Word: carazo
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...Carazo's free-spending ways have turned a crisis into a disaster...
...falls on Sept. 15, the President of Costa Rica traditionally lights a "Liberty Torch" in the old capital city of Cartago and the next day addresses school children in the present capital of San José. This year things did not work out too well. At Cartago, President Rodrigo Carazo Odio, 54, was shouted down when he tried to speak, and later discovered that the air had been let out of the tires of his car. At San José he did not even bother with the customary oration. He quickly paraphrased the first verse of the country...
...Carazo is probably the most unpopular President in the history of Central America's showplace democracy, and the reason is not hard to fathom: the nation's economy is in ruins. Inflation is roaring along at 40% a year (up from 20% in 1980). The unemployment rate is 12%, strikes have broken out, and consumer goods are gradually disappearing from store shelves. In late July, the government was unable to make payments on the $2.6 billion it owes to more than 130 international banks-a hefty $1,180 per capita debt in a land of 2.2 million...
Most economists in San José agree that Carazo, after his inauguration in 1978, unwittingly made everything worse. A politician who craved to be liked, he failed to devalue the colón and establish strict import controls. He continued to subsidize the prices of gasoline, food and imported luxury items. When he could not borrow any more, he printed additional money to pay government employees and avoid unemployment...
...When Carazo asked the IMF to lend Costa Rica money for the third time last January, he immediately began to sell dollars on the open market in order to bolster the sinking colón and thereby impress the IMF staff negotiating in San José. The cost: $45 million. As soon as the IMF team left town, the colón dropped again. In May he sold the country's $41 million in gold reserves stored at Fort Knox to pay short-term debts, further demonstrating that his government was, as a local journalist puts it, "like...