Laura Alfaro, the Warren Alpert Professor of Business Administration at the Harvard Business School, served as Minister of National Planning and Economic Policy in Costa Rica from 2010-2012. She reflects on the upcoming elections on February 6, with an unprecedented 25 candidates.
June Carolyn Erlick:
Laura Alfaro is the Warren Alpert Professor of Business Administration at the Harvard Business School. She served as Minister of National Planning and Economic Policy in Costa Rica from 2010 to 2012. Welcome, Laura.
Laura Alfaro:
Thank you very much for this invitation. It's always a great pleasure to talk to you and in this particular occasion, to talk about Costa Rica.
June Carolyn Erlick:
Costa Rican elections are coming up on February 6th. There are an unprecedented 25 candidates. Can you tell us how this came about? What does it reflect?
Laura Alfaro:
So for the longest time, if you want, perhaps since World War II, Costa Rica has been characterized by a big party, the Partido Liberacion Nacional, and the opposition to this party, which would take different names until it was consolidated under the PUSC name, Partido Unidad Social Cristiana, and they would alternate power. In the 2000s, there was a split from Partido Liberacion Nacional and the PAC was created. Otton Solis created this party, and again, it was split from this main party. There has always been smaller parties. Partido Comunista and so on and so forth, but the game has basically been around these three. Eventually, there was also the emergence of religious parties. Evangelical movement is strong in Central America and started to get representation.
Laura Alfaro:
So this is the evolution of these different parties, but right now, I think that 25 parties also reflect a discontent, in part related to the COVID pandemic. Unemployment was high. The young, particularly, feel disfranchised. The women are particularly undecided, which is interesting because in Costa Rica, as in many countries, women took a disproportional amount of the burden of the pandemic for many things. Services that tend to be women jobs in Costa Rica, tourism services, were shut down, locked down. So you see this discontent, the political identities emerge, time to see if there were opportunities, or to cave into these concerns that people have and thus, we have 25 parties. Having said that, I think it's only five or six that have a real chance of making to a second round. Although, there's a huge number of undecideds, as I mentioned.
June Carolyn Erlick:
Can you tell us about the strongest candidates? Who are they, what do they represent?
Laura Alfaro:
As you mentioned, I was a former minister for Partido Liberacion National, and so I am biased. Let me just put it out there. I am supporting our candidate, he's ahead of the polls. Figueres, he was a former president in the nineties. I think many in Costa Rica want this knowledgeable, executive person who has had experience. I think the last four years, one of the big concerns is that the economy and the country seem not to have had a direction.
Laura Alfaro:
So Figueres is ahead in the polls, he's followed by Lineth Saborío. She was vice-president under the PUSC. Costa Rica has already had a woman president, and now we have a former vice-president also running. She's also doing relatively well in the polls. The third candidate is, as I mentioned, the evangelical candidate. His name is Fabricio Alvarado. So, these three tend to be the ones ahead. None seem, as of today, to be able to go over the 40% threshold. In Costa Rica, you need to win with at least 40% of the votes. If that doesn't happen in the first round, then we go to a second round, and in the second round, it's a simple majority of the two main candidates.
June Carolyn Erlick:
So in other words, if people go to the polls on February 6th and nobody gets more than 40%, then you have to have a whole other election with just two candidates.
Laura Alfaro:
Yes. So the first election is the first Sunday of February, the second one, the first Sunday of April. In fact, this has already happened in the previous two elections. I think again, the outcome of this three way-split that we saw in the 2000, it became increasingly hard for parties to get over that 40% threshold. There have been weak candidates for some of the traditional parties. Again, the emergence of now a fourth big, if you want, group. And so the last two elections we've had to go to this second round.
June Carolyn Erlick:
In Costa Rica, do you have to vote?
Laura Alfaro:
No. It's your responsibility, but there's no penalty. It's not compulsory, as other countries.
June Carolyn Erlick:
Let me ask you what the rates of abstentionism have been in previous elections, and what's expected in this election.
Laura Alfaro:
We used to have participation rates of 80%, 90%. I used to be very proud of these numbers. I grew up with the elections being a party. And then, slowly that number has gone down. What is expected this time may be close to 67%. It's a tricky number to predict right now because of the pandemic, and it is possible that the process would be a little bit slower. In Costa Rica you can only vote that day. You have to go and vote. It's a Sunday, and that makes it easier, but there's just one day to vote. And so the COVID crisis may make it a little bit harder to predict if we're going to be around that 65%. It does favor the traditional parties because they do have some electoral that tend to be more loyal. It disproportionately may make young people not vote. So we'll see, but there's an expectation that will be 60-plus percent, which has been in line with the previous elections.
June Carolyn Erlick:
Are Costa Ricans in the United States allowed to vote?
Laura Alfaro:
Yes. Since the last elections, we have allowed Costa Ricans abroad to vote.
June Carolyn Erlick:
And do they make a significant difference in the elections?
Laura Alfaro:
At least the last ones, no, because we don't have a big diaspora compared to other countries.
June Carolyn Erlick:
Throughout Latin America, there's been a tendency to elect outsiders, people sometimes with very little experience. Do you see any signs at all that this might happen in Costa Rica?
Laura Alfaro:
I think the current president fits that profile. He was someone relatively young with no executive experience, no private sector experience. He won a little bit of reaction against the evangelical party, was more a vote against the other candidate who made it to the second round more than in favor, and I think the outcome of that has been seen the last four years. It's a very unpopular government. In fact, the candidate of that party has very little support.
Laura Alfaro:
Having said that, in Costa Rica we tend not to like to elect the same party twice, so there is also that history. But I would say that that already happened. As I mentioned, the three candidates that are ahead in the polls, and again, an election is decided the day of the election. But the three candidates that are ahead are a former president, a former vice-president and the evangelical candidate who has been running for a while now. So there seems to be actually a movement for experience knowledge and capacity within your view of what counts as capacity. But again, there's a huge number of undecided voters and the election will be settled the day it's settled.
June Carolyn Erlick:
So Costa Ricans are also going to be voting for legislators. What's the significance of that?
Laura Alfaro:
So it is likely that what will happen is what happened in the previous elections. The current president has the least amount of Congresspeople from his party that we have ever seen. There's even more candidates running for Congress than for president, and this does diminish the capacity to later enact laws and get the country going. That has been one of the issues facing this government. Having said that, I think the opposition was very responsible and in terms of at least some tax reforms and getting the COVID agenda going, parties came together and passed legislation. But that is always a concern when you don't have majority in Congress.
June Carolyn Erlick:
So what are the main issues in the election?
Laura Alfaro:
The main issue is unemployment, the second one jobs, the third one, unemployment. It has been the topic of the country. There was some slowdown before the pandemic, but Costa Rica was, as Latin America, hardly hit by the pandemic. We're a very small open economy. We depend on trade, we depend on tourism, a lot of those things. Because of the sanitary restrictions in... We got less tourists. The country enacted lockdowns early on, and this proportionally affected services, retail. Lockdowns in Latin America have been a little bit more controversial than in other places because they have not necessarily had the same effect in terms of limiting the spread of the disease. As you know, Latin America has been one of the regions has suffered the most terms deaths. But because we have very informal sector, even Costa Rica, 50% of the jobs are in the informal sector, it becomes very hard for the people. If they don't go to work, they just don't make a living. And so they have been very controversial in that sense because they disproportionately affected the economy while reducing a little the spread of the disease.
Laura Alfaro:
In terms of health, Costa Rica has done relatively well but again, in a region that has suffered a lot. Vaccinations, early on, there was a contract to get vaccines, and as you know, now Latin America is a leader in vaccination, which may speak a little bit more about the weakness of the US. But that front has been going well, but the economic effects linger and I think that is what in the minds of most of the electorate.
Laura Alfaro:
Second, corruption. We have been hit by a series of scandals, a lot of money not always well spent especially in the transportation sector. And so people also, concerns there. But I would say cost of living, employment, jobs. Those are the main topics.
June Carolyn Erlick:
So are the platforms of the leading candidates, very different in that respect?
Laura Alfaro:
I think the main ones. Again Partido Liberacion Nacional, PUSC, are putting forward that reactivation perhaps a little bit more to the right wing, which would be the PUSC. Liberacion little bit more center left, while the evangelical is using more the cultural concerns to their party, very conservative. And in fact, this is I think why the current president won. It was vote against those type of policies. I would say the majority of the population in Costa Rica tend to be more liberal in their thinking, and so having said that, that Evangelical is also very right wing, liberalization, low taxation, so on, so forth. But most of the platform in the cultural wars, if you want, while the other ones are thinking more about reactivation, how do we deal with poverty, jobs inequality.
June Carolyn Erlick:
How do you deal with poverty and inequality? What are some of the specific things that people are proposing?
Laura Alfaro:
Well, the first thing is we do need to keep the economy open. I think again, there has been a thinking of less use alternative methods, vaccinations, masks, instead of shutting down the economy. Then, as you know, Costa Rica, because we were particularly hit and we already had a very weak fiscal position, we had to go through the IMF. Another part of the agenda is the rethinking the agreement with the IMF in terms of how much we're going to do taxation, how much are we going to increase social spending in the time that is needed? So a lot of the agenda will be focusing the short term of this reactivation, thinking medium-term, fiscal sustainability.
Laura Alfaro:
The other topic that is a little bit more complicated, Costa Rica closed the schools almost two years, but the previous two years before the lockdowns, there were some massive strikes. So we have four years of very uneven education. Some effects have been reflected on [inaudible 00:13:24] exams, we're going down in math and reading and so there has to be also an agenda of improving education. I do worry that we may end up like in the 80s with another lost generation, another lost decade, out of this education. This one is always tougher because fixing education always requires sustained medium-term policies. But that is also something that is being discussed.
June Carolyn Erlick:
I know that you call yourself biased, but are the platforms in terms of education very different among the leading candidates?
Laura Alfaro:
Yes, because of the evangelical conservatism is very different from the other parties. As I said, in Costa Rica, I think most of the people support same sex marriage and so on and so forth, and I think they want to move on? But the evangelicals are stuck in that topic. Again, a little bit like in the US when they play the cultural wars. But other than that, it's a focus on we need to improve math, we need to improve science. As you know, Costa Rica has a very good green strategy, and in fact it was Figueres and again, if my bias comes out, this is just a fact. Partido Liberacion Nacionale has been the party that has enacted the national parks, is the party that created this payment system for reforestation that has been extremely successful. And so at least this party is coming again at the core with the green strategy, trying to create jobs that are within a strategy of being committed and serious about global climate change.
June Carolyn Erlick:
NACLA magazine recently called Costa Rica "a country in which democracy is on the brink." Do you agree? Why or why not?
Laura Alfaro:
I complete disagree. Just to give you some evidence, [Latinobarometer 00:15:15], as you know, has been tracking the views of everyone in Latin America about the role of democracy. Costa Rica continues to be top, we're second only to Uruguay, that's the highest support than Costa Rica. In the last two years, the support for democracy has increased. When you look at the level, it's usually a level that we tend to see when there is a recession, and so there's absolutely nothing out of the ordinary about the level of support now. If anything, it has been increasing. We go to the polls, we express, and I think there is, at the core, a fundamental respect to the democratic decisions. There might be some frustration about how slow things tend to happen in the country, but again, that is part of the democratic process in Costa Rica. We should work to improve it, but I don't think that anyone would think otherwise.
June Carolyn Erlick:
Do you have any sense of why a reputable magazine like NACLA would even make that statement?
Laura Alfaro:
Sell? [Laughs]
Laura Alfaro:
I wouldn't know. As I said, that in Latinobarometer is a survey that has been going for years. In fact, 25 candidates reflect that everyone believes that they can be part of the democratic system. And again, it might not necessarily be the optimal number, but everyone thinks they can run for president and they have a possibility to be a president, and there are now 25 choices. As I said, it does reflect that people are going through very tough times and there is different concerns and different political identities trying to cater or express those different concerns.
June Carolyn Erlick:
My next question might seem like it's a repetition of my former question, and when I asked you about the issues that the candidates were campaigning on? But this is actually about what happens when a president gets into government and faces different kinds of obstacles. I want to put on your hat as a former minister and think about what the most important challenges a new president would face in making things happen and getting policies through.
Laura Alfaro:
As I said, I think this is why Costa Rica is turning to experienced leaders, because I think the last two years we have seen what happens when day one, the president sort of needs to figure out how things work? We would have in the two main parties people who know how things work and in particular, in the case of... And again, I express my, my political affiliation, is someone who's known to be very executive. And so he gets the team, he organizes, he gets things done.
Laura Alfaro:
In a country like Costa Rica where we like to discuss things, it's important to be a little bit more receptive in terms of, "Okay, so we decided, we agree, and now we moved on." As I said, that those first days will be days of thinking the engagement with IMF. We have an agreement, IMF knows how Costa Rica works. There's an election and they're giving the space for that election. But once it happens, they're going to have to sit down and think of the next steps in terms of medium-term sustainability. So one team is probably going to be about that, and the other team is about getting the economy going again.
Laura Alfaro:
The recent numbers are better. Again, tourism is coming back, the economy is bouncing back, and so those are good numbers. But we need to do more to turn those numbers into employment and especially female employment. Disproportionately women lost jobs. At one point female unemployment was close to 36%, and that again goes in hand of making sure kids go to school and so the parents can go to work. And so it does include a series of policies, but I think that teams are thinking about how to do that in an inclusive way.
June Carolyn Erlick:
Many people say that Costa Rica is different from other Central American and even other Latin American countries. Do you believe that's true in how would you explain this difference?
Laura Alfaro:
I think it is true in terms of not only the commitment to democracy, but I also think the fact that we have no army has made a difference. I do think it's just a different way of approaching the world where you don't have an army, and as I said, those tend to be core values in Costa Rica. Everyone is proud that we have no army and in general of the democratic process, despite the fact that sometimes we feel it doesn't execute.Again, the situation right now has changed because of the pandemic, but I think that the democracy and the stability has brought opportunities to many and that's what we need to remind the people, that democracy, stable institutions are way to develop and grow.
Laura Alfaro:
The other thing that I think we're very proud is the accomplishments in terms of the fight against climate change. I think in Costa Rica we're proud "green" people, now with a very long history of protecting the environment in many ways, and I think that also differentiates us. The good thing is I think everyone is catching onto that, but we were, we were green before many were green.
June Carolyn Erlick:
Costa Rica is in the middle of a very explosive and conflict-ridden region. Do you think the elections are going to make any difference in the way that it handles its policies towards other Central American countries?
Laura Alfaro:
I think the major parties have all voiced their strong opposition about what's going on in Nicaragua, and so I don't see a change in that. Parties that are in favor of dictatorship I don't think have a chance of winning the election, and there is one in particular that has been very pro-dictatorship. But as I said, I just don't see a possibility of winning an election Costa Rica. Costa Rica has voiced this opposition, and I think the people also have voiced the opposition. We have always seen the negative effects of these dictatorships in the region, migration, poverty. And so you asked why we were so committed in favor of democracy, because we have the constant example of what happens when you deviate, and in terms of economic and social outcomes, the difference is, sadly, huge.
June Carolyn Erlick:
You mentioned migration. Do the leading candidates have different positions on that issue as people come from Central America?
Laura Alfaro:
As you know, in Costa Rica, we have a policy that anyone who comes can use the public services. I'm not saying that the quality of the public services is great, but for the most part they can be used. And so the main parties are in favor of that. Again, there might be some more anti-migration, but I just don't see it in the main candidates, per se, as being against the people who need help is that we are all having a tough time. And so we are trying also with the limited resources that we have to try to help everyone. But it is important that international organizations do help in terms of these migrations from the region. There is in the US a lot of discussion about when they go to the north, the migrants, but there's very little discussion when they go south, and we do receive a lot, again, in a time where we're all having difficult times because of the pandemic.
June Carolyn Erlick:
We just spent a half an hour talking about the election on February 6th, but why should people in the United States and other countries even care?
Laura Alfaro:
So recently, Costa Rica, Panama, and Dominican Republic created an alliance for Desarrollo de la Democracia, development of the democracy, and President Biden hailed this alliance, and he said that at this moment where countries in the region, in particular in Central America, are turning their backs to democracy, it becomes imperative that we can continue to show that democracies can deliver for people on the issues that matter the most to them. So I think for the US, where we share the value and the respect for democracy, freedom, I do think that there's also moral duty to help countries that share those values, and I do think in Costa Rica, we have shown that it is the way to improve the lives of people. I have to say that I have been very lucky. I have had a lot of opportunities, but a lot of those opportunities have been forged in a country that had had this stability, this democracy.
Laura Alfaro:
My grandparents, again, didn't have the opportunity to study at the beginning of the century, but my parents did. They all went to public universities that were created in this democratic system of social inclusion, and because of that I had a different set of opportunities. I was able to come and study in the US with a scholarship, my parents would never have been able to pay for that. But again, all of these forge stability, education, public goods, and that is what we should continue to show, that it can be done. And because of that, I think the US also has a moral duty to help the countries that manage to create this prosperity under democracy.
June Carolyn Erlick:
Thank you. Is there anything else you would like to add?
Laura Alfaro:
I do hope everyone goes to vote. It's a privilege, and so hopefully we'll get a candidate in the first round. I think it will help us sort things faster. But if not, well, there will be the second round, but it is important to exercise our rights.
June Carolyn Erlick:
You've been listening to Laura Alfaro. She is the Warren Alpert Professor of Business Administration at the Harvard Business School. She served as Minister of National Planning in Economic Policy in Costa Rica from 2010 to 2012. Thank you so much for being with us.