Costa Rica is the only Central American country that works. In a region where civilian presidents have traditionally taken orders from their military, Costa Rica has no military. It abolished its army in 1949 and now has truly free elections and a policy of neutrality in the disputes of other nations. Costa Ricans have a 90% literacy rate and the highest living standard in Central America. For the past few years, Costa Rica enjoyed both peace and prosperity--but now it may have to choose.
When President-elect Oscar Arias takes office May 8, he will inherit a big problem. Costa Rica's prosperity is the result of nearly $1 million a day in U.S. aid. The United States is using the aid as a lever to encourage Costa Rica to abandon its neutrality and join the opposition to Nicaragua's Sandinista government. If Arias stands firm on neutrality, Costa Rica's middle-class life style could be the price.
Costa Ricans are terrified of economic decline, in part because the last collapse came just eight years ago, mainly following a drop in the price of coffee, the country's main export, and a rise in oil prices, as well as the coming due of massive international loans. By 1982, the value of the Costa Rican colon had depreciated 370% in relation to the dollar. Inflation was 80%, with unemployment rising; economic growth had stopped and Costa Rica had suspended debt-service payments.
The United States was slow to help. In 1981, three years after the crisis began, the United States gave Costa Rica just $15 million in grants and loans. Aiding the government of Rodrigo Carazo was not considered in U.S. interests; Reagan Administration officials considered Carazo economically irresponsible and too friendly to the Sandinistas. "We never agreed to have our territory used as a source of pressure against Nicaragua, and that brought an absence of American government support," said Jose Miguel Aforo, Carazo's vice president.
When Carazo was replaced in 1982, by current President Luis Alberto Monge, U.S. aid mushroomed. The Costa Rican Office of External Debt estimates that U.S. grants and loans totaled about $300 million last year, making it, after Israel, the largest recipient of U.S. aid per capita. The aid enables Costa Rica to pay its $500 million annual debt-service bill and maintain a standard of living as high as before 1978. Costa Rica is hooked.
Such aid strengthens a capitalist, democratic, exuberantly pro-U.S. neighbor of Nicaragua, but also gives the United States clout in persuading Costa Rica to arm itself and oppose the Sandinistas.
"In 1984, Costa Rica asked the United States for money to modernize its police forces," said one former official. "We requested $2 million for police and intelligence training. We ended up with $7 or $8 million." A draft State Department report said of the request: "The money is potentially an important milestone in our relations. It provides an opportunity to help shift the political balance in our favor on Nicaragua's southern flank. It could lead to a significant shift from Costa Rica's neutralist tightrope act and push it more explicitly and publicly into the anti-Sandinista camp. That could pay important political and diplomatic dividends for us."
The State Department said the report was the work of a junior official and did not reflect policy. But other Reagan Administration officials have echoed its sentiment.
"Our embassy here applied pressure on Costa Rica to ask for military training and encouraged the government to request modern military hardware," said Tom Ghormley, a former official of the U.S. Agency for International Development in Costa Rica. "There is the definite feeling in the government that acceptance of economic aid is conditioned on acceptance of military aid," said one former Costa Rican official.
Since 1982, Monge has declined offers from the United States to participate in the Central American Defense Council, to join U.S. military maneuvers (after the United States said Costa Rica had accepted) and to have the U.S. military train the Civil Guard and Rural Guard police forces. When Monge formally declared neutrality with an official proclamation in November, 1983, some officials thought it was his way of telling the Reagan Administration to lay off.
But it has become harder for Costa Rica to resist U.S. pressure, and in the last few years, militarism has grown. U.S. battleships dock in Costa Rican waters. The Civil and Rural guards, supposedly police forces, are now indistinguishable from soldiers. They wear camouflage, drive jeeps and carry M-16s. U.S. Green Berets train the Civil Guard in counterinsurgency, night fighting and guerrilla warfare. The tradition of complete turnover in the guards every four years, preventing the development of a standing army, has been ended for forces who receive training--and Minister of Security Benjamin Piza Carranza says he'd like to train them all.
Piza himself owes his job partly to U.S. pressure. Until August, 1984, Monge's public-security minister was Angel Edmundo Solano, a liberal who believed Costa Rica could live with the Sandinistas. Solano's views made him the bete noire of the Costa Rican right, and more important, the then-U.S. Ambassador Curtin Winsor Jr., who even refused to shake Solano's hand in a receiving line. "There was tremendous pressure from the embassy for Solano's removal," says Juan Jose Echeverria, who held the post in the Carazo government.
Piza, Solano's replacement, is a Texas A&M-educated; former president of Seagrams Costa Rica and one of the founders of Costa Rica Libre, the country's equivalent of the John Birch Society.
Civil Guard officers say that with Piza has come a new tolerance of contra activity. "Under Solano, some guard officers would help the contras, " says one former guard member. "Under Piza, far more do--and they don't even bother to hide it."
The town of Upala, for example, about five miles from the Nicaragua border, is home to a contra headquarters. People in Upala lower their voices when talking about the contras. "There's a psychosis here," says one man. "Everyone thinks everyone else is a spy."
What residents are afraid of is that they will be suspected of not helping the contras. Pastor Baltodano, a bean farmer who lives less than three miles from the Nicaragua border, says that last December eight members of the Civil Guard held him and some friends at gunpoint, threatening to kill him because they thought the group was working with the Sandinistas.
Upala is also headquarters for AID's Northern Zone project. The project's showcase is a three-car-wide dirt road that, when completed, will run parallel to the Nicaragua border for almost 25 miles. The road has also been certified as an airstrip.
"Neutrality is only true in San Jose (the capital city)," says Peter Glibbery, a British itinerant soldier who has been in a Costa Rican jail since April, 1985. Glibbery and the others in his five-man group were arrested during a "crackdown" on contra activity in Costa Rica. They were the only contras arrested, and the men's resentment at sitting in prison while their bosses walk free led them to talk to reporters.
"The Civil Guard used to bring us boxes of hand grenades to give to the contras, " says Glibbery. "Our entire intelligence came from the Civil Guard. They told us where the Sandinistas were."
The change in the Civil Guard mirrors growing disturbances in Costa Rica. On Dec. 15, 1985, a leftist peace march through Central America came to San Jose. Members of Costa Rica Libre threw stones, tear gas and bottles at the marchers for four hours while the Civil Guard watched. Finally Piza stopped the riot.
A mob attacked the Nicaraguan embassy last year. During the presidential campaign in February, conservative candidate Rafael Calderon circulated literature that asked, "Why do the communists support Oscar Arias?" Although Calderon toned down his rhetoric for international reporters, he told a University of Costa Rica professor his first action as president would be to "eliminate the word 'neutrality' from the Costa Rican vocabulary."
That has not been the policy of Arias, who has stated his intention to breathe life into neutrality. He used his victory press conference to say Costa Rica would "not be complacent towards the enemies of the Nicaraguan government." In recent weeks, Costa Rica has begun a more genuine crackdown on contra forces in its territory. Arias also told a U.S. interviewer that he opposed Reagan's proposed $100 million for the contras. A State Department spokesman said he was "perplexed" by Arias' statement and Ambassador Lewis A. Tambs went home for consultations.
In a March radio interview, Tambs told Costa Ricans that the drop in the oil prices and the rise in coffee prices would help their economy. "Many are going to say since you have these advantages, you aren't going to need so much aid," he said. On March 21, Elliott Abrams, assistant secretary of state for inter-American affairs, met with outgoing President Monge in San Jose. One topic was the Reagan Administration's concern with Arias's views.
Two recent events may make balancing U.S. aid with U.S. demands more difficult for Arias than for Monge. First, the Gramm-Rudman Act could probably cut U.S. foreign aid. In addition, Nicaragua is becoming an even higher priority for President Reagan. Pressure on Costa Rica is likely to increase as the Administration turns up the heat to see Nicaragua become a non-repressive, nonaggressive, non-communist democracy, as the Administration puts it. This is, ironically, still a pretty good description of Costa Rica--at least for now.