Government officials rolled out a savings plan that promises to shed $77 million of spending on public entities. Vice President Helio Fallas, who doubles as the finance minister, announced the efficient spending directive 009-H at a Tuesday press conference alongside Jose Francisco Pacheco, Costa Rica’s vice minister of expenditures.
Designed on being more efficient and plotting better investments in the public sector, the executive directive looks to cut nonessential costs over the next two years. Most of the savings are expected to come from only allowing 15 percent of the current job vacancies to be filled within ministries and public entities. This will cause 2,500 currently unfilled jobs to become completely obsolete. The withdrawal from filling these positions is slated to save the government around 22 billion colons, or $40 million, according to their estimates.
In addition the directive will freeze administrators salaries, preventing pay increases for ministers, vice ministers, executive presidents, directors, and assistant directors. That ceiling placed on their pay will save an estimated 670 million colons, or $1.2 million.
Both Fallas and President Luis Guillermo Solís signed off on the outline Monday and it will go into effect as soon as it’s published. Solís and the central government currently face a large deficit that could become as much as 6 percent of the gross domestic product, meaning total current incomes won’t be able to crack that deficit alone.
In finding other options to cut back, Pacheco said the government is looking to shed at least 20 percent of expenses from what he called controllable costs. In highlighting these expenses, Pacheco mentioned that the president’s administration is trying to cut down on high-end public employees buying cars for their personal use. He said that omitting those bills for new cars and the gas prices accompanying them should provide an easy way for the state to minimize luxury costs.
“This is a wish and a call for our leaders to diminish costs as highlighted under this new guideline,” Pacheco said. “We also want them to install self-measurements. Already we’ve seen some positive feedbacks.”
Included on the list of nonessential costs that the government wants to deter are foreign travel allowances, office redesigns, and art works, among numerous others.
Authorities are also going to tightly monitor offices and buildings that public agencies are
renting. The state supplies a rental budget, which reached 27 billion colons this year, for public agencies to use when renting working space or computer equipment. According to the directive, a specialized committee will review potential building leases to check off on factors like infrastructure, long-term pricing, and overall utility. Pacheco said this particular process has already begun.
“We are calling on all the ministers to send us information about rental contracts and building rental costs,” he said. “We want to make this a very tight-knit collaboration.”
A finance ministry group called the Dirección General de Presupuesto Nacional will monitor the executive branch and the Secretería Técnica de la Autoridad Presupuestaria will be placed in charge of reviewing all other public offices.
Within two months of the directive’s publication, the finance ministry will prepare a list of modifications to the national budget law in order to reduce authorizations of spending and to help alleviate the public debt, according to the plan.
Both Pacheco and Solís have said they are willing to be flexible on some of these points, as they have pointed out that expectations will vary depending on the ministry or organization.
The Instituto Costarricense de Turismo, for example, has been exempted from some of the belt tightening in order to continue to advertise the country.
The proposed austerity measures were not greeted favorably in all quarters. Antonio Alvarez Desanti, a leader of the opposition Partido Liberación Nacional in the legislature called the plan a copy of what former president Laura Chinchilla had decreed.