Costa Rica’s President Carlos Alvarado Friday asked International Financial Institutions (IFIs) and the United Nations for better financing conditions to face the pandemic's economic effects. He also proposed “exceptional and historic” measures to protect the poorest.
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"In the current context, the terms of financial assistance should be exceptional in terms of interest, grace period, and payment time," Alvarado said in a letter addressed to the top executives of the United Nations, the World Bank (WB), the International Monetary Fund (IMF), the Inter-American Development Bank (IDB), the Central American Bank for Economic Integration (CABEI), and the Development Bank of Latin America (CAF).
The Costa Rican president asked these organizations for flexibility in evaluating the countries' fiscal situation, which would allow for an increase in the deficit, "as long as it is the result of efforts to avoid the impoverishment and disappearance of the industrial park."
To avoid an increase in business bankruptcies and unemployment, Costa Rica established a moratorium on tax payments, a decision that affects short-term revenues
"The planet has witnessed how a health system, when saturated, forces doctors to choose which patients to save and which not to... That is a tragedy," Alvarado lamented.
"The rulers live a very similar dilemma... Our current dilemma is to mitigate the Covid-10 growth curve to avoid our systems' saturation and, at the same time, sustain our post-crisis economies and protect people... so that they do not fall into unemployment and poverty.”
In his letter, Alvarado also stressed that, although the actions of national governments are key to mitigating the crisis, developing countries lacking a wide “fiscal space” have few response capacities, which significantly exposes them to negative effects.