Articles - July August 2019

How to Stay Peaceful and Democratic in Today's Political Climate

A Conversation with the Ambassador of Costa Rica to the United States, Dr. Fernando Llorca
Roland Flamini

Costa Rica has always danced to a different tune than the rest of the Hemisphere. In 1949, when Latin American countries were typically run by military juntas, Costa Rica voted to abolish its army, and instead spend its money on a social program of free public health care and education that remains unique in the region. At the time, Costa Rica was the only Latin American nation with a democratically elected government. For years, foreign tourists have flocked to the country for its serene beaches, lush wildlife, and lively cities – over 1 million of them U.S. citizens in 2018, according to the U.S. State Department, of whom 120,000 are permanent residents. Part of Costa Rica’s attraction is continued good care of its ecological birthright. According to press reports, President Carlos Alvarado has proposed banning fossil fuels to make Costa Rica the first de-carbonized country in the world.

Not that the silver lining doesn’t have a few clouds, as Fernando Llorca, Costa Rica’s ambassador explained in a recent one-on-one interview with Diplomatic Connections. The need for revenue to finance his country’s social welfare programs is constant, and the new center-left government, the country’s first coalition, recently passed a long needed tax reform bill to combat chronic tax evasion and make other changes in the financial system. Ambassador Llorca, a medical doctor and London trained specialist in health policy and finance, says part of his mission is to interest the U.S. in Costa Rica’s production of medical devices and the high quality, as well as affordable (by U.S. standards), health care sector.

The lack of a military has encouraged organized crime and drug trafficking and, the homicide rate is 11.7 per 100,000 inhabitants in the country (the worldwide average is 5.3). Currently the government is – with U.S. help – retraining the country’s police to a higher standard to tackle rising crime. Reversing the 1949 decision on the army is not considered an option, says the ambassador. The other perennial problem is the influx across its open borders of refugees from less stable neighbors, such as Nicaragua, and Panama, and more recently Venezuela. Numerous Nicaraguans from earlier conflicts were assimilated into Costa Rican society, but there are new arrivals. The ambassador’s main worry, however, is a major Venezuelan influx if the crisis there is not resolved.

Diplomatic Connections:  You have a medical background, including holding the cabinet post of minister of health. What led to your appointment as your country’s ambassador to Washington?

Ambassador Llorca:  Costa Rica is seeing more investment in the production of medical devices. That’s a very strong export sector and we want to continue that line. One of the questions I’m frequently asked in the six months that I’ve been here is why Costa Rica doesn’t produce the caravans (of immigrants) like other Central American countries. And the main answer is that in the past we developed strong social welfare policies and our citizens are happy in their own land.

Diplomatic Connections:  Your own professional background includes periods in London, where you attended the London School of Economics, and then Madrid.

Ambassador Llorca:  Exactly. I trained as a medical practitioner in Costa Rica, but then I studied health policy and financing at the London School of Economics and the London School of Hygiene and Tropical Medicine.

Diplomatic Connections:  And you actually worked for the British National Health service.

Ambassador Llorca:  My wife and I lived in London for about four years, where I worked as a medical practitioner, and for the Department of Work and Pensions, not the National Health, as an analyst. I would determine whether specific pensioners were entitled to certain benefits offered by the British Government.

Diplomatic Connections:  Your official biography, issued by the embassy, states that because of “your experience in developing social and health policy, financing health care services and insurance options” you intend to “apply your knowledge” in your role as ambassador. Could you expand on this, please?

Ambassador Llorca:  One of the main problems that all societies have is how to finance the health care that we need almost everywhere. In Costa Rica, we have developed a universal-coverage health care system, which is primarily public, but also has a private sector. However, we need to improve the way we finance it, and definitely one way would be to export health care services to some other countries. Costa Rica is very efficient, and we offer high quality services to our patients. We believe we could offer it to some other countries, including the U.S., and maybe American insurance companies could explore its possibilities.

Diplomatic Connections:  Is that happening already?

Ambassador Llorca:  In some specific areas, yes, like aesthetic dental services, but we would like to expand that for the rest of the health care field.

Diplomatic Connections:  That’s an unusual priority for an ambassador, is it not?

Ambassador Llorca:  My experience is not only dealing with health care. I used to lead huge multilateral programs with the World Bank, for example, and the Inter-American Development Bank. These were mainly social programs, so I’m familiar with multilateral cooperation projects, and to improve the bilateral cooperation in that field. For example, I used to promote bio-medical research in Costa Rica, and that’s an opportunity we have to cooperate with such organizations as the National Institute of Health in the U.S. We contributed substantially to the development of some vaccines actually being used in the rest of the world. We believe that Costa Rica is in a position to develop products together with well-recognized health institutions in the United States. So that’s another field that we are also trying to develop. Tourism, of course, continues to be promoted – more than 1 million tourists are received from the United States per year, and building that up is a priority. Great attempts are made to promote some traditional products too, like bananas. Exporting coffee in a different way is one of our goals as well. We don’t want to be the cheapest coffee; our objective is world recognition as the highest quality coffee.

Diplomatic Connections:  Would you describe Costa Rica as a welfare state?

Ambassador Llorca:  I would say we are recognized as a regional leader in that area. Strong institutions have been developed, our social security system recently marked 77 years of activity, and the ministry of health is 90 years old. A nutritional program has been maintained for children throughout the whole country for 66 years, yet we still confront the problem of child obesity. To answer your question — yes, ours is a strong welfare state.

Diplomatic Connections:  How does that compare with the Scandinavian welfare states?

Ambassador Llorca:  The fundamental difference is that European countries are rich, so they can afford to support better welfare programs. Costa Rica manages its welfare programs with a limited amount of resources, but maintains a good cost-benefit relationship.

Diplomatic Connections:  Costa Ricans justifiably boast of the quality of life in their country, with its free public health care and education systems, life expectancy higher than it is in the U.S., and a renowned ecological footprint. So where’s the reality check in this description? What remaining problems are there left to be solved?

Ambassador Llorca:  Quite a few still require attention. For example, plastic, which is actually affecting the sea, our rivers and lakes. That is something that we’re trying to deal with and we haven’t yet been able to solve the problem.

Diplomatic Connections:  But so does everybody.

Ambassador Llorca:  Yes, it’s a huge international problem and its damaging our oceans. There’s something that a good ambassador should be doing, sharing his country’s experience while seeking bilateral and international cooperation.

Diplomatic Connections:  Do you also have a water shortage problem?

Ambassador Llorca:  Historically, water was thought of as an unlimited resource; now we recognize that it is not. It’s something we have to take care of, definitely, to regulate and protect our water sources.

Diplomatic Connections:  There’s an OECD report from 2018 that says the government needs to prioritize dealing with what it calls labor market informalities, and the need to add more women to the workforce.

Ambassador Llorca:  Yes, that report shows some of the issues we are experiencing in Costa Rica, such as the informal labor market, mainly among young people, and also the shortage of working women, both of which are not good. We developed some projects, such as a special insurance for entrepreneurs—and you will find that most of those entrepreneurs are women and young people. We are also trying to guarantee health care and insurance for people who are at high school, university, and in technical schools, because it is understood that improvements are necessary concerning the capability of our human resources. We want to become a bilingual society (Spanish and English). Great efforts continue to be made towards training teachers to higher levels, but none of these projects are easy, and will take several years to reach our target.

Diplomatic Connections:  You have been minister of health, but are you a politician, have you ever stood for election?

Ambassador Llorca:  No. I started as deputy minister of health and then I became minister. I would say I’m a technocrat in the health care and social development fields.

Diplomatic Connections:  Does Costa Rica have a centrist government?

Ambassador Llorca:  Costa Rica has been recognized as a politically stable country. The main parties are the Social Democrats, but the Christian Democrats are also a huge party, well organized. At the moment, we have our first coalition government, and it is center-left. But in the past we’ve had different political parties running for government, including with religious support. But the main parties are the Social Democrats and the Christian Democrats, with smaller parties including the Liberals and also some Communists.

Diplomatic Connections:  Would that be the Cuban influence?

Ambassador Llorca:  I wouldn’t say Cuban influence, although we do have some Communists. Their showing in elections is small. Right now, we have a coalition led by our president, Carlos Alvarado, who also studied abroad (in the United Kingdom). He realized that a coalition was needed to be able to face all the current challenges. For example, we used to have a huge fiscal problem, and President Alvarado introduced a new fiscal (tax reform) law. Because it was supported by the coalition, it was approved in a very short period of time. We’ve been waiting for it for 20 years. He was able to unlock the situation.

Diplomatic Connections:  Your economy isn’t doing badly, though. The growth rate is – what, 3.7 percent?

Ambassador Llorca:  Well, 3.6 percent. Our exports picture is healthy; for instance, medical devices have become a strong part of that sector. At the same time, we spend a lot. We have a huge government, and one of our main missions is to reduce spending as much as possible. This new tax reform will increase revenue somewhat, but mainly the way we implement the taxation has changed. Some tools will be introduced that will assist us with the whole process, and of course, at the end, the goal is to improve the way taxes are collected.

Diplomatic Connections:  In other words, tax evasion is going to be reduced.

Ambassador Llorca:  Yes, but we’re also going to reduce the fiscal problem that we have.

Diplomatic Connections:  How does Costa Rica, a stable country, manage to survive in your insecure and unpredictable neighborhood?

Ambassador Llorca:  Good question. We recognize that the region is very dynamic, let’s say, with changes taking place in the government of each country. In the past, there were civil wars with not necessarily democratic solutions. Now most of these countries are officially democratic, but with a lot of persisting social problems, and constant changes of government. Costa Rica has tried to remain stable, and to promote the wealth and the economic growth at levels that will keep the population happy and staying at home. We’re not the country with a migration situation: I don’t like to call it a problem because immigration is a phenomenon that is actually all over the world. Costa Rica, for instance, has U.S. citizens living there, and tourism is thriving.

Diplomatic Connections: Do you mean U.S. citizens living in retirement?

Ambassador Llorca:  Retirees as well as young people. It’s one of the most important, colonies let’s say, in Costa Rica. Some have second residences.

Diplomatic Connections:  Can you make a general observation about what is happening in that part of the world?

Ambassador Llorca:  Because we abolished the military 70 years ago, it was imperative to develop strong international relationships. That’s the best way that I can explain that we’ve been able to survive in a very dynamic and changing political environment.

Diplomatic Connections:  You don’t have a military, so how do you deal with security issues?

Ambassador Llorca:  That’s one of the most important problems we have. We’re trying to fight organized crime and drug trafficking; this is when not having an army, which is good in some ways, becomes a problem in dealing with security issues. We’ve had to invest a lot in diplomatic activity—and also we resort to international law when we have a specific problem. But we have to recognize that crime has been increasing in Costa Rica, mainly linked with international drug trafficking. We’ve been trying to improve our police forces, training them in a better way, and raising the intelligence capability to face the problem.

Diplomatic Connections:  If you have a rise in security problems, has this created any public call for the re-introduction of the military?

Ambassador Llorca:  That debate is already solved in Costa Rica, and there are no second thoughts because we recognize that removing the army was the best decision to be able to invest in health and education. The money that we once spent on the army was what financed our social programs. And, in the end, it is strongly believed that the army doesn’t make the difference when you have an international issue, like the ones that we have had. For example, not too long ago, Nicaragua invaded our territory. We acted through the international community and we were able to win that fight. The Nicaraguans withdrew and the occupied territory returned to Costa Rica. All the tools made available to us through the international organizations were utilized, but we ended up at the international court of the Hague, so it became an international issue.

Diplomatic Connections:  How would you characterize Costa Rica’s relationship with the United States?

Ambassador Llorca:  Costa Rica has a strong relationship with the United States. Many common goals are shared – the fight against drug trafficking in the region, a robust relationship in terms of trade and commerce; the U.S. is our leading foreign trading partner. Also, there are a lot of Costa Ricans in the U.S., and a combination of American tourists and residents in Costa Rica. There is a lot of activity in reviewing trade agreements at the moment. A regional trade agreement is successfully maintained with the United States – the Central American Free Trade Agreement (CAFTA) – and we’d like to keep it that way.

Diplomatic Connections:  Is Costa Rica in any of the hemispheric economic organizations, such as Mercosur?

Ambassador Llorca:  We have agreements, yes.  Bilateral agreements with China, Chile, and Mexico are also upheld. There is a regional one with the European Union, and recently we signed an agreement with South Korea.

Diplomatic Connections:  How big is the Chinese presence in Costa Rica?

Ambassador Llorca:  Costa Rica was one of the original countries in the region to establish relations with China, more than ten years ago. At the beginning, the relationship was very strong. The Chinese invested a lot, and developed different projects, mainly infrastructure. There were some good experiences and also some less than happy experiences involving corruption; we recently needed to stop some of those projects. Nevertheless, there have been some successful endeavors. There is the Confucius Institute in Costa Rica. What I’m trying to say is that we still have the relationship with China, but it’s not as strong as it was previously. Mainly, we now have some cultural and academic pursuits that are of interest to both countries. Following the corruption cases, we definitely try to avoid further projects because Costa Rica, along with the United States, is trying to fight corruption.

Diplomatic Connections:  Is there a Costa Rican diaspora in the United States?

Ambassador Llorca:  There is a group around New Jersey, and others in California. But that’s not the huge numbers like some others from the region, with a significant impact on their economies (from remittances), but not Costa Rica.

Diplomatic Connections:  You do have refugees coming into your country from neighboring countries.

Ambassador Llorca:  Absolutely. Although, that’s not new. Refugees have been coming in from the whole region of Central America for a very long time, mainly Nicaragua. In the past, we’ve had as many as 500,000. Those that stayed in Costa Rica obtained citizenship long since. There are approximately 80,000 new refugees from Nicaragua, and at least 5,000 from Venezuela. Nicaraguans come south because it’s close and we have an open border. Most Venezuelans go to neighboring countries, Colombia, Brazil, Chile, and I would say Panama. Our concern is that the three million refugees that have left Venezuela can easily become six million in very short period of time if we don’t something about the current situation.

Diplomatic Connections:  Is the situation in Venezuela moving towards a resolution?

Ambassador Llorca:  Costa Rica is one of the countries seeking a resolution through dialogue, but in the end we recognize that the Venezuelans need to resolve their own crisis. Costa Rica has been strongly urging Venezuela to go back to the democratic process.

Diplomatic Connections:  How do Costa Ricans respond to the influx of refugees?

Ambassador Llorca:  Due to our strong welfare and social programs, we can absorb some of the refugees. For example, children are accepted at our schools, which is good for the kids because the worst thing is for them to remain outside the educational system. Refugees with serious medical problems – chronic illnesses, accidents, pregnancies – are always accepted in the public health system. We have some ability to cope, but if the refugee situation becomes huge, additional assistance is going to become necessary. We are already receiving some cooperation from the U.N. refugees agency and also the European Union, but more support may be required.

Diplomatic Connections:  These are not transit refugees going north to join caravans.

Ambassador Llorca:  No. Four years ago a lot of Cubans went through Costa Rica. There have been many Asians who pass through from Brazil, and from African countries as well. The caravans from Guatemala and Honduras don’t touch Costa Rica.

Diplomatic Connections:  Thank you for speaking with Diplomatic Connections, Ambassador Llorca.

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