Central American Critic of US Policies on Verge of Comeback

By Howard Williams | July 7, 2008 | 8:17 PM EDT

San Jose, Costa Rica (CNSNews.com) - Oscar Arias, a strong critic of U.S. foreign policy when he was president of Costa Rica between 1986 and 1990, is expected to return to the presidency in May.

A long hand-recount of ballots in the February 5 general election has been completed, with the country's supreme elections court saying Thursday that Arias had outpolled his chief rival, Otton Solis, by just 18,167 votes (or 40.92 percent to 39.80 percent).

The court declined to declare the winner officially, however, until the outcome of a probe into allegations of polling station irregularities.

Solis is refusing to concede defeat, although four other presidential candidates have congratulated Arias on his apparent victory.

Political observers here say that the elections court has never yet overturned its initial count results.

Foreign and local political analysts say Arias in 2006 is not the same as the one who appeared to enjoy irritating Washington when last in power.

They say he is more of a pragmatist and is keen to develop more trade with and investment from the U.S.

At the same time, he will likely speak publicly in favor of other Latin American regimes - such as Bolivia and Venezuela - when they have public disagreements with Washington.

Although still the leading economy in Central America, Costa Rica is losing ground to neighboring Panama and Nicaragua in attracting foreign (mainly American) investment, trade, tourists and high-spending retirees.

At more than 14 percent last year, inflation rate is now the second highest in Latin America, and one-fifth of the 4.01 million population lives below the poverty line.

"There was a lot of criticism of Arias in his first term," Ryan Piercy, general manager of the Association of Residents of Costa Rica (ARCA) said in an interview. The body represents the interests of foreigners - mainly Americans - living here.

"He was seen as too authoritarian and many believed he spent too much time on international affairs and not enough on domestic matters," he said.

"But, now, the feeling -- or the hope -- is that he will keep his election promises and concentrate on the economy. In his first term when he was awarded the Nobel peace prize [for helping to broker an end to regional civil wars], he put Costa Rica on the map. That, in turn, attracted a lot of Americans here who enjoy Costa Rica's stable political system and its economy."

In the years since, however, he noted the economic slump and soaring inflation.

Piercy said although Arias had a left-wing reputation, "on economic matters he can be very open."

"He is in favor of the free trade pact with the United States because that is expected to attract more U.S. investments."

Arias alone cannot deliver on his election promises, however. He needs the help of the National Assembly, where legislators value their independence from both the presidency and their own party hierarchy.

Carlos Sojo of the Latin American Faculty of Social Studies said Arias would have to use his skills as a negotiator to get a majority of the Assembly behind him, especially in a situation where party discipline is notoriously difficult to enforce.

In the last parliament, he noted, 13 of the 57 legislators switched party during their term of office.

Nevertheless, there have been signs of ad hoc alliances being formed which should help Arias push through his proposed economic reforms.

The Social Christian Unity Party (PUSC) of outgoing President Abel Pacheco is expected to support ratification of the U.S.-Central America Free Trade Agreement (CAFTA).

PUSC comes out of the election weakened, but should nonetheless be able to help Arias push through the necessary legislation to implement some of the more controversial aspects of CAFTA.

Even without CAFTA, some 80 percent of Costa Rica's trade is with the U.S., which is also the major foreign investor in Costa Rica.

Although there are no official figures, more than 200,000 American citizens are estimated to spend more than three months a year living here..

Analysts say Arias is keen not to upset the one country whose economic cooperation is considered vital if he is to achieve hoped-for economic reforms at home.

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