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 SIPDIS DEPT FOR WHA/CEN AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA AMEMBASSY OTTAWA PASS TO AMCONSUL QUEBEC AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE 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. SAN JOSE 00000023 002 OF 004 ¶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 SAN JOSE 00000023 003 OF 004 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 SAN JOSE 00000023 004 OF 004 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