By Fernando Quirós
In the mid-1980s, I worked for five years at a Costa Rican bank named COFISA. It’s long gone, having been absorbed within three successive mergers into what today is Citibank in Costa Rica.
COFISA was a strange financial critter. It famously went broke due to foreign-exchange losses, in the great devaluation of the early ’80s, which started Costa Rica’s exchange rate on the track that has taken it from ₡8.6 to the dollar at that time, to over ₡500 today.
This was the Iran-Contra era, when the Reagan administration was pumping money into Central America to keep the Sandinista infection from spreading outside of Nicaragua. Part of that strategy was to build up the private sector as much as possible.
In Costa Rica, USAID, which channeled foreign-aid funds, faced a problem. Costa Rican state banks were bureaucratic black holes, into which aid funds would disappear without ever reaching private companies. There was COFISA, broke but small and privately owned. So USAID resurrected the bank, effectively bailing out the shareholders with long-term soft loans to be channeled to private-development projects.
Yours truly got the job of credit head at COFISA. I led the department that screened and structured project loan applications and tried to pick winners that could actually pay back the money lent. Those USAID funds naturally had mixed success, with a lot of write-offs, but a lot of good export projects launched or helped along as well.
One problematic project was Bromelia International, a bromeliad-exporting farm started from scratch by a Gringo architect with a lot more vision and persuasiveness than management capacity or business sense. Bromeliads are giant orchids that make beautiful potted plants. They have the disadvantage that naturally they only bloom every three years, but the huge advantage that their bloom can be stimulated by dusting with hormones, so that theoretically they can be grown and exported as yearling plants, with controlled blooming. The flower lasts about three months, after which the owner either has to wait three years with a flowerless plant for the next bloom, or can just throw the plant away.
Bromelia International got into trouble right away, with rank mismanagement by the architect owner. It looked like a hopeless failure, unless a good owner-manager willing to take on the project could be found.
Enter José María Figueres.
His father, José Figueres Ferrer, is known as the founder of modern Costa Rican democracy: He won a revolution by force of arms in 1948, and then famously gave back power to the winner of the contested election that sparked the revolution, and abolished the army. This unprecedented democratic gesture won Figueres enough prestige to be elected president of Costa Rica three times. But the partisan division between Figueres and his political party, the National Liberation Party, and his political opponents grouped around the Unity Party, was as deep and bitter as can exist within a democratic framework.
Figueres Ferrer also nationalized Costa Rica’s banks, as an economic deathblow to the grip of the coffee-exporting hierarchy that had controlled the country through their financial institutions.
Young José María Figueres Olson had a big military bent. So much so that he went to college at West Point. When he returned to Costa Rica as a West Point graduate in the mid-1980s, the situation of Figueres Ferrer’s La Lucha estate loans with state banks was a big problem.
With his father’s health rapidly deteriorating, the son took over management of the La Lucha estate companies. He rationalized chaotic operations, closed 30 or 40 companies down to a much more manageable 10 or so, restructured the bank loans and oriented La Lucha toward sustainability.
The Costa Rica business community took note of José María’s good work at La Lucha, and he made himself an instant reputation as an agro-industrial turn-around artist. He looked around for new projects and fell in love with Bromelia International.
But there was one big problem at COFISA: The owners and board members were all from the Figueres enemy Unity political side. A COFISA loan to a Figueres company would be like the Republican National Committee bankrolling a Michael Moore movie. But COFISA’s general manager at the time was an ex-USAID, strong-willed Gringo, who managed to force the Bromelia International restructuring through, with José María Figueres taking over.
Young José María was a pleasure to work with; he was smart and highly focused, but with a good sense of humor, passionate about the Bromelia project, and a man of his word. COFISA put in a little more money and restructured the existing loan, and José María put in a lot more money as fresh funds.
In the end, Bromelia proved too big a challenge. He could not turn it around, and it ended up as a COFISA write-off. But my experience with José María as a manager and entrepreneur was totally positive. I can still remember him showing up at COFISA with a bottle of champagne to toast the closing of the Bromelia restructuring, dressed in an olive drab army T-shirt, camouflage pants and high military boots.
One of the more colorful and refreshing characters I worked with at COFISA.
Fernando Quirós is an ex-banker and financial consultant with extensive private-sector experience in both loan and venture capital financing. Now semi-retired, he is also a published author with books available on Amazon.com, and an avid semi-pro photographer.
