ALFREDO VOLIO, MINISTER OF PRODUCTION

UNCLAS SAN JOSE 001162

SIPDIS

SIPDIS

WHA/CEN
STATE PASS TO USTR FOR AMALITO

E.O. 12958: N/A
TAGS: PINR EAGR EIND PGOV CS
SUBJECT: ALFREDO VOLIO, MINISTER OF PRODUCTION


Summary
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1. Alfredo Volio was appointed by President Arias to head a
new Ministry of Production which is a combination of two
traditional ministries, the Ministry of Agriculture (MAG)
and the Ministry of Economy, Industry and Commerce (MEIC).
Volio is a 46-year-old businessman who has worked in food
trading and processing companies related to macadamia, dairy
products, cattle raising, and citrus fruit. He has little
previous government experience. His priority will be to
manage the merger of the ministries into an efficient and
functioning new combined ministry. End Summary.

Background
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2. Prior to assuming his new position as Minister of
Production, Volio worked as a manager of various food
trading and processing companies with operations in Costa
Rica and North America related to macadamia, dairy products,
cattle raising, and citrus fruit. He was a director of
numerous trade and producers' associations over the past
decade. Volio also served as President and board member of
the National Bank, the International Bank of Costa Rica
(BICSA),and the National Stock Exchange. He has spoken at
several international conferences related to the macadamia
industry, international banking, and sustainable
development.


3. Volio has a B.A. in business administration from the
University of Costa Rica. He speaks fluent English. He is
married with children, one of whom currently attends West
Point. During initial contacts with the Country Team, Volio
has been personable and has had a business-like attitude.
He is known to the Embassy Agriculture Affairs staff due to
his involvement several years ago in the macadamia nut
industry and participation in the screwworm commission.


4. The new Ministry of Production will require legislation
transferring powers to the new combined ministry. At this
stage it is not clear whether the legislation will grant new
authorities to the Ministry of Production beyond the
existing authority granted to MAG and MEIC. Minister Volio
is going to need every ounce of leadership and management
skill he can muster as he seeks to merge functions and
cultures of MAG and MEIC into a cohesive unit.


5. MAG, in particular, appears to be a ministry barely held
together with duct tape. Major programs, e.g., animal and
plant health surveillance and meat and poultry inspection,
are funded in good part through a regional organization
(OIRSA - Organismo Internacional Regional para la Salud
Agropecuario) and a hodgepodge of trust funds derived from
user fees. Strict budget ceilings and a lack of authority to
charge user fees have given rise to a proliferation of
unusual financial arrangements, the staffing of programs
outside of civil service parameters, and the failure to
execute regulatory functions in full conformity with law and
regulation. Serious questions have also been raised about
MAG's program to regulate pesticides and the alleged failure
of the ministry to remove dangerous chemicals from the
market and to obtain required safety data from chemical
manufacturers.


6. Costa Rica's financial watchdog agency, the Contraloria
appears to have MAG's failings and lack of transparency and
oversight on their radar screen. This presents an immediate
challenge for the new minister to eliminate irregularities
and impose adequate controls. In the waning days of the
Pacheco Administration, the Contraloria pushed hard for MAG
to bring programs and administrative procedures into
compliance with the law. The Contraloria even went so far
as to force the trust fund administrator for the
Phytosanitary Service, the agency responsible for the
inspection and certification of all plant product imports
and exports, to send dismissal letters to its employees. Had
the Contraloria not granted MAG an extension until August
2006, the suspension of plant health inspections would have
jeopardized Costa Rican food exports and imports.



6. COMMENT: At a recent breakfast meeting with Embassy
staff, Minister Volio described the differences he noted on
the first day between the two ministries he is now trying to
combine. He said he arrived at MEIC to find his desk well
organized, computer and telephones working, and briefing
memos ready for his review. Quite the opposite scene
greeted him at MAG where no one had bothered to clean out
his desk, which he found full of papers and old files as if
his predecessor had simply left for the day. There was no
computer, and he still didn't know his own telephone number
a week after being sworn in. He said he could see he had
his work cut out. Minister Volio is one of President
Arias's closest confidants. The embassy finds him to be a
person who is eager to learn and is interested in working
with the U.S. END COMMENT