Selling our grandparents’ inheritance

Ana Felicia Torres Redondo; Carlos Pentzke Pierson
Centro de Estudios y Publicaciones Alforja

Within the context of the economic crisis, the rapid loss of mechanisms of social mobility and economic, political and cultural break down, a real and symbolic rupture is occurring, under progressive and unorthodox procedures, in various fields of the State’s monopolistic provision of services, such as electricity, health care and education. Attempts at privatising a public institution or a complete sector have faced strong opposition among the people.

Between1940 and 1975, Costa Rica reaped important benefits in terms of humandevelopment. However, the 1980s – linked to the economic stabilisation andstructural adjustment programmes – saw the emergence of a crisis that thecountry has not managed to overcome completely. “Although it is true thatprimary indicators showed a trend towards recovery and stabilisation or moderategrowth …the previous period’s rapid pace of progress has not beenrecovered.”[1]

Aspart of this stagnation, it may be pointed out that almost one third of thepopulation is living in poverty, or very close to it. The country has made scantprogress in improving the two factors that will enable this population toovercome poverty and the country to pave the way for development: education andthe creation of quality jobs. Two other critical areas reveal threats to thepromotion of development: the deficit in the transport infrastructure and thehigh public debt. Faced with all these limitations is a dismantled State,without resources and urgently requiring tax reform based on a new fiscal pact.

Itis important to note that the population has lost trust in the basicinstitutions of democracy, such as the political parties. The presidential,parliamentary and municipal elections held in 2002 showed clear criticism andsanction by the electorate of the two-party system. In spite of a very high rateof abstention (31%), the population that did vote redistributed power,recomposing the legislative power and, to a lesser extent, the municipal power.The population feels that transparency is necessary to verify that campaignpromises are actually being accomplished during the government’s period inoffice. A clear indicator of the changes taking place in Costa Ricanpolitical culture is that women achieved 33% representation in the legislativebody. Thus, the monopoly of the traditional political parties and the patriarchyhas started to crumble.

Privatisation“à la Costa Rican”

Withinthe context of the economic crisis, the rapid loss of mechanisms of socialmobility and economic, political and cultural break down, there has been a realand symbolic rupture of the state “monopoly” in the provision of services invarious fields, such as electricity, health care and education. Hence, the wayis being paved for a gradual but sustained process of privatisation, whichstarted in the 1980s with the sale of some state companies involved in sugar,cement and fertiliser production. Rapidly, other forms of privatisation werelaunched in the framework of the Structural Adjustment Programmes, mostlyaffecting sectors such as health.

Privatisationof public services has taken root in Costa Rica through progressive andunorthodox means. Since the reform process started, the dominant sectorsperceived that an orthodox implementation of neo-liberal measures would becounter productive to the country’s stability. Furthermore, when the reformswere launched in the 1980s, Central America was undergoing a period of politicaland military conflicts, sufficient reason to avoid internal instability.Finally, there is growing awareness among the population that the achievementsobtained through the people’s struggles in the 1930s and later strengthenedfollowing the civil war in 1948, belong to the people and must therefore bedefended.

Partsof work processes previously carried out by the State that are attractive toprivate capital have been privatised: for instance, the concession of publicworks, a mechanism whereby private companies can build public facilities –such as highways – and manage them for a given period. The privatisation ofpublic health clinics for management by private cooperatives is another example.In addition to these services, health care and education have also been cleartargets of privatisation, as State management of these fields has deteriorated,both in quality and in coverage.

Theattempts at privatising public institutions or entire sectors have faced strongopposition among the people, making governance impossible. In May 2000, thepopulation mobilised to oppose the Rodriguez Administration’s attempt toprivatise energy and telephone services. For 15 days, the country witnessedroadblocks, confrontations with the police, universities at a standstill, andlarge-scale demonstrations protesting against both the Legislative Assembly andthe President of the Republic.

Pavingthe way for “two Costa Ricas”?

Littleby little, public education and health care services have become mechanisms forsocial exclusion, remaining as the only option for people with few economicresources. Meanwhile, a small group of Costa Ricans educate their children atprivate schools, colleges and universities and have private professional carefor their preventive and curative health. In this kind of privatisation, thereis no doubt that public and private health care and educational supply co-exist,but competing at a disadvantage.

Theprivatisation and profit-making rationale has taken root not only in the realmof private medicine, but also within state institutions, in which health units– Basic Teams for Comprehensive Health Care (EBAIS), clinics and hospitals –fall into the so-called “management commitments”. This mode of operatingemphasises the ability of the health management units to implement the budgetthey request, although no quality control accompanies the process.

Table1.- Income from EBAIS care – Private companies (2002 – USD millions)


Health areas





Pavas, San Miguel y San Rafael de Desamparados





Santa Ana, San Francisco de Dos Ríos, San Antonio de Desamparados





Escazú, La Carpio y León XIII








USD 12,244

Source: “Cooperativas yClínica Bíblica en duelo por EBAIS”, in La República, 13 September2002.

Education,a mechanism and forum for social mobility parexcellence, has seen a surge of private academic and technical schools atall levels. The possibility of private education is increasing strongly, vis-à-visa public education that no longer receives 6% of the constitutionally grantedGDP. Additionally, the coverage and quality of public education hasdeteriorated, and public schools have serious dropout problems, especially atthe secondary level. Private education, although occasionally deficient inquality, is generally of better quality than public education. Thus, educationhas changed from being a mechanism for social mobility to becoming an instrumentof status and exclusion. There are two Costa Ricas: a private and a public one.

Table2.- Regular education institutions and services by functional unit, Initialpublic and private education enrolment (2002)

Level, branch





Private subsidised









I & II cycles







III cycle and diversified education



































Source:Prepared by the authors from the web page, Ministry of Public Education(www.mep/cuadromatricularegular.html)

Water:“mind your own business”

Likemany other countries, Costa Rica already has a brisk trade in drinking water.Gradually, the people are becoming familiar with the idea that water supply is aprivate matter. The State monopoly has been symbolically broken. Without-of-date legislation and a broken down and dispersed government, a series ofbills are to be found currently in the legislature, which in some way encourageprivatisation by enabling private companies to have access to water concessions.

Currently,the Lorena de Santa Cruz community in the Province of Guanacaste is the objectof a request by a private company to exploit one of the richest aquifers in theregion. The region’s main wetlands[2]are also located in this community. If this exploitation were to take place, itcould have dire consequences: the projected extraction could substantiallydecrease the amount of water in the communities’ wells and affect supply; andthe wetlands could dry up, and the main rivers substantially decrease theirflow. This situation would have serious adverse effects on aquatic biodiversity,affecting migratory birds which nest and feed in the wetland.

TheCosta Rican Institute for Aqueducts and Sewage has announced that there will bea crisis in the supply of drinking water by the year 2015. With chaotic landplanning and voracious tourist activity developing in the country on a majorscale, a national discussion on the availability, present use, and present andfuture demand for ground and surface water is needed urgently.

Alreadyseveral coastal communities have had to fight battles with trans-nationaltourist companies. Private management of this resource for tourist purposes hasplaced at risk present and future access to drinking water by entirecommunities. Biodiversity in wetlands is also seriously threatened by theunregulated use of groundwater.

Therope always breaks at the thinnest point: women and poor people

Withinthis scenario, poor families – 21 of every 100 – must make do with publiceducation and health care services, under the conditions of access and qualitydescribed in the preceding paragraphs.

Privatisation of health care and education directlyaffects poor families headed by women, which are on the increase, more than poorfamilies headed by men. Outstanding among these, are poor homes having youngwomen as family heads. Furthermore, in Costa Rica, as in most of the countries, women havefewer resources than men do. Thus, as to be expected, it is women who will haveto make do with deteriorated public health care and education services forthemselves and their children, because they do not have the resources to pay forprivate medicine and education services.

Additionally,participation of women in the labourforce is increasingly strong in the informal sector of the economy. Fewwomen in this sector of the economy can obtain insurance and therefore haveaccess to public health services.

Thegovernment is submitting to the United Nations System the second and thirdreport on compliance with the Convention for the Elimination of All Forms ofDiscrimination against Women (CEDAW). In spite of the fact that the countryshows significant development in this field, the report also reveals negativetrends and important structural obstacles to the eradication of violence againstwomen. One of the main trends is related to the inequity in economicparticipation and access by women to productive resources. Privatisation ofeducation, health care and water are among the factors favouring the trend toexclude women and the poor from the benefits of development.


[1] United Nations Development Programme. Estado de la Nación en Desarrollo Humano Sostenible. Report #7. San José, Costa Rica, 2001, p. 51.

[2] Wetlands are ecosystems depending on natural or artificial, permanent or temporary, stagnant or moving water systems. They may be fresh or salt water or a combination of both (brackish). The wetlands include the coast and part of the sea up to a depth of six metres at low tide.

This chapter was prepared at CEP-Alforja, with the collaboration of the following organisations: Fedeagua, Fecon and ANPE. Contributions were also made by the Consumer Defence Commission, Ministry of Economy.