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El Residente Costa Rica’s English language newsleer

March/April 2013

¢1500 March - April 2013

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El Residente


Contents: President’s Message................. 4 My Costa Rican Experience ....... 6 - Linda Gray

Wild Side of Costa Rica ............ 9

Editor’s Note Changes. For good or for bad, things will likely connue to go on changing. Each year we change the El Residente in order to try to make it a lile beer, but somemes things change for the worse as well. In this issue you will read a few arcles relang to change, from immigraon to driving, changes in the capital city, in the theatre, and even a few changes here at the ARCR office.

- Ryan Piercy

LTG: Merely Players ................ 10 - Annee Halle

Costa Rica on the Globe ........ 12 A Day in the Life...................... 14 - Allen Dickenson

A City Rejuvinated .................. 16

As humans we are funny, in that we always seem to be resistant to change, despite the fact that history has proven that change is inevitable. No maer what we have done to try and stop it, or connue to try, eventually change overtakes us. Allan Garro also brings us some of the changes passed by the government, with its eyes looking towards dealing with the financial problems it faces. Changes that many of us dread.

- Richard Ternouth

Health Care: Face ................... 19 - Dr. Oscar A. Suarez

Legal Update .......................... 21

As the changes connue, I hope we are all able to adapt. Ryan Piercy Contact Informaon:

- Allan Garro

Dollars & Sense....................... 22 - Alan Weeks

Business Directory................... 26

This magazine has been published every two months since 1995 as the official communicaons media of the ARCR. Our organizaon provides service to thousands of foreigners who have chosen Costa Rica to reside for short periods or for permanent residence.

Published by: Email:

ARCR Administraon Edtor in Chief: Ryan Piercy Adversing, Publicity: Cindy Solano Office Hours:

Monday- Friday, 9 am to 5 pm CRC me GMT-6


#101 Casa Canada, Av 4 Calle 40 San José, Costa Rica Tel: 506-2233-8068 Fax: 506-2255-0051

Mailing Address:

P.O. Box 1191-1007 Centro Colon San José, Costa Rica

Since 1984 the ARCR has been offering reliable SERVICES, INFORMATION and ADVOCACY to Costa Rica’s foreign residents. We have the experience and ability to help you with your residency applicaon, immigraon, business and financial management, real estate purchases and rentals, property management, insurance, pet importaon and much more. If you wish to place an ad in El Residente, please contact the ARCR main office. Goods & services offered are paid adversements. Neither ARCR Administracion nor El Residente research the companies and take no responsibility for the quality of such goods and services.

March - April 2013


President’s Message

by Terry Wise

Happy New Year, from a New Face The purpose of this column is to provide updates and addional informaon about subjects not covered elsewhere in the issue: subjects that may have been too recent to make the regular arcles, but may be important to our members. That said, here are four “late breaking” topics about which you need to be informed. First, there has been a change in the ARCR office: we now have a new Office Manager. Her name is Saicy Quiros. The appointment of Saicy to this posion is intended to make the office more efficient and give beer service to our members, while also giving Ryan more me to work on special projects that will be beneficial to ARCR members. Therefore, beginning immediately, we ask that any quesons about Immigraon, Cedula requirements, Caja, drivers license, etc. be directed her. Her new dues will require her to be away from her desk or in meengs much of the me, so Saicy has requested you please send your quesons to her via email, rather than calling. Her email address is: Saicy appreciates your cooperaon and promises to respond promptly. Second, many of you have heard and asked about the law regarding extending Visas. The law specifies that $100.00 USD fine (called a MULTA) will be accessed persons for each and every month they overstay their Visa. The law has been on the books for a while, but had not been enforced. Now, beginning April 23, 2013, the law WILL be enforced. So watch the expiraon date on your Visa. It’s never a good idea to “open the door” to the immigraon authories. Third, the laws regarding obtaining a Costa Rican drivers license have been changed; it is now a lile more difficult. And there is a catch. The Costa Rican authories have determined that a person now must have a valid CEDULA (Costa Rican residency card also called a DIMEX card) to obtain a Costa Rican drivers license. Therefore, if you don’t have a Cedula you cannot obtain a Costa Rican drivers license. The law sll allows those with an unexpired foreign drivers license to operate a vehicle in the country during the me their Visa is valid. Now here’s the “catch”; the rules say that if your Visa has expired you cannot connue driving using your out of country license.

For Immigraon purposes, once the applicaon for residency has been accepted and a file number issued, the applicant does not have to leave the country when their Visa expires. However, in order to connue driving with your foreign license, you need to have a current Visa, which means a person must leave and reenter the country to obtain a new Visa expiraon date. So, be careful if you are driving while waing for your cedula; technically, to drive legally, you need to keep renewing your Visa unl you get your Cedula. The last item is that you may have noced on the cover of January/February issue of the El Residente there is a price in the lower right corner. I’ll explain. Many companies/businesses who adverse in our publicaon have asked for copies to sell in their waing rooms/restaurants/ lobbies, or to give to their clients. However, the prinng of those addional issues would create a financial burden on ARCR. We then recognized that there was an opportunity for ARCR to sasfy our adversers, gain addional exposure with those who might not be aware of our organizaon, AND have a way to off-set the costs without raising fees to our adversers or members; that was to create a special issue which could be more widely distributed. It is called, El Residente PLUS and will be sold for 1,500 Colones. To accomplish this, the current issues are being expanded with an insert which contains arcles about things Costa Rican; there will be interviews, history, and tourist informaon. Also included will be entertainment pages for children and a crossword puzzle for adults. Not to worry, the basic El Residente will connue to be distributed to all members at no addional cost, just as it always has been. Of special interest to ARCR members is that the insert will contain a FREE classified page where they can list items they have for sale. If you want to place a classified ad, send your informaon to: To make sure there is no confusion, let me repeat: distribuon of the regular issues of El Residente is sll included in the membership and is FREE to members; the price on the cover is only for El Resident PLUS which will be distributed at those locaons where it will be for sale. That’s all for now. Take care and to offer suggesons simply email me at:

Contest Update: My Costa Rican Experience In this edion you will find our second place arcle, submied by Linda Gray. Her simple and usual encounter with the local law enforcement provides good insight into the culture here, as well as a wholesome method of dealing with the situaon. Definitely it relates a truly Costa Rican Experience that many of us may have shared already. El Residente


March - April 2013


My Costa Rican Experience

by Linda Gray

The Yellow Submarine For about a year, I drove a bright yellow Nissan Xterra. Did I say yellow? I mean drop dead, arrest me, lightsand-sirens yellow. One day, some friends and I decided to drive down to Drake Bay for some awesome deep sea fishing. I love the drive to Drake Bay. Once you pass Rincon, it’s all dirt roads, bad bridges and river crossings, but the scenery is some of the most spectacular in Costa Rica. Think luscious green fields of horse pasture, with rivers meandering through, doed by majesc Ceibo trees reaching for the sky. Unfortunately, in my excitement to finally get another deep sea fishing trip under my belt (impossible to pass up for this Gloucester girl), I completely forgot about the me of year. River crossings in the rainy season can be more than a tad treacherous, as we were soon to find out, when the car literally started floang. “Gun it!” my fellow passengers (all men of course) shouted. Gun it? What good is that going to do? We are floang, boys. The res are not going to start acng like propellers you know. We finally made it to the other side, but while we were crossing, the current in the river ripped the license plate from the front of the car. I didn’t realize it unl we got back home. Since I had to take these folks back up to the airport in San Jose in a few days, I beat feet into San Isidro to order a new license plate. In Costa Rica, the Registro (registry) controls all the legal property documents in the country, from real estate to cars. We’re lucky to have a regional office of the Registro right in San Isidro. To get a new plate, I had to bring a leer from my aorney stang why the plate was missing (at a cost of $50, thank you very much), stand in line, fill out forms, and … your plate will be here on Friday. Here’s your receipt. Oh oh. I have to go to the airport on Thursday. It’s going to be a bit dicey, driving seven or so hours up to the airport and back with one license plate missing, in a car that you can “see coming and going.” So on Thursday, I crossed my fingers, picked up my friends, and headed up the Costanera. I brought the receipt from the Registro as proof that the plate was on order. I mean, really, do they expect me to just NOT DRIVE the car while I’m waing days for this new plate? Yes, indeed; apparently that’s exactly what they expect.

Tarcoles Bridge, north of Jaco. There is one spot where the Transitos (traffic police) always set up shop, to catch speeders and other miscreants. When I came driving by in my bright yellow buggy, the officer mooned me to pull over. Oh crap. Here we go. “Buenas dias señora. Did you know that you are missing your front license plate?” he smiled, leaning in, checking out the other gringos in the car (who had just finished smoking a joint in the back seat, and were trying desperately not to breathe in his face). “Well, yes, actually it got ripped off when we were crossing a river in the Osa a couple of days ago,” I said with a big smile, trying to distract him from the giggling fools in the back of the car. “I went to the Registro and ordered a new plate, but it won’t be here unl Friday. Here’s my receipt. I had to take my friends to the airport, or I wouldn’t be driving the car.” “You know, it’s a REALLY big fine for driving without a license plate,” the officer said, very seriously. At this parcular me, Costa Rica, in its usual notthinking-about-the-consequences wisdom, had just instuted a new set of traffic fines that were completely outrageous considering the average income level of its populace. For example, $440 for not wearing a seat belt, $700 for speeding (only 12 miles above the speed limit), $500 for talking on a cell phone, etc. It was a polical controversy being debated throughout the country at the me. “I know. These new fines are crazy aren’t they? How do the Ticos afford to pay them, it makes no sense.” I said, bang my eyes, coyly smiling. (Seriously, woman you are too old for this…) “Oh, so you know,” he said surprisingly, “Do you live here?”

Everything went fine unl we were just aer the El Residente


“Yes, I live down near Dominical, I have a finca with a lot of horses. Do you like horses, señor?” I said hopefully, trying to become his new best friend. In Costa Rica, making small talk with a big smile is the culturally acceptable method for backpedaling your way out of a scky situaon. So far, so good. “Well,” he said, smiling with ancipaon, “I’ve decided that since you are such a nice person, I’m not going to give you a cket….but…. it’s a REALLY big fine you know.” Pregnant pause. He’s waing for me to whip out the wallet, I know it. Bribery is not only common, it is completely expected in a situaon like this. These transitos probably make a month’s salary every day, pung the screws to innocent tourists. “Thank you SO much señor, that’s really nice of you. I sure do appreciate you not giving me that cket,” I said, in my most charming, appreciave manner. He wasn’t quite sure what to do at this point. The bribe he was hinng at just wasn’t forthcoming. So he had to make One Last Try. “You know, I’m not going to write you a cket,” he

March - April 2013

offered, “but it’s a REALLY REALLY big fine.” “Well, señor, I can’t tell you how much I appreciate your kindness. Thank you again.” “So,” he said, dejectedly, “are you driving your friends to the airport now?” “Yes that’s right. They have a flight at mid-day.” “You’ll be coming back this way aer you drop them off?” “Yes, someme this aernoon,” I said, realizing that my Oh So Easy To Spot car was going to be my downfall. “Well then you have a good day, señora, drive safe.” “Thank you again señor. You have a good day too.” Of course I did NOT drive home via the Costanera , knowing full well what would be waing for me. Instead I went home via the Cierra del Muerte, the mountain road known as the Road of Death. In this case, it was the Road of Savings. Or possibly, the road of People Avoiding Giant Traffic Tickets. In any event, it worked out just fine.


El Residente


Wild Side LXXII

by Ryan Piercy

Thick-kneed Neighbors Another sort of oddball avian found in Costa Rica is the Double-striped Thick-knee, Burhinus bistriatus, known also as a Stone-Curlew. Of the nine species, it is the only member of a family found locally; seven are found only in the Eastern hemisphere. More odd sll is the name, which is evidently derived from the mistaken impression that their rather large ankle joints are actually knees.

olive. Both sexes will take turns incubang as the other stands a short way off. In 25-27 days the young will hatch and soon leave the nest under the guidance of the parents. Males and females are quite alike in appearance with finely streaked gray-brown upper parts and a pale neck blending into a white underbelly. They boast a black stripe on the side of their crowns and their big yellow eyes surround a black iris. Their bill is a dusky brown with a yellow base, and their legs are clearly yellow and very long. Their feet have three short, forward poinng toes that are webbed at the base, with no hind toe at all. There are four sub-species with varying size and plumage, though it is very difficult to tell them apart, parcularly since it is hard to get near them. They are not endangered due to their extensive range from Southern Mexico to Columbia and Brazil and, in fact, have benefited from the clearing of woodlands to make pastures. The populaon is considered to be quite stable, numbering in the millions. Esmated lifespan is fieen to sixteen years in the wild.

This medium sized bird stands about 20 inches (50cm) and weighs up to 780g. They are fond of open spaces and can be found on the ground in sandy or stony terrain, savannahs, bushy dry areas, pastures, stubbly fields, burned areas, and open meadows in scrubby woods. Their large eyes give them good night vision ability, as they are primarily nocturnal. In the day they will lounge around, preening themselves and resng in silent camouflage. If approached they will run away quickly in fright or, less frequently, fly slowly away at low altudes. It is unfortunate they avoid taking to the air as they are beauful in flight with the striking designs and coloring on their wings.

In Costa Rica the bird is an abundant resident, locally called the Alcaraván Americano. It can most oen be found on the pacific coast lowlands, especially the area from Guanacaste down through the Puntarenas. A good place to look for them is on open grasslands or pasture areas and, if you can determine where they are nesng, the eggs can be studied at a close distance during the correct me of year. Remember, however, that the parents will be waing in extreme concern a short distance away.

At night they will become acve, foraging for insects, worms, snails, scorpions, small reples and frogs, and somemes seeds or buds. They will also become noisy, with calls and loud nasal trills, most especially under the light of a shining moon. The nest of a Thick-knee is inconspicuous and also rather strange, being nothing more than an unlined scrape on the bare ground. Here, during January through April, they will lay one to two eggs which are rather large and boldly spoed in brown, black and gray over a buffyMarch - April 2013


LTG: Merely Players

by Annee Halle

“Acon is Eloquence” W Shakespeare It was in 1955 that Jonas Salk announced to the world that he had produced an effecve vaccine against Poliomyelis, a dread disease that can kill or cripple thousands of its vicms during a single epidemic. The US polio epidemic of 1952 resulted in 3,145 deaths and le 21,269 people seriously handicapped. An iron lung was used to help those in the acute phase of the disease to breathe. If the paent could survive this acute phase then there was hope for recovery. Invented in 1927, but not in general hospital use unl aer 1939, an iron lung retailed for about $1500, about the same price as a house in those good old days!

from their shows to support charitable organizaons in Costa Rica. Pung on a show is a very expensive project when one considers the costs of performing rights, performance and rehearsal space, set construcon, props, and costumes. The group has experienced its lean years in terms of profits, but it has always tried to find a way to provide support. Organizaons such as the Fundacion de Angel de Amor, which provides accommodaon for abandoned seniors in its facility “The Tom and Norman Home” in Guapiles, and Open Arms of Costa Rica, a collecve of benefactors whose aims are to improve the lives of those they encounter by providing funds for educaon and medical programmes, have both been the recipients of funds raised during LTG Christmas events in recent years. Last season saw a mutually beneficial collaboraon between the Costa Rican Humanitarian Foundaon and LTG. The script for one of the short plays featured in their producon My Life Is a Crazy Quilt was provided by the women of La Carpio. The play told their stories and also featured the quilt they made to record them. The women aended the opening night as honoured guests and received a poron of the proceeds to help them in their work. The unique handraed angels that the women make were also sold during the intermission. This was not the first me that LTG has worked to benefit this very worthy organizaon and I do not think it will be the last.

What you might ask has this to do with the Lile Theatre Group? In 1950, with Bert Williams as its president, LTG worked very hard and managed to raise sufficient funds to purchase, not one but two, iron lung machines, and donate them to the San Juan de Dios Hospital. There were none of these life saving devices in Costa Rica at the me. The hospital’s director did not feel that they would ever be used and wanted nothing to do with them, so LTG had to pay a technician to take care of the machines, and ensure that they would be in working order, in the event of a crisis. Three years later, Costa Rica was ravaged by a polio epidemic, and more than 2000 Costa Rican children were afflicted. There can be no doubt that the forward thinking and the dedicaon of those founding LTG members was responsible for saving many lives during that terrible me.

With the support of our audiences and our members we hope to connue to be of service to the community for many years to come. The Naonal Theatre has started a new iniave this year with its “Theatre in the Theatre “seasons. These are described as being “a family friendly event for drama lovers, which will be held at least twice each year”. Performances will occur on three mid-week aernoons at 2pm. This me slot was selected as a result of data obtained from audience surveys conducted at the Teatro Naonal during 2011. The opening event, a presentaon by the Naonal Associaon of Modern Puppet Theatre (MTM) entled ODISEA, certainly seemed to be very well supported. The puppetry and scenic elements were most creave and excellently presented. This 60 minute entertainment was more than worth the cket price of 2000 colones. The second event is planned for later in the year, but as yet no details are available.

Throughout its history LTG has connued to use profits El Residente


On February 8th, several members of LTG, very talented musicians and singers, came together under the directorship of Barry Slutskin, to present an informal evening of cabaret style entertainment in the Shakespeare Bar, which is located in San Jose at the Teatro Laurence Olivier. This is a great lile space with a unique ambience, which frequently hosts art exhibions as well as music nights. This comparavely new venture for the present membership was declared a resounding success. We hope to present more of these events throughout the year. Also planned is an evening of delighul romanc comedies featuring the work of renowned French playwrights of the belle epoch. This event will be part of a fund and awareness raising campaign called “Give Your Heart to LTG”. Jim Theologis, well known arst and teacher as well as stalwart supporter and ex-president of LTG, has put his considerable talent at LTG’s disposal, and has designed an original “HOT LOVE” logo for T shirts. These T shirts went on sale at the beginning of December 2012 and will remain available throughout 2013.

March - April 2013

God of Carnage by Yasmina Reza will be coming to San Jose in April 2013. Directed by Noel Montagano, it will feature some of Lile Theatre’s best known actors: Tom Humes, Lisa De Fuso, and Susan Liang, as well as a vising professional actor from the US, James Kissane. God of Carnage, a study in the tension between civilized surface and savage insnct, definitely delivers the catharc release of watching other people’s marriages go boom. This award winning play promises to be highly entertaining and well executed. Tickets will be going on sale on April 1st 2013 and there will be weekend performances from mid April through to the beginning of May. LTG welcomes both new members and potenal directors and offers plenty of opportunies to parcipate both on and off the stage. If you would like more informaon about The Lile Theatre Group please feel free to call Annee Halle on 8858- 1446, or contact us through the LTG website at


Costa Rica on the Globe by Ryan Piercy The Hell Drivers Costa Rica is just a small country with a mainly farming background, and yet Costa Ricans have always had their eyes set on the greater world. In the 1800’s they began the export of coffee, followed by other crops. In 1884 San Jose was one of the first cies in the world, and the first city in Lan America, with electric streetlamps. The

Naonal theatre was finished by 1897, in order to bring famous acts from the world over to the people of the country. Over the following decades this fascinaon never changed and with the development of the motor car, along with the rest of the planet, Costa Ricans became aracted to the new mode of transportaon and with speed. During the fores and fiies the world became enthralled with a new sport, Stunt Drivers, and this lile country was no different. In February of 1960 the most famous of these acts, The Hells’ Drivers, arrived in San Jose. The group, which had driven to Costa Rica, was owned by Jack Kochman, and was one of three groups Kochman orchestrated. The show featured Jasper the Clown, sll considered as the number one thrill show clown ever. Billed as “Los Volantes del Infierno”, Kochman’s group performed in the Naonal Stadium, built in 1924, with

El Residente


seang for up to 25,000. The show was so popular that they experienced sell-out crowds and, originally

scheduled for only one weekend, they were held over for an addional two days for a total of six shows. Tickets started at just three colones, about US $0.50 at that me. However a seat in the shade ran five colones and seats in the balcony were ten colones.

on wheels, in Simca Aronde vehicles, leaving them in perfectly vercal posion and holding for approximately one hundred meters on just two wheels, without being pped over. No doubt both the skill of the driver as well as the consistency and stability of the Simca Aronde are amazing.” Jack Kochman was also the producer behind these breathtaking events, with years of careful planning for each stunt. He had begun with ten cars, changing the act each season, adding more spectacular stunts, and finally headed on to shows around the world. Kochman himself once stated “the roar of engines, the whine of res, the sharp smell of exhaust - they’ve always had a thrill for me. And I guess they always will.” In 1960 he shared his passion with the lile country of Costa Rica, giving them a first-hand taste of the thrills experienced in the face of speed and danger. One has to wonder if it was one of the causes that has led to how the Ticos themselves drive today . . .

The drivers enthralled the audiences with thirty different stunts, guaranteed to send chills down the spine, intermixed with the crazy ancs of their legendary clown. Running the ramps at hair-raising speeds, aerial leaps, and lt-ups just short of rolling, were commonplace stunts. Amongst all the acts were rollovers, crashes, burning vehicles, and Jasper the clown who would survive a near miss by two cars passing on either side of him at high speeds. One of the most popular stunts was when “Dapper” Dan Fleenor , Kochman’s headlining driver at the me, demonstrated his “Salto de la Muerte” (Jump of Death!) This tall Texan was renowned as a great stuntman and later purchased the Hurricane Hell driver’s group from Jack Kochman. His was the last act in North America to perform a ramp-to-ramp jump while another manned car passed underneath the airborne vehicle at the same me. The tricks that really caught the aenon of the local press were not the death defying acts, but the acts of precision and skill. A local reporter was rightly impressed and found the enre show “Simply Fantasc”. He was most impressed by the driver who drove on just two wheels. He went on to say, “The most sensaonal are the incredible acrobacs performed by these masters March - April 2013


A Day in the Life

by Allen Dickenson

How To Sell Your Car As some may already know, I have a service where I help expats “relocate” their vehicles. It’s mostly just hooking up those who want to buy a vehicle with those who are trying to sell. People usually come to me aer trying to sell on their own for a while; maybe aer they ran out of me before they had to leave. Or maybe it was just bad luck or they got red of trying, but for whatever the reason, if they are stuck with a vehicle they haven’t been able to sell, some will contract with me to be their broker. Admiedly, selling a vehicle in Costa Rica can be frustrang because it can be a problemac process, especially when different languages and cultures are involved. Added to that, there are so many used cars, trucks, and SUVs available here that any vehicle can be difficult to sell. So, before you get to where you need to contact me and pay me a small fee (Hey, I have to feed those five kids somehow!) to hopefully find you a buyer one day, I want to pass on some ps I have learned that may help. First, determine the fair market value of your vehicle. DON’T base your price on emoon or gut feelings. You may have deep affecon for your ride, but the buyer won’t be buying emoon; they’ll know ahead of me what a fair price is. Instead, go to several web sites and look for comparable models and use them as a guide. You can also look in the newspapers – La Nacion has a large used car secon once a week that can be a reference. A TIP: Most adversed prices are 10% - 15% higher than the “street” price. That’s because buyers expect to haggle and bring the asking price down, so sellers set their price to accommodate some reducon. But have an absolute boom price you will accept in mind. Exposure is the key to selling. You can’t expect buyers to beat a path to your door if they aren’t aware of what you are offering, no maer how good the deal. To increase awareness, put some signs or a noces on the vehicle (white liquid shoe polish is good to write on windows, but NOT on painted surfaces) so that when you drive it people will see it. Beer yet, for about 2,500 colones each, local sign shops can make up adhesive backed leer signs you can sck on your car. Either way, make sure your telephone number is prominent and, if you don’t speak Spanish well, include another number for someone who does that will help you. Post a lisng everywhere on the Internet you can think of – Craig’s List CR and all the Yahoo bullen boards for Costa Rica (Costa Rica Living, Central Valley Living, Young Expats, Escazu News, Costa Rica Classified, etc.) Consider the classifieds in the on-line newspapers too. El Residente

Also, find one or more of the Costa Rica used car sites,, for example, and list it there. Give a good descripon and add pictures where you can, but be honest. Menon anything that would add value or ence a buyer. Make sure you specify what part of the country you are in too, and give good contact informaon. Here’s an example: 2008 Nissan Maxima. Santa Ana. V6, automac transmission, 45,000 miles (30,000 km). Four doors. Original owner bought new in US and imported. Car maintained to perfecon. Leather interior with custom wood accents, special (factory installed) stereo system with CD, USB port, and AM/FM radio. Alarm system. Original floor mats. Cold A/C. Aluminum wheels, new res. Never wrecked and no major dings or scratches. Priced below book for quick sale: $5.00 USD. For more info in English, call 5555-1234, in Spanish 8901-2345, or email at: When lisng the price, DO NOT include the phrases “Or Best Offer” or “Negoable”. You are just telling potenal buyers you will accept less than your asking price. Prepare some handout sheets lisng the basic points of the vehicle (year, engine and transmission type, mileage, etc.) and carry them with you to give to interested buyers. A TIP: Prepare signs and handouts in BOTH English and Spanish – you don’t know who will be looking. Another TIP: Have your car regularly, professionally cleaned, inside and out. Think about what you’d like to find when you look at a car for sale. A clean piece of crap will sell faster than a dirty one. One more TIP: Get any minor problems repaired before pung the vehicle on the market. A buyer will use anything, no maer how minor, as jusficaon to beat your price down. Be prepared to bargain, but don’t let the buyer be in control of the process by nong small defects. If possible set the vehicle outside where people going by can see it is for sale. Occasionally drive it around your local area and maybe park it on a busy street during the day for drive-by exposure. Be paent; expect some me to elapse. Don’t become discouraged early and lower your price too fast – you are looking for the person who wants YOUR car; unless you offer the vehicle at a super, super bargain basement price, responses may be slow. (Some people think that lowering a price to smulate a sale is suspicious and indicates defects.) If you have the me, begin adversing well before you ulmately want to sell, but be prepared to close the deal right away when a legimate buyer appears; buyers won’t wait. A couple of addional notes: If you adverse on Craig’s 14

List, be aware that you might get “Phished.” Craig’s List is especially prone to this. For example, be very suspicious of an email saying something like the sender wants your car but is “off-shore” and doesn’t have access to their bank account, but, they do have a PayPal account and will pay that way. Then, and this is a key phishing phrase, they’ll have their AGENT / REPRESENTATIVE / FRIEND take delivery of the vehicle for them. Believe them and you’ll end up without the vehicle or the money.

– Leave all the documents (current Marchamo, ownership papers, etc.) for the vehicle behind; don’t take them with you.

Take reasonable precauons. Don’t meet potenal buyers alone or in isolated areas; meet them in the dayme, or at least in a lighted, high traffic area like a mall parking lot, preferably one with security. And if you are a woman, take a male friend along. (Sorry, I’m not being sexist, just praccal.)

– Make arrangements to maintain insurance on the vehicle (especially if it’s to be driven.)

It’s legimate for a buyer to want to drive your vehicle, but never, NEVER EVER, let them drive your car alone – always ride along. Make sure it’s just you, plus maybe your friend, and the buyer in the car. If they want to bring their friend along (which they may call their mechanic) DO NOT let them. Two of you can control the situaon. Two of them can change the odds greatly. What if you are leaving the country and the car hasn’t sold? This can be a big problem for some expats – they may have had the vehicle on the market for a while, are scheduled to relocate, but nobody has purchased their car, even aer the price has been reduced considerably. A vehicle is a prey sizable investment and can’t just be abandoned or given away. What to do? Unfortunately, Costa Rica doesn’t offer many alternaves. The best, and most common opon, is to leave the vehicle with a designated representave, along with the Costa Rican equivalent of a Power of Aorney, to sell for you. There is risk is in doing that and, if you choose to go that route, there are some things that need to be taken care of before hand:

– Establish a line of communicaons via email or telephone where the representave can easily and quickly contact the owner to get approval in case there is an offer that is less than the previously established lowest acceptable price.

– Establish how the sales proceeds will be transferred. If the amount exceeds $10,000 USD, there may be tax implicaons, or at least bank transfer rules. Also, if there is to be compensaon paid to the representave, paying that money may require an addional step. Check with a reputable aorney so this informaon is decided up front. Lastly, be paent. The representave isn’t going to be able to do more that you could when you were trying to sell it. A quick final point: If you are looking to BUY a vehicle, have a reliable mechanic inspect it for you first. You’ll probably have to pay him a small fee, but it is a good investment because there is a lot of “junk” on the roads of Costa Rica – and you don’t want to spend your money on one with hidden damage. Most people (Gringos and Ticos) have decent cars to sell, but there are some who will try to pass off something as more than it is, so be cauous. (There are some areas a mechanic can’t thoroughly inspect, like inside the engine, but you will sll have an advantage of knowing the vehicle is otherwise sound.) And there you have it. Be realisc, be cauous, and good luck selling (or buying) your vehicle. I hope this helps everyone have a happy and sasfactory car selling / buying experience.

– First and foremost is find someone you trust implicitly because, for all intents and purposes, that power of aorney allows them to “own” the vehicle. That document lets them do anything with it AND the proceeds from it when it is sold. (An opon is to give the power of aorney to one person, but leave the car to be sold with another. That is a bit cumbersome, but it avoids pung all the power in one person’s hands.) – Make a clear agreement between the representave and yourself as to what exactly is expected and allowed of them. (Can they drive the vehicle? Where will the car be stored? What’s the boom line selling price? How will communicaon take place? Who will pay for expenses like adversing, repairs, new Riteve inspecon or Marchamo. And when will any expenses be paid?) March - April 2013

Allen Dickinson is a member of ARCR. Aer serving 23 years in the US Navy he seled in Pensacola, Florida, where he resided for 24 years. In 2006 he rered and relocated to Costa Rica. He has owned over forty personal vehicles and has bought and sold many others. He can be reached via email at: 15

A City Rejuvinated

by Richard Ternouth

A Highway to Somewhere Highway 27 This is the second in a series of arcles focusing on the dynamic transformaons currently taking place in the area of San Jose. This arcle will stray a lile bit from the greater San Jose area and take a look at the Autopista Del Sol, which has its beginnings in La Sabana and stretches seventy-seven kilometers to the port of Caldera, near Puntarenas. It has also had tremendous impact on outlying areas from Guanacaste to Uvita. A Long Time Coming The highway opened in January 2010, two months ahead of schedule, aer thirty-five years on the drawing board and many delays. From La Sabana at the western end of San Jose, it heads west ending at the port of Caldera. Although it was originally introduced as the Autopista Del Sol, it is also called Highway 27, The Caldera Highway, or the Peace Highway. It was completed at a cost of approximately 230 million USD.

A Maer of Concern One of those delays occurred a year before the official opening when the environmental control panel, the Tribunal Ambiental Administravo, suddenly halted construcon on much of the new highway between Ciudad Colón and Orona. This was due to concerns about the stability of the road’s underlayment and erosion, and excess sediment flowing into about twenty rivers along its route. There were also issues about the steep slopes bordering the route which were suscepble to mudslides in the rainy season. President Laura Chinchilla stated that repairs to the Caldera highway were a priority for her, and from my latest trips along the highway it looks like she has kept her word. El Residente

Those who have traveled Highway 1 (the Pan-American Highway) prior to the compleon of Highway 27 will remember those long, dreary stretches through the mountains between San Ramon and Puntarenas where, if you got behind big trucks, the traffic somemes crept along at a snail’s pace. With the new highway those problems were allayed; you can now get from San Jose to Caldera in about an hour. The road also provided a new way to get to Guanacaste. From Puntarenas you can zip up to the Pan-American Highway and save about two hours of travel me. And a trip to Jaco is now only one and one-half hours, which puts desnaons such as Manuel Antonio, Dominical, and Uvita closer than ever before. It’s a Win-Win The new highway presents a win-win situaon for residents, tourists, and Costa Rican businesses. The compleon of the new infrastructure has provided important connecons that will connue to enhance Costa Rica’s already surging interest among travelers and expats, and smulate re-discovery by locals. There are many noceable benefits such as: • Increases in investments and economy in such towns as Atenas, Ciudad Colon, Santa Ana, Orona, and San Mateo. • Rising land values along the highway where some have almost doubled. • Job creaon through the construcon and subsequent operaonal needs, such as toll booth operators. • Transportaon mes and costs for goods entering from the ports have been reduced. • More diversity of goods and services are available in previously remote areas. • Reducon in the number of traffic accidents that were caused by overburdened vehicles traveling on the old mountainous, narrow, poorly lit country roads. Closer to Home: Santa Ana and Escazu Emerging from La Sabana and going west a few kilometers, one cannot help but noce the tremendous boom in commercial development on both sides of the toll road, all due to their high visibility and the quick and easy access from the highway. Signs for the businesses along this stretch read like the who’s who of commercial and retail and services. Starng with Walmart, there is Office Depot, EPA, Avenida Escazu (did you say Starbucks?), and globally recognized hotel names. And of course, there is the ever expanding Mul-Plaza which 16

is populated with many internaonally famous brand stores. Traveling west a bit further, one can see where high end residenal development has exploded in and around Santa Ana, partly due to the quick travel me to the beaches and the short commute to San Jose. Viewed from the western end, for the residents of the Central Pacific area, the new highway has cut travel me to San Jose down to less than two hours. Those traveling in to shop, take care of business, go to the airport, or just visit friends or family, can now make the trip much more quickly and easily. Approaching San Jose there are off ramps to Rohrmoser, giving great accessibility to the commercial developments, businesses, shops, services, and restaurants in Sabana Sur. Or if the traveler desires to go further east, they have easy access to the circunvalación; the ring road which runs around the perimeter of the city. Highway 27 ends at the eastern end of La Sabana Park,

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but from there the commuter has immediate access to downtown San Jose via Paseo Colon or other routes such as Avenidas 6 and 10, which lead into San Jose Central. With quick and easy access, travelers and residents alike can now visit and enjoy what San Jose has to offer in museums, cultural events, music and theatre, stadium events, the new Chinatown, or take a leisurely stroll along the many new pedestrian walkways in San Jose Central. Anyone got a Jet Pack? Not to mislead anyone, there is sll way too much traffic on our roads, and that will not change. During rush hour (which at mes seems like all day) and holiday weekends, my preferred mode of transportaon would be a Jet Pack. But if you don’t have one of these handy devices, and have not yet had a chance to travel our new highway, I encourage you to give it a try. In fact tomorrow I am on my way to the Dominical and my mouth is already watering knowing there is a great Fish Taco awaing me only one and one-half hours away in Jaco!


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Health Care

by Dr. Oscar A. Suarez

A New Look: Facial Rejuvinaon Once called face-lis and later known as cosmec surgery, facial rejuvenaon is a common subject of interest for many who visit Costa Rica. Herein I will discuss the modern state-ofthe-art for those whose may have an interest in the subject. The way we appear to ourselves and others is a very important aspect of how we feel about ourselves, as well as having an impact on how others perceive us. Because the face is oen the first thing many people noce, emphasis on its appearance has become widespread. Consequenally, facial rejuvenaon has become a very important and popular treatment within the pantheon of modern plasc surgery. Not long ago those procedures oen involved an extensive surgical procedure with a very long recovery me; one which frequently le sgmas, including scars, that revealed that a surgery had been performed. More recently facial fillers such as Botox, and skin resurfacing, have gained popularity. The long term success and potenal problems with each of these procedures, however, was largely unknown. The profession now has the benefit of many years of scienfic studies of surgical and non-surgical facial rejuvenaon procedures. Following an extensive number of paents and conducng many scienfic studies, combined with different in-depth examinaons of the various modalies of facial rejuvenaon, it has been determined which are the safest and most effecve. This informaon, combined with each paent being evaluated individually to fully understand their needs and expectaons, is used to determine the best procedure, with the lowest potenal for future problems, for that person. As a result, many paents opt to combine surgical with the non-surgical procedures to get the very best possible outcome. In every case, the ulmate goal is for the paent to achieve a natural look, a shorter recovery period, and to be happy with their ulmate appearance. When we use the term facial rejuvenaon, what are we talking about? Rather than the days of a complete facial surgery, the science now more oen concentrates on various features of the face individually. There are several main focal areas that, when combined, make up the image others see. The primary features are the eyes, which play a very important role in the way someone appears. As persons age the eyelids begin to change and things like crow’s feet or drooping eyelids start to become evident. Crow’s feet are an easily corrected problem commonly using a non-surgical procedure, oen Botox or Dysport. This procedure, however, is only for a select group of paents. Another common problem is excess skin that may restrict peripheral vision; fat pads in the lower eyelids and / or other condions that cause closing of the eye opening. Correcng these condions is more oen a surgical procedure. In each

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case the plasc surgeon must evaluate the paent individually to determine which procedure(s) will be best to get the results the paent desires. The second most frequently noced facial feature is the middle face or cheek areas; folds and lines which begin on the sides of the nose and extend downward toward the cheeks. As we age, these lines get deeper and more pronounced. The most popular procedure for correcng this problem is the use of fillers such as hydroxyapate (Radiesse®) and hyaluronic acid (Juvederm®, Restylane®, or Teosyal®). These types of fillers can also be a wonderful soluon for the vercal lines around the mouth called Marionee Lines. Somemes other features, such as the eyebrows or forehead (frown lines) must be considered and included to get ideal results. Depending on the extent of the condion and the paent’s individual characteriscs, fillers can be ulized in combinaon with Botox for these areas. This treatment can achieve an incredible result. And, for those paents who are concerned about the loss of tone and elascity of the facial ssue, there is now a procedure that combines heat by ablave and sub-ablave radio frequency to firm up that ssue for a more youthful appearance. The third most common concern of paents is the appearance of the neck. Non-surgical procedures are only able to help in mild forms of the loss of elascity of the ssue around the neck. In minor cases, ablave and sub-ablave radio frequency treatments can be ulized to firm up the ssues. In other selecve cases, Botox can be used for the strong muscular bands. Commonly, neck li surgery is indicated independently or in combinaon with a full face-li. Another procedure that has been ulized for the cheeks and neck is the technique placing treads in the appropriate areas. The long term results, however, have been shown to have a very limited effect and are most successful in those with very thin faces. There is never just one soluon for every paent and open communicaon between the paent and surgeon is crucial. One paent may want to start with non-surgical procedures and later, when the correct me comes, move on to a surgical procedure. Others may need to address their concerns by starng with a surgical soluon and, in me, complement it with non-surgical procedures. Each person is different and there really is no formula. A thorough examinaon and consultaon with a Board Cerfied Plasc Surgeon will help determine the best approach for each individual paent. As you can see, there are many different opons available to help a person achieve their personal degree of desired facial rejuvenaon. In all cases, precauonary measures such as ulizing skin moisturizer and sun protecon, eang a balanced diet, and geng regular exercise and appropriate daily rest, are important for maintaining healthy skin. If you are concerned about your facial appearance there are soluons, if you know the opons.


Alcoholics Anonymous Groups meet daily throughout the country; mes and places change frequently. Call for up-to-date informaon. San José 2222-1880 (Anchor club, also serves Narcocs Anonymous) Av 6 Calle 1, 2nd floor Maryland Building. Heredia (Laura) 2267-7466, Puerto Viejo Limon 2750-0080, Zancudo 2776-0012, Tamarindo 2653-0897, Flamingo (Don) 2654- 4902, Manuel Antonio (Jennifer) 2777-1548, Jacó (Nancy) 2637-8824, Zoo Group Escazu 2293-4322. Grecia (Jay) 2494-0578. Southern Zone, meengs in English & Spanish, 8634-9241. Puriscal, Fred 8866-0128. Al-Anon Meengs English language Al-anon meengs are open to anyone whose life has been/is affected by someone else’s problem with alcohol. Meengs are one hour long and held twice each week in Escazu centro, above the Buena Tierra Restaurant, 25 meters south of the San Miguel Catholic Church. Tuesday’s at noon and Thursday’s at 10: 30am. Tel: 89 93 17 62 (Rosemary) and/or 22 28 10 49 (Barbara) email: Also in Grecia on Tuesdays at noon (English), contact Cheryl at 2444-1515. American Legion Post 10- Escazu The oldest and largest American Legion Post in Costa Rica meets at 12 noon on the first Wednesday of each month at Club Cubano in Guachipelin. For informaon and map, go to the website at, or call John Moran at 22321680. American Legion Post 12- Golfito Meengs are held 4 pm 1st Tuesday every month at Banana Bay Marina. The Golfito GOVETS have been helping Southern Costa Rica for over 20 years. Contact Pat O’Connell at or 8919-8947, or Mel Goldberg at 8870-6756. American Legion Post 16- Goicochea Meengs are the second Wednesday of the month in the Hotel of the Hospital Clinica Catolica. Lunch at 11:30 and the meengs at 12:30 Contact Jim Young at 2524-1265. American Legion Auxiliary The Legion Auxiliary meets the Second Saturday of each month, at 1300 hours in Moravia. Contact Doris Murillo 2240-2947. Bird Watching Club The Birding Club of Costa Rica sponsors monthly trips to observe local and migrant birds in various areas of the country. For more informaon contact us at Canadian Club The Canadian Club of Costa Rica welcomes everyone to join us for our monthly luncheons, and at our special annual events, like our Canada Day Celebraon, no passport required. For informaon visit our website: Democrats Abroad Democrats Abroad meets on the last Saturday of every month at the Aurola Holiday Inn, San Jose. Contact Nelleke Bruyn, 22793553, e-mail Join Democrats Abroad at Register to vote absentee at! Lile Theatre Group LTG is the oldest connuously running English-language theatre in Central or South America. The group currently puts on a minimum of four producons a year offering a choice of modern, classic,

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serious, and farcical plays. The group’s monthly social meengs are held in the theatre on the first Monday of the month from 7p.m. to 9 p.m. and everyone is welcome. Membership: Student C2,500, Adult: C5000, Family: C8000. Also, earn your Wings, become an LTG Angel. For more informaon Call the LTG Box Office 8858-1446 or Marine Corps League Meets at 11am the 2nd Saturday of every month, at Tres Hermanas Rest. big bull statue in front. On service road opposite Hospital Mexico on the autopista. Call Bill Enell at 8812-0126. Newcomer’s Club Newcomers Club of Costa Rica (for women) meets the first Tuesday of every month, September through May. September meeng will be an interest fair. Contact: 2416-1111 or hp:// PC Club of Costa Rica This computer Club meets on the third Saturday of each month at Pan American school, in Belen, 830 to 11:30 am. Two months Free Trial for newcomers. For informaon call Chuck Jennings. Phone 2266-0123 Republican’s Abroad Republicans Abroad meets the third Monday of the month at 11: 00 am at Beso’s Restaurant in Sabana Sur. Contact Dick Macauley at 2439-2897 or Radio control Sailing Club Meets at Sabana Park Lake. For informaon contact Walter Bibb. Wine Club of Costa Rica Please mark your calendars. The wine club usually meets at 1 P.M. on the last Sunday of each month. Join us to tantalize your taste buds and expand your educaon. For more informaon on upcoming events please contact us. Phone 2279-8927, 2257-2223 Women’s Club of Costa Rica The Women’s Club of Costa Rica is the oldest, connuously operang, philanthropic organizaon for English-speaking women in Costa Rica. Founded in 1940, WCCR now includes over 250 members represenng 25 countries worldwide, drawn together by the moo: Friendship through Service. The Club aracts fascinang women who are interested in serving community needs in Costa Rica, parcularly focused on children’s educaon while, at the same me, making deep, meaningful, personal relaonships. Along with its philanthropic fundraising acvies, WCCR also hosts regular lunches, teas and many special interest groups, including a Professional Women’s Group. Guests are welcome and further informaon and a calendar of planned events can be found at Women’s Internaonal League for Peace and Freedom Open to men too. English language group in Cariari de Belen, English-Spanish group in Heredia, Spanish language group in San Jose. We work on peace and human rights issues. Call Mitzi, 24337078 or write Veterans of Foreign Wars: Post 11207 No-host lunch at 12 noon in the Club Colonial Casino dining area, meeng at 1:30 pm on the second floor. All members are welcome plus veterans who served overseas may join. Call Bob Sempell at 2588-1475.


Legal Update

by Allan Garro N.

Government Raises Taxes and Tariffs The cost of living in Costa Rica for both locals and expats has been rising a great deal lately. The logic applied by a number of countries to jusfy raising taxes is because an economic recession is on the minds of our lawmakers, whether it makes sense or not. Aer a huge fiscal plan failed to be approved last year by Congress (thank God) the Presidency found a shortcut to increase income by convincing Congress to change some laws. Here are a few examples of the ways things have become more expensive from a legal point of view. Luxury Home Tax In January 2010 the Luxury Homes Tax came into effect, imposing a tax different than the territorial tax to homes with a construcon value higher than 100 million colons – US $200,000.00 - in which case the value of the land was taxed as well. The law forces homeowners subject to this tax to file a new declaraon every three years, which means in 2013 it is me to update the value again. The limit was modified to 117 million colons –US $234,000.00- for construcon value, but the Revenue Ministry also modified the parameters used to calculate the value of construcon, raising the values another thirty percent. As a result any person who owns a house with a construcon value of US $300,000.00 and a land value of US $200,000.00 has to pay 0.25% yearly, which represents US $1,250.00, to cover this tax. If the construcon value is below US$234,000.00 only normal property tax is imposed on the home. Homeowners with a value beyond US $2,000,000.00 will have to pay 0.40% yearly. The parameters to evaluate homes can be found on the website from the Direccion General de Tributacion -the Costa Rican equivalent to the U.S. IRS or Canada Revenue Agency. hp:// New Tax on Corporaons Last year a new Tax on Corporaons came into effect. Starng April 2012 all registered corporaons were obligated to pay a tax equivalent to 50% of a base salary on acve corporaons, or 25% if the corporaon is inacve. Proporonally for the remaining eight months of the year the tax amount was around US $268 for acve enes and US $134 for inacve ones. Most corporaons created by expats are used as holding companies to protect houses, lots, farms, vehicles and other type of properes. Before this law the cost of maintaining a holding corporaon was relavely low, but this new tax increased it substanally. This year the tax is due in January and the amount to be paid is close to US $400 or US $200 depending on the company status, acve or inacve. Starng February 1st interest charges apply over the tax. The consequences of non-payment are different; but to name a few: a) The Naonal Registry will not issue cerficaons showing the legal representaon of the company, normally known as “personerias”, b) Registered Assets such as properes or cars can’t be sold or acquired without paying the tax first and c) Aer three payment periods without paying the tax the Naonal Registry will proceed to dissolve the company. To put the cherry on the pie, any person wanng to create

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a new corporaon will no longer pay about US $80 in Registraon costs, but close to $500 because the Naonal Registry will now charge the full Tax on Corporaons plus extra charges to authorize the legal books. Property Transfers The transfer taxes and stamps –without fees- over a property represent around 2.6% of the fiscal value or the selling price whichever is higher. This means a property with a value of US $100.000 will pay about US $2,600.00 to be transferred into a different person’s name or company. In order to save money it became a usual pracce to create a holding corporaon in which to register properes for sale. When a buyer was found the Seller would transfer the stock of the company into the Buyer’s name instead of transferring the property tle in order to avoid paying the transfer taxes. This was normal with condominium projects. The same law menoned above, number 9069, amended the transfer tax law to impose the tax on “all forms of transferred properes”, so now even stock transfers made to transmit the control of a property from a seller to a buyer are subject to this tax. However it is not very clear how this can be regulated because those transacons happen based on private contracts, but it is important to know this change on the law. One way the government is controlling the transfer of properes through companies is by requiring the presentaon of legal documents to banks to show the source of deposits of US $10,000 or more. New Traffic Law In 1994 a Traffic Law took effect imposing “severe fines.” Over the years such fines became very cheap to pay because they were imposed based on economic values calculated at the me of creaon of the law. Because it was obviously necessary to introduce an amendment, and due to the pressure from the media, lawmakers passed a new Traffic Law in March, 2010 imposing fines completely out of proporon, with amounts of over US $600 in some cases. Many affected cizens challenged this law in Constuonal Court where the Jusces started voiding most of the fines because they were unreasonable in relaon to the average income in this country. Our lawmakers then had to start over with more reasonable amounts. Instead of dedicang the me and resources necessary to come up with a beer amendment, what they did was lower the amounts of the fines a lile by publishing a new law in October 2012. In my personal opinion, changing fines from US $423 to US $380 or from US $282 to US $188 sll does not match with the payment capacity of the regular cizen. Therefore the current fines are sll unreasonable and out of proporon. It is evident that government tends to raise taxes and tariffs as much as possible in order to increase income regardless of the impact this has on the populaon. Things could have been done using more reasonable parameters, considering the mes we are living in. ALLAN GARRO NAVARRO Aorney at Law


Dollars & $ense

by Alan Weeks

Lies, Damn Lies & Stascs Early in my career, a wise accounng manager warned me that “figures can lie & liars can figure.” With this in mind, we should be wary of claims made based on seasonally adjusted data. We also need to be very wary of opmisc economic and/or market forecasts which have been based on a connuaon of unsustainable “Ponzi” financing. Perhaps the following excerpts from a document sent in late December to American CEOs by the presgious Boston Consulng Group (BCG) will help to clarify the current financial situaon. “ENDING THE ERA OF PONZI FINANCE” (2) “The biggest Ponzi scheme is sll ongoing in the developed economies.” “The West is not going to find its way to the right economic path with a lile tweaking at the edges,” the CEO of the BCG Group said. “What’s needed is a wholesale overhaul of the economic system to tackle record levels of public and private debt.” “The crical starng point is to accept the fact that many of today’s debts will never be repaid and to embrace debt restructuring and defaults. All stakeholders will have to contribute to the necessary cleanup. Creditors and holders of financial assets will have to accept losses. Taxpayers, especially the wealthy, will have to accept higher taxes. Otherwise, we risk experiencing a lost decade or more.” As further collaboraon, a very recent arcle in THE ECONOMIST magazine, called THE DEBT CRISIS (3), reported on a private research note from MORGAN STANLEY (MS). Here are some excerpts: “It was argued that most developed governments are effecvely insolvent. MS drew up balance sheets for each government: its total assets (including future tax revenues), and its liabilies (including market debt), and the net present value of future “primary” expenditures such as pensions and health care. It was noted that tax revenues could be pushed up in some countries and future spending on health and pensions could be brought down. However, Morgan Stanley reckoned that shoralls are so large (between 800% and 1,000% of GDP in the US and the UK) that the situaon is “hopeless.” With this ominous background informaon let us proceed to review the following:

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2012’s BIGGEST LIES; 2013’s BIGGEST RISK (4) Key European Union (EU) officials recently declared the EU crisis is over and this seems to have reinforced the current market complacency. However, their claims are at odds with the many grim facts being reported: 1. (a) “Large parts of the Eurozone periphery have suffered economic collapse as bad as anything since the destrucon of the 2nd World War”. (b) Italy is in the throes of its 4th recession since 2001. And, with naonal elecons scheduled in late February, it is possible that a Euroskepc coalion government could be elected 2. Eurozone unemployment has already reached all-me highs, with youth unemployment over 50% in some countries. This could well lead to greater civil unrest and instability. 3. Both Greek and Spanish banks are sll significantly undercapitalized and plans to help them seem to be based on dubious assumpons that the loans made will be repaid. 4. The real estate bubbles that burst in Ireland and Spain created financial havoc. It is now reported that the real estate bubble in the Netherlands is in the process of collapsing, and France’s real estate bubble is standing on shaky ground. A good reason to be very wary is that, as one pundit put it: “the French government seems to believe it can suspend economic reality by government decree.” Other governments seem to suffer from the same illusion. 5. Eurozone factory output connues to fall. 6. (a) European retail sales have collapsed, with a near record drop in Italy and the 9th consecuve drop in French retail sales. (b) The steep economic downturn is baering vehicle sales in Europe and car makers have incurred unsustainable losses. As one CEO (5) said: “a day of reckoning looms for EU auto makers.” Thus, in spite of polical pressure to resist, significant plant closings and job cuts are inevitable The plunge in retail and auto sales has dire implicaons across the EU because consumer spending accounts for over 60% of the EU economy. The grim reality is that as more people become unemployed, tax receipts will keep shrinking and the need for benefits will keep increasing, worsening the naonal debts. Furthermore, with the Eurozone being so interconnected, it was not surprising to read that Germany, the EU powerhouse, is expected to report its economy also contracted in the 4th quarter of 2012. Thus, all signs point to a full-blown recession that is worsening every month in Europe. 22

Why then, are the markets ignoring all these signs? There certainly appears to be a widespread belief that the Central Bank “Wizards” can magically fix it all. How? CHINA’S EXPORTS SURGE Should you believe China’s latest success story? Certainly Goldman Sachs (GS), UBS, and others are skepcal and it renewed concerns that China’s stascs can be unreliable. There are several reasons to be skepcal: (a) The 14.1% increase in exports from the previous year did not match goods movements through ports, imports from trading partners, nor reported overseas orders. (b) Given that Europe has been China’s largest export market, and the fact that European demand has been declining rapidly, where did the large increase in exports go? (c) Lack of overseas demand is reported to be a drag on U.S. manufacturing. One explanaon for the big increase is that there was government pressure to report exports before yearend to reach the official 2012 target of 10% growth. The GS Beijing-based economists stated: “It is possible that local governments may have tried to boost exports data by making ‘round trips’ in special trade zones”. And apparently, for a fee of 1,000 Yuan ($161) per vehicle per day, a freight company will drive trucks into warehouses in bonded zones, where cargo must clear customs, so that business can obtain a refund of value-added tax on the “export” of their products. However, does anyone inspect the truck vans leaving the bonded zones to see whether the goods were actually unloaded? MOVE OVER MICHIGAN, CHINA IS THE WORLD’S NEXT RUST BELT (6) This recent arcle in FORBES described many problems that China is now experiencing. Just two years aer it overtook the U.S. to become the world’s largest manufacturer, the country faces the prospect of a decade of de-industrializaon. Industrial sites are being converted back to farmland in one province and a once booming factory center is on the verge of bankruptcy as companies close, leaving the local government severely cash-strapped. Many factors are contribung to this, including: 1. (a) Labor issues are eroding Chinese manufacturing compeveness. (b) Labor issues have also spurred the decision to automate manufacturing and assembly. March - April 2013


3. (a) (b) (c) 4.

Of course, robozed producon in China is no cheaper than in the U.S. In fact, when transportaon and inventory costs plus delivery me delays are also considered, the BCG Group predicted that around 2015 it should be more economical to manufacture in the U.S. Because of cizen protests about polluon in the water, smog and soot in the air, metals in the soil, etc., Chinese authories have had to start enforcing environmental rules, which is cung into both manufacturing and power generaon. Foreign investors are beginning to pull back from manufacturing in China cing the rampant the of intellectual property. Foreign direct investment into China dropped to the lowest level since 2009. Wealthy Chinese are sll reported to be taking “suitcases” of money out of the country as the “get rich and get out” trend connues. “Default Alarm Rings as Trust Loans Jump Sevenfold” (7) “Short-term financing instruments, such as Trust Loans, have been rising very quickly”. The underlying assets in this shadow banking system can be quite dodgy. In addion, some of the wealth-management products sold by Chinese banks are “fundamentally a Ponzi scheme.”

If progress on rebalancing and structural reform away from excessive dependence on exports and infrastructure spending, to domesc consumpon, remains slow, the probability of much lower growth in China will rise. Because the party leaders have been so enriched by the past boom, progress to rebalance and reform is expected to proceed slowly. Under this scenario, the Societe Generale (SocGen) (8) economists perceive there is a “tail risk” that China will experience several quarters of just 3% growth, with slow improvements for years thereaer. This would translate into a significant global recession with the Asian region being the most seriously affected. And it does not take a great stretch of the imaginaon to paint an even bleaker scenario of outright currency wars and trade proteconism. AN UPDATE ON THE U.S. As menoned earlier, the lack of overseas demand is reported to be a drag on U.S. manufacturing. In fact, manufacturing in the New York region contracted this January for the 6th straight month and the index for the Philly region plunged from the prior month.


U.S. HOUSING RECOVERY ACCELERATED AT YEAREND (9) The CEO of CoreLogic stated that “for the first me in almost 6 years, most U.S. markets experienced sustained increases in home prices in 2012. We sll have a long way to return to the 2005-2006 levels but all signals currently point to a progressive stabilizaon of the housing market…..” See the addendum for some actual housing data. THE SORRY STATE OF THE CONSUMER (10) The author of this arcle contends that the improved senment in the housing market is a percepon that is not supported by actual data, demographics, nor aer-tax income trends, but rather by ultra-low interest mortgage rates. He also contends that many homeowners have already refinanced, so that the marginal benefit to the economy has already occurred. Because consumer spending in the U.S. accounts for 70% of its total economic acvity, this sector will be examined more closely. U.S. economic acvity remains very sluggish. This point is underscored by the fact that U.S. holiday retail sales have registered the weakest growth since 2008. Digging into the December retail sales numbers showed weak sales of clothing, auto parts, building materials, and a big drop in home improvement sales. A further indicator is that consumer senment again fell below expectaons. A new arcle in Reuters (11) reported that “nearly a third of the naon’s working families earn salaries so low that they are struggling to pay for their necessies.” And “the overall number of low-income working families is increasing.” And, we should remember there were earlier reports that student loans were also being widely used to spend on essenals as well as on very discreonary consumer items. This is unsustainable! Moreover, in another arcle by Mish (12), it was reported that “more than one in four workers are dipping into rerement funds to pay their mortgages, credit card debt, and other bills.” According to another survey, “42% of workers cashed out of their 401-K plans rather than rolling them over when they changed jobs.” Mish also stated he suspects that many low-income households are desperately clinging to their “underwater homes.” As he said, the mentality that “my house is the only thing I have” is tough to fight. “However, the reality is that many homes are worth less than zero because of ‘underwater’ situaons.” El Residente

“Currently, there are sll more than 25% of homeowners ‘underwater’ which limits their ability to move, refinance, or sell their homes.” (15) Another writer stated that long-term U.S. unemployment is at the highest level since World War II. He also contended that long term unemployment is “threatening to create a permanent underclass of workers who will find it almost impossible to obtain jobs in the future.” Several writers made the point that “Obamacare has the potenal to create more unemployment and partme workers.” Dr. Marc Faber (13) also believes something is not quite right with the U.S. economy, which is evident from the recent performance of Wal-Mart, Tiffany, Kohl’s, etc. However, what disturbs him about most market assets is that they had outsized gains since 2009. In his opinion, investors’ expectaons about future returns on their assets are far too opmisc. Dr. Faber also states that while many may argue that the U.S. is not in recession and headline unemployment numbers are improving, he believes the U.S. is not immune to the global economic slump. Furthermore, Dr. Faber pointed out that “in an economy driven by consumpon, the weakest holiday retail sales growth since 2008 is an ominous sign.” And beyond the U.S. borders, the Eurozone is already in recession with economic acvity expected to worsen this year. In addion, muted economic growth is expected for both China and India, the recent drivers of the global economy. Finally, to help him determine the real state of the U.S. economy, he looks at indicators such as the Federal Reserve reports on the velocity of money and the U6 unemployment rate. The fact is that money velocity connues to slump and is now at its lowest level in 50 years. At the same me the U6 unemployment rate remains uncomfortably high at 14.4%. These crical factors make him believe that all is not well with the U.S. economy and the markets will react sooner or later to the real gloom. For this reason, Dr. Faber’s own priority has shied to the preservaon of outsized gains and warns that investors also need to focus on capital preservaon. Meanwhile, the SocGen


Group expects the sub-par 24

Chinese growth will significantly affect various assets. They forecast the U.S. dollar will appreciate by 10% relave to other major currencies. They also expect about a 50% drop in the price of base metals as well as a drop in oil prices. In addion, they expect European equies might fall 20%. Gary Shilling (14) pointed out that “investors are fixated on easy money policy”, and “a zeal for yield that almost completely ignores financial risks.” Shilling calls this a “Grand Disconnect” and believes it will be riskier in 2013. He also just stated that “the latest rush into stocks will end miserably.” It is also his view that the global investment environment will connue to be dominated by deleveraging, which should connue for at least another five years, along with low growth. Gary Shilling provided a list of investment themes, shown below, but cauons that his themes could change dramacally as the year progresses.  Treasury bonds are sll aracve.  High-quality income-producing securies of companies that pay substanal dividends. (But, be wary of a capital loss in equies expected this year.)

March - April 2013

 Consumer staples and foods that are necessies will do well.  The U.S. dollar should appreciate.  Selected health care providers and medical buildings are aracve long-term because of America’s aging populaon.  North American energy producers (exrenewables) look good as America strives to become more energy independent.  Rental apartments will benefit as singles and couples no longer see homes as a good investment.  Producvity enhancers like robocs and tech companies remain aracve as businesses try to cut costs. In conclusion, there seems to be no posive upside trigger in sight to create any robust economic acvity. Thus, we agree with Dr. Faber and others that there are good reasons to remain very cauous, as well as with his view that this is a year of capital preservaon. Please note that the opinions expressed in this arcle are solely those of the writer. For more informaon and reference details, please contact Alan Weeks by e-mail:


Exchange rate of the Costa Rican ¢ to the US Dollar August September October November December January

503.22 503.31 503.24 503.17 514.32 507.00

Basic Interest Rate August September October November December January

10.50 % 10.50 % 10.25 % 9.50 % 9.20 % 8.30 %

Exchange rate of other currencies to the US Dollar

'&+%#-3511-831'%+#-+343+/034# +%#3+/%'

 Ostomy -'#3'%0/4#%453#4

 0523402'/5.$'202%0/4#%4052#/#)'2 Wound Care &+2'%4-8#4 02(02120('33+0/#-3'26+%'3%#--53#4  52'.#+-#&&2'33+3+/(0#4-#/4+%#.'&+%#-%0.#/&0523402'+3 Incontinence %0/6'/+'/4-8-0%#4'&/'#24*'031+4#-##49-+%#"'#-300:'2*0.' Dermacosmetics 6+3+4#4+0/3'26+%+'3 (805#2'%0/%'2/'&#$05435/$52/3104312'.#452'#)+/)#/&'6'/3,+/%#/%'2+/034# +%#1204'%480523'-( 7+4*  777+(%31#+/%0. 120&5%403 *'-+0%#2'+34*'.034#&6#/%'&/#452#-1*040 +..5/01204'%4+0/35/3%2''/+/4*'702-&#/&7#3&'6'-01'&#4#26#2&'&+%#-!%*00-! #4052 3402'40#--  #/&4*'+2(#.+-8.'.$'2352%*#3' #/&2'%'+6'# &+3%05/40/8052152%*#3'

AtlĂĄntica Medical Supply Company

Giro Canadian Dollar Euro Swiss Franc Nicaraguan Cordoba Danish Krone Norwegian Kroner Swedish Krona Honduran Lempira Brish Pound Argenne Peso Columbian Peso Mexican Peso Dominican Peso Brazilian Real Guatemalan Quetzal Korean Won Japanese Yen Venezuelan BolĂ­var Hong Kong Dollar Taiwan Dollar Bolivian Peso Chilean Peso Russian Rouble Peruvian Sol Polish Zloty Australian Dollar Chinese Yuan

1.54134 1.00220 1.35630 0.91070 24.56250 5.50100 5.48540 6.36540 19.93000 1.58220 4.38130 1,774.08000 12.70500 40.63500 1.98920 7.85050 1,088.59000 91.04000 4.29470 7.75640 29.55000 6.91000 471.50000 30.06880 2.56250 3.09240 1.04180 6.21900

Libor Rate 1 month 3 month 6 month 12 month Prime Rate

El Residente

0.19970 % 0.29800 % 0.46840 % 0.78100 % 3.25 %


Holidays of Costa Rica Thurs/Fri, March 28th, 29th Easter - Naonal holiday ARCR Closed Mar 23rd - 31st


Thursday, April 11th Bale of Rivas - Naonal holiday ARCR Closed Wednesday, May 1st Labor Day - Naonal holiday ARCR Closed A Touch of Wisdom “He that cannot endure the bad will not live to see the good.” - Jewish proverb “If passion drives, let reason hold the reins.” - Ben Franklin (1706-1790) “One day at a me.” - unknown A Bit of Fun... Why don’t men often show their true feelings? - Because they don’t have any. What’s the difference between a man and E.T.? - E.T. phoned home. A successful man is one who makes more money than his wife can spend. Marriage is a three ring circus: an engagement ring, a wedding ring, and suffering. Marriage is the process of finding out what kind of man your wife would have preferred. How Dogs and Women are alike..... Neither believe that silence is golden. Neither can balance a checkbook. Both put too much value on kissing.

March - April 2013


El Residente


El Residente 2013-03  

Changes. For good or for bad, things will likely continue to go on changing. Each year we change the El Residente in order to try to make it...