Anti-CAFTA figurehead and presidential candidate tries to appeal to business community

October 16, 2009

Ottón Solís, a presidential candidate who´s best known for leading a battle against the region´s free-trade pact with the U.S., spoke Tuesday to the Costa Rican-American Chamber of Commerce (AMCHAM) – perhaps the country´s biggest proponents of a free market.

In the lead-up to Costa Rica´s nationwide referendum on the Central American Free-Trade Agreement with the United States (CAFTA) two years ago, Solís stood on the opposite side from the foreign business community, trying to convince Costa Ricans that the terms laid out in the pact for an open market would be harmful to the economy and small business owners.

But on Tuesday, he stood before his one-time opponents, hoping to persuade them that he had their best interests at heart.    

“I think he spoke very frankly on the topics we asked him to address,” said Lynda Solar, president of AMCHAM. “Do we agree with him on all things? No, we do not. But I think it is important to look for areas we do agree in order to resolve those issues.”

While Solís told his audience that he supports foreign investment, he said he disagreed with other politicians in that “it is the answer to all our problems.”

The country can´t just focus on trying to attract as much foreign capital as possible, he said. Instead, it needs to focus on preparing a workforce, improving infrastructure and making the state more efficient.

“This is our plan to be more competitive,” he said. “This is how we will attract foreign investment: with efficiency in handling processes, with transparency, with better infrastructure….”

But then came the bad news.

Solís, a 55-year-old academic and politician, said that foreign business can´t continue to escape local taxes.

“It´ s very hard to explain when you have a country with so much poverty and education problems, and there are multinationals that are paying 0 percent in income tax,” he said, advocating a progressive tax in which people and businesses on the high end of the income spectrum are taxed more.

AMCHAM´s Solar sounded an alarm of caution at this statement.

“Costa Rica competes with other countries for these multinationals,” she said in a phone interview later that day. “Do you prefer to raise taxes with the possibility that you´ ll lose investments, high-paying jobs (and indirect employment) and watch them go elsewhere?”

Solar, whose organization does not endorse candidates or take political sides, said, “It´ s a factor that has to be weighed seriously for Costa Rica to continue to compete.”

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