Costa Rica News – Only a few months ago, the chatter was all about strengthening trade relations between Nicaragua and Costa Rica, for the mutual benefit of both nations. Today, however, growing tension over controversial updates to the NICA Act could have serious implications for the Nicaraguan economy. And these are likely to resonate across Central America.
What is Happening with NICA?
US congress looks set to approve the Nicaragua Human Rights and Anti-Corruption Act in the coming weeks. This is an updated version of NICA that is, ostensibly, at least, aimed at addressing human rights concerns following the crackdown on anti-government protests, and the Nicaraguan police’s decision to make demonstrations illegal.
Politicians and campaigners like Bianca Jagger say the Act is essential to prevent human rights violations However, there are others who see it as a cynical move by US legislators to retain control and stifle economic growth in Central America.
The Implications for Costa Rica
The effects of US foreign and economic policy are inevitably felt the world over. The recent trade war with China has combined with growing interest rates in the US to send the trade deficit towards a record high. These factors have all led to a surge in the value of the US dollar, and this is felt by importers, exporters and those who make a living through currency trading. Of course, there are plenty of individuals and businesses in Costa Rica who trade with the US or speculate on the money markets. However, the tension between the US and Nicaragua strikes particularly close to home.
The implications of NICA are far-reaching. Reduced access to government loans will affect Nicaragua’s ability to do business with its main trading partners, of which Costa Rica is a prime example. However, these latest revisions to the Act are also leading to diplomatic tension. Allegations of human rights violations need to be taken seriously, and Costa Rica’s Director of Foreign Policy, Christian Guillermet, said: “We call for all human rights to be respected so there are no acts of violence, and above all so that all this can be resolved through peaceful means and dialogue.”
This led to something of a war of words, with the Nicaraguan Foreign Ministry issuing a written response that essentially told San Jose to mind its own business, while suggesting that Costa Rica is less than welcoming to Nicaraguan immigrants.
At a time when the economy is showing signs of recovery from the difficult times of recent years, this is the kind of set back that will benefit nobody. Much will depend on whether the US follows through with the revisions to NICA, and for now, we can only watch and wait.