San José, Costa Rica, since 1956

What Will Drug Listing Mean for C.R.?

News Analysis

With one announcement, Costa Rica went from a tourist paradise known for its pristine beaches, rich wildlife and pura vida (pure life) attitude to occupying a spot on the U.S. president’s list of the world’s top 20 drug trafficking countries.

Its name now occupies a place alongside well-known drug hotspots such as Colombia, Mexico and Venezuela, and according to a document released by the U.S. government, it has been identified as embodying a number of “geographic, commercial, and economic factors that allow drugs to transit or be produced.”

Already, Costa Rica is on the Orga-nization for Economic Cooperation and Development’s list of tax havens, and it’s an internationally recognized center for sex tourism and a hub for online gambling. With its recent placement on the U.S.’ list of major drug transit and producing country’s (referred to as the “Majors List”), some wonder whether its reputation as an oasis for tree-huggers and peace-lovers is in danger, and also, whether its economy will suffer as a result.

In her announcement before cameras and reporters from San José’s Holiday Inn last Thursday, U.S. Ambassador Anne S. Andrew said one factor that led Costa Rica to the list is “the growing presence of drug cartels that are using Costa Rica not only as a transit zone, but also as a base for their command and control operations.

“Costa Rica is actively engaged in the fight against narco-trafficking, but its geographic position on the isthmus, linking Colombia with Mexico and the United States, as well as its long Caribbean and Pacific coastlines make it vulnerable to drug shipments,” Andrew said.

But Andrew couldn’t guarantee that the listing means Costa Rica will be getting any additional funds from the U.S. in the fight against drug trafficking.

“Being on the Majors List does not mean that there will automatically be new monies flowing to any of the countries that are included,” Andrew said. “It does mean that the United States is looking very carefully at what types of resources can be committed, what types of programs are most effective and how we can work as partners to the countries of Central America as we all work together to address this regional threat.”

Yet, Costa Rica, which depends on tourism for $1.9 billion of its gross domestic product (GDP), or almost 10 percent, stands to lose if the one million United States citizens that visit the country are scared away by its newly minted reputation as a center for drug trafficking (TT, Sept. 17).

“The fact that we are on this blacklist worries us,” said Juan Carlos Ramos, executive director of the National Tourism Chamber. “It risks affecting our image as a peaceful country. People come here to enjoy the country’s beauty, its tranquility, its safety. … We need to direct special attention to this.” 

Three days after the announcement, President Laura Chinchilla boarded a plane to New York where she has spent the better part of a week convincing businesses to invest in the country. She told them, “Since 2000, our GDP has increased three-fold, our foreign direct investment has multiplied 3.3 times, and our exports have more than doubled.”

Emphasizing Moody’s Investors Service’s recent boost of the country’s credit score to investment-grade status, she said that she is aiming to raise $9 billion in foreign direct investment in the next four years and grow exports to $17 billion in order to become “the first developed country in Latin America.”

  Wall Street analyst Alejandro Grisanti, director of Latin America research for Barclays Place, does not see the naming to the Majors List as negatively affecting investors’ decisions in the short term.

“It’s a warning sign to investors more than anything else,” he said. “Unless Costa Rica sees a surge of violence in the next year, I don’t see the naming (of the country) to this list having any repercussions; at least at this stage in the game.”

Although crime and violence do play into investors’ perceptions of Latin American countries, “Costa Rica continues to be a country that is very safe; a place with a good level of human capital and an attractive option,” he said.

But security experts in the country have expressed concern. They say Costa Rica risks losing its economic stability, the credibility of its institutions and much of its sovereignty unless there is an immediate influx of resources to counter the drug threat.

“We don’t have the resources we should to confront the attack of drug organizations,” said Mauricio Boraschi, the country’s recently appointed drug czar. “We need to be at the levels of Colombia and Mexico in terms of (addressing the issue). We are obviously asking for resources for this country.”

He has issued a plea for better technology, specialized police and judicial forces, and asked that Costa Rica’s unique position be taken into consideration.

He said, “Costa Rica has different characteristics in the Central American corridor. The fact that we don’t have an army (makes us a priority) for cooperation.”  The country’s police forces must align themselves with the military forces of other countries, he said, which can be difficult due to dissimilar training.

However, Andrew said because drug trafficking is a regional issue, it requires a regional response. For that reason, the United States is facing the issue primarily by investing through the recently created Central American Regional Security Initiative (CARSI). She hopes the plan will leverage “individual efforts of the different countries in Central America in order to have a more effective regional response.”

Boraschi says that he wants to tackle the problem here before it tailspins. “The situation of Costa Rica continues to be less dramatic than other countries, but we are in a place where if we don’t take measures in this moment, we could arrive at the levels of violence (experienced by other countries in the region),” he said.

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