Is Costa Rica Run by 5-Year-Old Children?
The Path to implementing CAFTA is a Long and Hard One.
The politics of a state run monopoly have always amazed me, especially when the state itself is run by indecisive, un-thorough, bickering bureaucrats. Now that the Costa Rican Electricity Institute (ICE) has been set loose into an open yet empty telecom market, breaking free from the reigns of regulation by Aresep (the state regulating authority), they have proven their business ethics by immediately raising phone rates for their customers. The decision was met by stern disapproval, with government officials complaining that the Telecommunications Superintendent (Sutel) had not yet been formed to establish fair business policies in the newly opened sector. ICE responded with a big “I don’t care” and was set to proceed with a 10% increase in prices and extend peak call time by six hours daily.
The plot thickened when Sutel was organized in haste, just in time to officially reject ICE’s price hike that was set to go into effect today. Sutel, a vast governing body of four newly appointed professionals, decided that freedom is relative and ICE does not yet have the right to set its own prices until there is competition in the market, as telephone users currently have no other option. In a continued display of winging it, a Sutel representative said that once competition does exist, they will “probably” set a maximum price for phone services that companies must abide by or face fines.
In a defiant move, the Executive President of ICE, Pedro Quiros, said if the company can’t raise phone prices, it will have to renege on its promise to lower internet prices by 40%, while sticking his thumbs in his ears and taunting “nani-nani-boo-boo…”.
One can only hope that this childish behavior can be righted in time so that customers are not the ones that get the short end of the stick, or the Wiffle bat as may be this case. That is not to say ICE is completely at fault, which can be compared to Frankenstein in its good-intentioned creation gone bad; with the government hoping to provide jobs in Costa Rica and low priced energy and telecom services for its people. Corruption and the same protectionist mentality turned it into a money pit, and they must start begging for artificial competitive advantages in the “open” telecom market to balance out its suckiness. Good luck ICE.
Oscar Aria’s Plan for Peace Employment
Still reliving his Nobel Peace Prize days, President Arias is back at trying to save the world, starting with the Costa Rican economy. His newly released plan to keep the country out of recession calls for solidarity among the population. Specifically, he asked that private companies and their employees strike an accord to slash everyone’s work hours and salary in half so that no one has to get fired. A more honest Arias might have just stated “Please, please, pleaseee let me leave the presidency having achieved the lowest unemployment rate on record, it’s just one more year! What does a recession have to do with this?!”
In a country where the majority of laborers and professionals make up the lower and middle classes, slashing income in half “for a short period” means that instead of half the country going hungry for a couple months till they find a new job, the entire country can starve perpetually, together, you know, in harmony. Currently Social Security offers unemployment compensation for three months after losing your job. Arias’s new plan would extend this to six months, another reason why the government would hope to see a lower unemployment rate! With two employees covering the work of one, the companies would still have to make payments to the Caja (insurance and social security) for both employees instead of one. Thus it seems Arias is hoping private companies will foot the extra bill instead of the government, in the name of solidarity, of course.
More Carelessness Shames Government
Another decisive victory for the Costa Rica government was the passage of the new Traffic Law to start the New Year off with less traffic deaths. The law entails excessive fines for infringements such as not wearing a bright colored vest on your motorcycle and not having your children in a car seat designated for their specific age group. And oh yea, if you get caught drunk driving, you lose your car, the end. However, when the first drunk driving case went to court, it was ruled that the new law was unconstitutional and the perpetrator, a woman, was let off without punishment.
This has led to a slew of people who had their cars revoked by the government awaiting trial visiting the court demanding that their cars be returned to them. The idealistic law had dictated that the seized vehicles would be donated to government organizations and charities. Now it’s back to the drawing board, though hopefully they will have a trial lawyer review the law this time before they get too optimistic.
One Final Rant
It was announced today that the inter-sectorial bus routes, planned to be active on the streets last June, will hopefully be ready for the middle of this year. Considering the country’s track record, they are probably patting each other on the back for such speedy negotiations.
Instead of the Central Valley’s current bus system that looks like a spider with buses going straight into the city where you must change buses should you be trying to go to another suburb outside of San Jose; the new system would connect suburbs in a semi-circular fashion without having passengers going into town to go 5 kilometers in the other direction. One has to ask, if the fleet of unused buses is sitting in a parking lot, a company was already awarded the contract and the need most definitely exists, what’s the hold up?!
The plan, originally slated to begin operation in June 2008 met with problems when the Administrative Transportation Tribunal found problems with awarding the contract to Consorcio Sectorial MPT, an alliance of several bus companies who made the highest bid for the valuable right to transport some 300,000 people daily on the seven new routes.
It was decided that MOPT must write out rules for the process of awarding public transportation permits to bus companies. After they did so, a host of appeals came flowing in from the sore losers who did not get the contract. Today, they are down to two final appeals by other bus companies that have complained that the new routes will severely affect the number of customers they will receive. SORRY BUDDY, it’s called supply and demand. It’s about time companies in this country learn to listen to the market rather than holding stubbornly to providing the type and quality of service that they feel like. It’s kinda like a company that sells square blocks to fit into round holes, you’ve got the basic elements there, it just doesn’t quite make sense. Hopefully a loss of customers will send a clearer message.
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