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Costa Rica Faces Massive Strike Prior to Alvarado Taking Office

27.4.2018

Alvarado, who will assume the presidency on May 8th, met with union leaders on April 17th and asked them for restraint but failed to stop calls for a strike.

The main unions in Costa Rica called for a strike in rejection of a fiscal adjustment plan that is currently being discussed in the Legislative Assembly.

The general secretary of the Association of Public Employees (ANEP), Albino Vargas, confirmed that the main trade union centres are keeping the strike call firm. "We keep going, we will not take any step back," Vargas said before a DPA consultation.

Unions are threatening to paralyze public services and activities in state agencies, including port operations, because the government has not agreed to withdraw from Parliament a fiscal adjustment project aiming to generate more revenues.

According to experts, the plan is urgently needed to alleviate a deficit in public finances, which in 2018 exceeded 6% of gross domestic product (GDP) and that according to the Central Bank could reach up to 8% in 2019 if no containment measures are adopted.

The project of the Legislative Assembly of Costa Rica also seeks to eliminate tax exemptions for the profits of cooperative organizations and the Solidarity Associations (organizations that operate through agreements between employers and workers to avoid labour disputes) and that have greatly proliferated in the country.

Costa Rica, with 4.9 million inhabitants, has been carrying one of the highest fiscal deficits in Latin America for more than ten years. The gap between government income and expenditure was on the verge of leading the country, in the middle of the last year to a state of financial insolvency.

Its economy is based among other things on the production of bananas and pineapples. In 2017 unemployment stood at 9.3% and poverty currently affects almost a quarter of the population according to sources in the Central American country.

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