Central America's forgotten democracy

...and because of the position of Costa Rica in Central America, in the long run, I think Reagan's proposal is in the American interest...

...Recently there were complaints of government interference with the circulation of a left-wing journal,an ordinary event elsewhere in Latin America but not in Costa Rica, where Communist journals are freely distributed...

...All the PLN leaders stress stimulation of trade unions and cooperatives as a keystone of the country's improvement...

...two, Costa Rica must continue to trade with, and have good relations with, Nicaragua...

...There are some cushions against this austerity...

...there is a delicate balance between elitism and egalitarianism...

...On the other hand Costa Ricans recognize that to be anti-Nicaraguan and obtain credits from the U.S...

...In fact," says Alvarado, "the growth in cooperatives may well offer a counter offensive to the Reaganomics with which the U.S...

...While the primary source of wealth is agriculture (Costa Rica is known as the "dessert country," thanks to its crops of cocoa, coffee, sugar and bananas, plus its production of milk), a much larger proportion of the land, primarily coffee and sugar plantations, is owned by small farmers than is true in other South and Central American countries...

...But on the whole the orientation of the PLN, including that of Monge, has been far too close to the Socialist International to consider any of this domestic activity a dangerous swing to the right...

...Fuerst...

...While the Reagan administration works closely with Mitterrand, trades with Yugoslavia, palavers with China, and assists Hungary to get extended loans from the IMF, no such beneficent gestures are available to Nicaragua or to countries that could help her...

...At the time of PLN's election victory, even Figueres commented wryly, "Although people hate Carrazo [Monge's predecessor as president] now, in six months they may be saying things were not so bad under Carrazo...

...So far, his assistance to Costa Rica in this area has been minimal...

...But even they recognize that they are on a short leash, and that if things do not start looking up soon, they may forfeit public support...

...During the last six months, the U.S...

...But even before Monge took office, Eduardo Lisano, a leading economist and one of the more influential figures in the new government, had warned, "Our people may have to go back to rice and beans for a short while, and middle- and upper-income families may have to curtail their vacations and their extras...

...Extensive government-owned enterprises in industries like cement too often become bureaucratic, inefficient, and arteriosclerotic," according to Oscar Arias Sanchez, PLN secretary-general...

...This, says the PLN leadership, has led to an excess of public spending which has become a significant factor in the inflation that Costa Rica is experiencing, though the crucial factors have been the high oil prices and low agricultural prices...

...Purely and simply the U.S., or at least the present administration, has not recognized that Costa Rica, as a strong democratic state with socialist leanings, does represent a third way in the massive struggle between the Cuban-Soviet axis, and Western-style capitalism...

...Even the businessmen are part of a middle class, not a superwealthy one...

...FUERST is professor of social work and urban studies at Loyola University in Chicago...

...If all the Latin American countries were as peaceful and progressive as little Costa Rica they would soon lose their evil fame...

...But more capital is needed, and of course the kind of trade concessions outlined in President Reagan's Caribbean Basin proposal, which Costa Rica welcomed even while recognizing that Congress might not pass it...

...the political unrest remains manageable...

...In other words, for the short run, less investment will be made in consumer products for the domestic market and more in agriculture, industry, or anything that will produce foreign currency...

...and by the International Monetary Fund, and Costa Rican leaders are not, in any case, in complete sympathy with the stand taken by the Nicaraguan junta...

...The country's main problem, not surprisingly, is the economy, over which hangs the serious consequences of Costa Rica's default on international payments...

...LAST YEAR, for example, no sooner had the new PLN government taken office (and embarked on an austerity program) than the price of the Costa Rican colon plummeted in world markets...

...Of course Costa Rica's position is made more delicate by the fact that in the Reagan camp there seems to be no middle way...

...When labor is as cheap as it is in Costa Rica, it's hard to fail if you have a good item...

...It has a well-educated and reliable work force, low birth rates, high life-expectancy (approximately seventy years), and literacy rates comparable to our own...

...may mean playing ball with the CIA and with Somosistas, a group that Costa Ricans of all shades abhor...

...Today the outflow of middle-class capital which had intensified with the drop in the currency's value has been at least temporarily stopped...

...For them small enterprises - cooperatives and controlled private ones - are clearly superior to state capitalism...

...This urging was the background music for the invitations to Monge to visit Washington and the visits by Regan and Shultz to Costa Rica...

...The extended family structure of Costa Rica means that most households, even if they have some unemployed, also have some members who work, so that people will not go hungry...

...What makes the problem worse, is that the normal economic belt-tightening which the Costa Ricans must do if they are to strengthen the colon as well as their economy, is bound to cause some unrest...

...The plant will provide electric power for domestic use and for export to Nicaragua...

...While the emphasis of the PLN is on better distribution of wealth, it is equally determined that extensive state enterprise is not the answer...

...State enterprise, the PLN believes, should be the exception rather than the rule, although it feels banking, insurance, oil refining, and utilities must be government owned...

...wants to overwhelm us...

...Excessive paternalism encourages individual irresponsibility while it stimulates inertia by offering the vain hope that the state enterprise will solve all the problems...

...The PLN is pushing ahead with the hydroelectric plant in Guanacaste, which will produce five thousand jobs...

...Both during and after his campaign, the new PLN president of Costa Rica, Alberto Monge, had declared: "There can be no peace while there is hunger, and a first priority is a further improvement of the distribution of ownership of means of production in agriculture, industry, and trade...

...Reagan recognize that the Costa Rican democracy is also a genuine believer in non-participation in the Nicaragaan struggle...

...To some extent this has come to pass...

...Accordingly, some left-wing members of the PLN are growing uneasy...

...Clearly, almost all Costa Ricans, from former President Figueres on down, abominated Somoza and strongly disagreed with the U.S...

...There is some evidence that Monge has accepted U.S...

...Further, the family assistance program, combined with a food program in the schools that is extended to the unemployed, feeds masses of people...

...position on Nicaragua...

...Today the Costa Ricans retain this fierce devotion to democratic principles...

...Nevertheless, a review of the Costa Rican position would indicate more than a little uneasiness...

...Figueres and many young Costa Ricans like Rodolfo Navas Alvarado recognize that "there are forces among the Sandinistas that are interested in a more authoritarian type of government than Costa Rica can stomach...

...If this unrest is accelerated by increased police or military activity directed at left-wing groups, the long vaunted stability even of Costa Rica can be threatened...

...It took several months and a trip to Washington as well as other foreign negotiations to bring the colon back to even a workable ratio...

...Our biggest danger is the high expectations that people have.'' Actually, it is this caution as well as this long history of social responsibility and progressivism among the leaders of the PLN that allows them the necessary latitude to retrench without serious reaction...

...has intensified its anti-Nicaraguan campaign and has made extensive efforts to push Monge and Costa Rica into an anti-Nicaraguan stance...

...It is, in fact, because of these forces that liberal groups from Costa Rica and the U.S...

...Nevertheless, despite the willingness of many local capitalists to bet their own money and business on the success of the PLN, they also want to hedge those bets a little...

...THE ONE THING we have not wanted to do, Arias Sanchez said to me, "is to promise more than we can deliver...

...Can it be that the State Department and Mr...

...If one were to distill a consensus, it would probably be close to that expressed by Arias Sanchez, who, while indicating that uneasiness, said, "One, Nicaragua must be allowed to have whatever kind of government it wishes...

...If President Reagan believes so fervently in Costa Rica, mere are many economic concessions and measures of financial assistance that he could offer that nation - and that would really bolster democracy...

...In the course of his recent speech assailing Nicaragua and urging more military aid for El Salvador, Ronald Reagan also seemed to embrace Costa Rica as his ideal of a Central American democracy...

...In large part, this electoral result is related to the fact that Costa Rica is not divided solely into the very rich and very poor as is all too common in Latin America...

...NICARAGUA HAS BECOME a crucial factor in Costa Rica's future...

...Compounding this, of course, is the problem of the foreign debt, much of it generated when coffee was king and optimism, nationally and internationally, was high...

...It desperately needs the credits offered by the U.S...

...And that Costa Rica's government leaders are long-time members of the Socialist International (along with leaders in France, Spain, Scandinavia, etc...

...In last year's national election the Partido Liberacion National (PLN) garnered 57 percent of the vote, the Partido Unidad 37 percent...

...and three, under no circumstances will Costa Rica allow itself to be used as a military or hostile base for anti-Sandinist or anti-Nicaraguan propaganda...

...For the coming years, according to Padre Benjamin Nunez, one of the older and most respected leaders of the PLN, "we will allocate to the cooperative sector all that they can take in the way of expanding housing cooperatives, cooperative industry, consumer cooperative distribution schemes, and agricultural buying and merchandising co-ops...

...Nevertheless, the 70 percent inflation, the unemployment, the adverse balance of payments - with high prices for oil and continuing low prices for coffee - have resulted in huge trade deficits...

...FUERST GUATEMALA AND EL SALVADOR are constantly in the news because of their military struggles and authoritarian regimes, Nicaragua gets covered because of the fear of a Soviet-model takeover...

...Presently, twenty-five percent of the workers are members of one kind of cooperative or another, and cooperative enterprise represents 10 percent of the GNP except in the case of milk wholesaling, where it represents 35 percent...

...While Navas Alvarado would expand cooperatives to almost all fields, making it 20 percent of GNP within the next three years, Arias Sanchez and President Monge and others are inclined to give at least as much attention to attracting private capital, both domestic and foreign, which for the moment promises significant dividends and more immediate results...

...As early as 1907 Fernando Garcia wrote about Costa Rica: Costa Rica has been without anything worthy of the name of revolution for fifteen years...

...If the U.S...

...Costa Rica is fortunate in having an industrious and frugal middle class of small farmers who own land, horses, and oxen...

...must offer strong help and support, to strengthen the hand of the moderate-to-left group whose attitudes are similar to those of the PLN...

...Since things appear to be declining rather than improving, one might think that left wing (PVP) Partido Vanguardia Popular leaders Mora and Fereto have a "terreho abandonado...

...In short, the party seeks a healthy balance of forces: state ownership, cooperative ownership, and a substantial input of private capital...

...For example, when I asked Figueres how he felt about Nicaragua he said, "Things change very fast," Then he looked at his watch and said, "At 12:15 pm today this is what I believe...

...According to Arias Sanchez, ' 'Our aim in the future is to develop society rather than the state...

...The capital outflow of the last few years should be attributed more to political unrest in the neighboring countries than lack of potential within Costa Rica itself...

...Little attention, however, is devoted to Costa Rica, a solidly liberal democracy of two million people in Central America - a too-little known land with elections every four years, a Supreme Court like ours, a free press, and no army...

...The fact is that Costa Rica is itself on a hot seat...

...The country has always supported more school teachers than soldiers...

...The extreme left and right parties split 6 percent of the vote, with half to the Communists...

...Jose Figueres, founder and supporter of the PLN, himself three times president of Costa Rica, told me, "I know if I were an American labor leader I wouldn't seek it, but as a Costa Rican I know we need it...

...wants to secure stability and friendship in Central America, its best investment would be maintaining the regional role of Costa Rica, not through armaments and anti-Sandinista policies, but with economic aid that supports the belief of two million Costa Ricans that they are going to make it in their own way...

...offers of police and counter-insurgency training against potential terrorist activity...

...The main fact about Costa Rica has been its political stability - and such stability is not an ephemeral thing...

...Rodolfo Navas Alvarado, head of the Cooperative Federation and of the Costa Rican youth movement, as well as a newly-elected member of the Costa Rican Congress (now its vice president) sees cooperative operations expanding in the medical field, in industry, transport, distribution, and in many other fields as a counter-measure to the overgrowth of bureaucratization...

...His references indicate how desperately we need to understand exactly what Costa Rica is and where it stands...

...There have been some significant strikes in the banana industry and some unrest at the university, where expenditures for faculty and students have been curtailed...

...Nevertheless there are no revolutions on the horizon...

...Luis Liber-man, a consulting economist, discussed the great potential for more investment, foreign and domestic...

...Business and professional men with whom I spoke last year, such as a furniture-manufacturer, physicians, attorneys, and several store-owners, believe that they as well as the country will surmount the present economic difficulties...

...and like the SI are unwilling to follow Washington's lead in casting every third-world struggle in East-West terms...

...Two-thirds of its people have lived above a poverty level...

...For example, he said, "a family-owned company which we initiated several years ago exported $50,000 worth the first year, $1.5 million the second year, and the present projection is for $4 million...

...There have been several attempts to overthrow the government which thanks to an efficient police force were cut down in a single day with no loss of life...

...To soften the austerity program, the government plans to construct ten thousand houses for low-and moderate-income families which can provide jobs...

...Likewise, Costa Rica plans to use its unemployment fund as a source for more housing and for more jobs...

...Industry represents only 24 percent of the gross national product, a deficiency the government is desperately trying to remedy...

...Currently, attitudes vary from those who more or less support the Sandinistas to those who qualify their previous support with concern that Nicaragua seems to be heading in the Soviet direction...

...The attitude of influential Costa Ricans toward developments in Nicaragua is significant...

...This makes Costa Rica's path most difficult since most Costa Ricans recognize that the Costa Rican-Nicaraguan ties, as neighbors and long-time trading partners, are strong...