José María Villalta of the Broad Front Party, the current presidential front-runner in the latest poll in Costa Rica, had to defend his redistributive policies to a pro-business crowd during a debate at the Costa Rican Union of Private Business Sector Chambers and Associations (UCCAEP) Thursday afternoon.
The left-leaning candidate said that Costa Rica’s tax system should be more progressive, demanding that some sectors, especially, finance, should pay more taxes to offset the country’s rising inequality rate.
Villalta, who currently leads in the polls, raised eyebrows earlier in the campaign when he spoke about pulling Costa Rica out of the U.S.-Central American Free Trade Agreement, or CAFTA, and reassessing the country’s other trade agreements. On Thursday, however, the candidate took a step back, saying that it was not “viable” to revoke Costa Rica’s participation in CAFTA, despite his personal distaste for the free trade agreement.
Costa Rica exports more than any other country behind only the United States within the regional trade alliance.
Villalta clarified a question from the audience that nationalization was not part of the Broad Front’s government plan.
Besides taxes, Costa Rica’s presidential candidates addressed the high cost of electricity and the country’s deteriorating infrastructure.
Libertarian Movement Party candidate Otto Guevara hammered on his campaign promise to open Costa Rica’s electricity market to private generators as a solution to high prices, which he and UCCAEP agreed drives businesses and investment out of Costa Rica.
“Opening the energy market will benefit everyone,” Guevara said, referencing the positive affects of CAFTA on the liberalization of the telecommunications and insurance industries.
Several candidates pushed back against this idea, from National Liberation Party candidate Johnny Araya to Guillermo Solís and José María Villalta of the Citizen Action Party (PAC) and the Broad Front Party, respectively.
Electricity in Central America is three times higher than in other regions, according to the Inter-American Development Bank. The bank estimates the wholesale price of electricity in Central America at $150 per megawatt compared to $50 in other “similar systems.”
PAC’s Solís said that infrastructure investment was the most “urgent” problem facing Costa Rica, and that it was synonymous with competitiveness. Several candidates spoke about the need to repair Costa Rica’s crumbling bridges and build new highways. Villalta said that the country needed a holistic infrastructure approach that looked beyond new highways as the only solution to congestion, including trains connecting the cities of the San José metro area, and other public transportation options.
UCCAEP vice president and debate moderator Luis Mesalles challenged several of the candidates’ claims that large infrastructure projects would generate jobs in the quantities they promised.
Mesalles also noted that most candidates sidestepped the issue of Costa Rica’s ports in favor of highways. According to the World Bank, Costa Rica has the worst ports in Central America.