Celebrating 25 Years of Scoop
Special: Up To 25% Off Scoop Pro Learn More

Search

 

Cablegate: President Arias On His Visit to Washington

VZCZCXYZ0008
OO RUEHWEB

DE RUEHSJ #2702/01 3352141
ZNY CCCCC ZZH
O 012141Z DEC 06
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6765
INFO RHEHNSC/NSC WASHDC IMMEDIATE
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY

C O N F I D E N T I A L SAN JOSE 002702

SIPDIS

SIPDIS

WHA/CEN FOR J:MACK; NSC FOR D:FEARS

E.O. 12958: DECL: 11/30/2016
TAGS: PREL PGOV PINR ETRD ECON CS US
SUBJECT: PRESIDENT ARIAS ON HIS VISIT TO WASHINGTON

REF: SAN JOSE 2685

Classified By: AMBASSADOR MARK LANGDALE PER 1.5(D)

1. (C) SUMMARY: On November 29, the Ambassador met with
President Arias to discuss the latter,s upcoming visit to
Washington. The Ambassador noted Arias,s position as a
leader with regional stature, and suggested President Bush
would be interested in Arias,s views on developments in
Nicaragua and Cuba, as well as his domestic agenda, topped by
CAFTA-DR and fiscal reform. On Nicaragua, Arias opined that
Ortega &would have no choice8 but to be different than he
was 20 years ago. On Cuba, Arias said he was willing to
discuss a peaceful transition, but hoped this issue would not
be the major topic in Washington. Arias noted the irony of
Ortega making more positive statements on CAFTA-DR than some
opposition figures in Costa Rica, giving Arias more
ammunition to use against them at home. Arias stressed that
he wanted to talk more &about Costa Rica8 this visit,
giving the Ambassador an opening to stress the need for
CAFTA-DR implementation, tax reform, judicial modernization
and improved protection for investors, which would generate
long-term benefits dwarfing the short term gains from
international development assistance. Arias is likely to
discuss assistance proposals, anyway, including the so-called
Costa Rica Consensus and a debt-for-education swap idea. Our
response should be to continue lowering his expectations.
Costa Rica is best placed to help itself. END COMMENT.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

2. (U) On November 29, the Ambassador, accompanied by
PolEcon Officer David Henifin, met with President Arias to
discuss the latter,s December 3-6 visit to Washington.
Arias was alone, mentioning that FM Bruno Stagno was in
Europe.

-----------------------------
CUBA, NICARAGUA AND CAFTA-DR
-----------------------------

3. (C) Arias asked what would likely be on the President,s
agenda. The Ambassador reminded him that the White House had
originally planned the meeting for after Costa Rica passed
CAFTA-DR, but the President had accelerated the timetable.
Given Arias,s position as a leader with regional stature,
the President would be interested in his views on
developments in Nicaragua and Cuba, as well as Arias,s
domestic agenda, topped by CAFTA-DR and fiscal reform.

4. (C) On Nicaragua, Arias opined that Ortega &would have
no choice8 but to be different than he was 20 years ago,
given the changes in Nicaragua. Ortega &must (govern)
responsibly,8 he added, although visiting Cuba so soon after
the election was a &mistake8 on Ortega,s part. On Cuba,
Arias said he was willing to discuss a peaceful transition,
but he hoped the issue would not be the major topic of his
conversation with the President. On CAFTA-DR, Arias noted
the irony of Ortega making more positive statements of late
than some opposition political figures in Costa Rica. Arias
asked the Ambassador to forward pro-CAFTA statements by
Ortega or prospective members of his government. The more
positive comments from Nicaragua, the more pressure Arias
said he could apply in Costa Rica. He dismissed hardline
anti-CAFTA critics Alberto Salom, deputy leader of the PAC
party,s faction in the legislature, and Jose Merino, sole
representative of the Frente Amplio (Broad Front) party, as
&Allende socialists8 out of step with the times.

---------------------------------
DOMESTIC AGENDA: NEEDED REFORMS
---------------------------------

5. (C) Recalling that when he visited Washington 20 years
ago, senior USG officials &only wanted to discuss
Nicaragua,8 Arias stressed that this time, &I want to talk
about Costa Rica.8 Taking the opening, the Ambassador
outlined the new USG framework for foreign assistance, which
placed Costa Rica in the highest tier as a &sustaining
partner.8 The Ambassador highlighted how Costa Rica is
doing, compared to OECD standards, in terms of governing
justly and democratically and investing in people. Costa
Rica is considerably below OECD standards in terms of
economic growth and the business environment. For example,
the Ambassador noted that Costa Rica ranked 160th out of 175
on tax collection as measured in the World Bank,s &Doing
Business8 index, highlighting the need for an effective and
workable tax system to help underwrite Arias,s domestic
agenda. With CAFTA-DR implementation, appropriate fiscal
reforms and improved protection for investors, Costa Rica has
the potential to become the Singapore of the region.
6. (C) Arias was receptive, especially on the need for tax
reform, but rejoined that Costa Rica,s overall economic
growth was good, and may top seven percent for 2006. In
overall foreign direct investment in the region, Costa Rica
ranked third behind Chile and Mexico. The Ambassador
suggested that the performance of Costa Rica-based
multinationals like Intel and the impact of the lucrative but
narrow real estate market (mostly appealing to high-end
foreign buyers) skewed these figures. Over the long run,
growth in small to moderate businesses, and job generation
outside the tourism sector, would be the keys to core
economic growth in Costa Rica.

--------------------------------------------- -----
USG ASSISTANCE: EDUCATION AND COSTA RICA CONSENSUS
--------------------------------------------- -----

7. (C) Turning to assistance issues, Arias floated two
proposals for discussion in Washington, the first a debt for
education swap, modeled on the debt for land arrangements
that launched many of Costa Rica,s national parks 20 years
ago. The Ambassador cautioned that such a proposal probably
was not realistic, as the new Congress is likely more
interested in boosting education spending at home than
helping education systems abroad. In the long run, opening
and reforming Costa Rica,s economy would give the GOCR far
more resources to spend on education and other social
projects.

8. (C) Arias then asked for USG reaction to his Costa Rica
Consensus idea (for more assistance and debt relief for
&responsible8 middle-income countries which spend more on
social programs than on defense). The Ambassador replied
that the concept was interesting, even noble, and possibly
worth a closer examination from a disarmament perspective,
given the remilitarization in the region (i.e., Venezuela).
The idea, however, does not mesh with the USG,s new foreign
assistance framework, which is geared instead towards helping
developing countries to help themselves. Targeted technical
assistance is likely, but extensive bilateral aid, such as
Costa Rica benefitted from in the past, is unlikely. The
Ambassador added that realistic international consideration
of the Consensus idea would take time and certainly not bear
fruit before Arias,s term ends in 2010.

9. (C) COMMENT: Arias,s comments suggest an opening for
more focused discussion on his domestic agenda, stressing the
need to make reforms at home without expecting large-scale
bilateral help from abroad. Arias,s views seem to be
changing, but he still views the region and Costa Rica
through the prism of the 1980s, when Costa Rica relied on
extensive USG assistance. A lingering sense of
exceptionalism, which argues that Costa Rica deserves special
treatment (and international assistance) because of its
record as a stable democracy and responsible international
actor, will need to be diplomatically overcome.
LANGDALE

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
World Headlines

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.