediate use will be to hoist satellites into orbit or cargo to space stations. One suggested scheme on earth is to incinerate dangerous refuse and turn it into useful byproducts.

by Rod Hughes

We never thought we would ever see it, but Costa Rican companies are outsourcing in order to field their own brands even as the country woos foreign automotive parts firms to settle here. But the lure of cheap Asian labor is too good to resist.

Financial writer Peter Krupa of The Tico Times, Central America´s leading English’language publication, recently profiled three of these small companies that hope to grow larger by importing their own bands. The best example is Luis “Guilly” Cubero whose already successful Santa Ana bike retailer sells between 7,000 and 8,000 road and mountain bikes per year.

But come September he will be selling “Guilly Bikes” to display alongside imported brands like Trek, Cannondale, Shimano and Fox Racing, hoping to raise annual sales to 12,000. It would seem the right time with fuel prices rocketing upward. The bikes are designed by Cubero and manufactured in Taiwan.

Another such Tico Tirm is Cococo (Campania Costarricense de Computacion) t6hat now has its own laptops to sell alongside its Hewlett-Packards and Toshibas. Ditto BTC which is adding laptops assembled in-house from imported technology to its line of PCs already made at their Los Yoses plant.

The advantage for the company is obvious. “If you don’t have cheap labor from Asia, you can’t…compete,” Cubero told reporter Krupa. His bikes will range from a child’s model at $50 to more than $1,000 for top of the line models. And a Cococo laptop will go fore $500, 5-7% lower than equivalent imports.

But there are other advantages for the local buyer than just lower price. Getting a manufacturer to honor his warranty is often nearly impossible when the firm’s headquarters are on another continent and the local retailer is unhelpful. But parts and service are local with local companies.

But that trend is not stopping Foreign Trade Minister Marco Vinicio Ruiz from trying to attract foreign auto parts firms to do their outsourcing here. They would not feel lonely. Bridgestone-Firestone Tires set up the first automotive-related firm way back in 1967 and now turns out 12,000 tires per day, notes Tico Times reporter Leslie Friday recently. “Hutchings, Deshler, Continental AG and Daewoo are just a few among the long list of other companies who have in-country sites proving anything from assembly and electronics work to packaging,” Friday wrote.

The sprawling Bridgestone-Firestone plant alongside the PanAmerican Highway north of San Jose on the way to the airport is not the only example these days. In 2007 the country exported $240 million in automotive components and final products, Friday discovered, a whopping 214% over the 2003 figures. Costa Rica’s advantages were outlined by Gabriela Llobet of the Costa Rican Investment Promotion Agency (CINDE): Strategic location (proximity to U.S. markets), skilled workforce, political/economic stability and its incentives (e.g., free trade zones).

Besides giving evidence that CINDE has been doing an excellent job of aggressively marketing the country among foreign companies, interest in this country shows that the lessons of the Bridgestone-Firestone and Intel have sunk into the minds of companies. It was only 40 years ago when Ticos turned up their noses at a “made in Costa Rica” label. Today a product from this country is respected–even if it is made in Taiwan.

May 12, 2008

I went for a swim in the pool yesterday, after filling and vacuuming. I think I’ll swim every day, whether I want to or not, just because of all the work I had to put into it.
I thought I was becoming more Tico. In fact, I am, but the process is not complete, yet. I figured I was ready to accept all setbacks, regardless of cause. For example, lies, stupidity, theft, negligence, corruption, petty little power trips like the people in all governments like to pull. In short, I was ready to deal with life, with a new, calmer, better outlook. Wrong.
I got mad at the ICE office when the guy told me Carlos had to be there to change the service into my name. I told him two other people, one in the same office, had assured me he didn’t need to. I said one of them must be lying, and that I was sorry I was mad, I knew it wouldn’t help, I didn’t even care if I changed the name or not, really, but anyway, I was mad.
I got mad at the RTV (raytayvy), the yearly safety. They said the alignment on my car was out. Remember, I had just got all that work on the front end done? Including an alignment? It’s lucky for me that I have friend as strong-willed as Jose. We argue heatedly about how to do stuff, but one always listens to the other. And we always laugh at the results, right or wrong. Today, I went to Canas for my re-safety. They give you a month to come back with the problem fixed. The plan was to wait until 8 a.m. to phone RTV and find out if I needed an appointment for the re-test. Jose didn’t think I should phone, we were going right by anyway. I figured it would save time phoning, and if I needed an appointment, and couldn’t get one, I would just go to the bank in Miramar, and save Canas for another day. Well we had a little trouble getting through, so I agreed to go.
He insisted we stop at the Yamaha store to see about parts for his bike on the way. I gave up hurrying, and had a snack and a coffee. When he came out, I explained that if we were going to stop in anyway, I would have left early. I wanted to get to the bank as early as possible because the line grows all day, and the line at the parts store, would be the same on the way home. He began to understand.
We stopped at the RTV, and, yes, we needed an appointment, but they could squeeze us in. By the time I got to the bank, it was 9:15, and it was full. I asked the guard where to go for a cash advance on my credit card, and he said the main desk. Now, the Banco Nacional here has three separate systems that I have run into, that they use in different branches, so you always have to ask the guard. After waiting in that line, I discovered he was wrong, and went and took a ticket for the other line, about 95 numbers away from the one being served. It was 11:45 before I got out of the bank. I was mad about that too, and only felt better after making Jose give up his argument and admit I was right.
Next, it was off to the alignment shop, where the work took about an hour, and cost about $32. We had a nice lunch while we waited, and drove to the RTV, about 5 km., for the re-test. I failed again. I got mad again. We went back and I had a couple of beers this time while I waited. When he was done, the mechanic showed me on the computer screen, with a detailed explanation, that it was well within the limits, and in fact, perfect on some specs. Well, it passed this time, and we headed home. I guess the only way I’m really becoming more Tico, is that I’m late for more things. And maybe I calm down faster.
We still had one more errand to run. Linda wanted a desk for the office in the new house. Jim, around the corner had a nice one built in a corner. It is rustic, but attractive. I was going to get the same guy to build it, but he has taken ill and is unable to work. I talked to Jose about it, and we figured we could build it. I drew up a plan, and talked to Mike and Jose about our options, and decided we would try to find some nice wood for the top, get a local shop to finish it, and build a functional frame underneath.
Jose and his brother go to Sardinal hiking in the mountains with a couple of their friends. They say they are deer hunting because they carry rifles, and would like to shoot one, but they haven’t, yet. Jose saw some nice wood in Carlos’ driveway. Carlos is a neighbour of his friend in Sardinal. One Sunday, I believe three weeks ago, he took a drive up to talk about it. He made numerous phone calls, and another solo trip. I drove him up once, and waited in a bar while he walked around the corner to talk to the guy. I did that before, when I was younger, but I wasn’t trying to buy wood. This Saturday, past, we went to a different bar, down a gravel road, about a mile east of Sardinal, and looked at his wood in the dark. In a country where many of the large, old trees have been cut for lumber or to clear farmland, he got a tree that couldn’t be used for lumber, and for example, made a one piece table, including the six legs, that would be about ten or eleven feet long, and six feet wide. It has a hole in the middle that reduced it’s value as lumber, but would allow for expansion and prevent cracking of this magnificent piece of Guanacaste. He had stacks of heart shaped “biscuits” of wood about three feet in diameter, and slabs 24 to 30 inch wide by 1 to 3 inches thick 100 inches and longer. All Guanacaste. One brother, Luis, does the chainsaw work, and the other brother, Marvin makes it into furniture. The bar is furnished with their handywork, and it’s excellent.
When we had finished walking through the yard, I offered Luis a beer. That was the best thing I could have done. He enjoys beer as much as I do, and Jose drank Coke, while they talked some more about the wood, and quite a bit about me. He wasn’t going to sell this stuff to just anyone, and he wanted to know what I planned to do with it. He reminded us that it was more valuable to his family as furniture, and they didn’t usually sell wood. While we sat with him, most people in the bar came over and said hi to him. Everyone shook our hands as he introduced us as his new friends, and a few sat down to drink with us, buying rounds for everyone. I noticed the ones who sat at our table, two guys one time, and one guy the other, were drinking soft drinks. Talk seemed to be about lumber, and one guy paid him quite a bit, so it was obviously his bar and lumber business, and we were associating with the biggest guy, certainly family, in the neighbourhood.
After a few hours of drinking, he deemed me acceptable, and the deal was closed. I never heard them talk money, but apparently he gave Jose a ball park figure. We agreed to return today to pick out the two pieces I wanted, so we went there directly from Canas. Louis grandmother told us he had to go to Puntarenas for an emergency.. Jose has talked to and probably met ten of the family, I have met seven. Fortunate too, because she thought Marvin was in Sardinal, so we went and found him. He took us out to the bar, where I selected two beautiful one inch slabs, and we drove to another brother’s house, because Marvin didn’t know the price, or have a tape because he does the furniture.
We finally got home, almost twelve hours later. Life certainly gets stretched out here!