Identifier
Created
Classification
Origin
05SANJOSE2930
2005-12-27 19:38:00
CONFIDENTIAL
Embassy San Jose
Cable title:  

PRESIDENTIAL CANDIDATE OTTON SOLIS RUNNING AGAINST

Tags:  PGOV PINR PREL ECON CS 
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C O N F I D E N T I A L SECTION 01 OF 02 SAN JOSE 002930 

SIPDIS

E.O. 12958: DECL: 12/27/2015
TAGS: PGOV PINR PREL ECON CS
SUBJECT: PRESIDENTIAL CANDIDATE OTTON SOLIS RUNNING AGAINST
CAFTA-DR


Classified By: Charge Russell Frisbie for reasons 1.4(b) and (d)

Summary
--------
C O N F I D E N T I A L SECTION 01 OF 02 SAN JOSE 002930

SIPDIS

E.O. 12958: DECL: 12/27/2015
TAGS: PGOV PINR PREL ECON CS
SUBJECT: PRESIDENTIAL CANDIDATE OTTON SOLIS RUNNING AGAINST
CAFTA-DR


Classified By: Charge Russell Frisbie for reasons 1.4(b) and (d)

Summary
--------------

1. (C) Presidential candidate Otton Solis told Ambassador
that CAFTA-DR "would place Costa Rica in the hands of the
multinationals." He said the treaty was one-sided, opening
the Costa Rican market to U.S. industrial power, against
which Costa Rica cannot hope to compete, and in return
providing for Costa Rican exporters only "tiny things" in
addition to what they already have under the Caribbean Basin
Initiative (CBI). Ambassador said that in his view no
country will benefit more from CAFTA-DR than will Costa Rica.
Ambassador said that CAFTA-DR was intended to replace CBI,
so Costa Rica should not count on CBI benefits in the future,
nor is it realistic to hope, as Solis has urged, that
CAFTA-DR can be renegotiated. End summary.


Election Campaign
--------------

2. (SBU) On December 13, Ambassador paid a courtesy call on
Otton Solis, who is running behind Oscar Arias for president
in the February 5 election. Solis founded the Citizens'
Action Party (PAC) in 2000 and ran as PAC's candidate for
president in 2002, coming in third place with a respectable
26 percent of the vote. While he is now in second place, the
polls indicate he will probably receive fewer votes than last
time. His platform calls for greater transparency,
decentralization, and citizen involvement in government.
More concretely, he wants to preserve existing state
monopolies, including in telecommunications and energy, and
he is against CAFTA-DR. The meeting took place in Solis's
home. Also present were his campaign chief Alberto Salom,
his candidate for second vice president Marita Gonzalez, and
retired diplomat and PAC supporter Alvar Antillon.
Ambassador was accompanied by Polcouns.


3. (SBU) Solis said his campaign focuses on direct "citizen
encounters" in town-hall-type meetings with an open-ended
agenda. He does not give speeches, he said, but sits on a
stool and discusses issues raised by voters. Solis said that
voters most often bring up Nicaraguan immigration (most

advocating that immigrants be kicked out),security, drugs,
CAFTA-DR, and fiscal reform. Solis said that with regard to
Nicaraguans, "My duty is to calm people down." He argued:
(1) Nicaraguan immigration cannot be stopped, (2) Costa Rica
benefits from Nicaraguan labor, (3) Costa Ricans
hypocritically hire Nicaraguans and complain about them at
the same time, (4) The "racist notion" that Nicaraguans are
more prone to crime than Costa Ricans is demonstrably untrue;
in fact, the opposite is true, and (5) While Nicaraguans
remit USD 120 million from Costa Rica to Nicaragua, Costa
Ricans remit USD 300 million from the United States to Costa
Rica. Costa Rica is therefore a net winner in remittances.
Solis did acknowledge, however, problems arising from the
fact that many employers do not pay payroll taxes due on
Nicaraguan employees. This gives Nicaraguans a competitive
wage advantage and means that they do not contribute to the
costs of public education, health care, and other government
services that they nevertheless use.


Economy "not working"
--------------

4. (SBU) Solis said Costa Rica's model of development is
failing. The economy is plagued by increasing unemployment,
poverty, and income concentration, slow growth, an
unfavorable trade balance, fiscal problems, and corruption.
He said: "Costa Rica suffers from a mix of contradictory
policies - - market-oriented policies for small businesses,
and subsidies and tax exemptions for multinationals and other
large enterprises." Farmers, he complained, are not
protected from imports.


5. (SBU) CAFTA-DR, Solis believes, will make matters worse
and in effect "would place Costa Rica in the hands of the
multinationals." He sees the treaty as one-sided, opening
Costa Rica's market to U.S. industrial power, against which
Costa Rica cannot hope to compete, and in return providing
for Costa Rica only "tiny things," e.g., slightly more access
for textile products and sugar, in addition to what the
country already enjoys under the Caribbean Basin Initiative
(CBI). Solis said: "Our negotiators did not negotiate; they
merely accepted everything the U.S. wanted." He said
CAFTA-DR will have to be renegotiated.


6. (SBU) Ambassador responded that all the CAFTA-DR countries
will benefit from the treaty, but none more than Costa Rica.
He said that Costa Rica has already proved it can compete,
and CAFTA-DR will open up many new opportunities. It was
unwise, he said, to count on CBI benefits in the future
because CAFTA-DR was intended to replace CBI. He said that
passage of CAFTA-DR in the U.S. Congress was a very difficult
process leaving "blood on the floor." Ambassador said it was
unrealistic to hope that the U.S. would consider any
renegotiation.


7. (SBU) With respect to ending CBI benefits, Solis said that
he refused to believe that the United States was "an evil
country that would punish us" for not approving CAFTA-DR. He
said it was impossible to imagine such a thing because Costa
Rica is a democratic, peaceful country that cares for its
environment and has always been a friend to the United
States. Costa Rica, he said, cannot be treated like
Guatemala or Nicaragua. There would be tremendous tension in
Costa Rica if the U.S. tried to hurt the country. Ambassador
stressed that there was no intention to hurt Costa Rica, but
to bring Costa Rica and the U.S. closer together through a
mutually binding and mutually beneficial trade agreement
supported by majorities in both countries.
Oscar Arias
--------------

8. (C) Solis warned that the election of Oscar Arias as
president would be disastrous for the United States. First,
he said, Arias hates the United States. Solis said that over
the years Arias has learned that defying the U.S. wins
applause at the UN. So Arias condemned the Reagan
Administration's bombing of Libya. If reelected, Solis said,
Arias plans to move the Costa Rican Embassy in Israel from
Jerusalem to Tel Aviv, and he will continue to make anti-U.S.
speeches at universities in exchange for honorary Ph.D.
degrees. Second, according to Solis, the Arias campaign is
"probably" financed by narcotraffickers. Solis claimed that
six narcotraffickers were involved in Arias's 1986 campaign
and that Arias is therefore careful not to condemn drug
trafficking. Third, Solis said, Arias is anti-democratic.
Arias refuses to engage in dialogue with farmers, labor
organizations, or students. Further, Solis said, Arias has
debated the other candidates only twice and refuses a
one-on-one debate with Solis, who is second in the polls.
Solis said that he, contrary to Arias, loves and admires the
United States (two of his brothers studied there),is the
worst enemy of drug trafficking and corruption, and believes
in dialogue and consensus, and thus is a true democrat.


Biographic Information
--------------

9. (U) Solis told Ambassador that he had not been involved in
politics until 1986 when he was age 31 and Arias asked him to
be his Minister of Planning. Solis said he resigned after 29
months because of his disgust with the Arias Administration.
Solis was a National Liberation Party (PLN) member of the
Legislative Assembly from 1994 to 1998 and planned to retire
from politics at the end of his term. But then he decided to
found PAC in 2000 and has been working for the party full
time ever since.


Comment
--------------

10. (C) It is interesting that Solis has never said in public
what he told us in private about Arias. While there are
small elements of truth in some of Solis's comments about
Arias, we do not believe that Arias hates the U.S., is in the
hands of narcotraffickers, or is anti-democratic. The fact
that Solis does not make such allegations against Arias in
public probably indicates that Solis does not believe them
either and does not want to look ridiculous or be sued for
slander.


11. (C) Solis has staked out his position on CAFTA-DR and
will not move. He does not want to appear anti-U.S. or
anti-free trade, so he says that he wants a free trade
agreement with the Unites States, but a different one. He
also stresses that Costa Rica needs to negotiate agreements
with the European Union, Japan, and Mercosur.


12. (C) Solis and his party's campaign appears to be
foundering, but, because the ruling Social Christian Unity
Party (PUSC) has collapsed, PAC will likely end up as the
second force in the Legislative Assembly with Solis as the
party boss. Solis is therefore a power to be reckoned with
and can be expected to oppose a future President Arias's
free-market-oriented reforms at every turn.
LANGDALE