Ottón Solís, professor at IE University in Spain and founding member of the Citizen’s Action Party (PAC): “Former President Carlos Alvarado’s administration promoted and implemented an effective package of public employment reforms, a fiscal rule setting tough upper limits on the growth of public expenditures and a debt consolidation program. The international financial community, starting with the IMF, recognized the high quality of these policies and supported them with new lending facilities. This, plus continuous success in the attraction of tourists and foreign investment, created the structural conditions for bringing to a halt the depreciation of the local currency. However, the central bank had different ideas. Given the openness of the Costa Rican economy, a shortcut to reducing inflation would be an appreciation of the exchange rate. The central bank proceeded accordingly, approving a…”
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IESA
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