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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.


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.

20 Responses to “A Reader Asks About the Effects of CAFTA”

  1. Bob Furlong on July 10, 2008 5:03 am

    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

  2. Bob Furlong on July 10, 2008 5:04 am

    Opps, Should have sent in Private e. Sorry

  3. Tim on July 10, 2008 7:05 am

    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!

  4. Ed Reames on July 10, 2008 10:26 am

    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.

  5. Sara James on July 14, 2008 9:51 am

    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.

  6. Mo'e on July 19, 2008 8:55 am

    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!


  7. Johnson on July 20, 2008 10:34 pm

    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.

  8. bfriesen on September 15, 2008 6:49 am

    You must admit, however, that the United States system DOES NOT WORK. And it is about to implode, with doctors beginning to refuse ANY health care or Medicare patients because the amount paid directly to them is absurdly low and being manipulated downward by the health care insurers. Of course those same companies have no problem raising rates they charge to individuals AND employers. And why? For the “investors”! And there in lies the problem with a life and death service being regulated by “capitalism”.

    Health care in America is becoming a privilege of being wealthy or having a wealthy employer, but even huge corporations like GM are feeling the pinch. So should health care be a “right” of all people, or should it be a “privilege” for the wealthy who can pay for it?

  9. bfriesen on September 15, 2008 6:57 am

    BTW, you use the term “socialized medicine” like it is a dirty word, and to be sure it does have it’s down side and has been implemented poorly in some countries but in many other countries it provides quality health care…to the populace.

    Don’t “throw the baby out with the bath water”. There’s a reason that EVERY industrialized nation BESIDES the United States provides healthcare to all of its citizens through some kind of “socialized medicine”.

  10. Anthony on September 17, 2008 12:24 am

    I second your comment. How then do you explain that the WHO ranks Costa Rican “socialized medicine” one position above the US. Let’s not forget there are 70 million people in the US without health care. By the way CAFTA has nothing to do with the CCSS. I will finalize by saying that as in everything extremes are bad. Socialism nor Capatilism are great models. When taking the best of both you will have a more stable system. Don’t agree? Look no further Cuba vs the States. Extreme poverty and extreme greed that has caused the economy to collapse and continuation of bubbles(.com, housing…).

  11. Will on October 25, 2008 2:29 pm

    I recently returned to the USA after having lived in New Zealand for 20 years and the “Socialized Health Care” there was amazingly efficient with very fast service. A person could usually walk into a doctors office and be seen within a few hours if that long, sometimes right away. However most people book ahead a day or two in advance.

    Also,the specialists were excellent but understandably requird booking in advance because they had surgeries to perform which takes priority.
    NZ’s healthcare standards is second to none in quality and it is a socialized system.

    As far as the Telecom in NZ it is on par with any large Monolopy. The service is average, the product is average and the prices are high. But that is what you can expect from a Corporate Monolopy.

  12. B. Brist on February 8, 2009 8:24 pm

    You obviously have no idea about what goes into a FTA, much less what went into CAFTA and why it’s harmful to U.S. citizens and Central Americans. First off, such privatization opens programs to private ownership without the guarantee that citizens will be served. Such programs may well be expensive and mismanaged, but it’s not correct to assume that the best remedy is to allow for Carlos Slim to buy them. Reforms can be instituted without turning an entity over to a blood-sucking international corporation. You would be well served to read up on development economics before blogging about such things.
    More broadly, CAFTA contains provisions to protect U.S. and international corporations that go far beyond those written into other FTAs. I’ll give you an example: Read chapter 16, which concerns intellectual property provisions. And then, go do some research. The “IP protections” granted under CAFTA are, effectively, killing AIDS patients in Central America because they afford drug makers de-facto patents on drugs that should be made available to Central American governments.
    Or how about reading into the chapter 15 about labor standards and then visiting a sweat shop or a labor union in Guatemala. Trying to organize a union there is more dangerous than every country in the Americas other than Colombia. A dozen people have been killed for trying to start a union. And when the labor unions filed a complaint against their government, the U.S. labor department decided to give the Guatemalan government 6 months to work things out.
    If you are going to write about things as complicated as CAFTA and foreign trade agreements, you should really learn the ins and outs.
    You may have had great experiences with Wal-Mart’s customer service department and horrible experiences with the phone company in Costa Rica, but by no means does that authorize you to discuss this subject authoritatively. So shut up.

  13. Tim on February 9, 2009 8:40 am

    Thank you for your opinion.

  14. B. Brist on February 9, 2009 10:23 am

    It’s not opinion. Union busting, lack of access to ARV treatment, an influx of subsidized U.S. grains that disrupts local markets and causes increased migration, and increased foreign investment in things like cyanide-leaching gold mines, megatourism developments that steal land from indigenous peoples: these are all FACTS about the effects of CAFTA that have been documented and studied. If you’d like to educate yourself, I’d happily refer you to people who know about and are studying the situation.
    But I suspect you’re just as happy to spout off ill-informed opinions based on casual observations and guesswork.

  15. Tim on February 9, 2009 12:23 pm

    Of COURSE it is opinion! It is Your opinion and you have a right to it. However, opinions are like feet… everybody has ’em but and most think theirs don’t smell.

    What you do NOT have a right to do is to think is that your opinion is better than anyone else’s as that is just plain arrogant and will not be tolerated here.

    The majority of Costa Rican citizens voted for CAFTA, and good or not, their opinion far outweighs yours. There are also a ton of people who think CAFTA is great, but according to you, only your opinion should be considered because you know it all and the rest of us are idiots. Incredible arrogance!

    So we will wait, and in 5 years or so, if all YOUR opinions turn out to be correct, then just think how happy (and arrogant) you will feel then! At that time, come back here and post a “I told you so” comment, but until then, your comments on this topic will no longer be accepted. You stated your opinion… twice… and I published them. Now move on…

  16. Thom Johnson on February 17, 2009 12:43 pm

    Hilarious. I love it. Someone is finally calling you out on your ignorance, Tim, and you threaten to ban them from your blog because he’s expressing his opinion. Isn’t that what blogs are all about? That’s rich.

  17. Tim on February 17, 2009 1:22 pm

    Call me out on my ignorance? Oh… I think not.

    If you think I was or am worried about someone disagreeing, then you might ask yourself how YOU were even able to read his comment! I welcome comments for or against!

    I stated my opinions and everyone is welcome to disagree. They are not welcome to use foul language, call other people names, or just submit the same words over and over again. That is boring.

    I printed his comments word-for-word just like I have printed yours. In fact, I have never NOT printed a comment except for SPAMMING, language abuse, or promulgation of anything that is against the law.

    Saying that, I have noticed that people who are against CAFTA treat everyone else like they are just idiots. And… if I understand you, because I am not against CAFTA; then I am an idiot? LOL!! That means he and maybe you, are also calling over HALF the adult Costa Rica population idiots? Arias as well? Have you even the slightest idea how arrogant that is?

    OK, so he thinks I am an idiot… so be it. However, one comment is enough. The comments area is not an area for debate. It is for COMMENTS. Make your comment known and move on. That person wrote three more comments, added nothing, and each one stated that all his comments were all FACTS and were not just his opinion. I disagreed and still do.

    There were and are many, many people who think CAFTA is great, but he, and maybe you as well, think everyone else is wrong and you are right! Sorry… It does not work that way.

    I am guessing that, by the way you started out about someone calling me out “on my ignorance”, that you are the same clown just using a different email. Sorry… your negative opinions on CAFTA are welcome, but because others disagree, they are not idiots…

    Now your 15 minutes on this topic are up as well.

  18. Daniel on March 5, 2009 4:15 am

    CAFTA gives corporations more rights than people. If trade is to be free, so must migration.

  19. JP Perez on October 3, 2009 4:58 pm

    do you think cafta will open up quick opps for us health insurance companies? or will this take a while?

  20. Tim on October 23, 2009 2:46 pm

    Yes and yes… but not too long.