Costa Rica's silver anniversary not silvery

PUERTO LIMÓN, Costa Rica—Today is the 25th anniversary of the biggest recorded earthquake in the history of Costa Rica. The Limón earthquake, named after this country’s sixth largest city, was even stronger than Haiti’s earthquake in 2010 that killed more than 100,000 people. But the death toll here in 1991 was only 48.

One important reason for the relatively small damage: Much better building construction. Few planes were able to land on damaged runways at the local airport, but helicopters brought in relief workers and food. Costa Rica was then the darling of Central America in U.S. eyes, with politicians generally friendly toward the United States and market economics.

Costa Rica’s political and economic power is concentrated on the country’s Pacific shore and in its west-side capital and largest city, San Jose. Puerto Limón’s 58,000 people, on the eastern, Caribbean side of Costa Rica, have lagged behind. Amazon employs more than 3,000 Costa Ricans in the San Jose area, which is also a center for missionary work. But here in Puerto Limón, the city where United Fruit was born, truckloads tend to carry bananas rather than Apples.

Many Limón buildings look dilapidated. I can’t do better than Paul Theroux’s description years ago in The Old Patagonian Express:

“The stucco fronts had turned the colour and consistency of stale cake, and crumbs of concrete littered the pavements. In the market and on the parapets of the crumbling buildings there were mangy vultures. Other vultures circled the plaza. Was there a dingier backwater in all the world?”

Human vultures have replaced some flying ones: Puerto Limón has a crime problem, with five times as many homicides per capita as San Jose has. Police warn about muggers by night and pickpockets by day. Political crime is also increasing, as the democratic overspending disease spreads. Costa Rica’s 2016 budget features a deficit of nearly 7 percent, up from 6 percent in 2015.

Fitch Ratings in January gave Costa Rica’s credit a negative outlook. The reason: “adverse public debt dynamics, driven by large fiscal deficits, and legislative gridlock preventing progress on reforms to correct fiscal imbalances in a timely manner.”

Moody’s Investors Service in February also was bearish on Costa Rica, changing its rating from “stable” to “negative.” The reasons emerged from a rating committee meeting on Feb. 4: Costa Rica’s “institutional strength has materially decreased”; Costa Rica’s “governance and/or management have materially decreased”; Costa Rica’s “fiscal or financial strength, including its debt profile, has materially decreased.”

Costa Rica is emulating Venezuela and Ecuador in looking to sell more bonds to China.