Today's Stories: 56% Say Solís Should Quit Consumer Price Index Up Battle Lines Drawn for Banana Wars 2 News Briefs

Former president Óscar Arias speaks to the press on his position over Comptroller Alex Solís refusal to resign his post.

According to a report by local television station Telenoticias, prosecutor Francisco Fonseca is in charge of the study and is to report to the Attorney General his findings.

The study will focus on the presumed falsifications of signatures on legal documents and the allegation that Solís was involved in a high interest loan operation to Costa Ricans who wanted to travel to the United States illegally.

A telephone poll taken by the television station revealed that 56% of the calls received were in favour of the Comptroller resigning his post, while 46% said no. The total number of calls received from the poll were 724; 393 to resign, 331 to stay.

Former president Óscar Arias (1986-1990) made his opinion public yesterday, telling the press that Solís should quit and not waste Legislative Assembly resources and keep the public anxious. Arias added that Solís is making an error in not resigning.

Solís made it clear that he will not resign. He is determined to stay in his post and do the job to the best of his abilities and is confident that any investigation will exonerate him.

Consumer Price Index Up
The consumer price index for the month of June rose to 1.07% up from .067 for the month of June in 2003, accordin to the Instituto Nacional de Estadísticas y Censos (INEC).

For the first six months of 2004, the accumulated pricing index reached 6.26%, up from 4.34% for the same period in 2003.

Hikes in the prices of gasoline, eggs and cigarettes accounted for the majorut of the increase. Other products that saw an increase in prices were papaya and electrical energy. In contrast, tomatoes, chayote and homogenized milk saw a drop in prices.

Battle Lines Drawn for Banana Wars 2
Remember the banana war? Perhaps you thought the European Union had settled its differences with Latin America, whose growers kicked up such a fuss about import tariffs during the 1990s.

Think again. The European Commission is drawing up its new tariff regime for the bendy fruit and growers are preparing for Banana Wars Two.

It might seem bizarre that a massive international dispute could arise from this foodstuff (dictionary definition: elongated usu. tapering fruit with soft pulpy flesh) whose shape and colour have made it a byword for wackiness.

Bananas, allegedly "discovered" by Alexander the Great in the Indian valleys in 327 BC, are funny. There are about 400 different types and they don't actually grow on trees but on a giant herb of the same family as lilies, orchids and palms. Named after the Arabic word for finger, they are harvested when still green and have to be processed, boxed and dispatched within 20 days.

But, for the countries that actually produce the stuff, the banana is no laughing matter. It is the world's favourite fruit. With the EU accounting for only a small amount of banana production (they grow them in the Canary Islands), they represent a huge export market. Some Latin American economies really do depend on them and the EU's tariffs lay it open to claims of favouritism when it comes to trade.

The problem started 12 years ago, when the EU decided to adopt a common policy on imports, and slapped tariffs on bananas from Latin America. Traditionally, many EU members - particularly Britain and France - had bought bananas from Africa and the Caribbean to support former colonies, and the EU tariffs enshrined this in law.

Latin American farmers appealed to the World Trade Organisation and, with the help of the US, won. The EU massaged down the tariffs three years ago, but is planning to raise them again in the coming year, and Latin American farmers fear this could be crippling. The problem is that Caribbean and African countries are immune from the tariff, and will remain so if the EU gets its way.

As well as raising the tariff, the EU is considering scrapping a quota system that ensures it buys from each area rather than just one. The fear is that the big multinationals - Chiquita, Dole and Del Monte - will move to Africa to avoid the tariffs. The wheels are already in motion.

Albert Lacombe, a Costa Rican farmer whose father set up in the banana business 30 years ago, has seen his profits halve in the past few years after the export price fell from $6 to $5.25 a box. Costa Rica, the world's second-biggest banana exporter after Ecuador.

However, exports have been in decline since the introduction of EU tariffs, and the cost of social welfare contributions means Costa Rican bananas are more expensive to produce than in neighbouring countries.

Costa Rica is no banana republic. The country is the most developed in Central America, with literacy and infant mortality rates far better than its neighbours, and similar to European countries. Bananas account a high percentage of exports.

But while Costa Rica's economy as a whole would survive if the banana trade died, it would have disastrous local consequences for the country's Caribbean east coast, where the banana industry employs 100,000 workers. Most still receive social security benefits, including free health treatment and a state pension. The working conditions are far superior to those in most other Latin American countries, and yet the country is among those lumbered with the EU tariffs.

It is plain that Costa Rica won't keep its position as one of the world's biggest exporters if it remains so much more expensive than elsewhere. Albert Trejos, the minister for foreign trade, claims the key is to market Costa Rican bananas as "responsible bananas". "This is not about consuming more, but about consuming better. I believe that markets care about how their products are made."

But it seems unlikely that customers will pick the more expensive banana with the Costa Rican flag. Volker Ribniger, a German whose farm on the Costa Rican east coast is making a loss, and is relying on loans from the national banana federation, Corbana, says: "The customer doesn't really care about stickers. They care about prices."

Unfortunately, prices will come under pressure if the EU raises the tariffs as insiders expect.

Romano Orlich, Corbana chairman, says: "I believe the best system would be fully free trade." So why should we buy a Costa Rican banana over another? "A Costa Rican banana is a happy banana," he says. Let's hope for his sake it doesn't get skinned by Brussels.

News Briefs

• Tribunal Supremo de Elecciones (TSE) announced yesterday that 2.6 million Costa Ricans will be eligible to vote in the 2006 presidential elections to be held 5 February 2004, of which 332.481 will be elgibile to vote for the first time.
   
• The Costa Rican coast guard found a bag containing 20 kilos of cocaine floating near the Isla del Caño in the Pacific Ocean. This find is in addition to a find two weeks ago when a 240 kilos of cocaine were found floating 25 miles off the coast near Jacó and last week a bag containing 20 kilos were found by youths at Playa Caletas, in Guanacaste.
   
• The criminal court in Golfito ordered three months preventative detention against a couple who attempted to burn alive a 21 year old man.