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Reference ID Created Released Classification Origin
05SANJOSE2882 2005-12-16 23:11 2011-03-08 16:04 CONFIDENTIAL Embassy San Jose
Appears in these articles:
This record is a partial extract of the original cable. The full text of the original cable is not available.

162352Z Dec 05
C O N F I D E N T I A L SECTION 01 OF 04 SAN JOSE 002882 
E.O. 12958: DECL: 12/16/2015 
REF: STATE 210813 
1. (C) Relations between the United States and Costa Rica are 
very friendly.  Our countries share a strong commitment to 
democracy and human rights.  Costa Rica is the longest 
continuous democracy in Latin America and serves as an 
important example of how a long-term commitment to democracy 
benefits a country.  Costa Rica does not have formal 
diplomatic relations with Cuba and is concerned about 
attempts by the Venezuelan government to increase its 
influence in the hemisphere.  Although Costa Rica has no 
military, its coast guard and police cooperate closely with 
the U.S. Coast Guard, Navy, and Drug Enforcement Agency (DEA) 
in narcotics interdiction. The domestic political situation 
is paralyzed. Costa Rica is the only CAFTA country that has 
not ratified the treaty.  Attempts at fiscal reform are 
stalled, as well.  This void of leadership and political will 
to tackle serious issues confronting the country has put a 
cloud over the investment climate in the country 75% of Costa 
Ricans believe that now is a bad time to invest in the 
country.  Some of the worst road infrastructure in Central 
America, a rising violent crime rate, bottom quintile 
standings with the World Bank in tax collection, contract 
enforcement and investor protection reinforce this negative 
investment climate.  Until elections are concluded in the 
spring of 2006, nothing is expected to change. 
2. (C) U.S. economic assistance to Costa Rica has fallen 
dramatically since 1995 when we closed our bilateral USAID 
mission.  There was an upsurge in U.S. military and counter 
narcotics assistance with the signing of a Bilateral Maritime 
Agreement in 1998, but that assistance has now been reduced 
very substantially because of Costa Rica's reluctance to sign 
an Article 98 agreement and a shift in priorities in the 
State Department's Bureau of International Narcotics and Law 
Enforcement Affairs (INL funding has declined from a peak of 
$3.2 million in 2000 to $355 thousand this year).  Failure to 
sign an Article 98 agreement also has caused Costa Rica to be 
ineligible for trade capacity-building funds to implement 
CAFTA-DR.  This decline in assistance, which is viewed as 
"sanctions" by many in the GOCR and the press, unavoidably 
diminishes U.S. influence in Costa Rica and affects the level 
of bilateral cooperation in the areas of counternarcotics, 
counterterrorism, and trade. 
3. (C) We expect far more vigorous leadership if former 
president and current front-runner Oscar Arias takes office 
in May.  Arias is much more committed to free-market policies 
and CAFTA-DF than Pacheco, but with respect to some 
international issues, such as the use of military force and 
levels of economic assistance from rich to poor countries, 
Arias likely will be at odds with the United States.  Arias 
is unlikely to embrace an Article 98 Agreement in any form. 
4. (U) The Mission's three principal goals summarized from 
the MPP FY 2007 are: 
(1) to encourage greater economic prosperity in Costa Rica; 
(2) to assist and protect the growing legions of American 
citizens visiting and living in Costa Rica 
(3) to improve the domestic security of both Costa Rica and 
the United States; 
(4) to promote democratic ideals and a better understanding 
of, and support for, American foreign policy objectives in 
the region and the world. 
5. (C) Trade and Investment.  Ratifying and implementing 
CAFTA-DR is the litmus test of cooperation on trade 
liberalization and improving the investment climate in Costa 
Rica.  Though we exerted a tremendous amount of effort to 
encourage the Pacheco administration to submit CAFTA-DR to 
the legislature as soon as possible after completion of 
negotiations in early 2004, it was not submitted until 
October, 2005, where it remains in committee. 
Improving the neglected infrastructure of Costa Rica will be 
needed for the country to be able to reap the benefits of 
freer trade.  Because of a weak fiscal situation, this work 
will need to be financed utilizing foreign concessions. Costa 
Rica has not had a successful foreign concession in history. 
Helping solve current concession disputes and helping Costa 
Rica streamline and simplify the concession process is an 
important priority of the mission.  Another key priority of 
the mission is to assist Costa Rica in instituting 
responsible fiscal reform. 
6.(U) American Citizens Services.  Over 700,000 Americans are 
expected to visit Costa Rica this year.  About 30,000 
American citizens live here permanently.  Our mission 
processes more stolen passport claims than any other embassy 
in the world.  We are also number four in processing 
non-natural US citizen deaths.  The consular section is 
undergoing a remodel and expansion that should help alleviate 
the consular backlog and help streamline American citizen 
7. (SBU) Domestic Security.  We are seeking to improve Costa 
Rica's track record against drug trafficking within the 
current environment of minimum USG support.  Significant 
weaknesses in the monitoring of the sea and air ports of 
Limon and Liberia have been identified and proposals for 
rectifying are being generated.  We are placing greater 
emphasis on the arms-for-drugs trade in which Costa Rica is a 
transit country and on money laundering activity. We also are 
seeking to make Costa Rica a regional model for combating 
child sex exploitation, with the ability to export 
instructors and training to its neighbors. Crime is on the 
rise on the country and the National Police Force and the 
judiciary are struggling to respond.  We are working with the 
government to propose changes in the wiretapping laws and to 
provide access to rudimentary equipment and training that is 
currently not available.  A lack of an Article 98 agreement 
is a major impediment to providing any meaningful assistance. 
8. (U) Diplomacy, both Traditional and Public.  Costa Rica 
loves democracy, and we often work together with the GOCR to 
promote democratic principles, for example through the Summit 
of the Americas process and in the UN. Costa Rica is a great 
example for Latin America.  It is vital that the country 
serve this role in the current environment of change in Latin 
America. We are working with the government and the private 
sector on an anti-corruption and transparency campaign to 
counteract the negative effect of three of their past 
Presidents being under arrest or suspicion of taking bribes. 
We are also actively promoting the charitable good works of 
US companies and foundations in the country as well as 
continuing and strengthening the Fulbright Scholars Program. 
9. (SBU) Despite minimal U.S. material assistance, 
cooperation in counternarcotics 
intelligence-sharing and joint operations continues to be 
excellent, based on our close working relationships with the 
new head of the Costa Rican Coast Guard and the 
long-time chief of the drug police.  Over 10 tons of cocaine 
has been seized this year. There have also been significant 
successes in the apprehension and extradition of most wanted 
offenders from Costa Rica to the United States.  We have put 
into place an excellent training program for prosecutors and 
police in the area of sexual exploitation of children that 
has resulted in an unprecedented level of cooperation with 
positive results. 
10. (SBU) Although Costa Rica is the only CAFTA country that 
has not yet ratified the treaty, this is in large part due to 
the success of the mission in insuring that the opening up of 
the telecommunications and insurance markets is part of the 
agreement.  This has enraged the powerful monopoly and its 
trade unions, which have made it a priority to stop CAFTA 
implementation.  The Econ and Political Sections have done an 
excellent job in preparing the scene for a decisive move 
beyond this historic impediment to growth. Another important 
success in the economic arena was the resolution of the 
Tepezcuintles expropriation case.  This leaves only one 
expropriation case remaining to be resolved in Costa Rica. 
11. (U) With important national elections set for February 
2006, the mission has had success in introducing important 
ideas for reform. A year-long commission on anti-corruption 
and transparency has presented its report and steps are being 
taken to implement the recommended reforms. Experts on 
fundamental fiscal reform were also brought from the United 
States to help steer the domestic debate onto a more 
productive path. 
12. (U) Our counternarcotics and law enforcement strategy has 
been hampered by irregular, unpredictable, feast-or-famine 
access to funds used for training and equipping our Costa 
Rican counterparts.  U.S. legislation to protect American 
service members has cut off U.S. military assistance, 
including EDA and IMET, as of fiscal year 2004.  And INL has 
drastically reduced its support for counternarcotics 
programming in Costa Rica.  The fall-off in U.S. training and 
other assistance has resulted in a noticeable deterioration 
of the seaworthiness of the still very dependent Costa Rican 
Coast Guard fleet and a general degradation of Costa Rican 
counternarcotics capabilities. 
13. (U) The other major problems at post are resource based. 
The management section requires both additional staff and 
ICASS funding to maintain adequate service in the 
face of increasing demands.  For the last few years this post 
has suffered from inadequate ICASS funding levels.  This 
year, in order to partially rectify the situation, we have 
asked for a shift of program funds to ICASS to meet minimum 
operational requirements.  The RSO office and the Econ 
section are also areas that are woefully understaffed 
considering their workload and importance to the success of 
the overall mission. 
14. (U) Consular staffing and space are inadequate, but have 
been addressed partially with the initiation of a consular 
improvement program.  Additional space is required before 
staffing issues can be resolved.  The renovation project is 
set for completion in June/July 2006.  At completion, the 
Section will have adequate space for current, but not for 
projected, needs.  Additional staffing, both officer and FSN, 
have been requested through Consular Packages, MRV funding 
requests, and the MPP. These requests are critical. 
15. (SBU) Political Section: This section handles its 
responsibilities professionally.  They include annual 
reports, demarches, the INL portfolio, overseeing a major 
U.S. Labor Department project in Costa Rica, attempts to end 
the Article 98 deadlock, monitoring the CAFTA passage saga, 
and regular political reporting on the February 2006 elections 
including our expectations of the next government. 
16. (SBU) Economic Section: The section has been very 
effective in working with Costa Rican and U.S. elements to 
coax the GOCR to move CAFTA-DR forward with the all important 
telecom and insurance market openings intact. The Economic 
Section's close and coordinated relationship with both the 
Foreign Commercial Service and the Foreign Agricultural 
Service is exemplary.  This section has also conducted an 
excellent speakers program on important topics of reform for 
Costa Rica. 
17. (U) Management Section:  The Management Section has 
experienced turnover in most of its 12 American positions 
since summer 2004.  During this time period the section 
quickly melded together as a team, made an analysis of 
ongoing operations, decided what operational changes were 
needed and then has worked together to institute them.  The 
results have focused on better customer service and 
information feedback, making smarter use of information 
technology through e-documents and reduction of paper, 
smarter and more efficient procurement practices, cost 
containment and reduction and more transparent B&F 
operations, an enhanced community liaison office, and 
remodeling the Consular section workspace to make it a 
healthier and more pleasant work environment.  Lack of ICASS 
budget resources this past year, resulting in a less than 
adequate LE Staff wage increase has affected morale, and 
various ongoing issues with the host government regarding tax 
exoneration, customs and social security issues, have made 
the working environment difficult at times. 
18. (U) Environmental Hub:  The Hub links regional 
environment and science activities to our bilateral 
priorities.  Its range of contacts and expertise encourages 
joint action with other sections on CAFTA-DR, health issues, 
public outreach, and other opportunities 
19. (U) Consular Section: The Consular Section has a heavy 
federal benefits, passport, arrest, death, repatriation, 
extradition and letters interrogatory caseload. 
While immigrant visa caseload is relatively low, 
non-immigrant visa applications increased 20% in FY05, and a 
30% increase is expected for FY06. 
20. (U) Regional Security Office:  The RSO enjoys an 
excellent collaborative relationship with Costa Rican 
counterparts on matters focused on, but not limited to, 
Embassy security, fugitive investigations, and major fraud 
cases. They have had good success with some of the most 
stretched resources at the mission. 
21. (SBU) Public Diplomacy:  The PD section is an integral 
and integrated part of the Embassy team.  The PAO and/or IO 
participate actively in Country Team and other weekly 
Embassy meetings, providing both public affairs insights and 
substantive information on priority political and economic 
issues in the news. PA officers and staff coordinate 
program and press activities with other sections of the 
22. (U) Drug Enforcement Administration:  DEA provides 
leadership and knowledge regarding U.S. drug law enforcement 
and money laundering investigations, and coordinates closely 
with other Mission elements involved in pursuing the 
Mission's counternarcotics objectives.  Host government 
cooperation with DEA is superb. 
23. (U) Peace Corps:  Peace Corps Costa Rica pursues the 
three goals of the organization through projects that respond 
to the needs of the Costa Rican populace.  Peace Corps 
volunteers are working in projects focused on meeting the 
needs of children at risk, to address the needs of rural 
communities, and to help micro-enterprise development. 
24. (U) Animal and Plant Health Inspection Service: APHIS is 
developing early detection systems of injurious pests of 
agriculture that could jeopardize the U.S. food supply and 
is developing a novel approach to pest reduction in Costa 
Rica that will also reduce pest risk to the U.S. APHIS works 
closely with host government officials and industry to 
develop a variety of cooperative agricultural programs 
beneficial to both countries consuming publics. 
25. (U) Foreign Commercial Service: The Senior Commercial 
Officer is very effective at contact work and routinely 
shares important information in the Mission.  The mutual 
provision of TDY assistance among all FCS posts in Central 
America supports the Mission's goals of furthering regional 
economic integration and maximizing opportunities for U.S. 
26. (U) Office of the Defense Representative:  ODR is a key 
player in the mission's counternarcotics efforts and works 
effectively with other mission elements.  The office has 
contributed very substantially to maintaining U.S. contact 
with Law Enforcement authorities in Costa Rica despite 
resource constraints. 
27. (SBU) The lack of resources to support counternarcotics 
cooperation with Costa Rica will have a growing and long-term 
adverse impact on our efforts to combat drug 
trafficking and to stem the flow of illegal narcotics to the 
United States.  It may eventually cause Costa Ricans to call 
into question the value to them of the Bilateral 
Maritime Agreement of 1998. 
28. (U) The Economic Section faces potentially crippling and 
permanent personnel shortages in the course of the next two 
fiscal years.  The section's OMS slot is a 
one-time-fill-only DRI position that will disappear when the 
current incumbent rotates out in the summer of 2006.  The 
section's second officer position, also a DRI slot, 
faces a three-month gap early in 2006.  When the future 
incumbent rotates to the consular section a year hence, the 
gap will become permanent without the authority we seek to 
create a permanent position.  Such reduced capabilities as 
Costa Rica begins to implement its CAFTA-DR obligations will 
diminish the Embassy's effectiveness in a crucial area. 
29. (U) The Political Section instituted a program to combat 
sexual exploitation of children in Costa Rica which 
emphasizes both deterrence and punishment.  Posters at the 
airport and billboards at beach resorts now warn potential 
sex tourists, and, thanks to U.S. training and equipment, 
arrests and prosecutions are on the rise. 
30. (U) The Public Affairs Section transparency and 
anti-corruption program produced real results when concrete 
suggestions for government procurement reform were presented 
in November at a public ceremony.  This process represented 
an unprecedented commitment by a broad range of Costa Rican 
society to make changes in the ingrained ways of doing 
business and root out corruption.