China Does Not Return CR Call!

ISSUE #587: Dec. 13 -19, 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 /


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...

Semi furnished unit: For sale: $235,000
Fully furnished unit: For sale: $245,000
Floor 12 -west view

Read more about Paradisus Condos


Residencias Los Jardines
Property Management, Rentals, Re-Sales

Market Activity

Sales: one offer - complications.

Rentals: no inquiries.



Unit #105: $139,000 / See Unit

Unit #110: $199,900 / See Unit

Unit #116: $214,000 $199,000 / See Unit

Unit #123: $237,000  $215,000 / See Unit

Site Plan



UNIT #105
FOR SALE $139,000

Total Area (Sq Ft): 950
Total area (Sq M): 88
Bedrooms: 1
Bathrooms: 1
Floor(s): Single Floor
Type: Detached
Furnished: Yes

Detached, single story, one bedroom with den and screened terrace with bar-b-q and semi private back yard. Beautifully maintained -all furniture and furnishings are included. Cedro cabinetry throughout including kitchen, living room entertainment center, bedroom and bathroom built in closets / cupboards... Granite counters (kitchen / bathroom), SS appliances, vaulted ceiling, ceramic floors through out, leather LR furniture, flat screen TV, etc.


UNIT #110
FOR SALE $199,900

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 #116
FOR SALE $214,000 $199,000

Total Area (Sq Ft): 1290
Total area (Sq M): 120
Bedrooms: 2
Bathrooms: 2
Floor(s): 1
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 #123
FOR SALE $237,000 $215,000

Total Area (Sq Ft): 1516
Total area (Sq M): 140
Bedrooms: 2
Bathrooms: 2.5
Floor(s): Two story
Type: Detached
Furnished: Yes

This two story, detached 1,423 sf home + parking for one car has two bedrooms, 2 ½ bathrooms and a 2nd floor covered terrace.

The open railed wrought iron cement stair case leads to the 2nd level where the master bedroom with en-suite master bathroom as well as 2nd bedroom and en-suite bathroom are located. Also accessed from the 2nd floor hallway is the covered terrace.

This is a very nicely furnished home with a good floor plan for those wanting two floors.


Our Lives

WEATHER: Breezes have started... this means the trade winds are coming and with them, a change in the weather.

Offer 105: It was made and accepted but had conditions which the Board of Directors could not accept. The offer is in limbo at this point in time. The issue has to do with use of common element land to, at times, keep two dogs. The space is, in effect, not used by others, but is still technically common element land.

Social Life: a whirl... despite the traffic... and the traffic is TERRIBLE, This next week will see fewer cars... The country, except for retail, is shut down until the first week in January.

China does not return CR's call: A friend heard on Friday that China has not said anything about buying CR debt. CR was counting on this, $1 billion, to fund half the government 2016 expenses. Guess even the Chinese have difficulty with this. So what now? That is a good question.  The same person also said that the government would force the government controlled banks to buy CR debt... these banks are already on or near junk rating status because of their requirement to fund CR government shortfalls / debt. This will exacerbate the problem. This might be the wake up call that CR has so far snoozed through. Pura Vida might become, Mal Vida!


News Items of the Week


1. CR vs. Nicaragua: border dispute was ajudicated by the International Court in the Hague... as expected... a mixed verdict... yes Nicaragua did invade CR land but failed to assign any damages. It left it up to the two countries to negotiate... yeah... like that is really going to happen.

2. Vacation exodus: Most of the government had Friday off. Others took it off... the roads were freer than the past 6 weeks but still clogged. I look forward to Jan.

3. CR Report Card by Ticos: not great. Corruption, security, and government overall performance... three greatest areas of dissatisfaction. Perhaps government propaganda can fool expats, but at least some Tico's recognize a disparity between propaganda and reality.

4 / 5 / 6: Ref. the note above... The head in the sand trick is not likely to work much longer.  There are likely to be some big changes this year in CR and it may well be painful for many. Note the loans in dollars, and the loans in dollars from those earning in colones. Note also that given the amount of money the government has had to spend to support the colon and what is being expected the inability to continue to support it, the dollar value is likely to raise and those with dollar loans including the government, the government agencies, ICE, RECOPE, INS, CAJA, etc... this could get really painful.

7. More Loans: and we still have international agencies dispensing other people's money for infrastructure while CR pisses it away on waste and corruption, excessive pensions and salaries, "green" thingings, and a useless convention center which stated purpose cold be accomplished by a private site near the proposed  government site.

8. ICE Rate Cute: as the author points out, anyone trying to follow the ups and downs of government reviewed rates is in for whiplash... there seems to be no rhyme nor reason for each and there is no overall rationale or methodology.

1. Calero decision was far from a complete victory
By the A.M. Costa Rica staff

Most Costa Ricans were thrilled that the International Court of Justice reaffirmed the country's sovereignty over the Isla Calero.

The authoritative Spanish-language daily newspaper La Nación headlined Victory even as the full decision was being read in The Hague, Netherlands. A similar headline showed up on an editorial later in the day Wednesday.

Wednesday morning's
story on decision HERE!

However, a close reading of the 229-section decision shows that Costa Rica only won what was obvious. Nicaragua did invade Costa Rican territory in 2010, and the nation's leadership did so with full knowledge that the land involved was Costa Rica.

Dredger-in-chief Edén Pastora, the former Contra leader, even was caught on the radio affirming that the land was Costa Rica. As a Costa Rican lawyer said in a letter to the editor in 2011:

"The treaties of 1858, the Cleveland treaty, the Alexander treaty, maps published by both countries clearly define the borders of both countries. It also has been of public knowledge that the island of Calero belongs to Costa Rica. There is no space for interpretation or opinion about what belongs to Costa Rica and where the limits are located."

What the 15 World Court justices failed to do was assess any punishment on Nicaragua for the military invasion. The court did order reparations for unspecified material damages, but that means the value of trees cut and the expenses in filling in the canals the Nicaraguan workers dug.

What was not assessed were any other kind of costs including the very expensive legal efforts by Costa Rica, and perhaps the cost of mustering hundreds of heavily armed police officers to the border and keeping them there.

The court said that the two countries should spend a year negotiating the damages. Only then and with a new proceeding will the court step in.

The court said that Nicaragua was likely to act in good faith in the future. Yet from the decision it is clear that Nicaragua's lawyers told some tall tales during the four-year litigation process.

For example, Nicaragua's lawyers argued that the canal that workers dug across Costa Rican land was really a former mouth of the Río San Juan. The court rejected that claim because there were large trees in the path of the canal and no indication of previous sediment.

The purpose of the canal was to change the mouth of the river to cut off Costa Rican land and make it Nicaraguan. The south bank of the river is the national border. This was a bold land grab.

The court did find that Costa Ricans have rights of navigation on the Río San Juan, but it also did not void a 2009 Nicaraguan decree that is being used to assess fees on tourists.

Costa Rican officials seem prepared to celebrate the decision and seek renewed relations with Daniel Ortega's government. And maybe this was the point of the court's seemingly wishy-washy decision.

Even La Nación said in its editorial Wednesday that on the border Costa Ricans and Nicaraguans live, trade and establish familial ties together. There is ample space for fruitful cooperation between the two nations, it added.

2. Vacation exodus starts today in metro area
By the A.M. Costa Rica staff

Any Central Valley employees with a little vacation time are getting a jump on the Christmas holiday today.

Public employees are supposed to begin vacation at the end of the Friday workday. But many find ways to get Friday off, too.

Many private firms maintain the same schedule as the central government and provide workers with a holiday through Jan. 3. That gives the employees at least a 16-day vacation because both Christmas and New Years are on Fridays.

This is the beginning of the tourism high season. Typically beach and mountain hotels do at least 50 percent of their annual income in December and January.

3. 41% of Costa Ricans sees setback in fight against corruption

(EFE) .- 41% of Costa Ricans considered that the Government of Luis Guillermo Solis (2014-2018) has shown a "setback" in the fight against corruption, according to a survey of the public University of Costa Rica (UCR) revealed today.

News Survey 2015 reported that 36.1% of Costa Ricans think that the fight against corruption "as usual", while only 21.5% believe that it has "advanced".

People argue that the public sector is no more corruption (72.5%) than in the private sector (9.3%).

Investigated on different social actors, politicians are perceived with the highest levels of corruption (69.6%), followed by traffic officers (49.4%), public employees (49%) and the police of the Force public (47.8%).

In addition, the population was "dissatisfied" with the performance of the country. The average satisfaction was 4 points with zero being no satisfaction and 10 lots.

Satisfaction with the judicial system was the highest (4.6), followed by public safety (4.5), the cost of living (4.2) and the executive (4.2).

Other details of the cast reveal that overall support to strikes or demonstrations in the country is averaging 4.6 points and is higher in people of 18-29 years (5.8) than in older (4 ,1).

Public participation in this type of movement shows that 20.7% of respondents have ever been present at the demonstrations and marches where most experience (15.3%).

Participation is lower in indefinite strikes (4.9%), arrests (2.3%), roadblocks (1.5%), "rule" or slow transit (0.9%) and making factories or buildings (0.6%).

The survey also reveals that college students are the ones who have participated in the pressure measurements (48.7%) compared with those with primary or secondary (17.4% and 18.6%, respectively).

The same applies to those working in the public sector, doubling its stake (49.9%) in contrast to the private sector (22.5%).

The survey was conducted during the month of October to 1,087 people across the country and has a margin of error of 3%.

4. Costa Rica has 6 months to avoid fiscal crisis

As if it were a seriously ill patient, the public finances of the country could enter a crisis if the tax reforms that the Government of the Republic claims as urgent not apply in six months.

As part of this warning signal, representatives of the World Bank, the Interamerican Development Bank (IDB), the ministers of the Ministry of Finance and the Comptroller General of the Republic met with several benches of the Legislaiva Assembly.

These agencies are alarmed at the situation facing the country, and while recognizing that they could collaborate to finance the "transition", when it is decided to implement the reforms, if it is not done, it will be very difficult to continue to lend money to projects that are required.

In the meeting was present Fabrizio Zarcone, country representative to the World Bank and IDB Beverinotti Javier, who expressed concern that Costa Rica is jeopardizing the entire social development that has shown in the past, aggravated, to "Costa Rica and no one believes the promises."

That is, if the changes required, which passes through the adoption of reforms in the Legislature, not given, the gates of credit with these authorities could close.

"The country is facing a fiscal emergency, this is a subject that for years there has been talk, but the consequences have not felt that a project comes in and saves the penalty," the deputy finance minister, Fernando Rodriguez.

According to the chief, for example, the government of President Abel Pacheco, he had introduced the "Plan tax system" but if it was not, itself a small contingency law allowing emergency stand was adopted. with the breaking of the CAP.

In the last government of President Oscar Arias, revenue grew and there was no need, and the Dona Laura began to deteriorate the picture.

"It contained a little with 'Eurobonds', but today we have nothing, the economy does not grow, there 'Eurobonds', and it touched us face reality," said the Deputy Minister.

"If we do not apply within 6 months tax changes that the country needs for the second half of 2016 the consequences begin to hit people with high interest rates, more problems for the economy to grow, more unemployment, and that will continue growing every year, "he added Rodriguez.

Even to continue paying salaries of public employees, the Government would have to continue to borrow at very high rates, a situation that is no longer sustainable.

For the head of fraction of the PAC, Marco Vinicio Quiros Redondo, "both international bodies come to confirm what the government has been saying and that different actors have failed to recognize. This has been an issue that has polarized, as some sectors have objected solely because they were ideas put forward by the current government."

"The fact that ombudsmen today are the IDB and the World Bank saying that indeed the time is up, gives credibility to what the government has done; but must also be a commitment from other sectors and the responsibility to see what is required and that the tax issue does not become chaos for the following years, "said lawmaker PAC.

However, the response of several fractions on the subject, is that they require the executive branch positive signals, which indicate there is reduction of public spending, before considering approving new taxes.

5. International bankers here seeking info on tax bills
By the A.M. Costa Rica staff

Representatives of the World Bank and the Interamerican Development Bank met with Costa Rican officials and some legislators Monday to push for approval of more taxes.

There are a handful of bills at the legislature that the executive branch has proposed. Still even within the Presidencia there are those who doubt any bill will be approved unless strong curbs are placed on spending. President Luis Guillermo Solís has not shown an inclination to make significant budget cuts.

In fact, the central government is going ahead with major construction projects that eventually will show up in future budgets.

Lawmakers already approved for the second and final time in September a $48 million loan to build a wholesale produce market in Sardinal, Guanacaste.

State banks are putting up $12 million and the government the balance for a $35 million convention center in Heredia. The Instituto Costarricense de Turismo also seeks to hire some one to help it market the facility.

The Ministerio de Obras Públicas y Transportes will soon seek bids for a $7.5 million office tower at Plaza Víquez. This is supposed to be the start of a $30 million government city.

The finance ministry still is trying to purchase a 5,200-square meter office building for $121.7 million.

Even the legislature plans new buildings at a cost of $76 million.

The public has taken notice, and there even is a Facebook page devoted to fighting the legislative construction proposals.

The visitors Monday were Fabrizio Zarcone of the World Bank and Javier Biverinotti of the Interamerican Development Bank. Both entities have significant investments in Costa Rican loans.

The Partido Acción Ciudadana, which generally supports new taxes, reported the meeting. This is the party of the president, and attending Helio Fallas Venegas, minister of Hacienda, and José Francisco Pacheco Jiménez and Fernando Rodríguez Garr, both vice ministers.

Marco Vinicio Redondo Quirós, an Acción Ciudadana lawmaker, said the two men visited to verify what the government has been saying.  Redondo said some persons object because the proposals have been put forward by the current government.

Fallas is seeking a value-added tax, increased income tax, anti-fraud legislation as well as changes in what income is exonerated from taxes. There also are bills to reduce the amount spent in pensions. And then there is the bill to renew the tax on corporations.

The U.S. Federal Reserve Board is expected to begin this week increasing the interest rate it charges to banks, and this is expected to have an impact on what Costa Rica will have to pay for international loans.

There also is the possibility that the Banco Central will not be able to continue to support the colon currency against the dollar. An increase in the value of the dollar will make repayments of international debt harder. The colon is among the few currencies that has actually increased in value against the ever stronger dollar.

Although officials seldom discuss the topic, average Costa Ricans loath taxes because they do not have faith in public officials. A procession of recent news stories about excessive salaries and pensions contributes to this attitude. They also suspect systemic corruption.

The Ministerio de Hacienda unknowingly supported this anti-tax view Monday when it reported that it had collected 926.7 million colons ($1.76 million) from professionals who had understated their income.

The Dirección General de Tributación, the tax agency, is part of the ministry.

The tax agents have been checking up on the returns of 450 professionals who purchased fancy cars, properties and condos, yet declared little income.

The faulty tax reports came from physicians, lawyers and architects, among others, who reported expenses related to food, transportation, private education, medical expenses and personal loans that should not be included, the agency said.

The tax agency said at least 1,000 more professionals will undergo a review after the first of the year.

Meanwhile, the legislature is expected to begin a Christmas holiday without taking action on any of the tax bills.

6. Experts: US Fed rate hike will affect most dollar loans in Costa Rica

The U.S. Federal Reserve announcement Wednesday of its first interest rate increase in more than nine years is expected to affect about 87 percent of variable interest rates that Costa Ricans and companies here took out on dollar loans.

The Fed raised the benchmark federal funds rate – locked near zero since the recession in 2008 – by a quarter point to a range of 0.25-0.50 percent.

Acobo Financial Group economist Luis Diego Herrera said the announcement would lead to a slight increase in interest rates here for a majority of credits using the U.S. indicator as reference.

Herrera believes interest rates in dollars will increase by 0.25 percentage points, and the change “will increase monthly payments for those who took loans in that currency.”

Data from Costa Rica’s Financial Entities Superintendency, or SUGEF, show that 45 percent of total loans granted by Costa Rica’s banks were in dollars.

Of these, 79 percent were requested by people or companies with incomes in colones, and 87 percent are loans granted at variable rates that will see hikes in monthly payments. The remaining 13 percent of dollar loans were granted at fixed rates and will not be affected by the Fed’s adjustment.

Costa Rican Banking Association (ABC) Executive Director María Isabel Cortés said the Fed’s adjustment is small, and its impact on local interest rates will not be immediate because most local banks anticipated the increase.

“Today’s announcement was not a surprise,” she said.

Cortés said local banks have been preparing for this decision – and others that could come in 2016. The Fed announced it expects to continue to raise rates at a slow, gradual pace next year.

Preparations by local banks, according to the ABC’s director, included periodic evaluations to analyze the repayment capability of all customers seeking loans, both in colones and dollars.

“In these exercises they [banks] use scenarios of higher interest rates or high variations in the exchange rate of dollar, so they won’t be surprised,” she said.

The rate’s increase also is expected to affect the government because it will make it more difficult for the country to obtain loans from abroad. Loans from foreign countries or international agencies traditionally have been one of government’s main strategies to finance the country’s fiscal deficit, estimated this year to reach about 5.9 percent of the gross domestic product, according to the Central Bank.

The Fed’s move also is expected to force Costa Rica’s Finance Ministry pay higher interest on all loans from abroad at variable rates.

U.S. media following the announcement mostly agreed that the rate increase is a signal the Fed is confident about the strength of the U.S. economy and its ability to handle higher borrowing costs.

7. BCIE approves US $287 million in financing for Costa Rica infrastructure projects

December 18th, 2015 (ICR News) A meeting between Costa Rica president, Luis Guillermo Solis and representatives of the Central American Bank for Economic Integration (BCIE) Thursday afternoon concluded with the approval of US $287 million in financing for infrastructure projects in the country next year, reports.

The financing will be used for clean energy projects by the Costa Rican Electricity Institute (ICE), road infrastructure programs administered by the National Highway Council (CONAVI) and the Ministry of Public Works and Transportation (MOPT), public hospital infrastructure and equipment including funds for a new medical tower at the Calderon Guardia Hospital, as well as funding for the Costa Rican Institute of Aqueducts and Sewers (AyA) to improve water sanitation and infrastructure.

President Solis was in Honduras on Thursday, where he met with his counterpart, Juan Orlando Hernandez.  The presidents reportedly discussed the ongoing Cuban migrant crisis in Costa Rica.


8. ICE gets its rate cut instead of a hike
By the A.M. Costa Rica staff

Anyone following the changes in utility rates and in other services regulated by the government is bound to get dizzy.

The regulating agency Thursday announced that instead of getting a requested rate hike, the Instituto Costarricense de Electricidad would get a 6.7 percent cut in electrical distribution rates.

The state power company may appeal.

Wednesday the same agency, the Autoridad Reguladora de Servicios Públicos, said it had changed the way that the rate for liquid petroleum gas was calculated and that the household gas cylinder would increase in price by 2,000 colons, nearly $4.

And then every month there is a change in the price of motor fuels.

The state power company known as ICE sought a 12.7 percent increase in the rate for generation, 9.8 percent in transmission and 8.3 percent in distribution.

The company's rates filter down to rates charged by companies like its subsidiary, the Compañía Nacional de Fuerza y Luz, although ICE has a number of its own retail customers. The Autoridad Reguladora said the rate cut would benefit 739,000 electrical customers.

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

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