Candidates Pledge
China-Led Recovery as Vote Nears
By Blake Schmidt and Jonathan Levin
(Bloomberg) - Costa Ricans head to the polls
for presidential elections this weekend with
the leading candidate, Laura Chinchilla,
pledging that a pending free-trade pact with
China will power an economic rebound.
Chinchilla, who stepped down as President
Oscar Arias’s vice president to run, said a
vote for her on Feb. 7 guarantees tighter
ties with China under the agreement Arias
plans to sign as early as this month.
Signaling consensus on China’s importance,
contender Otto Guevara, a self-described
libertarian, says he would make Costa Rica a
middleman for Chinese-U.S. trade.
“Our main trade partners like Europe and the
United States will take a while to recover,”
Chinchilla, 50, of the National Liberation
Party, said in an interview in San Jose this
week. “China will be very important for
commercial relations.”
In a campaign shadowed by last year’s
recession and the loss of about 64,000 jobs,
the debate has been shaped by surging sales
to China and plunging exports to the U.S.
China’s power and possibility have also
sparked controversy as Guevara accused Arias
of “checkbook diplomacy” for breaking
relations with Taiwan in exchange for
Chinese investment.
Chinchilla would be the first female
president of Latin America’s oldest
democracy. She led Guevara of the
Libertarian Movement Party 44 percent to 27
percent in a Jan. 28 CID-Gallup poll of
1,200 people with a margin of error of 3
percentage points. Otton Solis, of the
Citizen Action Party, trailed with 19
percent. The leading candidate needs at
least 40 of the vote to win in the first
round.
Crime, Prices
Costa Rica’s 4.5 million people consider the
cost of living and crime their primary
problems, said Carlos Denton, CID- Gallup’s
president for Central America. Chinchilla, a
U.S. educated former Security Minister, has
pledged to boost the law enforcement budget
by 50 percent after the homicide rate almost
doubled from 2004 to 2008. She would also
increase deficit spending to create jobs.
Guevara, the most pro-market candidate,
calls for tax cuts and adopting the U.S.
dollar as the currency.
Solis, an economist, has promised to
renegotiate the Central American Free-Trade
Agreement with the U.S. to better protect
farmers.
Costa Rica in 2007 became the only Central
American nation to switch diplomatic ties
from Taiwan to China after China sealed
free-trade agreements with Chile and Peru.
Of 23 countries recognizing Taiwan, 11 are
in Central America and the Caribbean,
according to the Taiwan Foreign Ministry’s
Web site.
China, which considers Taiwan a breakaway
province, hopes Costa Rica’s move will sway
its neighbors, said Jin Guanghao, a Chinese
Embassy spokesman in San Jose.
U.S. Vacuum
China is moving into a “vacuum” left by the
U.S. in the region, said William Ratliff, a
research fellow at Stanford University’s
Hoover Institution near Palo Alto,
California, who has a Ph.D. in Chinese and
Latin American history.
Costa Rica’s $29 billion economy, Central
America’s second- biggest, is already
benefiting. Exports to China jumped 13
percent to $768 million last year while
sales to the U.S., the country’s biggest
trading partner, plunged 13 percent to $3.1
billion, according to government trade
agency Procomer.
“Chinese soft power has to do with
expectations of future power and future
economic benefits,” said Evan Ellis, author
of “China and Latin America: The Whats and
Wherefores.”
China has combined “ payoff” and
“attraction” in wooing Costa Rica, said
Joseph Nye, a professor of international
relations at Harvard’s Kennedy School, who
coined the term “soft power.”
China Bond Purchase
China bought $300 million in Costa Rican
bonds in 2008 and donated an $83 million
soccer stadium, Jin said. It also committed
as much as $700 million to finance expanding
the country’s sole oil refinery.
“No one gives something for nothing,” Costa
Rican taxi driver Randal Mora said as he
passed the half-built stadium where Chinese
construction workers toil.
Solis vowed if elected he would name the
stadium for the Tibetan Buddhist leader
Dalai Lama after China persuaded Arias to
cancel a meeting with his fellow Nobel
laureate in 2008 as a condition for a visit
by China’s president, Hu Jintao.
The Chinese ambassador recently placed the
first brick for a Chinatown in San Jose
while plans are in place for a Confucius
Institute, part of a global network of
centers the Chinese government uses to
promote its language, culture and political
philosophy.
‘Bad Taste’
“This diplomacy has been opaque,” Guevara,
49, said in an interview in San Jose. “Our
diplomatic relations aren’t to be bought or
sold, and what happened was in bad taste.”
In 2008, Costa Rican courts ordered the
Foreign Ministry to release a memorandum
co-signed by Chinese Foreign Minister Yang
Jiechi that revealed China agreed to the
bond purchase and $130 million in aid, among
other incentives, in exchange for the break
with Taiwan.
Chinchilla, who is portrayed by opponents in
campaign ads as an Arias puppet, denied her
former boss hid anything.
The final round of negotiations for a China
trade agreement begin this month, the
Foreign Ministry’s director Gabriela Castro
said by phone. China has agreed to eliminate
tariffs on 90 percent of Costa Rican
products and Costa Rica has reciprocated on
94 percent of Chinese goods. |
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