Arias poised for comeback as Costa Rica’s president

Oscar Arias, Costa Rica’s Nobel peace prize winner, looked assured on Thursday of returning to office after an absence of two decades as official figures suggested he had won the closet elections in 40 years.

Mr Arias, a centre-right candidate for Costa Rica’s National Liberation party (PLN), celebrated the news late on Wednesday after a manual recount of this month’s vote gave him an advantage of just 1.1 per cent over Ottón Solís, a leftwing candidate, in second place.

But the jubilant Mr Arias stopped short of proclaiming victory. Parties have three working days to file complaints concerning the recount, which means Costa Rica’s authorities are almost certain to delay an official decision until the beginning of next week.

Mr Solís, the candidate for the relatively new Citizens’ Action party (PAC), has so far refused to accept Mr Arias’s victory. He said several parties, including his own, had registered complaints about the recount and said it was impossible to talk of a winner until those complaints had been resolved. “We are talking about a large number of votes, so anything is possible,” he said.

Experts say that whoever authorities declare the winner will have to tackle structural problems that have robbed Costa Rica of vibrant economic growth and prevented it from reducing poverty, which affects about 20 per cent of the country’s 4.3m population.

Eduardo Lizano, a former central bank president, told the FT this week that one of the biggest problems was the absence of fiscal reform to increase revenue. The inability so far to raise taxes and a resulting structural deficit have led successive governments to cut infrastructure and social spending, which has undermined the fight to reduce poverty.

“Governments have resorted to cutting spending in sensitive areas and increasing borrowing, which has raised the burden of interest payments while making borrowing much more expensive for private companies,” he said.

Mr Arias has promised to use his experience to push through necessary reforms. In particular, he proposes fiscal reform to raise government income, which is barely 13 per cent of gross domestic product.

“The rich do not pay enough taxes in Latin America,” he told the FT.

He has also proposed pushing ahead with the politically sensitive Central American Free Trade Agreement (Cafta), a trade accord between Central America, the Dominican Republic and the US. Costa Rica is the only member country yet to ratify the agreement at the legislative level.

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