“Fiscal Sustainability for the Wellbeing of Costa Rica” is the name of the proposal presented to the Legislative Assembly by the Minister of Treasury Rocio Aguilar this Wednesday.

Administrative actions, decrees, law projects and directives are included as part of the proposal that hopes to contain the government’s expenses with the purpose of bringing down the fiscal deficit between 1.6% and 1.7% of the GNP in the next years, a percentage that is insufficient to resolve the crisis but a good first step to show the commitment of the country to the risk classification organizations, multilateral organizations and also to recover the hope and move forward in joint solutions as a country to guarantee that it can continue with a fair, inclusive and prosper development model.

“These measures are not to be understood as the solution, but as the first stage in a national strategy that will start with a reform of employment in the public sector, an institutional redesign and a more progressive and modern tax system that fits the productive reality of the country and allows Costa Rica to continue in the road to growth and development that has marked our almost bicentennial democratic tradition”, stated Aguilar.

The Minister was emphatic that the contention plan will NOT affect social projects or involve layoffs. “All acquired rights are respected”, she affirmed.

Three decrees were announced, the first one with the purpose or authorizing institutions that receive transfers from the National Budget to finance operational expenses during 2018 and 2019 with the resources available of free surplus. The second one refers to changes in the additional percentage recognized by institutions and public companies to professionals based on exclusive dedication. The percentage applied over base salary will be of 10% for those with employees with bachelor degree and that are in positions that require it, and 25% for those professionals with a doctorate or masters degree. The third decree involves the limitation of reorganizations, which will only be allowed in Ministries, decentralized organs and entities and with the sole purpose of making the operations more efficient and as long as it does not require additional personnel or new expenses.

The directives include the two that were announced this week regarding the “freezing” of salaries of government officials, which means they will not receive raises for the next four years,; the reduction of the budget for extra hours worked, the reduction of the budget for publicity, the promotion of the working from home practice and digital signature, the prohibition to rent new buildings, also, rental contracts that need to be renewed will have to be in colones and with increases equivalent to the inflation; limitation of international trips, (except for the Minister of Foreign Trade, the Minister of Foreign Affairs and the Minister of Tourism), restructuring of salary pluses; raises in the public sector will no longer be a percentage of the salary but a fixed amount of 3750 colones (Approx. US $6.64) in the first and second semesters, among others.