The Country Oscar “the Eagle” Arias Will Be Flying Over

Oscar Arias takes office on May 8 for the second time, now with a fragile electoral mandate, a fragmented parliament, an organized opposition and a combative social movement— all serious handicaps to fulfilling his agenda, particularly approval of CAFTA. How will he pull it off?

Amaru Barahona

The neoliberal implant that has been laying waste to Latin America since the 1980s has been less orthodox in both Costa Rica and Uruguay than anywhere else. Two particular features distinguish it in Costa Rica. First, ample strategic assets remain in state hands (telecommunications, energy, banking, oil refining, insurance, water systems and the national liquor factory). Second, the rollback of the extensive network of social welfare institutions built up between the 1950s and the 1970s, when Costa Rica’s growth was accompanied by a social policy unparalleled anywhere in Latin America except Cuba, has been less radical and traumatic than elsewhere on the continent.

Heterodox neoliberalism
and economic growth

Costa Rica is also the only Central American country that has converted its traditional export production (coffee, bananas, sugar and beef), which is in crisis, to nontraditional production (tropical fruits and vegetables, ornamental plants, and both the textile and more sophisticated versions of the assembly plants for re-export known as maquilas). So successfully has this been achieved that they now dominate its exports.

Furthermore, the country has the most advanced tourist industry on the isthmus. The dynamism of its exports plus its income from tourism has allowed Costa Rica a modest but sustained growth since 1984 that is reflected in an impressive per-capita gross domestic product, which even acknowledging the recognized limitations of this indicator is currently around US$4,000 annually.

The country’s heterodoxy and growth have produced two phenomena that fall outside the neoliberal norm in Latin America. First, there has been no significant increase in poverty, which is around 23% today, up only 5% on the late seventies, and second, no considerable increase in unemployment, shown in the fact that Costa Rica has so far been able to absorb the flow of unemployed Nicaraguan migrants—although this appears to be changing.

Social exclusion
and consumer culture

For all that, however, the special performance of Costa Rican neoliberalism hasn’t totally avoided the social, political and ethical crisis common to the rest of Latin America. Small-scale producers of maize, beans and rice have disappeared and the small-scale producers of the equally traditional coffee and sugar cane crops are now in a profound crisis. Income distribution has polarized and the real salary has less relative purchasing power today than it did at the end of the seventies. The middle classes have become visibly poorer and the vulnerability at the lower end of this sector is approximating that of the poor strata.

Per-capita social spending is less than in the seventies and public health and education services have been slashed, with increasing priority given to private purchase of these services. The once-excellent collective transport is seriously deteriorated and low-income housing projects are extinct. “Flexible” labor relations have been imposed and the new generations of workers are losing historical social rights: long-term contracts, social security, pension rights, severance pay, etc.

All these social exclusion processes are accompanied by the promotion of a voracious consumerist culture, which exceeds the economy’s real capacity, generates frustrations and criminal appetites and is expressed in the growing contamination of the urban centers and the boom in crime, prostitution, drug addiction and social and sexual violence. Costa Rica’s public safety is no longer the envy of the other Central American countries; a private army of over 12,000 armed guards from more than 100 companies patrol shopping malls, banks, supermarkets, business offices, private universities, institutions, neighborhoods and up-scale private homes.

Costa Rica has had the only respectable liberal democracy in Latin America that has functioned without interruption since 1948. Neoliberalism, however, has been doing away with its attributes, leading the political model into a deep crisis. There have been increasingly serious and more widespread corruption scandals among the political class since the mid-eighties.

Politicians and parties in general, but above all the two traditional oligarchic parties (the National Liberation Party and the Social Christian Unity Party), as well as the Legislative Assembly, the executive branch, the judicial system and politics as a whole, have all lost credibility among the citizenry and sparked disenchantment. Even the Catholic Church, a civil society institution with traditional political weight, was implicated in the recent murder of journalist Parmenio Medina. There is an evident and intense erosion of Costa Rican society’s traditional institutionality right now.

President Pacheco
leaves with poor marks

Outgoing President Abel Pacheco won a fragile mandate in the 2002 elections representing a dissident tendency of the Social Christian Unity Party (PUSC). For the first time the country had to hold a second round because no candidate received the 40% of the votes established by the Constitution to win in the first round. Abstention was 31.5% in the first round, plus 2.5% null and unmarked ballots, and increased even more in the second: 39% plus 2% null or unmarked ballots. That 41% of Costa Ricans who abstained or annulled their vote one way or another was in fact the highest bloc of votes in the second round.

Upon taking office, Pacheco promised to put an end to corruption and govern for the poor. Having fulfilled neither of these promises, his administration ended with extremely low levels of popular support. The ethical crisis affecting the political class reached its climax when three former Presidents from the two traditional parties were accused of corruption. Two of them, Miguel Ángel Rodríguez and Rafael Ángel Calderón, both of the PUSC, were imprisoned and are awaiting trial. The third, José María Figueres, of the National Liberation Party (PLN), fled the country. Pacheco himself has been accused of receiving illicit campaign financing, with a long list of mysterious donations on which the government of Taiwan and Nicaragua’s ineffable Pellas family both appear.

Limits to growth and
the oligarchic project

Poverty did not drop as promised during the Pacheco government; it remained at roughly 23%. Moreover, the concentration of wealth continued unabated and income inequality between rich and poor widened as minimum real wages shrank. The fiscal crisis worsened, forcing inflation into double digits and thus accentuating the impoverishing of the middle classes.

The economic model’s growth potential is beginning to reveal its limits: the textile maquilas are in crisis due to China’s competition for the US market. The growth rate in the export of nontraditional agricultural goods is slowing down, also thanks to the entry into the US and European markets of new rivals with the same development recipe. The growth rate in tourism, the model’s only activity to display certain multiplier effects, is also slowing down due to the competitive incursion of neighboring countries and a demand that tends to remain invariable: the populations of the countries in the North.

All this is limiting the economic system’s capacity to absorb the labor force and is triggering greater and increasingly sordid xenophobia toward Nicaraguan migrants. The Migration Law approved in November 2005 is a faithful copy, minus the wall, of the law being debated in the US Congress in that it criminalizes undocumented migrants and penalizes those who assist or shelter them.

The Costa Rican oligarchy has been rejuvenated through diversified investments in the modernizing enclaves—finances, industrial maquilas,nontraditional agriculture, tourism, major media, big import commerce and services for elites—promoted by the economic model, all with varying degrees of control by transnational, particularly US, capital. It is an oligarchy that has lost all vocation for independence. It sees the solution to not only the limits to growth and the social situation, but also to the crisis affecting the political system, in an intensification of neoliberal reforms and the reconstitution of oligarchic hegemony, with no mediations that could distort the channeling of its interests. With this rationality, it sees CAFTA, the region’s free trade agreement with the United States, as the best instrument for getting Costa Rica on the orthodox neoliberal track and shaking off all the old heterodox policies. This is why it chose a figure with Arias’ profile as its political representative for the task of implementing this new class project.

2006 elections:
Two rounds, high abstention

Oscar Arias was only finally declared Costa Rica’s President-elect over a month after the voting on February 5 . The initial provisional ballot count showed a virtual tie between him and Ottón Solís. the Civic Action Party (PAC) candidate. Both had just squeaked past the 40% of the votes needed to avoid a second round by fractions of a percentage point. As a result, the Supreme Electoral Tribunal had to manually recount the votes, finally proclaiming Arias the victor on March 7, with 40.9% to Solís’ 39.8%.

Otto Guevara, candidate of the neoliberal rightwing Libertarian Movement, came in a distant third with 8.5% of the valid votes, and the remaining 10.8% was shared by the other parties, only 3.4% of which went to the PUSC. Winning just five elected legislators, this formerly powerful party has become nearly politically invisible. At 34.8%, abstention rates were the highest for a first round in decades, while the null and blank ballots again totaled 2%.

Arias’ political client network

Oscar Arias’ first term as President was 1986-90, during which he received the Nobel Peace Prize for his role in negotiating the regional peace agreements known as Esquipulas II (1987) that helped end the wars in Central America. Today Arias is more than a political representative of the Costa Rican oligarchy chosen as a flotation cushion to keep its hegemony afloat during the current crisis; he is also one of the most representative economic members of his class. His many investments include agricultural production and agroindustrial processing (sugar, alcohol, ethanol and coffee), the poultry industry, media companies (newspapers and radio chains), real estate, private energy generation and beers. He also controls the Sama financial group, which deals in bonds covering both the political and state debts.

To emerge as candidate, Arias structured a powerful political client network capable of interfering in the various branches of state. His influence in the Constitutional Court was revealed in the published memoirs of recognized intellectual Guido Sáenz, now the minister of culture. This influence permitted Arias to use a dubious unconstitutionality suit to repeal the prohibition of presidential re-election, thus paving the way to his own candidacy. His brother and campaign chief, Rodrigo Arias, was a privileged adviser to President Pacheco for much of his term.

Arias took control of the PLN through what the displaced general secretary and board members labeled fraudulent procedures. Controlling the party apparatus made it possible to control the PLN’s legislative bench during the Pacheco administration. Arias also eliminated his party’s primary elections, imposing himself as the presidential candidate and selecting unconditional supporters as the party’s Legislative Assembly candidates.

Activating his client network, Arias assured the appointment of Rocío Aguilar as comptroller general and Eugenia Zamora as the new magistrate on the Supreme Electoral Tribunal. According to the media, both are “close” to the President-elect, a euphemism for subordination based on patronage in a patrimonial power network.

“I’m an eagle...”

Arias’ campaign was ostentatious and haranguing, and he outspent Ottón Solís fourfold. For the past two years, the oligarchic media have been presenting Arias as the only statesman qualified to resolve the crisis affecting the political system. Starting over a year ago, polls by the firms so fetishized in Nicaragua (Cid Gallup, Borge & Asociados, Demoscopía, Unimer) also projected him as the indisputable victor with more than a two-to-one advantage over Solís.

These polls are veritable bibles for certain “scientific” political analysts, even though they are little more than a marketing tool that subordinates a useful social research method to profit rates. The squalid turnout at Arias’ closing campaign rally, among other things, showed just how exaggerated their numbers were and caused the polling firms to reduce the range of Arias’ advantage significantly a few days before the election. One poll gave him an 11.1% lead and another a 17% lead, but in neither case did they cast Arias’ comfortable victory in doubt. Arias focused his campaign on hammering home three messages: I’m the statesman the people want and the country needs; I’m going to get CAFTA approved; and I’m not going to debate any other candidates because they would only benefit from the support I enjoy. Another example of his arrogance was the following gem, in response to a candidate who challenged him to a debate: “Eagles live on high and see from on high, and don’t bother to watch what the snails are doing.”

CAFTA: The apple of discord

Following the February elections, the Legislative Assembly found itself seriously fragmented. The PLN won 25 of the 57 seats in Congress, the PAC 17, the Libertarian Movement 6, the PUSC 5 and four micro-parties, two on the left and two on the right, won 1 each. No party has even a simple legislative majority, much less the qualified one required to pass special legislation. The ideological alignments, however, favor a right-leaning correlation of forces, especially on the two central questions facing society: whether to approve CAFTA and how to address the fiscal problems.

This parliamentary correlation doesn’t reflect the correlation of positions in society, however, particularly regarding CAFTA. Polls done by serious survey institutions such as the University of Costa Rica’s Social Research Institute and its School of Statistics, which don’t subordinate their research methods to profit margins, indicate that only a minority of the population is convinced that it’s worth approving. The rest either say they need more information or are explicitly opposed.

Speaking on behalf of political society, the Ombudsman’s Office came out firmly against CAFTA, recommending that the Assembly not approve it. Meanwhile, a commission of civic leaders named by the Pacheco government to analyze the document insists that it should not be approved without society’s consensus.

And two powerful civil society institutions have also been critical. The Catholic Church expressed serious concern about the consequences of its application, while a report sent to the Assembly by the prestigious University of Costa Rica also opposes approving the agreement.

Excluding most but not all of the business chambers and some business college directors, all of organized civil society (public sector unions and peasant, community, environmental, cultural, university, student, indigenous and women’s groups) overwhelmingly opposes the free trade agreement and is ready to mobilize against its ratification.

Irregular and arrogant
Electoral Tribunal

Arias’ PLN had the only electoral table delegate in some 15-20% of the polling stations—mainly in the peripheral provinces where he won (Guanacaste, Puntarenas and Limón)—and was the only party with a representative at all tables, perhaps because it paid its delegates. Moreover, the Supreme Electoral Tribunal (TSE) substituted the tradition of voting with a fingerprint and indelible ink for an X marked with a ballpoint pen, a procedure that makes it easier to annul the ballots marked for rival candidates should there be the desire to do so.

The PAC denounced serious infractions in 712 tables: missing voter registration lists, unsigned ballots, voting tallies that exceeded the number of registered voters, thousands of missing ballots... Based on these irregularities, it requested a recount in the questioned tables and a comparison of voters’ signatures with those on their ID card record, ideas that took on even greater importance once the slim margin separating Solís from Arias became known.

The TSE reacted arrogantly, backed by the media, which defended the institution’s “sacredness” and criticized the PAC’s “lack of respect for democracy.” In the end, the TSE rejected the PAC’s appeals, which further eroded its own credibility and moved its name onto the growing list of institutions feeding the citizenry’s disenchantment.

An integral, independent
social movement

A vigorous grassroots social movement began to develop in Costa Rica in the nineties, compensating for the political vacuum left by the disappearance of once influential leftist parties. In addition to the unions of the still-important public sector, this movement also includes a plethora of social organizations—the same array that has come out so strongly against CAFTA.

In addition to its breadth and mobilizing capacity, this movement has two qualities that are hard to find among Nicaragua’s weak social organizations, for example. One of these is that some years ago it established a systematic connection between its struggle against corruption in the political system and its fight against the implantation of neoliberalism. It has managed to block the progress of neoliberal orthodoxy and in 2000 organized an authentic popular insurrection—known as the struggle against the “electricity combo”—that bogged down the oligarchic-imperialist project aimed at privatizing communications and energy.

The other quality, also different from the Nicaraguan situation, is its complete independence from the political parties
in general and the oligarchic parties—the PLN and the PUSC—in particular. It has also demonstrated its independence from the agendas imposed by development cooperation financing sources.

This movement is so obstinately resisting approval of CAFTA that it has the oligarchy up against the wall and has so far stopped the Legislative Assembly from ratifying the agreement. The academic intellectual Left has played a very important role here, closely analyzing the CAFTA text to reveal its perversity, organizing round tables and debates all over the country and publishing books, journals, web spaces, booklets and articles. Its effort has had extraordinary results in counteracting the crushing propaganda spread by the government, business chambers and US-financed think tanks. This analysis and communication work has been accompanied by organized and systematic mobilizations with ever bigger turnouts.

The Church takes a progressive turn

The naming of Monsignor Hugo Barrantes as the new archbishop of San José has brought about a progressive shift in the upper echelons of the Catholic Church. This followed a number of scandals that affected the Church’s respectability in the wake of accusations that Father Mainor Calvo, director of the once very popular Radio María, was involved the murder of journalist Parmenio Medina; and following the Vatican’s removal of arch-conservative Monsignor Román Arrieta as bishop of San José, a post he held for decades.

Together with Honduras’, Costa Rica’s religious leadership is now the most progressive in Central America. Its discourse is sharply anti-neoliberal, although still lacking the polish and conceptual richness of Honduras’ Cardinal Oscar Andrés Rodríguez. Barrantes has not reiterated the Church hierarchy’s traditional support for the oligarchic parties, and his distance from the chorus of Arias apologists in the elections was evident. Barrantes has also adopted a critical posture toward CAFTA, demanding a national referendum on its approval.

Guevara, the sex symbol

In addition to exalting the figure of Arias in the electoral campaign, the media and polls also promoted the political rise of the Libertarian Movement and its leader, Otto Guevara. They publicized his fundamentalist vision of economic liberalism against the backdrop of his cheap TV-spot poses—dressed in white with shoes fit only for walking on carpets, but with a shovel in his hand,ostensibly for doing community work.

Guevara’s party was second only to the PLN in squandering its campaign financing on haranguing propaganda. And it molded its candidate into a sex symbol appealing to Costa Rican women: after each shovel-bearing photo opportunity, he closed by bestowing kisses on supposed admirers.

The electoral results suggest that this grotesque expression of Costa Rican politics has reached its limits. Guevara’s party got the same number of legislative seats as in the 2002 elections, and Guevara himself only pulled 8.5% of the votes for President, although the polls had predicted a percentage very close to what Ottón Solís actually won.

The PAC offers an ethical
position and clear proposals

The PAC emerged in the 2002 elections with a substantially ethical proposal directed against the upper echelons of the traditional parties, both of which were by then up to their ears in corruption. The party proposes modifying both the vision and the practice of politics with rigorous insistence on public morals.

Ideologically, it doesn’t define itself as leftist and so far has no comprehensive proposal for society, but it has produced important detailed proposals that add up to resistance to neoliberalism with the resurgence of a Keynesian economic policy. It defends the idea of a state prepared and able to regulate the market, with a capacity for strategic leadership and social and environmental protection. It clearly opposes the privatization of any strategic state assets and proposes protectionist measures to support domestic production. Above all, it rejects approval of CAFTA, promising to withdraw it from the Legislative Assembly and request a renegotiation.

Three limits to the PAC…

After its appearance four years ago as a force seeking to distinguish itself from the generalized decay of the traditional political world, it is now possible to view the limits and scope of the PAC’s transformational potential with some perspective. First its limits, one of which is the reductionist emphasis of its programmatic proposal, centered on ethically reforming the political system. This reform is inevitable, but formulating it without referring to the whole of society makes it difficult to achieve the ideological cohesion of its members. In the last parliamentary term this contributed to a division of its bench—with nearly half of its members leaving the party—and desertions by mayors and municipal council members elected on its ticket.

Another limit is its recourse to oligarchic values such as the absolutizing of Costa Rica’s historical particularities. It is a self-satisfied myopic vision with respect to the rest of Latin American that fails to see the importance of strategic alliances on the continent that could increase the weight and effectiveveness of the anti-imperialist struggle, however modest and limited it may be. It also feeds an affinity with the historical chauvinism promoted by the oligarchy, for example the self-image of Costa Rican superiority over Nicaragua and the rest of Central America. It is revealing that the PAC bench voted in favor of the fascistic Migration Law.

Another limit is its scant desire or capacity to develop grassroots organizational structures, especially among the poorest strata, which are still captive to the oligarchic parties’ clientelist styles. In the 2002 elections, the PAC’s vote came from the urban and educated middle classes from the most developed provinces, who are becoming increasingly impoverished by the neoliberal model, and this didn’t change qualitatively in the 2006 elections. Although the PAC increased its vote in both absolute and relative terms, its victory was still in the more developed provinces—San José, Alajuela and Cartago—while Arias won in the poorer provinces—and, not insignificantly, those with the highest abstention levels—Guanacaste, Puntarenas and Limón.

…and three values

The PAC has proved to be a transforming force. So far it has shown a consistent commitment to the two focal points of its programmatic platform: a determined fight against the political system’s moral decay and promotion of new forms of political conduct that reject patronage networks and advocate transparent communication in which words are matched by deeds. It has also demonstrated its desire to resist the neoliberal model’s advance and its juridical consolidation as a system through approval of CAFTA, although it doesn’t appear to have any alternative beyond a sketchy Keynsian economic policy, something like the return of the successful social democratic economic model Costa Rica employed for nearly thirty years after 1948.

Another value is that in these elections the PAC consolidated its slot as the second political force, right on the PLN’s heels, relegating the PUSC to near invisibility. It ran its campaign on a quarter of what the PLN spent, and effectively designed its publicity with a sober discourse that shunned demagogic promises.

And finally, in contrast to the media exaltation of Arias as the longed-for statesman-messiah figure or the film-star image in which Otto Guevara was cast, Ottón Solís affirmed his leadership as the most consistent within the Costa Rican political class, based on coherence between discourse and practice, as well as sobriety, culture and a firm but flexible defense of principles. In comparison, Arias always gave the impression of a cardboard cutout focusing on pomp and hollow promises, a lamentable figure harking back to a rhetorical and imprecise political style no longer in tune with the times.

Arias is in trouble

Oscar Arias is taking office with an extremely fragile electoral mandate, supported by only 25.7% of the eligible voters—a mere 0.6% more than Solís and his program of an anti-oligarchic “ethical front” and resistance to neoliberalism. The 37% represented by abstentions and blank and null ballots largely expresses firm civic disenchantment with the political system and a critique of the electoral process. Arias also will have to deal with a multi-bench parliament, which will require ongoing negotiations.

All this will make it extremely hard for the new President to honor the two key points of the class agenda imposed on him: bring the country’s economic model up to date, flushing out all the “backward” elements rejected by the neoliberal orthodoxy, and approve CAFTA, its most advanced instrument for achieving this purpose. During the campaign, the only clear programmatic point that emerged from all his egocentric propaganda was his determination to push CAFTA through parliament. Its approval or rejection represented the main clash between his electoral proposals and those of Solís.

Given both his razor-slim electoral victory and the presence of a combative social movement whose struggle connects the dots between corruption and neoliberalism, Arias’ attempt to push the neoliberal agenda forward can only intensify the social conflict. Soon after learning the results of the virtual tie in the race for the presidency, Arias showed a modest and sensible side for the first time: “Our house is divided; whoever ends up President will have to negotiate.” But it was only a fleeting insight; after he was proclaimed the victor, he returned to his inflexible determination to get CAFTA passed.

But how will he do it? Two routes have been formulated within his closest circles. One of them—which his brother Rodrigo is said to favor—agrees with the US pressure to speed up the process: “It has to be done immediately. A few months of the bully stick and then everything will return to normal.” It’s a dangerous path because it underestimates society’s correlation of forces in a country where brutal repression is no longer one of the traditional ways of exercising domination.

The other route is closer to the idiosyncratic qualities of Costa Rica’s political class: “First we have to create the conditions and when the time is right, we push the treaty through.” This seems to be the path favored by the President-elect. “Create the conditions” will mean triggering contradictions within the social movement to fragment and demobilize it. Above all it will mean using the oligarchy’s powerful media machinery to generate collective terror with the slogan: “Rejecting CAFTA will bring catastrophe.” Both routes are critical, and either could trigger the storm of social conflict looming on the horizon.

Amaru Barahona is a Nicaraguan social scientist living in Costa Rica.

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