San José, Costa Rica, since 1956

President Pacheco Names New Ministers

PRESIDENT Abel Pacheco onMonday filled most of the holes in hisCabinet following the wave of resignationsthat rocked his government during the pasttwo weeks.He named Vice-President Lineth Saboríoas Presidency Minister, Labor MinisterOvidio Pacheco as Minister of Public Worksand Transport and the former manager of theNational Stock Exchange, Federico Carrillo,as the country’s new Finance Minister.Fernando Trejos, the executive presidentof the Mixed Institute for Social Aid (IMAS)and former Vice-Minister of Labor, acceptedthe position of Labor Minister. First, however,he must resign as head of IMAS.President Pacheco said Manuel González,Costa Rica’s permanent representativebefore the United Nations’ Human RightsCouncil, agreed to become the country’sMinister of Foreign Trade. He is expectedto take the post in a month.At press time, Pacheco had not appointedthe coordinators for his SocialAffairs and Economic councils or a newPlanning Minister. Before being namedPresidency Minister, Saborío served asboth the coordinator of the Social AffairsCouncil and Planning Minister.PACHECO on Monday said it wasbusiness as usual at Casa Presidencial andagain denied his administration is undergoinga political crisis, as some claimed lastweek (TT, Sept. 10).“I don’t see the so-called crisis, whichseems to be causing great enthusiasmamong journalists,” Pacheco said. “Thecountry is calm. Absolutely nothing hasbeen interrupted. Every ministry is runningas usual. Costa Rica is a strong democracy.The resignation of one, two or five ministersdoes not lead to a crisis.”CARRILLO is the third FinanceMinister to be sworn in during the first 29months of the Pacheco administration. Hereplaces Alberto Dent, who resigned onAug. 31 in protest of an agreementbetween the government and 30 laborunions and associations to increase publicsectorsalaries (TT, Sept. 3).Upon being sworn in Monday, Carrillotold the press he plans to continue the workstarted by his predecessors of improvingthe government’s finances by eliminatingunnecessary spending, controlling the fiscaldeficit and convincing legislators toapprove the much-debated PermanentFiscal Reform Package.“It’s like a 300-meter relay race,”Carrillo said. “Don Jorge Wálter (Bolaños,Pacheco’s first Finance Minister) ran thefirst 100 meters. He handed the baton toDon Alberto (Dent), who ran the second100 meters. I will take the baton for the last100 meters. It’s all part of the same race.”Bolaños resigned in May 2003 underpressure from striking Costa RicanElectricity Institute (ICE) labor unions thatdemanded the institution be allowed toincrease spending on new infrastructureprojects. Bolaños opposed the measure,saying it would increase the country’s fiscaldeficit and cause an increase in interestrates (TT, May 30, 2003).CARRILLO described himself as a“negotiator, not a hard-liner” and promisedto be “tough, but with a heart” as minister.“There are people behind the numbers,”he explained, alluding to criticism the socialsector had directed toward Dent when heresigned over the salary increase.Carrillo inherits the Finance Ministry’sstruggle to pass a new tax plan just daysafter the controversial fiscal reform billreached the floor of the Legislative Assembly.The plan could be voted on as early asmid-October.He said the Finance Ministry wouldreview the final changes made to the taxplan before making any major decisions ongovernment spending.Carrillo, 39, has a law degree from theUniversity of Costa Rica and a Master’sdegree in Finance and Business Economicsfrom the Kellogg School of Management atNorthwestern University in Chicago.From 1992-2000, he worked as aninvestment banker with Lehman Brothers inNew York and Mexico City. From 2000 untilearlier this year, he worked as manager ofCosta Rica’s National Stock Exchange.Carrillo’s appointment to the FinanceMinistry was not well received by legislatorsof the ruling Social Christian Unity Party.Mario Redondo, the president of the fiscalreform commission, and Federico Vargas,head of the party’s legislative faction, toldthe daily La Nación that Carrillo does nothave enough experience for the job.MINISTER Pacheco has said improvingthe country’s roads is his main priorityas head of the Public Works and TransportMinistry (MOPT).Minister Pacheco inherits unresolvedissues pertaining to the controversial contractbetween the government and theSpanish-Costa Rican firm Riteve SyC,which has a monopoly on Costa Rica’smandatory vehicle technical inspections.Public discontent over Riteve’s monopoly,among other things, sparked eight daysof protests, labor strikes and blockades ofthe country’s main highways, ports and bordersby truck drivers who demanded themonopoly be opened (TT, Aug. 28).At MOPT’s request, ComptrollerGeneral Alex Solís reviewed Riteve’s contractlast week and concluded the companydoes have a private monopoly – somethingthat is illegal according to the Costa Rica’sConstitution. However, he said it is up to theConstitutional Chamber of the SupremeCourt (Sala IV) to issue a definitive rulingon the contract’s legality (TT, Sept. 10).Minister Pacheco takes over MOPT at atime when the government and AlterraPartners, the firm that holds a 20-year contractto remodel and operate JuanSantamaría International Airport, are in arbitrationtrying to resolve a dispute that hasparalyzed work on the country’s main airportsince March of last year (TT, Aug. 20).Minister Pacheco said he received acall Monday morning from Mónica Nágel,executive director of Alterra, in which shesuggested renegotiating the contract as away to resolve the dispute. Pacheco toldthe press this week he is confident a solutioncan be found outside the courts andoutside arbitration.PRESIDENT Pacheco expressed confidencein the new Transport Minister’sability to resolve these issues.“Don Ovidio is a very dynamic personand he’s a lawyer,” President Pacheco said.“I need a lawyer in MOPT. A lot of theseproblems with Alterra and Riteve arebecause of a lack of understanding of thecountry’s laws. He’s full of energy and aproven negotiator.”Ovidio Pacheco replaces Javier Chaves,who resigned on Sept. 8. That same day thethree top officials at the Foreign TradeMinistry (COMEX) also resigned – TradeMinister Alberto Trejos, Vice-MinisterGabriela Llobet and Anabel González, headCosta Rican negotiator for the proposedCentral American Free-Trade Agreement(CAFTA) with the United States.Their announcement came two daysafter Presidency Minister Ricardo Toledo,widely regarded as Pacheco’s right-handman, resigned from his post as a result ofpressure from the government’s economicteam and the country’s business sectorrelated to the controversial salary hikeagreed to the week before (TT, Sept. 10).IN the pre-dawn hours of Aug. 31,Toledo, Chaves and then-Labor MinisterPacheco signed the controversial agreementwith representatives of labor unions andtransport driver associations, effectivelyending eight days of nationwide protests. Aspart of the pact, the government agreed toincrease the salaries of the country’s 157,000public employees by 0.5% above a 4.5%increase already reached (TT, Sept. 3).Finance Minister Dent and RonulfoJiménez, the President’s top economicadvisor, said the country could not affordthe salary increase and resigned later thatday in protest. Silena Alvarado, FinanceVice-Minister in charge of expenditures,resigned from her post on Sept. 6, citingthe same reasons.

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