Pro-Market Economist Wins Costa Rica Presidential Election

Former World Bank economist Rodrigo Chaves won Costa Rica’s presidential election with promises of fiscal discipline after his rival Jose Maria Figueres conceded

Rodrigo Chaves on election night in San Jose, Costa Rica.
By Michael McDonald
April 04, 2022 | 08:51 AM

Bloomberg — Former World Bank economist Rodrigo Chaves won Costa Rica’s presidential election with promises of fiscal discipline after his rival Jose Maria Figueres conceded.

Chaves led with 53% to 47% for Figueres, with 97% of the votes tallied on Sunday night. His party, Partido Progreso Social Democratico, was founded 4 years ago and has never held a political office. In a February vote, it won 10 seats in the nation’s 57-member, unicameral congress.

Long an oasis of stability in a region plagued by violence, Costa Rica had a choice of president between two investor-friendly candidates, setting it apart from neighbors led by fiery radicals such as El Salvador’s Nayib Bukele and Nicaragua’s Daniel Ortega.

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Chaves, 60, promised to boost growth with more foreign investment and higher levels of tourism. The U.S.-educated president-elect has pledged to reduce the government’s fiscal deficit and said he favors a close relationship with the International Monetary Fund. The government signed a $1.8 billion extended fund facility with the multilateral lender last year.

In his victory speech Chaves said he would modernize the state, create jobs and govern with “transparency and austerity.”

Costa Rica’s bonds have returned 1.3% this year versus an average loss of 9.3% across emerging markets, according to data compiled by JPMorgan Chase & Co. The nation has long enjoyed some of the best living standards in Latin America, but has more recently been suffered from mediocre economic performance and seen its growth rate lag behind peers such as the Dominican Republic and Panama.

Chaves, who earned a Ph.D. in economics from Ohio State University, promised to cut red tape to foster an environment where entrepreneurs can thrive and said he can promote a low interest rate environment to spur investment.

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He worked 27 years at the World Bank, becoming country director for Indonesia in 2013. During the campaign, he came under fire over sexual harassment allegations made while he worked at the bank. He denied any wrongdoing, and attributed the accusations to misunderstandings caused by cultural differences.

Chaves served six months as Costa Rica’s finance minister under President Carlos Alvarado before stepping down in May 2020 over what he said were differences with Alvarado on spending cuts. Chaves will be sworn in as president on May 8.

“The best is yet to come,” he said. “We will have more jobs and better jobs, and better public services.”