San José, Costa Rica, since 1956

Oscar Arias at Midterm

The president often looks weary in public. His illnesses are partly to blame – an inflamed Achilles tendon in August, irritated vocal chords this week.


But the travails of presidency also have ruffled Oscar Arias.


After pushing through the free-trade pact with the United States, the most polemic policy of any president in recent memory, Arias reached his term’s midpoint this month with new challenges: surging food and energy prices, a slowing economy and rising crime.


“To recognize that this will be a difficult year is not a sign of weakness,” Arias told lawmakers at an annual State of the Nation address this month.


Wrong Direction


Some 54 percent of  Costa Ricans said last month that Arias is doing a “good” or “very good” job, making him the most popular midterm president in three decades, according to a poll by CID-Gallup. After Abel Pacheco’s impotent presidency (2002-2006), some Ticos appear impressed with Arias’ ability to get things done – particularly in foreign policy and the social sector.


Still, Arias’ approval has dropped 10 points since January, and more than half of Ticos said the country is going in the wrong direction, with violence, crime, drugs and high prices their main concerns.


“New challenges have surfaced, and old ones have resurfaced,” Eduardo Ulibarri, head of the Press and Freedom of Expression Institute (IPLEX), wrote in a column this month in the daily La Nación. “Let’s not ignore the storm clouds on the horizon.”


Arias’ legacy will likely be defined by his aggressive campaign for the Central American Free-Trade Agreement with the United States (CAFTA), approved narrowly in a national referendum in October.


During a draining 17 months, Arias traversed the country to tout the pact, while tens of thousands of free-trade opponents  took to the streets, directing much of their ire at the president.


Even after the referendum, opposition lawmakers filibustered bills that would implement the treaty, forcing Arias to ask trading partners for a seven-month extension to enter the pact.


In November, a frustrated Arias called the country “ungovernable.”


“I think he had a very optimistic assessment of what he could do, and he has been unhappily surprised,” said political analyst Luis Guillermo Solís. “He has grown sour at that.”

The World’s a Stage

The administration has had more luck abroad. Arias won a two-year seat on the United Nations Security Council, and he forged diplomatic ties with China and 17 other countries, mostly in Africa and theMiddle East.


“His foreign policy has been very successful,” said Solís, who served in the Foreign Ministry during Arias’ first term (1986-90). “He has made…courageous decisions.”


Still, some Ticos worry the president’s strong stands on human rights may be compromised by China’s gifts, which to date have included $30 million in cash, a promised new National Stadium and business contracts.


Arias’ foreign policy also ruffles market skeptics, already alienated by CAFTA. The president has entered talks on a free-trade agreement between Central America and the European Union, and he hopes to negotiate with China on a similar deal.


A Gloomy Forecast


An odd mix of neo-liberalist and populist, Arias has tried to assuage critics with crowd-pleasing social programs.  His 2008 budget nearly quadrupled spending for the Housing Ministry, which runs the government’s fight against poverty.


Grants go to poor families looking to build homes, low-income students as an incentive to stay in school, and elderly or disabled people so poor they need the aid to survive.


State aid, together with economic growth, decreased poverty to 16.7 percent by last July from 20.2 percent a year earlier. Now economic woes threaten to reverse that oft-touted achievement. A sluggish economy in the United States will likely cause foreign investment to drop and exports to stagnate, said economist Pablo Sauma. The Central Bank predicts gross domestic product will grow just 3.8 percent this year, down from 6.8 percent growth last year.


Meanwhile, Costa Rica is no exception to rising food prices worldwide. The price of the basic food basket – a measure of 10 items such as rice, beans, eggs and vegetables – rose 13.3 percent in the first quarter of this year.


Costly groceries especially hurt the poor, who spend more of their budget on food. Real minimum wages, set biannually by a committee of government, union and business representatives, have fallen steadily since January.


“A gloomy economic forecast looms on the horizon,” Arias said in his State of the Nation speech.


In what has become a catch phrase for analysts and lawmakers, he told the weekly El Financiero, “We’re in for two years of skinny cows.”


Sauma said Arias may be exaggerating as a political tactic.


“If things don’t go so badly, he can say, ‘Look how well I did. We had a crisis and we didn’t even feel it,’” Sauma said.


Still, Sauma added, the next poverty survey, to be released in October, will likely show an increase. Unemployment, now at 4.6 percent, could also increase as firms lay off workers to meet rising production costs, he said.


High grocery bills have translated to discontent at the polls. Some 29 percent of Costa Ricans said in April that Arias is handling the economy poorly, up from 17 percent just three months earlier, according to the CID-Gallup poll.


Erratic on Crime


When asked to identify the country’s biggest problem, nearly half of Ticos say crime and violence. Reports of crime jumped 6 percent from the first semester of 2006 to the first semester of 2007, according to a judicial branch report. Robberies are by far the most common, followed by drug possession and assault.


Nearly three out of every 10 Ticos report that someone in their household had been robbed or assaulted in the first quarter of 2008.


Facing mounting pressure from fed-up voters and judicial officials starved for resources, Arias allocated $28.3 million in March to renovate prisons, create 24-hour courts for petty crimes, and hire more agents to conduct investigations.


Also in March, the administration drafted a mammoth bill to crack down on arms sales, buff up police coffers and increase preventive prison terms, among other things. Still, some lawmakers said the moves were too little, too late. In the CID-Gallup poll, 53 percent of Ticos said Arias lacks a strategy to fight crime. Political analyst Solís called Arias’ approach “erratic at best.”


In April, Arias appointed a former math teacher with no crime-fighting experience as public security minister. On her first day on the job, Janina del Vecchio told the daily La Nación that crime is not as big a problem as it seems – contradicting what police officials had been saying.


The comment troubled an already skeptical public, and Arias sought to control the damage in his State of the Nation address by saying, “The crime problem is real, and tackling it is a priority for this government.”


Easing Out


Arias’ presidency has been fraught with contradictions, and his environmental policy presents another one. Costa Rica, which sells itself to tourists as a green paradise, declared “peace with nature” in July.


Still, Arias has been unwilling or unable to control rampant development along the Pacific coast, where natural resources are in danger. His recent decision to lift a ban on open-pit mining for metals further alarmed environmentalists.


The criticism has weighed on Arias, who looks his 67 years. Just halfway through his term, he appears to be slowly withdrawing from politics.


His brother, Presidency Minister Rodrigo Arias, is essentially a prime minister who runs the country according to the president’s general vision, Solís said.


Arias also increasingly delegates responsibilities to Vice President Laura Chinchilla, who he has hinted should succeed him and whose schedules are now e-mailed to reporters.


Chinchilla is now in Peru meeting with heads of state from Europe, Latin America and theCaribbean, while Arias nurses his sore vocal chords, unable to speak for several weeks.


In an interview with the daily La Prensa Libre, Arias said he would withdraw from politics after his term ends in 2010, filling his time instead with books, rest and music.


“I’m finished. It’s too much,” he said. “I hang up my hat in politics.”


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