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A Reader Asks About the Effects of CAFTA
July 9th, 2008
Tonight I received a comment from a reader… and it pushed my rant button. I may be completely reading the comment incorrectly and assuming a wrong tone or meaning… and if I am, I apologize now… but the rant is still coming as I am replying to many others who I am sure I read correctly!
Here is her email, and if the topic interests you (and you can deal with my rant)… read on!
My family plans to relocate to Costa Rica, and I would like to know what your thoughts are regarding the recent activity by the Costa Rican Congress ending it’s 84 year old insurance, and telecom monopoly (CAFTA). How do you think this is going to effect the citizens of Costa Rica that have enjoyed a universal health care system, and what do you think the implications are for Americans residig in Costa Rica, that have been able to partake in this system?.
From the tone of your comment, and I get a LOT of these emails/comments, you are one of those believing anything having to do with CAFTA and the big bad horrible USA must be bad for everyone else. If I am wrong, I apologize in advance.
But you got some words right.. just not the facts which are more obscure… so let me explain.
1. The telecom monopoly, like the vast majority of monopolies is a huge, cost wasting enterprise, employing tens of thousands of workers, and is roughly 7 years behind the rest of the world in providing the things over which they have responsibility (technology).
In addition, as with most monopolies it gives awful customer service at ridiculous prices (for Internet and power, not for cell service). The “high speed Internet”, when it DOES work, is painfully slow, and the vast majority of Costa Ricans have access only to dial-up modem service in their homes. It has held the country back economically. strategically, and educationally.
The cell rates ARE well priced, but of the two systems here, the only one that works at ALL is the old TDMA system popular in the USA back in the 1990s. It works great!!
The “new” GSM system is absolutely horrible, works at best only 90% of the time and does not work at all in many locations… yet the monopoly is telling many, many thousands of Ticos to turn in their old working cell phones and buy the new GSM phones. For many Tico families, this is a MAJOR expense. Gotta LOVE those monopolies! In 2009, they will discontinue the only system that works.
This telecom also controls the electric power. Last year we went days and weeks suffering brownouts and blackouts. This was the result of an astonishing lack of simple population planning, and numerous families and businesses suffered greatly. The president had to spend a TON of money buying emergency equipment just to keep the lights lit.
In the history of the world, there have been good monopolies I am sure, but the vast majority provided lousy customer service, a crummy product, at unfair prices… This is why monopolies were outlawed in the USA about 50 years ago.
This model fits here… because there is no competition, they do as they please while giving the customers the one finger salute.
Insurance
You wrote …”the recent activity by the Costa Rican Congress ending it’s 84 year old insurance… monopoly” and “How do you think this is going to effect the citizens of Costa Rica that have enjoyed a universal health care system”
You have things pretty mixed up. First, the congress had absolutely nothing to do with any of this.
The Central America Free Trade Agreement (CAFTA) was voted through by referendum…and was voted on by all Costa Ricans. The PEOPLE passed this treaty… not the congress. Hmmm. I wonder if the overwhelmingly super service provide by their telcom monopoly had anything to do with that vote!
After CAFTA passed, the congress had to alter existing laws to bring them into concordance with the terms of CAFTA that the PEOPLE OF COSTA RICA approved.
This is something that sorta grinds me in emails I receive… the perceived arrogance of those who think THEY know more than the Costa Rican people. I am not saying the writer said or implied this, but others have many times. The Costa Rican people are bright, intelligent, well educated people and right or wrong, they made their will known. Time will tell if it was a good decision, but I can assure you that never in my life have I EVER seen a more informed public on a topic up for referendum. Costa Rica could give civics lessons to any country in the world after the manner in which they handled the TLC (CAFTA).
So now there will be other insurance companies offering policies with wider coverages with larger groups and therefore possibly lower rates. There are dozens of huge international insurers who can now legally sell their products to those of us who live in Costa Rica. Now, perhaps a 50 year old women driver will not have to pay $1,400 per year for car insurance the same as her 19 year old son.
Oh… that’s right! There IS no compulsory insurance so only a very few people ever buy insurance because it can represent more than 10% of their annual income! Enjoy your next trip here! Drive defensively!
Your email implies that the “Universal Health Care” is going away. It is not. THE CCSS (CAJA) is alive and well. Good thing as my wife works for a CCSS hospital!
Oh… and to be clear… “Universal Health Care” is just socialized medicine… and just as in Sweden, Canada, England and other places, the system does not work for anyone except the very poor and seldom works well for them. Lines are huge. Several hours is common at my wife’s hospital. Generic medicine are prescribed to save money, but sadly they are purchased from a variety of countries and there is no quality control and therefore many medicines just do not work. I can vouch personally that that is true.
Waits for a doctors visit can take months and often DO. Waits for major surgery or even some minor surgeries can take years. The poor suffer with this crap as they have to… same as they will soon in the USA. Everyone else buys private insurance so they can see the doctor of their choice at the hospital of their choice a the time of their choice. For those of you who are “Universal Health Care” fans… I wish you well. It looks great on paper, but I have yet to see it work well. I can assure any middle class Gringo tht moves here that you will eventually get CAJA and buy private insurance in case you get sick.
So what do I think the implications are for Americans residing in Costa Rica, that have been able to partake in this system?. Not much… Nothing has changed, just more offerings and some of those are years away. If they use CAJA now, they will continue to use CAJA. If they buy private insurance now, they will soon have other options and perhaps better prices. If they are tired of paying car insurance as though they were an 18 year old male overdosed on testosterone… they will likely be happy with premiums that reflect their age, driving history and experience! Someone may come in and actually offer true hi speed Internet for less than $80 per month WITH reliable service and connections that actually do not die every day at 3 PM. Note I am referring here to TRUE high speed as you would find in most developed countries.
Costa Ricans will benefit I think by better services lower prices (or more for the money they do pay).
Even now, with the arrival of those big awful businesses from the bad ole USA, (like Walmart), customer service policies are changing country wide! Why imagine a Tico who can actually exchange a brand new and very costly TV (but one that was totally DOA right out of the box), instead of having to wait 3-4 months while it gets returned to the factory in Korea for repair!
Can you imagine?
And again… if I misread your email, I apologize… but that’s the problem with email… no visual or aural clues to clarify. Also, enough others have written about how they hate the USA, big business, Bush, Obama, and God that I am just getting fed up with it. As a famous bird once sang… Get Over It.
Filed under CAFTA, Cost Of Living Costa Rica, Cost of Living, Costa Rica, Free Trade Agreement, ICE, Internet, Opinion, Politics, Questions from Readers, Rants, TLC |7 Responses to “A Reader Asks About the Effects of CAFTA”
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You sound just great Tim, keep up the great work. Bob
A question- Is Walter Konjulka still in Costa Rica? We went to Nicaragua a few years ago to wash my passport and he had changed some when we got back. We’ve discontinued contact and I was just wondering. He had that pink palace with the phallic symbols in Heredia. You were working on his internet one day when I visited. Just curious, Bob
Opps, Should have sent in Private e. Sorry
Hey Bob
No way to forget THAT house. He bought that home before arriving here… nice house though even if a bit phallic
I never heard from him again after I did some tech work at his home (well maybe once) so I have no idea if he is still around.
That is really not too uncommon though… I meet a ton of people here and then they just sort of vanish. That too is not surprising as so many people never make it though the first year in CR. Then they feel embarrassed that they didn’t make it after investing in a home etc. That makes it harder to keep in contact afterwards because I am often the one who warned them to not buy property or make permanent changes to their lives until they have lived here for 9 months to a year. They ignore the advise then feel a bit stupid when they find themselves packing up. Everyone thinks they are the exception and of course they are not… then they don’t want to be reminded that they were warned.
Quien sabe!
Great rant. Enjoyed hearing your take on the CAJA. I have a friend in Belen who is still waiting to see a specialst in the CAJA. Since I could afford to see a similar one, I did so only having to wait a few days.
I guess the TDMA frequencies will be sold to someone like the second richest man in the world.
Any of you in favor of CAFTA, should educate yourselves. Because if you care about anything besides your own convient lifestyle, you would be opposing it. Read, “Confessions of an Economic Hit Man”. He tells of some very disturbing history, that most United States citizens are unaware or blind to. There is more to life than having efficient telephone systems and cheap products.
Corporatocracy sucks and is destroying our planet.
Well, we have been living here in Costa Rica for about 4 years in the Mal Pais, Playa Hermosa area. I built a house and have been trying to get a phone line for over 2 years so I can keep in touch and get online. We don’t have cell service here unless we go to the beach and walk out by the rocks at low tide. I use a calling card that i have to recharge at Banco Nacional, so every call home is a double charge of cell phone minutes and then calling card minutes.
Trying to work with the system, I worked a deal with my neighbor to buy one of his lines, we went to the ICE signed a bunch of papers, and they said everything was good and done, and in about 15 days they would move the line. I felt good, paid my neighbor and we went on our way. 2 months later nothing.
To make a long story short, I returned to the Ice about 6 times over another 8 week period and every time they had a new excuse, “we lost the papers”, “we couldn’t find the house”, “the truck has been broken” “we needed to change your number” etc etc, and then finally “we accidentally gave your line to someone else”. They told me I could sue them, if I wanted lol.
I broke down and bought an expensive satellite dish and service from a gringo run business. We now have reliable high speed internet and cheap calling through Skype and Vonage. I’m happy now.
So, If CAFTA would put the ICE out of biz, I’m all for it!
Mo’e
First a little background on my credentials. I am a Business Consultant and was one of the leads on each of the teams that started Procter & Gamble’s, IBM’s and HP’s operations in Costa Rica. My specialty is moving business from one country to another. For the past decade I have been moving business out of the US, but now the tide has turned and I am working on projects to bring business back to the US. That being said, I find it disturbing that anybody would think favorably towards CAFTA.
Costa Rica’s citizens did pass CAFTA, but barely. I believe it was 51% for and 49% against. The Costa Rican government was caught intentionally lying and inciting fear among the population to pass CAFTA. The US government also partook in the fear mongering by stating if the referendum did not pass by the due date, the US would basically stop trade with CR. All lies. The Costa Rican government spent millions marketing CAFTA where those against CAFTA had to start a grass-roots campaign that, “amazingly”, almost won. How can the majority of the Costa Rican population be so informed when they are being fed lies from the government?
Now that CAFTA has passed, what company in their right mind is going to upgrade all these services you talk about? Costa Rica, with its 4 to 4.5 million person population, is not near large enough to recover a companies return on investment for something like upgrading cell service or high speed internet. Why would the price of car insurance go down? Insurance companies need to make a profit, and with Costa Rica’s car accident and theft rate, the premiums will be just as high as they are now. How would healthcare get any better? Sure, the US has good doctors and facilities but half the US population can’t afford it.
Here is a not so distant issue I see CR having. Right now I am on a project pulling jobs out of India back to the US. Here is how General Electric determines the cost effectiveness of outsourcing. When, lets say the salary for a Costa Rican, increases to 1/3rd that of an American’s salary for the same job, the outsourcing is no longer cost effective. India has just approached that mark. We are now “farmshoring” the jobs back to the US in rural areas with low costs of living. The reason I bring this up is, most of the good jobs in CR are from outsourced US/British jobs. With Costa Rica’s cost of living rising at an alarming rate, pay will increase and approach the point India is at now. I believe CAFTA will speed this scenario up. A few people will get rich, but who is going to suffer once the crash comes? In fact, Costa Rica is already losing business to Panama due to the reason stated above. HP has already been aggressively exploring moving some of its operation to Panama.
Once a country gets into bed with the US, they will prosper, but, once the US sees a better deal, they throw them under the bus.
My Tica fiancé is currently conducting a study on how the “NO TLC” movement came to fruition. That strong of a movement had never been witnessed in Costa Rica’s recent history. Tico’s are brought up to be amiable and non-confrontational which makes it easy for the government to do just about anything it wants. The movement against CAFTA was so strong, some believe it is a turning point in Costa Rica’s political sphere.