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Costa Ricans protest government negotiations with IMF


Costa Ricans protest government negotiations with IMF

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Photo: Carlos Gonzalez/AP Photo

Protests will be held across Costa Rica today in opposition to government negotiations with the International Monetary Fund (IMF) on an economic relief package.

The protests are being organised by unions, student groups and other social groups opposed to some of the expected terms of the IMF program. The IMF approved on March 1 a loan totalling almost $1.8 billion in exchange for fiscal reforms and other structural adjustments by the Costa Rican government, such as an increase in taxes and freezes on public sector salaries.

The agreement now heads to the legislature, where its chances of success are unclear given that the agreement needs a supermajority of 38 votes—the government only holds 36 seats. Opposition lawmakers have already expressed their intention to reject public sector spending cuts and higher taxes that come with the IMF agreement. However, the Costa Rican Central Bank has warned that public debt could reach 80% of GDP by 2024 if the agreement does not pass. Expect the project to pass with the minimum number of votes due to the dire warnings from the central bank. This will likely lead to intensifying protests and a political price for those who vote in favour.

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