San José, Costa Rica, since 1956

President’s Brother Works Behind the Scenes

Rodrigo Arias pauses before sitting down, adjusts his cufflinks and eases into his seat.

He’s been here before.

His job as Minister of the Presidency, put simply, is to coordinate the administration’s colossal agenda that includes controversial fiscal reforms and pushing the polemic Central American Free-Trade Agreement with the United States (CAFTA) and accompanying legislation through a jam-packed Congress.

Both projects failed in the previous administration, and the clock is ticking for both as budget shortfalls and the 2008 deadline to ratify the trade pact loom.

But he’s calm, collected. It’s not his first time around.

In 1986, he led a hotly contested campaign to bring his brother to the presidency.

This year’s even tighter election brought the couple of political heavyweights into power once again.

This time, the divorced 60-year-old is approaching his golden years.His skin hangs a bit more on his sober face, his voice a bit more raspy, his four children all grown up. And instead of facing a Central America torn by violent conflict, the former National Stock Exchange president faces a country steeped in poverty, increasing opposition to the U.S. trade pact, and a budding crime crisis.

The younger Arias brother sat down with The Tico Times in his Casa Presidencial office this week to talk about CAFTA, his weaknesses, and how he’ll work behind the scenes to push the administration’s ambitious agenda.

TT: Your brother Oscar has said the assembly should approve CAFTA by December and legislators are starting to work on tax reform. What happens if neither of the administration’s priority projects are approved? Is there a Plan B?

RA: How much time is there before March 2008 (the deadline for approval of CAFTA)? How many months? … (laughter) We aren’t going to talk about a Plan B if we still have a big window of time to be able to approve CAFTA and all of the complimentary legislation. We’re optimistic that we’re going to get it … It’s difficult to say whether (CAFTA) will be approved by December. If not, it seems it can be approved in the period of extraordinary sessions, from December to April.

Opposition to the nine-part fiscal reform plan has been very vocal. Do you think there is a lot of opposition?

Well, I don’t know any country that applauds fiscal reform (laughs)… The goal of the government has been to bring in an additional income of 3-4% of the Gross Domestic Product. For that we introduced the four taxes (a tax on luxury properties, a value-added tax, an income tax and a tax on licensed businesses).We are working on (the income tax bill) now to reduce its size, to make it simpler and more agile. It will be ready in a couple of weeks, then we hope (the assembly) will create a special commission to discuss it. The current income tax bill is very big, very complicated, we want to make it simpler.

Bureaucracy in this country moves slowly, and the President recently singled out the Legislative Assembly for its sluggishness. Are there institutional changes you would make to speed things up?

We are trying to streamline all the trámites (bureaucratic processes). It takes a year and a half to get a construction permit here.

The Technical Secretariat of the Environment Ministry, which approves all environmental permits, is the bottleneck of the country. Every environmental permit takes a year. We’ve declared it a national emergency.

The country has seen big investment in tourism and construction… but really, the towns aren’t ready. The infrastructure is not there. The technical organisms that give permits aren’t prepared. We do have the labor but with all planned construction projects, a lack of labor could become a problem, too.

In Guanacaste right now there are megaprojects that will require thousands of workers to construct … the municipalities aren’t prepared. How is a municipality with a very small budget going to prepare itself for a $200 million investment project? They don’t have the money or qualified personnel to do a study.

Does the government need to be decentralized?

Yes, it really needs to be decentralized a lot. But despite all the problems the country has – that it is bureaucratic, full of legalisms, full of complicated processes – we have a great advantage in that we are a peaceful country.

But now we have to make an effort to take back our national security that Costa Rican is losing… In fact, insecurity is becoming the most important issue for the government, and we are taking steps… We want to double the number of police, adding 800 new police as part of the 2007 budget… we want to confront delinquency.

You have a lot of political experience. If you could talk to the Rodrigo of 1974 who was aspiring to his first Municipal Council seat in Heredia, what would you tell him? What would you have changed?

How would I change myself? (laugh, pause). It seems to me that in life, experience is of course a thing that comes with the years and one wants to have had the experience of today 30 years ago… However, it seems to me that the big decisions I made were made well. The launch of Oscar’s 1983 presidential campaign was a good decision.

There are nearly a million people living in poverty in this country – nearly a fourth of the population. If you could talk to them, what would you tell them?

That they can trust that this administration is worried about them. That they are the most important objective for this administration… The only way to confront poverty is through education. The past forms of ‘assistentialism’ in which we hand out things doesn’t work. It’s not giving people fish, it’s teaching them to fish. To do that, education has to be good. Now, only a third of those who enter high school graduate. That’s craziness.

The last time you were the Minister of the Presidency (1986-1990), democracy’s biggest threat was communism. Today, what is the biggest threat to democracy in Costa Rica?

The intransigence of many political actors. The corruption of many political actors, which has caused harm to democracy.

The ex-president of the International Monetary Fund recently came to Costa Rica and said IMF should begin changing its policies in light of countries like Mexico …

I remember 30 years ago, the World Bank and IMF only wanted to do macro-structural loans for the country, not concerned whether that would cause social upheaval, if it would improve education and poverty levels, only concerned that the country has macro-stability. That has changed. Now I see the IMF interested in whether the country has social justice and educational growth.

Before there were credits oriented to finance the private bank … IMF has recognized that applying strictly fiscal measures doesn’t solve anything.

Can Costa Rica learn anything from the case of Mexico, which is now in political crises just over a decade after having approved its own free-trade agreement with the United States?

No, that mistake isn’t going to be made. We don’t want to privatize, we want to open up markets, so that public companies can have competition.

That’s not privatization?

No. And concession of public works is not privatization. A company works on a public project, but the project is in the hands of the government.

What is your biggest weakness?

Probably always wanting to seek consensus. I always seek consensus, or points of agreement – consensus doesn’t exist…

There’s always someone who disagrees. The formula I use to negotiate is that if we only agree on so much, let’s look for those points of agreement… if I am going to negotiate with (opposition leader) Ottón Solís I’m not going to put CAFTA as the first point of negotiation.What are we going to get out of that? We can talk about education, social programs, a thousand things more, and we can advance. That is more or less what I do with the legislators. We decide on what it is that we agree on, and we move forward with that.


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