CHINCHILLA WINS: COSTA RICANS CHOOSE CONTINUITY

C O N F I D E N T I A L SECTION 01 OF 04 SAN JOSE 000023

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DEPT FOR WHA/CEN
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA
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E.O. 12958: DECL: 2015/02/09
TAGS: PGOV KDEM PREL PINR PLN CS CH CU VE KWMN
SUBJECT: CHINCHILLA WINS: COSTA RICANS CHOOSE CONTINUITY

REF: 10 SAN JOSE 110; 09 SAN JOSE 815; 10 SAN JOSE 19; 10 SAN JOSE 3

CLASSIFIED BY: Peter Brennan, Charge d'Affaires; REASON: 1.4(D)


1. (SBU) Summary: Laura Chinchilla won Costa Rica's February 7
presidential election, promising continuity and consolidation of
the Arias Administration's agenda. The USG's top notch
collaboration with Costa Rica will continue with the new
government, as Chinchilla's policy goals coincide with ours and she
has strong personal ties to the U.S. The President-elect aims to
improve citizen security - her top priority - and take concrete
steps toward Costa Rica's ambitious environmental and energy goals.
She will face the task of addressing domestic obstacles to trade
and investment. Chinchilla's National Liberation Party (PLN) won a
plurality in the Legislative Assembly, but she will be challenged
to put together a working coalition in this fragmented body. The
USG should encourage Chinchilla to continue Costa Rica's
constructive engagement on global issues; otherwise, we can expect
the GOCR to diminish its activism on climate change, human rights,
disarmament, etc. End Summary.



A Decisive Victory




2. (SBU) Laura Chinchilla handily won Sunday's presidential
election with just under 47 percent of the vote, beating by more
than 20 points Otton Solis from the Citizen Action Party (PAC) and
Otto Guevara from the Libertarian Party (ML). (They garnered 25
and 21 percent, respectively.) Chinchilla won almost 6 percentage
points more than Oscar Arias did in 2006, showing that the
candidate charged with being his "puppet" could surpass her mentor
and earn her own clear mandate. Chinchilla's victory was
dramatically more decisive than that of Arias four years ago, when
he defeated Solis by only one percent of the vote, as the bulk of
the opposition this year divided between PAC and ML.




3. (SBU) ML's rise, at the expense of PAC, came more as a result of
Guevara's populist campaign focused on security, rather than a
shift to the right on the part of Costa Rican voters. Luis Fishman
from the Social Christian Unity Party (PUSC),which held the
presidency from 1998-2006, earned only 4 percent of the vote;
however, PUSC maintained and even added to their numbers in the
Assembly. Almost 70 percent of the electorate voted in the
elections, a 4 point rise from the historic low turnout of 2006,
and the first rise in voter participation in twelve years.
Observers from the embassy, the Organization of American States and
a U.S. Federal Elections Commissioner found the elections to be
free and fair.



Madame President




4. (SBU) In electing Chinchilla, Costa Ricans voted for continuity
and consolidation of President Arias' agenda. Arias has been
criticized for setting lofty goals without putting in place the
mechanics to reach them (e.g. achieving carbon neutrality by 2021).
In contrast, we expect Chinchilla to eschew grand new
pronouncements and put her nose to the grindstone to move the
agenda forward. Chinchilla brings a significant career in public
service to the office, including stints as Legislative
Assemblywoman, Minister of Public Security, and President Oscar
Arias' former Vice President (she resigned upon declaring herself a
candidate for the presidency). Though she does not project the
public charisma of most politicians-a fact reflected in her
often-lackluster campaign-she is an intelligent and competent
technocrat who has surrounded herself with experienced advisors.
She will be Costa Rica's first female president.



Strong Relationship with U.S.

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5. (SBU) The USG's top notch collaboration with Costa Rica will
continue under the new administration. Chinchilla's policy goals
coincide with ours, and she has strong personal ties to the U.S.,
having earned a Masters in Public Policy at Georgetown on a USAID
scholarship and worked on judicial reform in Latin America as a
USAID contractor in the late 1990s. Chinchilla told us during the
campaign that she would seek U.S. assistance in her efforts to
strengthen citizen security, particularly in improving the
recruitment and training of uniformed police officers. One of her
close advisers told us late last year that Chinchilla would be
interested in working on a women's issues agenda with Secretary
Clinton.



Chinchilla's Priorities




6. (SBU) Chinchilla has said she will make improving citizen
security her top priority. Security issues took center stage
during the campaign, as Guevara and the ML relentlessly attacked
the Arias administration and Chinchilla for their failure to
effectively deal with a rise in crime and drug trafficking over the
past four years. Though the government almost doubled the public
security budget over the past two years (and saw a small drop in
some crime stats from 2008 to 2009),Chinchilla has promised to add
an additional $100 million per year for police funding. Among
other initiatives, she plans to establish a senior position focused
on combating organized crime and narcotics, expand gang prevention
programs, and open a new police academy. Chinchilla comes into
office with a strong background on citizen security issues; in
addition to her experience as Vice Minister and Minister of Public
Security, she has written a number of papers on police reform and
justice administration. She has attended security seminars in the
U.S., including a National Security Plan development seminar run by
the Center for Hemispheric Studies in 2007.




7. (SBU) As part of her effort to promote jobs, Chinchilla will
work to consolidate gains of the Arias administration on economic
issues. Arias' team negotiated a number of free trade agreements
(FTAs),including CAFTA-DR and soon to be concluded FTAs with
Singapore, China and the European Union. However, business leaders
charge that hyper-bureaucracy and inadequate training of government
officials interfere with their ability to take advantage of these
trade opportunities. Chinchilla will face the task of addressing
such obstacles to trade and investment. Another major hindrance to
trade and investment is Costa Rica's deteriorated physical
infrastructure. Aware that the government has insufficient
resources and capacity to meet these needs, Chinchilla's
administration will move forward with concessioning out the
Limon/Moin port complex (Ref A) and encouraging other
public-private partnerships in infrastructure.




8. (SBU) Chinchilla also has promised to focus on environmental
issues, specifically on achieving environmental sustainability and
advancing a clean energy policy. The Arias administration has
failed to turn much of its rhetoric on the environment into action
(such as Costa Rica becoming carbon neutral by 2021),and
Chinchilla recognizes that it falls to her administration to
implement concrete measures to achieve such goals. An early
challenge on this path will be the passage through the Legislative
Assembly of a long-overdue energy bill, which Chinchilla should use
to reform the energy sector to effectively promote clean energy.



Challenges in the Legislature and in her Party




9. (SBU) Chinchilla's first task is trying to put together a
working coalition within the Assembly that can effectively conduct
business. Chinchilla's administration will have to work with a
Legislative Assembly that is more divided than at any point in

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Costa Rican history. Though final results for the Legislative
Assembly have yet to be released, the PLN won a plurality,
capturing at least 23 of 57 Assembly seats (NOTE: there remain a
small number of seats in play as elections officials finish
tabulating all votes cast). PAC came in second with at least at
least 10 seats, followed closely by ML with 9, PUSC with 6 and
Accessibility Without Exclusion Party (PASE),which focuses on the
rights of the disabled and appealed to poorer voters, with 4 seats.
The remaining seats were split among a number of smaller parties.





10. (SBU) It will require Chinchilla's leadership to turn the
Assembly, which has been decidedly less than productive over the
past four years, into an effective legislative body. The ML and PAC
in particular have been difficult for the PLN to work with in the
past, a fact which is unlikely to change now, as each party tries
to establish itself as the voice of the opposition. Yet with 13
votes split among PUSC, PASE and other smaller parties, the PLN has
more options for potential partners than in years past. However
Chinchilla, who had a reputation for being somewhat aloof during
her term in the Assembly, will now face the challenge of uniting
disparate interests to form some sort of consensus on important
legislative issues.




11. (SBU) Another challenge for Chinchilla could come from within
her own party, as many PLN Assemblymen and party officials owe
their allegiance to President Arias. Oscar Arias still wields
tremendous power within the PLN, and the worst kept secret in Costa
Rica is that his brother, Rodrigo, has designs on the presidency in

2014. Chinchilla might at some point either have to accommodate
or stand up to Arias, but for now they generally espouse the same
goals for the country and ideas on how to achieve them.



Foreign Policy




12. (C) Chinchilla has yet to fully espouse her foreign policy
goals, as the presidential campaign almost exclusively focused on
domestic issues. In conversation with us in October, she seemed to
have given little thought to foreign affairs beyond Costa Rica's
relationship with the U.S. Senior Ministry of Foreign Affairs
officials told us during the campaign that all of the candidates
seemed to expect that foreign policy would run on "automatic
pilot". We expect Chinchilla to defer to her advisors, possibly
including President Arias, on foreign policy issues.




13. (C) We do not anticipate Chinchilla will reverse - or intensify
- any of Arias' foreign policy initiatives, such as opening
diplomatic relations (albeit very cool) with Cuba or recognizing
the "State of Palestine". Relations with Venezuela are likely to
remain distant and the rapport with Nicaragua frigid. While a
Chinchilla administration is unlikely to continue courting China
actively, as did President Arias, it probably will continue
initiatives that are underway (e.g., concluding/implementing the
free trade agreement). In addition, it may well respond favorably
to Chinese offers of assistance and/or sweet commercial deals,
similar to Costa Rica's January 2009 award of a USD 235 million 3G
telecommunications deal to Chinese firm Huawei. Foreign Ministry
colleagues tell us that the Funes Administration in El Salvador is
exploring opportunities to learn from Costa Rica's experience in a
number of areas of governance; we imagine a Chinchilla
administration would be receptive to such collaboration. Relations
with Panama and Colombia almost certainly will remain strong.




14. (C) Costa Rica's potentially diminished attention to
international issues would be a loss for the U.S., since the
country has been an articulate advocate of constructive positions
on matters such as climate change, human rights, and disarmament.
This embassy will encourage Chinchilla and her administration to
continue - and increase - Costa Rica's engagement on these and

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other issues where it can provide leadership. (Costa Rica is
currently a candidate for a seat on the UN Human Rights Council,
where it could serve as a positive voice and a valuable U.S. ally.)
We urge Washington officials to deliver the same message to
Chinchilla and her team as opportunities arise.
BRENNAN