Environmental Risks Behind Costa Rica’s Indebtedness with the IMF

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    The advance of the loan from the International Monetary Fund (IMF) for $ 508 million processed in the Legislative Assembly means a series of consequences that should concern the defenders of nature and ecosystems.

    This loan has an environmental dimension that is ignored even by the deputies themselves. This is due to the fact that the strategy of making the negative externalities of financial transactions invisible is very efficient.

    But the experience of other countries indebted to the IMF gives us a clear picture of what its impact will be, especially if the Executive Power is negotiating a “Right of Drawing Agreement” known as Stand-By with the IMF itself.

    A known consequence of these Stand-By processes has been the privatization of strategic public companies, mainly in sectors related to natural resources, especially energy and minerals. In addition, processes of liberalization of the financial and banking sector are also promoted, cuts of labor, social and cultural rights.

    In fact, within the “recommendations” of the IMF for this first loan, is promoting openness in the electricity sector by private entities. Which would lead in practice to hydroelectricity companies creating more dams on rivers unnecessarily, since the demand for energy in the country is not covered and even today the Costa Rican Electricity Institute is forced to buy energy from foreign companies even without need, due to laws written at the convenience of private companies.

    The little information that the government has revealed about the negotiations with the IMF means that many of the consequences of this type of indebtedness with financial entities that have promoted mining, dams and agribusiness around the globe cannot be known. But for this reason, from the environmental point of view, the increase in public indebtedness makes Costa Rica lose sovereignty to make its own decisions about national natural resources and leave us more vulnerable.

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