ARESEP – Who Is Regulating the Regulator?

It’s comforting to know that like so many other countries in the “developed world,” while the President of Costa Rica calls for austerity, there are “public servants” here totally taking the piss by giving themselves outrageous increases on top of already obscenely generous salaries.

The Autoridad Reguladora de los Servicios Públicos (ARESEP) regulates the prices of electricity, water, gasoline and a few other public services but clearly has a problem when it comes to paying attention to the recommended guidelines for their own salaries.

While the government recommends a salary increase of 2.33%, ARESEP gave 3.9% – 10.7% raises in salary to 40% of their staff.

• The General Manager received a 8.7% increase to c4,356,225 which is US$8,765 per month.
• The Superintendente received a 8.2% increase and now earns US$8,853 per month.
• There is even a secretary (“Secretaria 3” earning US$1,246 per month.

The ‘Regulador General‘ Dennis Meléndez – who now earns c5,507,611 per month which at 497:US$1 is US$11,081.71 per month – defended the expenses saying that the costs had no impact on the national budget, since the entity is financed by fees paid by regulated entities and companies.

In January 2011 we published Minimum Salaries in Costa Rica 2011. Professional soccer players earn US$591 per month and we noted that the minimum salary of a general mechanic in Costa Rica is ¢245,813 (US$493) per month, a basic unskilled construction worker earns ¢221,495 (US$444) and a cook earns ¢245,813 (US$494) slightly less than a cashier who earns ¢249,725 (US$501) per month.

If I was a Tico working like a dog earning less than US$500 per month, I’m not sure if I would be too thrilled to discover that Dennis Meléndez was earning US$11,081.71 per month – 22 times as much as I was – for regulating the price of electricity and a few other products and services.

Mr. Meléndez seems incapable of understanding that the more money they are paid in salaries means the more money the “regulated entities and companies” must charge their consumers, people like you and I who use electricity, water and gasoline!

In an economically naive statement Dennis Meléndez added that: “We do not help nor worsen the fiscal situation.” (“Nosotros ni ayudamos ni empeoramos la situación fiscal”.)

One can’t help but asking who’s job it is to regulate the regulator?

Written by Scott Oliver, author of 1. Costa Rica Real Estate Scams & How To Avoid Them, 2. How To Buy Costa Rica Real Estate Without Losing Your Camisa, and 3. Costa Rica’s Guide To Making Money Offshore.

Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.