Costa Rica was forced to turn to international lending agencies, namely the IMF, World Bank and USAID, for economic assistance, and as a result was subject to the austerity measures and Structural Adjustment Policies (SAPs) imposed as terms of their loan agreements. These SAPs required the State to slash its payroll and drastically reduce its control of and spending on industry, finance, business and even social services; to encourage further foreign investment, privatization of public services and to force trade liberalization by reducing imports on tariffs and offering tax benefits.
Deep cuts in education, health and transport infrastructure spending, in food subsidies and social security, threatened the country’s universally admired welfare state systems; and as state activities were transferred to the private sector, quality of life deteriorated with rising levels of crime, unemployment and general social decay.
Increasing industrialization and free-marketism widened the gap between rich and poor so that the middle classes grew poorer, extreme poverty rose by 50% between 1987 and 1991, and by 1995 15-20% of the population took home 70% of national income. However, such was the economic crisis that the governments of Monge and Arias, and their successors, Rafael Ángel Calderón (1990-94), son of former president Calderón and José María Figueres (1994-98) son of his infamous enemy, had no choice but to comply with these demands.
The state-centered liberal democracy of Figueres and the PLN; and the problematic alliance of welfare-state socialism with capitalist-industrial relations upon which it was founded; resulted in the creation of new economic forces and class structures which have inadvertently led the country into ‘neo-liberalism’ and the ultra free-market conservatism, minimal state and privatized services always preferred by the cafetalero elite opposition.
Since the mid-1980s and the formation of the PUSC, Liberación has lost its leading role, with the two parties generally alternating with each election and moving politically closer and closer together within this neo-liberal agenda.
The political, cultural and social costs of SAPs have been high, pushing the country towards the privatized, globalized economy favored by the ‘Washington Consensus’ lending agencies; a ‘new world order’ in which ‘exchange value is the only legitimate value,’ 31 gradually stripping the country of the capacity to shape its own destiny.
In 2007, despite the development of a thriving, high-tech computer manufacturing industry and a booming ‘ecotourism’ market, crime, poverty and inequality continue to rise, and the forces of globalized, free-market capitalism continue to push relentlessly forward as DR-CAFTA, the Dominican Republic and Central American Free Trade Agreement awaits ratification.
The protests and social unrest surrounding its impending approval suggest that cracks are finally beginning to appear in the glossy surface of the ‘leyenda blanca’ or national mythology. With its origins in the elite-paternalist social relations of 19th Century coffee production, the notion of ‘egalitarianism’, was a ‘poor guide’ to Costa Rica’s class relations even in 1948 when it was embraced by the supposedly progressive, social-democratic, PLN government. Today, in an inequitable, highly-competitive neo-liberal world order, it is an ‘even less realistic portrait’ of the country. 32
Three decades of Liberación rule actually accentuated the discrepancies and contradictions that always existed at the heart of Costa Rica’s social and economic order and DR-CAFTA can be seen as the embodiment of this; a real and tangible challenge to the ideological order that has maintained ‘peace’ and justified the political hegemony of the ruling classes throughout the country’s history.
In May 2006, President Oscar Arias Sánchez was elected to a second term in office, heading a now significantly more right-leaning PLN government that supports DR-CAFTA whilst proclaiming its continued commitment to social improvement. His challenge this time around remains firmly within the domestic arena. The next few years will show whether the infamous arbiter of peace can find a way to reunify his nation and reconcile ratification of the free trade agreement with economic recovery and a return to more equitable social relations.
Increasing industrialization and free-marketism widened the gap between rich and poor so that the middle classes grew poorer, extreme poverty rose by 50% between 1987 and 1991, and by 1995 15-20% of the population took home 70% of national income. However, such was the economic crisis that the governments of Monge and Arias, and their successors, Rafael Ángel Calderón (1990-94), son of former president Calderón and José María Figueres (1994-98) son of his infamous enemy, had no choice but to comply with these demands.
The state-centered liberal democracy of Figueres and the PLN; and the problematic alliance of welfare-state socialism with capitalist-industrial relations upon which it was founded; resulted in the creation of new economic forces and class structures which have inadvertently led the country into ‘neo-liberalism’ and the ultra free-market conservatism, minimal state and privatized services always preferred by the cafetalero elite opposition.
Since the mid-1980s and the formation of the PUSC, Liberación has lost its leading role, with the two parties generally alternating with each election and moving politically closer and closer together within this neo-liberal agenda.
The political, cultural and social costs of SAPs have been high, pushing the country towards the privatized, globalized economy favored by the ‘Washington Consensus’ lending agencies; a ‘new world order’ in which ‘exchange value is the only legitimate value,’ 31 gradually stripping the country of the capacity to shape its own destiny.
In 2007, despite the development of a thriving, high-tech computer manufacturing industry and a booming ‘ecotourism’ market, crime, poverty and inequality continue to rise, and the forces of globalized, free-market capitalism continue to push relentlessly forward as DR-CAFTA, the Dominican Republic and Central American Free Trade Agreement awaits ratification.
The protests and social unrest surrounding its impending approval suggest that cracks are finally beginning to appear in the glossy surface of the ‘leyenda blanca’ or national mythology. With its origins in the elite-paternalist social relations of 19th Century coffee production, the notion of ‘egalitarianism’, was a ‘poor guide’ to Costa Rica’s class relations even in 1948 when it was embraced by the supposedly progressive, social-democratic, PLN government. Today, in an inequitable, highly-competitive neo-liberal world order, it is an ‘even less realistic portrait’ of the country. 32
Three decades of Liberación rule actually accentuated the discrepancies and contradictions that always existed at the heart of Costa Rica’s social and economic order and DR-CAFTA can be seen as the embodiment of this; a real and tangible challenge to the ideological order that has maintained ‘peace’ and justified the political hegemony of the ruling classes throughout the country’s history.
In May 2006, President Oscar Arias Sánchez was elected to a second term in office, heading a now significantly more right-leaning PLN government that supports DR-CAFTA whilst proclaiming its continued commitment to social improvement. His challenge this time around remains firmly within the domestic arena. The next few years will show whether the infamous arbiter of peace can find a way to reunify his nation and reconcile ratification of the free trade agreement with economic recovery and a return to more equitable social relations.
