SAN JOSE, Sep 30, 2020, The Tico Times. Planned demonstrations throughout the country could block Costa Rican highways and cause other disruptions Wednesday, The Tico Times reported.
The “Movimiento Rescate Nacional” will protest against Costa Rica’s negotiations with the International Monetary Fund (IMF), the possible privatization of public institutions and proposed tax increases, according to its leader.
“Costa Rica has resources to face the fiscal hole it’s facing,” said lawyer José Miguel Corrales Bolaños in an interview with Teletica. “The loan is not necessary.
“We ask the government: Number one, stop negotiating with the IMF; number two, no new taxes; and number three, to enable global income tax, and that science and technology are used by the Finance Ministry to prevent tax evasion.”
Corrales said the manifestations will impact key highways, including the Interamericana, Route 27 and Route 32. Shipping ports (Limón and Caldera) and land border posts may also be affected.
“This will last for as long as the government wants it to last,” Corrales said, saying that he has asked for a meeting with President Carlos Alvarado.
The Costa Rican Presidency says a $1.75 billion loan through the IMF’s Extended Fund Facility (EFF) is necessary to guarantee the country’s economic stability in the medium term.
“In the 1980s, we already experienced a crisis born from debt problems,” the Presidency said in a video broacast on national TV, referencing the skyrocketing inflation, devaluation of the colón and poverty that characterized that period in Costa Rica.
Costa Rica in 2019 reached its worst fiscal deficit in three decades, and the Central Bank expects the deficit to reach nearly 10% of GDP this year due to the pandemic. Unemployment has reached 24%, the highest in history.
When a country borrows through the EFF, it “commits to undertake policies to overcome economic and structural problems.” The Presidency has proposed a fee on banking transactions, higher income taxes for top earners, and an increase on real estate property taxes, but these measures face considerable disapproval in the Legislative Assembly.