Drop in Interest Rates, Reduced
Work Hours To Avoid Layoffs Part of Government's Economic Plan
A 2% drop in the interested for mortgages by the state banks is the
main point of the economic plan Costa Rican president, Oscar Arias,
announced last night to counteract the effects of global crisis.
The state banks, the Banco de Costa Rica (BCR), Banco Nacional (BN)
and the Bancredito, as well as the semi state bank, Banco Popular,
are being asked to reduce their interest rates 2% on all mortgages
under ¢50 million colones.
The rate reduction is for 2 years.
Arias said the rate decrease would be across the board, everyone
borrower having the same benefit. For those who have borrowed more
than ¢50 million colones, the banks have the authority to
renegotiate the loan with their clients.
The president insisted that the private banks should adopt the same
measures.
In addition, Arias "Plan Escudo" includes an increase of 15% of
non-contributory pension plans of the Caja Costarricense del Seguro
Social (CCSS), and a request to the Autoridad Reguladora de
Servicios Publicos (Aresep) to review the gasoline price setting
policies, to quickly reduce gasoline prices at the pumps when the
price of crude oil on international markets drop.
Currently it can take a month or more for any drop in international
oil prices to reflect at the gasoline pumps.
Arias also said that the Cen-Cinai - the Centre for Education and
Nutrition-Integrated Center for Child Health Care - will also be
opened on weekends in the 37 cantones in the country with the least
development. The plan includes giving 16.000 children, every Friday,
a lunchbox with enough food for three more family members for the
weekend.
Also, CONAPE, the semi autonomous institution providing school loans
will maintain its student loan rates for the year and those
graduating this year will have up to one year to find employment and
begin their repayment. Currently CONAPE offers student loans at 7%.
The Plan Escudo also includes scholarships by the Instituto Nacional
de Aprendizaje (INA) to train 5.000
workers in companies affected by the crisis.
The president said in his speech that he hopes the Legislative
Assembly will approve a series of loans totally us$1.4 billion
dollars for the construction of pubic projects, like roads and
ports.
During his announcement at the fundación Omar Dengo, Arias asked
business leaders cut their salaries and the salaries of their top
executives, as well asked for solidarity in workers sharing a job,
saying it is better for two people to share a job, each earning
less, that one job cut.
The president asked for an agreement between employers and workers
to cut the number of hours worked daily so as to avoid layoffs.
"This crisis of devastating dimensions (...) means a strong
contraction for our economy, which most likely will be reflected in
increased poverty and unemployment," said the President last night.
For the most part the president's plan was well received by his
audience last night, whose make up was mainly business and union
leaders. For his part, Manuel H. Rodríguez, president of the Unión
de Cámaras (Uccaep), told the press that he is in agreement as long
as the plan to cut working hours is temporary.
Although the ministra de Información, Mayi Antillón, suggested on
Wednesday that the plan could include economic help for those who
lose their jobs during the crisis, no such plan was included in last
night's presidential address.
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