Planning to retire in Costa Rica? Think again.

February 11, 2006

Otton Solis, who opposes CAFTA, and whose Citizen Action Party is against corruption, is running a surprisingly close race in the Presidential election against Oscar Arias. President Arias is not only the front-runner, but also a Nobel prize winner for his peacekeeping efforts in neighboring Central American countries. Overall dissatisfaction is with the economy, includes a poverty level at 20% of the population living, inflation at 14% and slowing growth.

What It Means:

This is another example of a more nationalist trend in Latin America, one that advocates more government safeguards in the economy to protect local farmers and businesses from corporate competition. Other examples:
Nicaragua - President Hugo Chavez advocates “Bolivarism”, which seeks to unify Latin America
Bolivia - President Evo Morales advocates local control of the country’s natural gas resources, and an end to destruction of coca farmers’ crops.
Peru - Presidential candidate Ollanta Humala is a frontrunner, and an ally of Chavez and Morales.
Mexico - Andres Manuel Lopez Obrador leads in polls by promising increased government spending.

Action Steps:
Reconsider long term plans to retire in Costa Rica, but revisit investments in South America overall, as these countries are taking a renewed interest in economic self-determination. This is good for your portfolio.