Special deals for tourism will wreck the economy

Dear A.M. Costa Rica:

In today’s edition you covered pleas for a moratorium to the president -elect from the tourist industry.

This is a slippery slope to disaster. If the tourist industry has spare capacity, the long-term solutions are a lower value for the colon and a more competitive economy overall. Neither is a quick fix, and both require extensive changes throughout the economy.

The alternative is to allow downsizing in the sector. That is painful for those who go bankrupt or close, but necessary for the survivors to thrive.

Starting to subsidize special cases is a route to long-term economic disaster. Agricultural subsidies already exist here.  Tax moratoriums and special low tax rates are just another form of subsidy.

Unless we want Costa Rica to be like Cuba or Venezuela, this is a very bad idea.

Chris Clarke
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