by Rod Hughes

Showing just how vulnerable the country’s water system is, for the third time in a week nearly half million residents of the Central Valley were without water. The latest shutdown of the Water and Sewer Institutue’s (A y A) mains is blamed on an earth movement and A y A syys that water may not be on until tomorrow.

Sunday, the water was shut down for routine maintenance at the Orosi reservoir. At least that one afforded residents warning. Then Thursday morning, a ham-handed backhoe driver nicked the main conduit at Pitaya, causing an emergency shutdown. Today, engineers discovered other damage and the water was shut off again, in some places like Desamparados without ever having been turned on.

“In some sectors such as Coronado and Desamparados…there’s no water at all so we’re sending tank trucks to them,” said an A y A spokesman. In others, water was turned on for several hours before being shut off again. (As this is written at midday Friday, no tank trucks have been sighted in the San Miguel section of Desamparados where not a drop has moved through the mains since about 8 a.m. Thursday.)

by Rod Hughes

Central Bank President Francisco de Paula Gutierrez warned the country yesterday that vigorous “economic adjustments” are on the way in order to combat the effects of the skyrocketing petroleum and worldwide food prices and slumping foreign trade. Among these measures will be tighter credit, higher interest rates and a push to increase exports.

Gutierrez, in an exclusive interview with the daily La Nacion, stated, “The adjustment has to come from every side, from less internal demand. There will be restrictive monetary policies.” Internal demand includes buying by consumers, companies and the government from sources within the country, he explained.

During April, May and June, the Central Bank began a campaign of buying up colones, using millions of dollars in its reserves. And, already public banks have begun to raise interest rates. The measures will mean that Tico consumers have fewer colones with which to buy things, a condition that will hardly make retailers happy. Nonetheless, Gutierrez promised that the changes would be gradual and not abrupt. The search for new export markets also cannot be accomplished overnight.

Especially worrisome is the balance of payments deficit caused by soaring petroleum prices and shrinking export trade. Gutierrez foresees this continuing for a time. The government has already taken measures to reduce gasoline use by trying to reduce the time motorists spend idling their engines in traffic jams. This measure, introduced in late June for peak traffic hours, will definitely be extended for all day on one day per week, according to the final number of the license plate. The daily La Nacion observed in today’s edition that after peak hours, long convoys of trucks cause further traffic jams and this simply alters the time of the jams instead of eliminating them.

Gutierrez said that the opening of the telecommunications and insurance markets may alleviate the balance of payments somewhat by stimulating foreign investments. Those bills have passed the Legislative Assembly after a long, hard political battle.

But the country’s top banker is promising no rose gardens. “Costa Ricans have to understand that the situation we are currently navigating is much more difficult than what we had a year ago. It will require more prudence and discipline from people.” A year ago, unemployment was at record lows and the government was able to reduce the national debt while ending the year with a budget surplus.

by Rod Hughes

The country’s biggest Spanish-language daily, La Nación, continues to dig up details on the secret funds used to pay myriad presidential advisers. In its latest exposé, the paper says that Taiwan (with which the country still had diplomatic relations) donated $1.5 million to relieve the suffering of 600 underprivileged families in the Rincón Grande slum of Pavas in a solemn ceremony on Oct. 27, 2006.

The funds were to be administered by the Housing Ministry and they were– $1,331,508 total so far. But they were paid for consultant work, studies and such, the largest sum to FLACSO (the Spanish acronymn for a social science study group) at $424,758, according to the paper. Housing Minister Fernando Zumbado defended the use of the money, saying that it “benefitted many more persons than just in Rincón Grande.”

President Oscar Arias’s chief of staff Rodrigo Arias, who goes by the title of Minister of the Presidency, says that all is perfectly legal. This may be true because private donations to branches of government appear to be uncontrolled by law. Zumbado notes that the funds cannot be called public since they do not come from the taxpayers’ pocket. But the scandal cannot be called good for Arias’s international prestige, an aspect about which he is quite sensitive.

In what the newspaper called a turnabout, the Minister of the Presidency said haughtily, “We of the government of the republic cannot satisfy the questions of the media when they want them. That depends on our policies and what we consider merits giving the information.” The paper noted this was a direct contradiction to an opinion piece he gave the paper this week that said, “…the demand for information is logical, natural and desirable in a country where the government is determined be be absolutely transparent.”

La Nación’s inquiring reporters turned up even more oddities, such as the fact that a government spokesperson, former Channel 7 TV newscaster Mishelle Mitchell, does not appear on any government payroll. But, the paper noted, article 2 of the Corruption Law specifies that anyone performing services or agencies or other government entities are considered public employees. She says she reports to the president and that the international bank BCIE pays her for this service. She is one of 84 whose services are paid by $2 million donated by BCIE to the Presidency.

Neither Rodrigo Arias nor Zumbado specified exactly how this horde of study groups and advisers helped the poor people in the slums of Pavas. Friday’s edition of La Nacion also noted that, although presidency Minister assured the paper that all the advisers were “professionals,” the list turned over to the Legislative Assembly Wednesday included a musician, a mechanic, a messenger and a secretary. The mechanic, Jorge Calderon, told the paper that he received his pay from the international bank for mopping and polishing the floors of several rooms in the Presidential Office Building.