:00:00. > :00:09.Welcome to HARDtalk, with me, Stephen Sackur.
:00:10. > :00:15.They used to call Costa Rica the Switzerland of Latin America.
:00:16. > :00:17.It seemed so much more stable, peaceful
:00:18. > :00:27.It didn't even bother maintaining a standing army. Well, it still
:00:28. > :00:34.doesn't have that army, but it does have some very un Swiss like
:00:35. > :00:39.problems. A budget crisis, endemic poverty, organised crime and
:00:40. > :00:49.corruption. My guest today is Costa Rica's president, Luis Guillermo
:00:50. > :01:11.Solis. He came into power promising change, so what has gone wrong?
:01:12. > :01:13.Mr President, Luis Guillermo Solis, welcome to HARDtalk.
:01:14. > :01:22.I am pleased to be his. I guess your career over the last two years is a
:01:23. > :01:27.lesson in how fickle public opinion can be. You came into office with an
:01:28. > :01:31.extraordinary mandate. I think it had 78% of the presidential vote.
:01:32. > :01:37.Today you have an approval rating which when I checked the polls was
:01:38. > :01:40.standing around 14 - 15%. What has gone so wrong? We are trying to
:01:41. > :01:43.solve all of the problems you mention at the beginning of the
:01:44. > :01:47.problem. We are finding a lot of resistance. Polls are like
:01:48. > :01:54.photographs. They change with time. I was fourth before being elected
:01:55. > :01:58.president and then something happened in 1.5 months, so I know it
:01:59. > :02:02.will change. What is important is to address issues we have mentioned,
:02:03. > :02:06.and others we are dealing with, and solve problems as the people would
:02:07. > :02:10.like to see them solved after years of neglect. What is interesting
:02:11. > :02:14.about you is as indicated you were not very well-known in Costa Rica as
:02:15. > :02:19.a big-time politician before running for president. You told the people
:02:20. > :02:22.you were fundamentally different. You would do politics differently.
:02:23. > :02:25.There were some symbols you indicated. You said if you win you
:02:26. > :02:31.won't have pictures of yourself in everyone's offers. You won't have
:02:32. > :02:34.placques referring to you as president. Things will be done
:02:35. > :02:39.differently. The public seems to not buy the idea that you are different.
:02:40. > :02:43.This is a big discussion -- plaques. How much can you change in four
:02:44. > :02:49.years and what was the expectation of the people? They convened by a
:02:50. > :02:54.campaign insisting change. I continue to say that we are changing
:02:55. > :02:58.things. But there is a dynamic in a country that has been as you mention
:02:59. > :03:01.stable for a long time and then started to decline 20- 30 years ago
:03:02. > :03:06.with economic problems, corruption problems. These are problems I
:03:07. > :03:13.promised to address in the campaign and which I am working with. As I
:03:14. > :03:17.say in Costa Rica, the people elected me for four years, not two.
:03:18. > :03:21.There comes a point and I guess you have reached it now when promises
:03:22. > :03:25.don't hold good. If you are not delivering, you are not delivering.
:03:26. > :03:30.If we get to the problems, let's start with the economy and public
:03:31. > :03:34.finances. You have completely failed to get on top of what is a
:03:35. > :03:41.dangerously high public deficit. Not quite. We are dealing with the laws
:03:42. > :03:46.require to be changed in Congress and furthermore the economy is
:03:47. > :03:51.strong sans the deficit. If you look at what I promised it was a growing
:03:52. > :03:55.economy, a stable and solid economy, which is happening, except with
:03:56. > :03:58.regards to the deficit. Politics is great because you can make promises
:03:59. > :04:06.that mean everything and nothing. You promised work and happiness. You
:04:07. > :04:12.don't have much happiness right now. What we have promised, it is not
:04:13. > :04:15.fair but what we have so far is an economy growing at 4.2%, double the
:04:16. > :04:21.average in Latin America. Zero inflation. How terrible that you can
:04:22. > :04:26.deliver that growth and have a deficit of 6%. Because of structural
:04:27. > :04:29.problems after decades... You promised to address it and you
:04:30. > :04:34.haven't. If we go through it you have choices. You can impose taxes.
:04:35. > :04:39.You have talked about a new VAT sales tax. It seems you haven't
:04:40. > :04:45.delivered on that. That is a process in which we are. We have some time
:04:46. > :04:50.to do it. It is the responsibility shared with the legislative. This is
:04:51. > :04:56.an issue that four previous governments couldn't address. This
:04:57. > :05:00.is a new bid. We presented the project change the laws to the
:05:01. > :05:04.Congress. Eight of them. Six have to do with expenditure, two with income
:05:05. > :05:10.and we are dealing with them as we speak. This is not the end. We are
:05:11. > :05:17.dealing with it. We will get to expenditures in a minute. If we
:05:18. > :05:23.stick with taxation for a moment, Costa Rica has an extraordinarily
:05:24. > :05:29.low level of income tax. 13%. 13% quacks Mac looking at it, only 14%
:05:30. > :05:34.of Costa Ricans pay tax at all -- 13%?! That is unsustainable. This is
:05:35. > :05:39.why we are trying to increase it a little bit. I don't believe in zero
:05:40. > :05:43.deficit. We have agreed with the international financial
:05:44. > :05:48.organisations to drop it 3.75% to a little more than 2.5% deficit. The
:05:49. > :05:54.IMF says you has no choice. In a report the IMF said that the public
:05:55. > :05:57.debt to GDP ratio in your country is on an unsustainable path. It is not
:05:58. > :06:06.something you have agreed. You have no choice. We have agreed. They have
:06:07. > :06:09.helped us with projects presented to the legislature. We have a good
:06:10. > :06:13.relationship with the IMF. They have agreed what we are seeking is what
:06:14. > :06:16.is needed. We don't need to go to zero deficit as some of my opponents
:06:17. > :06:22.would like to see. This is out of the question. We cannot have that
:06:23. > :06:26.without risking Costa Rica to social turmoil. We will get to that
:06:27. > :06:32.possibility in a minute. All of the other things are fine. LAUGHTER they
:06:33. > :06:35.are not fine! Look at the international ratings agencies, SNP
:06:36. > :06:41.reduce your credit rating to negative outlook BB-. You are in
:06:42. > :06:47.danger of becoming the sort of country no one will lend to. That is
:06:48. > :06:52.because of the deficit. I know that! If you look at the other indicators,
:06:53. > :06:59.they are up, GDP growth for .2%. Last year the indicators were 2.8.
:07:00. > :07:04.We have almost double that. -- 4.2% this is double the average in Latin
:07:05. > :07:08.America. More investments, up 14%! Here you are in London trying to
:07:09. > :07:12.persuade business to invest. I think you seem to see foreign direct
:07:13. > :07:17.investment as a way out of your economic troubles. Undoubtedly.
:07:18. > :07:22.Imagine I am an investor. Let's talk, you and me. I am thinking
:07:23. > :07:26.about putting money in Costa Rica. I see the credit ratings agency have
:07:27. > :07:31.cut your rating. That alarms me. It means there is more risk. I also see
:07:32. > :07:34.that you are struggling to keep a lid on labour unrest. You have had a
:07:35. > :07:40.national strike, the health service, the schools service in uproar
:07:41. > :07:44.because of cuts you're trying to make to public expenditures. I am
:07:45. > :07:49.thinking as an investor, this country is not stable at all, never
:07:50. > :07:55.mind Switzerland. You have not seen the other statistics I am trying for
:07:56. > :07:58.you to look at. Costa Rica remains one of the most stable political
:07:59. > :08:04.democracies in the western hemisphere. It continues to enjoy a
:08:05. > :08:08.solid social security system, which I think explains the stability of
:08:09. > :08:13.the country. It continues to have one of the most experienced and well
:08:14. > :08:17.thought of educational systems, public educational systems, in Latin
:08:18. > :08:22.America. (CROSSTALK). The problem is you cannot afford these things.
:08:23. > :08:27.Social welfare, education system. Not only do we afford them but we
:08:28. > :08:32.are keeping that responsible path. We have a constitutional mandate to
:08:33. > :08:39.invest as much as 8% of GDP on education. My Administration has
:08:40. > :08:44.taken that amount to 7.89%. I have vowed to have the 8% achieved at the
:08:45. > :08:46.end of my mandate. That continues to be a serious objective of the
:08:47. > :08:51.government that we have not neglected at all. Let us talk about
:08:52. > :08:55.the way in which you pitch your bit for foreign investment around the
:08:56. > :08:59.world. It seems to me the one place where you have really had traction
:09:00. > :09:04.in recent years is China. China has put a lot of money into Costa Rica.
:09:05. > :09:08.Not quite. The US and Europe. China has not put much. They have put a
:09:09. > :09:15.lot of money in Latin America but in Costa Rica it has not been the case.
:09:16. > :09:24.China has been investing in one huge road which will make San Jose close
:09:25. > :09:28.to the Caribbean but the new port... You have been to see the
:09:29. > :09:32.President. Three times. You came back bearing gifts. You were
:09:33. > :09:39.delighted you have a grant of $25 million. But then soon afterwards
:09:40. > :09:43.news came that one of the most important ventures with the Chinese,
:09:44. > :09:46.which was a major new oil refinery which you had been planning for the
:09:47. > :09:51.last nine years, the whole project collapsed. The contract didn't work.
:09:52. > :09:58.It was not my contract. I inherited it. We try to change it. President
:09:59. > :10:03.Xi try to change it. It didn't work out. We decided that it was not
:10:04. > :10:07.worth pursuing. What is the lesson on the dangers of relying on foreign
:10:08. > :10:13.direct investment to get your economy going? You have to do things
:10:14. > :10:16.right, not wrong, you need contract and good incentives, you need to
:10:17. > :10:20.seek for what you can do and have a clear vision of what you need. So
:10:21. > :10:29.far we have developed enormously in the service sector. Tourism is up,
:10:30. > :10:36.double digits, we are back... The numbers before the crisis in 2008.
:10:37. > :10:41.We are extremely well suited in medical devices, for example. We are
:10:42. > :10:44.in sophisticated manufacturing. And so you have to find investment in
:10:45. > :10:47.areas where the country can profit from and these are a couple of them.
:10:48. > :10:53.And we have others, obviously, but these are fundamental. Isn't one of
:10:54. > :10:57.the saddest indictments of not just your record but the record of the
:10:58. > :11:01.last few administrations that you've delivered economic growth, as you
:11:02. > :11:07.say Costa Rica is a tourism centre for people from the US, Europe.
:11:08. > :11:10.Canada. All sorts of places, you have strong points, but you have
:11:11. > :11:15.consistently failed to deliver up on poverty reduction or indeed
:11:16. > :11:22.elimination. Compared with other central American countries you are a
:11:23. > :11:27.richer countries. One fifth of the population. That 20% who are poor,
:11:28. > :11:33.some of them really poor, it hasn't died in the last 20 years. Whereas
:11:34. > :11:36.Nicaragua, much poorer, but they are actually delivering on poverty
:11:37. > :11:42.reduction. Why are you failing so badly? It has to do with several
:11:43. > :11:45.things, fundamentally employment, with the economy not growing as fast
:11:46. > :11:53.as it should. This is the main explanation. We opted for making the
:11:54. > :11:56.Costa Rican economy associated with the most dynamic processes on the
:11:57. > :12:02.global world and we forgot that most of our own educated workforce was in
:12:03. > :12:05.the agricultural sector, and that was left behind. One of the things
:12:06. > :12:10.that I vowed to do and I am doing was try to bring that back. To
:12:11. > :12:17.strengthen the internal markets where the small and medium-size
:12:18. > :12:23.enterprises can generate more jobs. This is I think the fundamental, key
:12:24. > :12:27.issue. We will grow stronger and it will grow faster, and that number
:12:28. > :12:32.will go down. This will explain some of the country is growing as fast as
:12:33. > :12:37.they have. And other explanation is, you are frank about it, you talk
:12:38. > :12:40.about it, corruption. The elite and those who are well-to-do in Costa
:12:41. > :12:44.Rica have consistently creamed off quite a lot of the assets of the
:12:45. > :12:49.country by way of corruption. This was the case in the past. 7% of GDP
:12:50. > :12:56.you said was lost in corruption. Latin America. This is the overall
:12:57. > :13:02.number, the ID, international development bank, users. I have had
:13:03. > :13:06.no cases of corruption in the last two years in my Administration --
:13:07. > :13:10.IDB. In your administration? In your due respect I don't think that's
:13:11. > :13:16.what most Costa Ricans believe. They are wrong. Show me where it is one.
:13:17. > :13:19.There is no corruption. Obviously I am not talking about petty
:13:20. > :13:25.corruption, that could happen everywhere. I am talking cases where
:13:26. > :13:29.leaders of the country or hierarchs in institutions are somehow found
:13:30. > :13:34.doing wrong doing. That's not the case. If there is no corruption, if
:13:35. > :13:39.all your public officials in all branches of government are
:13:40. > :13:42.completely honest, then they must be incompetent, especially in law
:13:43. > :13:45.enforcement, because if you look at what the United States bureau of
:13:46. > :13:48.international narcotics and law enforcement is about your country
:13:49. > :13:52.and other international observers of the drugs cartels and their money
:13:53. > :13:57.laundering activities, you will see that right now in your country today
:13:58. > :14:02.there is major money laundering going on. The drugs cartels use your
:14:03. > :14:08.country as a sort of entrepot for getting drugs from Columbia to the
:14:09. > :14:11.United States and Mexico. You know this is happening. If officials are
:14:12. > :14:15.not helping them they are just incompetent. In your country and
:14:16. > :14:20.elsewhere, money laundering is a huge problem. Nobody can claim that
:14:21. > :14:27.it has been detected and solved anywhere.
:14:28. > :14:37.The country currently catching more drugs is Costa Rica. Much more than
:14:38. > :14:41.those who are closer to the US. We have been getting more than
:14:42. > :14:44.everybody else because we are popular and the police force is
:14:45. > :14:50.competent but the drug-trafficking continues to be a big challenge to
:14:51. > :14:54.all the countries here. That is true. But is their culpability in
:14:55. > :15:02.and out of the country? The bureau of narcotics in the USA that Costa
:15:03. > :15:09.Rica a complex bureaucracy which slows capture and it remains a
:15:10. > :15:13.nagging issue. One of the top three countries for cocaine transition
:15:14. > :15:19.into the US. Organised criminal elements are wielding a growing
:15:20. > :15:29.influence. We have been working with the US agencies including the FBI
:15:30. > :15:33.and the EA. Diplomatically. We want to deal with this. You talk a good
:15:34. > :15:40.game but the fact is that on the ground times of cocaine are still
:15:41. > :15:46.going through your country every us. -- tons. This is a regional issue.
:15:47. > :15:51.And producing the flow we are part of the corridor. Other countries in
:15:52. > :15:55.Central America are fighting it off on land, in the sea, in the air, and
:15:56. > :16:00.we are doing it successfully. Is there a continuation of this
:16:01. > :16:05.phenomenon in the region? Of course. It will continue to be. This is one
:16:06. > :16:08.of the most profitable criminal businesses in the world. This raises
:16:09. > :16:12.the other element in our conversation, you are desperate to
:16:13. > :16:18.save money and have been imposing austerity on things like law
:16:19. > :16:23.enforcement. Going back to a US report, they say this trend, drugs
:16:24. > :16:28.going through your country, raises serious concerns about the Costa
:16:29. > :16:32.Rican's ability to prevent these criminal organisations from
:16:33. > :16:36.furthering their business. Even though you say you are committed to
:16:37. > :16:39.the fight against international drugs crime you and putting the
:16:40. > :16:44.resources into it to allow you to prevent it. -- aren't. This
:16:45. > :16:50.situation needs to be handled every day. Investments in security are
:16:51. > :16:55.necessary to deal with drugs, but also contraband and other organised
:16:56. > :16:59.crime activities. The government has committed to this and will work with
:17:00. > :17:04.the private sector to stop this. We aren't capable of putting an end to
:17:05. > :17:10.drug-trafficking in Costa Rica and the Caribbean area, this has to do
:17:11. > :17:14.with the production of drugs down south and the incoming drugs in the
:17:15. > :17:20.USA and Europe. Drugs are thriving. We are victims of this, not part of
:17:21. > :17:23.the problem. Do you agree with your Attorney General who said recently,
:17:24. > :17:28.a quote, there is no returning to the peaceful Costa Rica that was
:17:29. > :17:34.free of violence and criminal organisations. Costa Rica is now a
:17:35. > :17:39.violent country. If you look at the numbers for Costa Rica itself, that
:17:40. > :17:44.may be the case. But Costa Rica is one of the more safe and less
:17:45. > :17:50.violent countries in Latin America. But it is a question of trajectory.
:17:51. > :17:57.Not so long ago I was in Honduras with HARDtalk, it has the highest
:17:58. > :18:02.murder rate in the world for a country not at war. Honduras, you
:18:03. > :18:07.know more than I do, drug cartels are killing those countries. It
:18:08. > :18:14.could happen to you. Of course. That is why we are dealing with these
:18:15. > :18:20.issues. We want young man who are unemployed to stop getting involved
:18:21. > :18:25.in drugs. Statistics say it is most likely them. That is why employment
:18:26. > :18:31.is also important. Not only in cities, but the borders and the
:18:32. > :18:37.coasts of Costa Rica. But if you look at the statistics, yes, violent
:18:38. > :18:42.crime has risen. Last year we had a peak. It has come down already. We
:18:43. > :18:50.want to keep it down. It is a permanent concern of ours in order
:18:51. > :18:53.to keep it down. There is a very violent debate about legalising
:18:54. > :18:59.drugs in Latin America. Uruguay has gone that way. Colorado and other
:19:00. > :19:02.states in America have looked at it. Europe, Portugal, they have
:19:03. > :19:11.legalised drug use to a certain extent. Is that the answer? That
:19:12. > :19:16.isn't the answer. The problem isn't marijuana, it is cocaine. And nobody
:19:17. > :19:22.is talking about legalising that. Maybe it is time. It isn't being
:19:23. > :19:27.discussed. Should be? Maybe. We should put it on the table. Argue
:19:28. > :19:31.putting it on the table? I think the legalisation of drugs in general
:19:32. > :19:38.needs to be discussed. -- Are you putting. We need to see the benefits
:19:39. > :19:44.and negative consequences. Are you for it? I am against it. But I am an
:19:45. > :19:49.academic. I like to see evidence of things. And I don't see conclusive
:19:50. > :19:54.evidence yet. I haven't seen countries that have legalised
:19:55. > :19:59.marijuana dealing well with hard drugs. We also have to look at the
:20:00. > :20:03.networking around cocaine which is extremely violent. That is in the
:20:04. > :20:08.case with marijuana all the time, especially with personal usage,
:20:09. > :20:13.which isn't a criminal activity in Costa Rica. We haven't criticising
:20:14. > :20:17.the person using marijuana as in most countries around the world. But
:20:18. > :20:20.the legalisation of the drug trade and hard drugs in particular is not
:20:21. > :20:28.a good idea. It down is like a daft question but I was intrigued. You
:20:29. > :20:32.say it isn't illegal to use marijuana. Have you used it? No, I
:20:33. > :20:40.haven't. Let's talk about something else. We have talked drugs. The
:20:41. > :20:43.movement of poor people in particular. In the case of the
:20:44. > :20:51.Western Hemisphere, those who want to get to the US. For you, it is a
:20:52. > :20:59.2-pronged challenge. One is Cuba. Americans have lifted the wall. That
:21:00. > :21:02.is affecting you. Many Cubans are worried the US laws may change soon
:21:03. > :21:07.because of the normalisation of relationships. They are trained to
:21:08. > :21:12.get to the US right now. Many are coming through your country. --
:21:13. > :21:19.trying. How worried are you about the amount of Cubans you are having
:21:20. > :21:23.to deal with? We have had 6500 stay in Costa Rica because Nicaragua
:21:24. > :21:28.closed the borders to them. We have had to deal with that mass of human
:21:29. > :21:35.beings. They were potentially a letter to Mexico. They were. Others
:21:36. > :21:41.went by land. -- airlifted. First to El Salvador and then on. The same
:21:42. > :21:48.thing happened with the migrants in Panama. They have just enacted a
:21:49. > :21:55.similar strategy with Mexico for 3500 Cubans that they had. It
:21:56. > :21:59.sounds... Many could still come because they are in Ecuador. That is
:22:00. > :22:05.right. Is your message to the US that you have to change the law?
:22:06. > :22:13.Yes. I sent a message to President Obama. Unless they have a drive for
:22:14. > :22:19.the policy... For example, the Cuban Adjustment Act and other laws.
:22:20. > :22:23.Otherwise it will continue. They are coming formerly out. It isn't the
:22:24. > :22:29.situation with other migrants coming through Central America without
:22:30. > :22:36.papers. -- formally. Poor people are often seeking... They are flying to
:22:37. > :22:39.South America and are desperate to move up the continent to get to the
:22:40. > :22:44.US. I use for defying your borders to make sure they don't get through
:22:45. > :22:55.the country? -- are you for defying. Those who come and are
:22:56. > :22:58.identified at the border are put through migration procedures which
:22:59. > :23:02.basically means they are brought into a detention centre. We try to
:23:03. > :23:08.find out where they come from, whether they have children. They are
:23:09. > :23:17.then taken to a place they can safely be given help, not a
:23:18. > :23:25.detention centre. They should not assume they can come through, but
:23:26. > :23:30.they can. We can't guard every inch of the border. The alternatives are
:23:31. > :23:32.to deport them back to where they come from and sometimes we don't
:23:33. > :23:37.know where that is. A final thought. You were a surprise
:23:38. > :23:43.president. You have two years left and you have had to years. Are you
:23:44. > :23:51.still think you can accomplish everything you have promised even
:23:52. > :23:57.though you aren't going to have a second term? I will deliver those
:23:58. > :24:03.promises. I haven't hated being a president. Eye-watering to them. Are
:24:04. > :24:10.you sure? Absolutely sure. -- I will deliver them. Mr president, thank
:24:11. > :24:24.you very much for being on HARDtalk. Thank you for your time.
:24:25. > :24:27.A lovely day on Tuesday, many places were dry and bright,
:24:28. > :24:31.The closer you were to the North Sea coast there was a nagging
:24:32. > :24:35.north-easterly breeze making it feel chilly at times and more cloud into