Highlights from Arias’ First Administration

May 5, 2006

Though Oscar Arias is perhaps best known for brokering the peace deal to end Central America’s civil wars, which subsequently won him the Nobel Peace Prize during his first administration, his legacy does include some domestic actions, despite criticisms that he looked outside Costa Rica’s borders to the detriment of the interior. Here are the highlights:

• Constructed approximately 80,000 homes for the poor – his best-known domestic claim to fame.

• Created the Housing Mortgage Bank (BANHVI), which provides access to housing through home loans and housing grants.

• Selected the country’s first female Vice-President, Victoria Garron de Doryan.

• Established the Constitutional Chamber of the Supreme Court (Sala IV) to address all issues – from legislative bills to individual rights – related to the Constitution.

• Reformed the education system by making it mandatory for students to pass standardized tests after the 6th and 11th grades.

• Presided over the government during a time in which the country’s foreign debt – which he described at the beginning of his administration as the highest per-capita foreign debt in the free world except for Israel –was reduced by $1 billion through forgiveness and renegotiation. However, he left office with the debt still standing at the sizeable sum of $4 billion.

 Oversaw structural reforms in Costa Rica’s economy endorsed by the World Bank – known as the Washington Consensus and the Structural Adjustment Package – aimed at promoting exports, liberalizing the economy and reducing the size of the state following the country’s earlier economic crisis. Some of these reforms are still criticized.

• Part of these reforms included eliminating financing to allow the National Production Council (CNP) to subsidize the purchase of basic grains for farmers, which resulted in huge strikes and loss of corn crops.

• Pushed non-traditional exports, attracted foreign investment and tourism and reduced unemployment.

• Constructed the Plaza de la Democracia, located next to the National Museum, and created the Parque de la Paz, in southern San José.

• Prompted controversy by granting a concession to the private company Comcel, later Millicom, to exploit radio frequency, which resulted in the company offering cell phone service outside of the Costa Rican Electricity Institute (ICE), the state monopoly on electricity and telecommunications.

 

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