Lots of News But No Progress

ISSUE #565: June 21-27, 2015


Brian Timmons, Newsletter Author
Brian Timmons

Dear friends,

When I started Residencias Los Jardines, I started writing a weekly news letter -determined to tell all the good, bad, and the ugly. I knew some readers would be interested in the construction process. I expected others might be interested in the lifestyle of two people who had decided to live outside the box. For others, the adventures of Lita, the parrot and the cat took on an entertainment saga all its own.

Residencias Los Jardines is finished. We periodically have resales and rental availability. Some readers may be interested in this information.

Brian Timmons
Residencias Los Jardines / https://www.residenciaslosjardines.com info@residenciaslosjardines.com


Featured house this week

Paradisus Condos / Rohrmoser

Paradisus Condos - click to visit

Each of the units consists of two bedrooms / two bathrooms, and a large living/dining/kitchen area. The floor plan of each of these units has eliminated the optional "den / office" divider. The result is a larger area offering more flexible furniture arrangements while still maintaining the option of including an office area. At 105m2 plus two parking spots each and storage locker, they offer a great opportunity for someone seeking views, security, central location, and first class, all round living...

Read more about Paradisus Condos


Residencias Los Jardines
Property Management, Rentals, Re-Sales

Market Activity

Sales: no inquiries.

Rentals: two rental inquiries.



Unit #110: $215,000 / See Unit

Unit #114: $235,000 / See Unit

Unit #116: $214,000 / See Unit


Unit #124: $850 mo. / Available July 7 / See Unit

Site Plan



UNIT #110
FOR SALE $215,000

Total Area (Sq Ft): 1290
Total area (Sq M): 120
Bedrooms: 2
Bathrooms: 2
Floor(s): Single Floor
Type: Attached
Furnished: Yes

Beautiful end-unit bungalow (one floor) town home (part of 4 homes) situate at the far quiet end of Residencias Los Jardines, steps from the main pool. It includes one designated parking spot and one storage unit. The home is 120 square meters (approximately 1,300 square feet) with two bedrooms (master has king size bed and guest has queen size bed), two full bathrooms (one being an ensuite), a large open concept kitchen, living room, dining room, granite breakfast bar with stools and features vaulted ceilings and lots of windows. The home has a large covered terrace overlooking the gardens. Custom made wood blinds cover all windows throughout. Ceiling fans in bedrooms, living room and terrace.


UNIT #114
FOR SALE $235,000

Total Area (Sq Ft): 1290
Total area (Sq M): 120
Bedrooms: 2
Bathrooms: 2
Floor(s): Single Floor
Type: Attached
Furnished: Yes

This 1,290 sf. (plus covered parking for one car and two lockers 67 sf.) single story, semi detached house, with garden terrace, two bedrooms is a beautiful executive style home. This home consists of two large bedrooms one with six piece en-suite bathroom with additional access to separate full shower. Each bedroom has large closets with extensive built-ins for personal organization. The vaulted living room and bathroom ceilings provide a feeling of grandeur while allowing the warmer air to rise and exit through the ceiling ventilating system. There are four TVs (one in each bedroom, one in the living room and one in breakfast / dinning room.) This is a beautiful well appointed home.


UNIT #116
FOR SALE $214,000

Total Area (Sq Ft): 1290
Total area (Sq M): 120
Bedrooms: 2
Bathrooms: 2
Floor(s): Single Floor
Type: Semi-Attached
Furnished: Yes

This 1,290 sf single floor home includes a 300 sf front terrace plus parking for one car and a separate, secure storage locker. It is and end unit and therefore attached on only one side by a 6 inch cement demising (common) wall, which prevents sound transfer.


UNIT #124
FOR RENT $850 mo.
Available July 7

Total Area (Sq Ft): 662
Total area (Sq M): 61
Bedrooms: 1
Bathrooms: 1
Floor(s): 2nd Floor
Type: Semi-dettached
Furnished: Yes

This 662 sf, + covered parking for one car, is a one bedroom home on the 2nd floor overlooking the large pool. It is ideal for a single person or couple.


Our Lives

WEATHER: This last week saw Central Valley's "mini verano" or little summer... a period of no rain during the rainy season. Timing varies as does duration but usually lasting from several days up to a couple weeks. Friday night saw the beginning of a soft rain which carried over into Saturaday morning...

Meanwhile, friends in Toronto, Canada are freezing and experiencing another terrible "summer" and friends in middle Florida are experiencing hot, humid weather -- I'll take CR weather any time over either of these two options.


News Items of the Week


1. State of the Nation: more of an op-ed than news in my opinion but it summaraizes the current state of teh country. It is consistent when the image I've presented for the past year. Certainly, CR does not do well with civil unrest;  the norm in my experience is three protests and the government caves into the special interest group...

2. The Weakest Link: this is well known but not well remembered.

3. Wealthy vs The Rest: concentration of wealth is especially dramatic in Central and South America. Observers wonder where all the money comes from for the expensive cars, houses, offices, restaurants, etc when we don't see and hear so much to the contrary...

4. Electrical Rates to be Reduced: a step in the right direction -- perhaps we are no longer one of the highest in the world...

5. Another Trial: probably the same result... the wealthy and powerful continue to be untouchable in or oout of office... very few have ever seen the inside of a jail...

6. / 7.: Employment and the Labor Force: somewhat a mixed message... the first smacks of government propaganda but buried iside is a disturbing factor... and the second article speaks to the lack of adequate training and skill set... I don't hear or see anything about this changing. While the government propaganda says that CR educaitonal system is fantastic, my assessment of the public education system is far, far different... it see it as being AWFUL... poorly trained teachers, poor cirriculum, lots of lost time eventhough it is officially counted as and paid as education, random hours frequently changed, useless school exercises... no science, history, math (other than adding / substracting and perhaps some multiplication / division, no compututing, poor quality English teaching, etc... Those who can afford it, send their kids to private schools... expensive but certainly much, much better than public schools.

8. More airlines from previously unserved areas: this will make it easier to travel and will help CR.  I didn't realize that the number one visitors from Central Am. are from Mexico.

1. Country's financial options are bad and even worse
By the A.M. Costa Rica staff

Costa Ricans like to think of themselves as living in a peaceful country where respect for institutions reigns.

That self image is likely to be put to the test as economic realities force unwanted changes.

The national government is prone to making short-term decisions to preserve what officials call the social peace.

Meanwhile,  Moody’s Investors Service notes that the national debt has mushroomed from 25 percent to 40 percent of the  gross domestic product in just seven years.

The  current administration seems unable to make hard decisions. For example, President Luis Guillermo Solís promised in his campaign to eliminate the road agency, the Consejo Nacional de Vialidad. Yet, employees there were told officially last week that the agency would at least outlast the current administration.

Even while the road agency exists, Costa Rican officials say they will outsource public road and bridges projects to a United Nations agency, which will receive a 4 per cent cut. The idea is to sidestep the country's bidding and contract rules.

This decision most likely will be challenged in court, as well as the executive branch's announcement that it will cut pensions 20 percent.

When Costa Rican officials decided to join the Central American Free Trade Agreement, there was plenty of social unrest. Opponents, mostly young university students, marched and held protests in front of the legislative complex. Some set afire barricades on major highways.

That is just a small taste of what might happen if some government chooses to enact austerity measures.

Thousands of demonstrators marched Sunday in European cities in a show of anti-austerity solidarity on the eve of an emergency summit aimed at keeping the debt-ridden Greek government from defaulting on its European loan payments, according to A.M. Costa Rica wire services.

In Costa Rica there have been protests to preserve social welfare programs like that Caja Costarricense de Seguro Social and a decision to charge a toll for a new highway.

The Asociación Nacional de Empleados Públicos y Privados is a coalition of unions that strongly promotes what it calls street democracy, meaning massive marches, work stoppages and general strikes.

Taxi drivers also showed the national tendency to protest by orchestrating running blockades earlier this month over a small cut in the official fare rate.

Government officials must certainly be wondering what will happen if they make any move to stem the growing deficit. The central government, facing the political realities of an anti-tax legislature, have delayed plans for a 15 percent value-added tax to replace the current 13 percent sales tax and a second proposal to increase the corporate tax rate.

Instead, the executive branch is promoting an anti-tax fraud proposal and an anti-smuggling bill more or less as away to save face.

Of course, the  Asociación Nacional de Empleados Públicos strongly favors higher corporation taxes even as foreign direct investment has fallen and international firms look elsewhere for a cheaper environment.

So does the Organisation for Economic Co-operation and Development, which the Solís administration is trying very hard to join. This Paris-based organization favors much higher taxes of the European style.

The result of higher taxes most certainly will be fewer jobs and higher unemployment.

The manipulation by the Banco Central of the dollar-colon exchange rate has succeeded in the short term. Still, the colon is overvalued, and this affects tourism and hurts exporters who receive payment in dollars and have to pay bills in colons.

An abrupt revaluing of the dollar to reflect reality will have a strong impact on retail sales and the ability of Costa Ricans to maintain their current lifestyles, not to mention making interest payments on the deficit.

Then there are unexpected financial woes. A reader Friday said that the country could be hit with a $300 million demand though international arbitration over the Las Crucitas open pit gold mine that the government shut down.

Much of the financial woe comes from many years of the country's social democracy that seeks to be all things to all citizens. Many of the government's social welfare investments end up benefiting bureaucrats instead of the poor. And this long-term policy is one reason for the unbalanced budget.

In the wings are far left politicians who are seeking to take power out of the confusion of financial collapse. They find support from Latin America's authoritarian regimes.

Consequently the central government faces two unwelcome decisions: Cut spending and risk a popular prottest or let the deficit grow and be someone else's problem.

Solís seems to have picked the second option.

2. Crooks exploit that vulnerable moment when the driver arrives home
By the A.M. Costa Rica staff

Riding in a vehicle is considerably safer than walking along a city street, but even then there are vulnerabilities.

Plenty of motorists have found that are at the mercy of crooks when they stop their vehicle to enter their secure garage or home driveway.

That is the time when armed men come from the shadows and take the vehicle. That happens even with electric doors.

This is not a new crime, although the frequency might be greater. Such cases have taken place for decades.

The latest victim is long-time Pozos de Santa Ana resident Christopher Morehead. He was confronted by a crook at his home Thursday about 8 p.m., said the Judicial Investigating Organization. He resisted and suffered a bullet wound to his left side, agents said.

Morehead, identified as a U.S. citizen, went to Hospital San Juan de Dios.

Typically stolen vehicles are dismantled for parts because this sidesteps the need to falsify paperwork.

Whether such a crime can be called a traditional bajonazo requires splitting linguistic hairs. A  bajonazo usually takes place when a motorist stops at a traffic light and a crook appears with a firearm. The word comes from the Spanish and means a low blow, either literally as in bullfighting or figuratively. In Costa Rica, the work also suggests that the crook made the individual get down out of the car (bajarse).

3. Coveted and criticized, Latin America's rich multiply

MONTEVIDEO, Uruguay – They buy 10 Porsches a day and travel the world by private jet, toting their Louis Vuitton bags and leaving behind a faint scent of Chanel.

They are Latin America’s super-rich, and they are multiplying faster than anywhere in the world, coveted by luxury brands keen to tap their buying power, but criticized for paying low taxes in a region plagued by inequality.

Latin America, a region of some 600 million people, is home to nearly 15,000 “ultra high net worth” individuals, or people with fortunes of at least $30 million, according to luxury industry consultancy Wealth-X.

The number rose 5 percent last year, while the number of billionaires rose to 151, a 38 percent increase.

That was the fastest growth rate for billionaires of any region on Earth.

Natixis Global Asset Management, a firm that specializes in managing large fortunes, recently launched its first Latin American offices, in Mexico City and Montevideo.

“We’ve clearly identified it as one of the regions where individual wealth is in an exceptional growth phase,” said Sophie del Campo, head of the firm’s Iberian division in Madrid.

Ensconced behind the high walls of their luxury villas, the mining magnates, telecom tycoons, large landholders and others who make up Latin America’s uppermost crust can be less visible than the region’s poor.

But they are the flipside of its intractable inequality problem.

Their lavish lifestyles and growing numbers are attracting keen interest from the global luxury industry, eager to expand to new markets and court new customers in existing ones.

Porsche is one example. Since arriving in Latin America 15 years ago, the German sports car maker has increased annual sales to the region from less than 300 vehicles to nearly 3,900 vehicles, said George Wills, president of Porsche Latin America, which is based in Miami.

The region’s largest economies, Mexico and Brazil, remain the “volume drivers,” he said.

“But if you look in terms of the markets themselves, the markets that are enjoying good growth are markets like Peru, Colombia, Panama … with 60 percent growth in some of them.”

According to market research firm Euromonitor, the Latin American luxury market will total $26.5 billion in 2019, up 88.8 percent from 2014 — the strongest growth in the world.

The boom applies to big-ticket luxuries, too.

Mexico is the world’s second-largest market for private jets, behind the United States, with Brazil poised to surpass it within the next decade, according to a recent market study by Brazilian jetmaker Embraer.

‘Fiscal justice’

The ultra-wealthy have varied profiles, from Mexican telecom magnate Carlos Slim, whose $77 billion fortune is the second-largest in the world according to Forbes, to Brazilian beer magnate Jorge Paulo Lemann (net worth: $25 billion), Chilean mining scion Iris Fontbona ($13.5 billion), to Colombian banker Luis Carlos Sarmiento ($13.4 billion).

What is clear is that their numbers are growing, in some cases because family fortunes have been divided up among heirs, said Mykolas Rambus, the chief executive of Singapore-based Wealth-X.

“The amount of wealthy people globally is booming and that is true in Latin America: It’s growing at a very good pace,” he said.

But the super-rich also face growing scrutiny in countries like Nicaragua, where 42.5 percent of the country lives below the poverty line but 210 ultra-wealthy individuals control a combined fortune of $30 billion, equal to 2.5 times the country’s annual economic output.

“The main characteristic of inequality in Latin America is not that there are a lot of poor people, but that there are a few people who have a lot,” said Juan Pablo Jiménez, an economist at the U.N.’s Economic Commission for Latin America.

Moreover, the latter “pay very low taxes, both in international terms and compared to what they are supposed to pay,” he said. “Taxes on wealth are very low in Latin America, and inheritance taxes are almost nonexistent.”

Last year, humanitarian group Oxfam called for more “fiscal justice” in the region to fight inequality.

But it is easier said than done.

Ecuador’s socialist President Rafael Correa had to back down last week from plans to start taxing inheritances of more than $35,400 after an outcry from the business world.

4. Electrical rates to be reduced next month
By the A.M. Costa Rica staff

Lower electrical rates have been established by the utility regulator. The cut will be 13.6 percent in power generated by the Instituto Costarricense de Electricidad.

The impact will be  2,018 colons, about $3.82,  a month less for the average family serviced by the state power company and  1,543 colons, about $2.92, a month less by a family served by the Compañía Nacional de Fuerza y Luz.  Other retail distributors will show similar reductions when the rates go into effect between July and September.

The cut is due to the lower price of petroleum and the fact that the Instituto Costarricense de Electricidad used less expensive petroleum during the last months of 2014, said the Autoridad Reguladora de Servicios Publicos.

5. Costa Rica court orders new trial against ex-President Miguel Ángel Rodríguez and 7 other former public officials

A financial crimes court on Tuesday ordered a new trial to move forward against Costa Rica’s former President Miguel Ángel Rodríguez Echeverría and seven other public officials in a case involving charges of alleged embezzlement involving two state-owned agencies.

The Prosecutors’ Office is accusing all eight defendants of “diverting public funds” by over-billing an insurance policy signed by the National Insurance Institute (INS) with British company PWS to insure National Electricity Institute (ICE) assets.

The case also includes INS former Executive President Cristóbal Zawadzki Wojtasiak, his wife Gilda Montes de Oca, INS official Álvaro Antonio Acuña Prado, his wife Roxana Cordero Bogantes, INS’ former Insurance Manager Rónald Bonilla Rodríguez, and ICE officials Antonio Corrales Moya and Ramón Lara Molinari.

The prosecutor’s indictment states that defendants allegedly used funds generated overpricing on the insurance policy to create a slush fund used for travel, leisure activities and cash for personal use.

A criminal court in February 2013 dismissed the charges against all of the defendants, but prosecutors appealed that ruling. Last April, the court began hearing the appeal, and on Tuesday, ordered a new trial. Judges have not yet set a date for that trial.

Rodríguez, 75, served as Costa Rica’s president from 1998-2002. He was involved in another case of corruption charges in 2004, barely a month after taking over as secretary general of the Organization of American States. He resigned from that post to attend the trial in Costa Rica.

He was sentenced in 2011 to five years in prison, but that sentence was revoked by a court that cited the statute of limitations on the charges and errors in the handling of evidence during the investigation.

6. US businesses love Costa Rican workers, there's just not enough of them

Ecoanálisis analyst Luis Mesalles said that Costa Rica is well positioned in the global economy but should be growing more.

Costa Rica’s best kept secret is its talent pool, according to several international business leaders speaking at a foreign investment conference Thursday.

Business leaders met to discuss the investment climate in Costa Rica during the Americas Society/Council of the Americas 2015 Cities Conference in San José. Costa Rica’s human talent and advanced manufacturing won accolades while analysts argued that the country needs to invest in infrastructure and right its finances.

“Costa Rica’s workforce is a wonderful secret that most don’t know about,” said Vincent Guglielmetti, general manager of Intel Costa Rica.

Representatives from several U.S.-based precision manufacturers, including Intel, MicroVention and General Microcircuits, said that the offering of technical and professional workers in Costa Rica was a major attraction when they decided to bring their businesses here. Proficiency in English, professional skills and work effort were listed among the advantages Costa Rican workers brought.

Costa Rican labor was a big pull for U.S. businesses, but there might not be enough of it. Several panelists said they are doubtful there are enough professionals to scale up operations in Costa Rica.

“There’s a need to invest in universities,” said Guglielmetti, referring to the small number of students with the necessary skills.

During a recent trip to Germany, President Luis Guillermo Solís, who also addressed Thursday’s conference, spoke with Chancellor Angela Merkel about Germany’s system of “dual education,” which links universities, technical colleges and the private sector to train workers in the skills businesses need.

If Costa Rica’s workforce is its biggest advantage, infrastructure is its biggest disadvantage. High transportation costs and lost productivity are two examples of how inadequate roads, public transportation and ports hurt business here.

Roberto Echandi of the World Bank said Costa Rica has fallen behind its rivals because of its lack of infrastructure investment.

“We’ve been waiting 20 years to address this, we need to act now,” Echandi said

Alongside the country’s infrastructure woes, other structural issues are holding back foreign investment and economic growth.

The country’s GDP grew 3.5 percent in 2013 according to the World Bank. Costa Rica’s growth beat the Latin American average but fell behind its neighbors Nicaragua (4.6 percent) and Panama (8.4 percent).

Costa Rica has benefitted from falling global prices of petroleum and raw materials and an ascendent U.S. economy, Mesalles said. But a strong colón, rising U.S. interest rates and red tape have been drags on the country’s competitiveness. Unemployment is over 10 percent.

Atop these challenges the country’s budget deficit has made some investors weary about Costa Rica’s medium-term outlook.

Foreign investors have been “losing patience” with Costa Rica, said César Arias, Latin America director for Fitch Ratings. Costa Rica’s investment outlook from Fitch Ratings is a stable BB+, but the ratings agency is pessimistic on the country’s ability to address the budget deficit, he said.

On Wednesday, Moody’s Rating maintained its Ba1 rating for Costa Rica. The agency downgraded Costa Rica’s credit rating in September 2014.

The outlook may be negative but Costa Rica has proven in the past that it can tackle fiscal reform, Arias said. Without solid public finances, needed investment in infrastructure and higher education would remain out of reach.

7. Nearly half of Costa Rican employers say it's hard to find adequate staff

A study by consulting firm Manpower found that local employers are having trouble hiring suitable workers, particularly for technical level jobs, and management and executive positions.

According to the study, 46 percent of employers reported problems filling vacancies in their companies mainly because applicants do not comply 100 percent with the required profile or they lack experience.

“Most of the country’s recent graduates are ineligible to be hired. They lack technical skills and work experience. Another situation affecting local businesses is that many candidates are looking for higher wages than those being offered,” Manpower Manager in Costa Rica Ana Gabriela Chaverri said

The list of the hardest-to-hire workers also includes sales representatives, production operators, engineers, secretaries and personal assistants, factory workers, accounting and finance professionals, and drivers.

A majority of employers —37 percent— said the lack of suitable candidates primarily affects businesses’ ability to provide its services properly, while 28 percent said it reduces their productivity and competitiveness.

For 21 percent of those surveyed, the situation causes high turnover rates that affect motivation and reduce innovation and creativity, the study concludes.

8. Airlines announce new flights to Costa Rica from US, Mexico

The Costa Rica Tourism Board (ICT) confirmed the opening of a new route to Costa Rica from Boston and a seasonal flight from St. Louis, Missouri. Both will arrive at Daniel Oduber Quirós International Airport in Liberia, the capital of the northwestern province of Guanacaste.

U.S. low-cost carrier JetBlue starting in January will add a second weekly non-stop flight on the Boston-Liberia route every Sunday. The new flight will use A320 aircraft type with capacity for 150 passengers. JetBlue currently offers a weekly flight on that same route on Saturdays.

Travel company Apple Vacations will open a seasonal flight between St. Louis and Liberia. The route will be available from March 18 to Aug. 5, 2016.

The new flight will be operated by charter carrier XTRA airways using Boeing 737-400 aircraft with seating for 150 passengers. According to ICT, the company agreed to open the new route because research found strong market demand from travelers in St. Louis.

ICT’s director of investment hunting, Hermes Navarro, said the operation of charter flights is important for any destination, because it helps airlines test a new market prior to extending operations permanently.

“Just last year, charter operations mobilized nearly 70,000 passengers to Daniel Oduber International Airport,” Navarro said.

New daily San José-Mexico flights starting next week

The Tourism Ministry on Wednesday reported that Mexican carrier Interjet will start a new flight on their Mexico-San José-Mexico route beginning July 1. Flights will depart Mexico City from Sunday to Friday at 8 p.m. and will arrive in San José at 9:50 p.m.

From Juan Santamaría International Airport flights will depart Monday to Saturday at 6:30 a.m. and arrive in Mexico City at 10:35 a.m. The carrier will open with special fares, the ministry stated.

Tourism Minister Mauricio Ventura said the announcements are proof that a current strategy for opening new routes and attracting new airlines is paying off.

“Clearly we are seeing a spike in travelers from the Mexican market that has traditionally been among the most successful in Costa Rica,” Ventura said. “Mexico is currently the country’s main source of tourists entering by air from Latin American cities, and all of these route openings keep us moving forward to the consolidation of air traffic between our two destinations.”

Brian, Lita, the Late Hugo IV, irreverent Vicka, the pigeon toed parrot, Chico II and Chica II

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