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A continued craze for fixing prices in dollars invades the public sector.

Health permits, Internet hook-ups and insurance: a few examples. The state departments
blame foreign-exchange based expenses.

The craze for charging in dollars has invaded Costa Rica. Owners of small shops,
restaurants, doctors and drug stores face charges this year of $30, $50 and $100
(based on risk factors) for their health and operational permits from the Health
Ministry.

Anyone interested in obtaining broadband Internet, buying medical insurance or
taking a trip abroad can also expect to pay in dollars.

What’s odd is that even the Central Bank – the entity most concerned about dollarization
– charges commercial banks in dollars for using its payment system.

The reason behind public and government institutions charging is dollars is the
same as that influencing the private sector: to avoid losing out because of the
country’s high inflation rates.

Some entities give specific reasons. “With dollar rates, we can buy internationally,”
explained Carlos Melegatti, the Central Bank’s payment-system director.

“Every payment that Racsa makes for materials, equipment and international
connectivity for its Internet service is in dollars,” said Racsa spokesperson,
Mario Zaragoza in justification.

Medical and travel insurance are also controlled by exchange rates and so charge
in dollars according to the National Insurance Institute (INS) department of personal
insurance.

What do the consumers say:


“They should charge in colones” says Sergio Vargas, age 44 who works
at Las Delicias bakery. “This country hasn’t officially dollarized yet. Health
permits and business licenses should be charged in colones.”

“If it improves things” Says Ringeld Montoya, age 23 who works
at Seelogics Internet cafe. “It seems as if people are starting to
charge in dollars because profits are greater. If it improves the service or the
quality of client service, then there’s no problem.”

Institutions shielded by Central Bank law.

Article 48 of the Central Bank Law is the legal screen used by public institutions
to justify charging in dollars. The articles states that: “Requesting payment
for transactions, contracts and capital liabilities in foreign currency is valid
and effective but remains the criteria of the debtor to pay in equivalent colon
amounts according to the commercial cash value of the foreign currency, as per
the date of payment effected.”

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The “commercial cash value” is the average exchange rate given by the
Central Bank.

Cynthia Zapata, executive director of the National Consumer Commission emphasized
that this article lets the client choose between paying in dollars or colones.

The Commission has not received complaints about public service tariffs but consumers
are complaining that banks are charging dollars for credit card services even
though these are only used for colon transactions.

Health Ministry legal director informed that three cases for protection of constitutional
rights had been presented in the Constitutional Chamber of the Supreme Court to
challenge the health authorities charging in dollars. One of the cases included
a group of businesses from Guadalupe; the Chamber has suspended payments pending
the legal outcome of the proceedings.

Our thanks to
Patricia Leiton and our friends at La Nacion – Costa
Rica’s largest Spanish circulation newspaper for their permission to use
this article…

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