San José, Costa Rica, since 1956

President Denies Crisis -- Pacheco’s Cabinet Crumbles, More Ministers Resign, Unions Hope for Shift in Administration

Seven high-level government officials resignedthis week, including more members of thePresident’s economic team, leaving some legislators,business leaders and analysts questioningthe country’s political stability.While some suggested this is the worst politicalturmoil the country has seen in decades, PresidentAbel Pacheco denied his administration is in crisis,and attempted to instill calm by insisting the governmentwould continue moving forward with itsagenda.“Everything is normal,” he told the press Wednesdaynight after half a dozen high-level officials resigned.SINCE Monday, the President has been handed theresignation letters of three cabinet members: ForeignTrade Minister Alberto Trejos, Minister of Public Worksand Transport Javier Chaves and Presidency MinisterRicardo Toledo – considered Pacheco’s right-hand man.Last week, Finance Minister Alberto Dent and top economicadvisor Ronulfo Jiménez stepped down.The resignations follow a controversial agreementsigned Aug. 31 by Chaves and Toledo and leaders from labor unions and drivers’associations to end eight days of protestsand civil unrest (TT, Sept. 3).The agreement was struck to bring stability,but the results have brought theopposite.“ALL the sectors and the Costa Ricanpopulation in general are profoundly worriedabout the situation facing the country,”said Evita Arguedas, president of the CostaRican Chamber of Commerce.Pacheco, however, has downplayed thesituation and said resignations are a typicalpart of an administration.“Nothing has happened here,” he saidWednesday night.“Why do some people try to makeeveryone believe there is a crisis wheneverything is working? Might there besomeone who wants to hurt Costa Ricasaying there is a crisis and insecurity?What insecurity? There have been noscreams and no punches. Everything is stillrunning,” he said Thursday after an emergencyCabinet meeting.CRITICS accuse Pacheco of being indenial, not only for the crumbling of theExecutive Branch, but because of the recentlyexposed corruption scandal among membersof his own party, the Social ChristianUnity Party (see separate story).The Pacheco administration wasserved another slap in the face when it wastold this week it violated the Constitutionby landing the country on the “Coalition ofthe Willing” supporting the U.S.-led war inIraq (see separate story).“The image (Pacheco) created is completelycontrary to the reality,” saidCongressman Luis Ramírez of theNational Liberation Party. “(Listening toPacheco) a person would have no ideathat two weeks ago there was a nationalstrike that stopped the country, that thetop economic officials have resigned, thatthere were other resignations, that thereare serious cases of corruption.”THE resignations began when the inkon the Aug. 31 agreement barely had timeto dry. As part of the pact, the governmentagreed to increase the salaries of the country’s157,000 public employees by 0.5%above a previously agreed on 4.5% raise.Dent and Jiménez, who did not participatein the negotiations, said the countrycould not afford the additional increase andresigned in protest later that day.Presidency Minister Toledo defendedhis actions in signing the agreement, butMonday announced his resignation andsaid he is leaving to “restore calm” to thePresident’s Cabinet.Toledo accused “certain groups,” referringto the economic team and businesschambers, of focusing more on “the numbers”than on the “social aspects and thefaces” affected by policies. While herefused to name names, Toledo accused theremaining members of the economic teamof blackmailing the president by repeatedlythreatening to resign.THAT is exactly what they did.Joining Trade Minister Trejos inresigning Tuesday, were Vice-Minister ofForeign Trade, Gabriela Llobet, andAnabel González, chief negotiator of theCentral American Free-Trade Agreement(CAFTA) with the United States.Trejos and his team were fundamentalin negotiating the proposed trade pact thatbrought many people to the streets in lastmonth’s civil unrest. Although fully negotiated, CAFTA must still be submitted byPacheco to the Legislative Assembly forratification.Pacheco Wednesday said that Trejosresigned because he was tired fromCAFTA and impatient about its ratification.The 70-year-old President also calledboth Trejos and Chaves “young.” Pachecoexplained Chaves’ resignation by saying hewas tired from ongoing problems surroundinggovernment contracts withAlterra, which operates Juan SantamariaInternational Airport, and Riteve SyC,whose controversial monopoly on mandatoryvehicle inspections sparked lastmonth’s protests (see separate story).When announcing his resignation,Chaves only remarked on the projects hecompleted during his time as minister. Hisreasons for resigning were unclear.Trejos said he resigned to give Pachecospace to form a new Cabinet the way hewants.“Perhaps other ministers should do thesame,” he said.SINCE he took office in May 2002,Pacheco has attempted to strike a balanceon his Cabinet between extremes.“The Cabinet was very heterogeneous.The coexistence between members of thepolitical and economic sectors and theSocial Christians and the neoliberals werebound to be a problem if a crisis of thismagnitude took place. There were profoundideological differences within thecabinet,” said analyst Luis GuillermoSolís.Rodolfo Cerdas, a political analystwith the think tank CIAPA, agreed.“The government lacks a clear direction.On the one hand, (Pacheco) attemptsto follow a liberal economic policy, but onthe other hand he responds to the populistsdemands of social groups,” he said.Yesterday, during an emergencyCabinet meeting, Pacheco said he asked allof his remaining ministers if any had plansto step down and they all said no.IN the two years of Pacheco’s administration,14 ministers have stepped down.Only nine of Pacheco’s original 21 Cabinetmembers remain.“These things happen in a government,”he said.Pacheco pointed to the administrationsof Luis Alberto Monge (1982-1986) andJosé María Figueres (1994-1998), in whichthe Presidents asked their entire Cabinetsto step down.“It’s not a crisis situation, it is arearrangement,” agreed Rolando Laclé,congressman with the ruling SocialChristian Unity Party and a formerPresidency Minister, in an interviewTuesday.Pacheco said he would need time toname permanent replacements, adding thatthe minister-less ministries are all in capablehands. Gilberto Barrantes, Minister ofEconomy, Industry and Commerce, wasnamed Thursday as the temporary head ofthe Foreign Trade Ministry.UNION leaders have cheered the resignationsas an opportunity for Pacheco topurge his administration of the neoliberaleconomic policies they have denounced forso long, which are based on de-emphasizinggovernment intervention in the economyin order to achieve progress and socialjustice through free-market methods.“Now don Abel has an excellent opportunityto name a balanced Cabinet. If hedoesn’t do this and replaces the emptyseats with more neoliberals, the conflictwill continue,” said Albino Vargas, secretarygeneral of the National AssociationPublic and Private Employees (ANEP).However, Pacheco made clear yesterdayhis administration would continue onits path. He said he would continue to fightpoverty and is committed to passing themuch-debated Permanent Fiscal ReformPackage, which is currently in the hands ofthe Legislative Assembly.He also said he will present CAFTA tothe Assembly in a “beneficial moment.”THESE words may come as reassuringnews to the business community, whichhas expressed serious concern over recentevents. Timothy Scott, executive directorof the Association of Costa Rican Free-Zone Businesses (AZOFRAS), praised theefforts Trejos and Dent have made towardCAFTA and the country’s macroeconomicstability.“We are very worried. This is a generalsentiment, not only among the differentguilds but also among all Costa Ricans.The two ministries that directly regulate ushave been left without leaders. This createsa strong sense of uncertainty among theentire business sector,” he said.Despite his resignation, Trejos maintainedsolidarity with the President in saying the government is not facing a crisis.The country, fundamentally, is still economicallysolid and has a positive reality,he told Channel 7.Further reassurance for the businesscommunity has come from Central BankPresident Francisco de Paula Gutiérrez,who this week reiterated he has no plans toresign.ABOVE all, the country’s businesssector is calling on the country to remaincalm, to prevent further problems.“We as Costa Ricans need to forgetabout unions, business chambers, syndicateassociations and organizations, about politicallycolored flags and private interests.Costa Rica is asking of us all to demonstratea true civic spirit before the difficult situationthe country is living,” said SamuelYankelewitz, president of the Union of CostaRican Private-Sector Chambers andAssociations (UCCAEP). “It is the time totake a pause and reflect and put into practiceour political maturity, backed by more than acentury of democracy.”(Tico Times reporter Fabián Borges contributedto this report.)

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