November 27, 2005

Costa Ricans demonstrate for free trade

Readers of my old blog "Hube's Cube" as well as newer readers may know of my ties to the "Switzerland of the Americas," Costa Rica. The English-language Tico Times reports on pro-CAFTA (Central American Free Trade Agreement) demonstrations in the capital of San José three days ago. Publius Pundit has a round-up of stories on the demonstration.

I'm certainly no expert on CAFTA nor econcomics in general, but having lived in CR for some time, I can tell you that the average "tico" (what Costa Ricans refer to themselves as) is pretty darn fed up with the monopolies that many sectors of the country have embraced. The largest, ICE (Instituto Costarricense de Electricidad, or Costa Rican Institute of Electricity) single-handedly runs the power industry and virtually all communications (telephone, Internet). Tales of absolutely brutal customer service, non-caring employees and constant strikes and strike threats have made the calls for privatization louder over the years. One of the most common anecdotes I've heard time and time again was people going to the main ICE office (quite close to where my in-laws live, by the way) to either pay or dispute bills, and having to wait interminably -- sometimes for almost an entire day -- while the ultra-unionized ICE employees fulfilled their "contract" to a tee: breaks seemingly every 15 minutes, drinking coffee and/or reading the newspaper while people wait in line right in front of them, and disappearing to do some "chore" after every second or third person in line is served.

Sound familiar? Ever call your cable company? (Here in Delaware, longtime residents may remember Rollins Cable -- the first cable company in New Castle County -- and their customer service was scant to non-existent.) How about service at your local post office? Granted, this isn't exactly a fair comparison because, despite the monopoly (or virtual monopoly) of the cable industry and postal services here in the US, customer service and service in general are magnitudes better here than in Costa Rica. This is in large measure due to the power of the countries' unions. In CR, they're extremely powerful, and ICE's is frequently the instigator in union disputes in other sectors of the Costa Rican economy. They'll get thousands of people into the streets demonstrating in no time, even if it has nothing to do with ICE.

Pro-ICE people point out that the monopoly has brought communications to the entire country at low cost. The former is largely true, though the quality of communications leaves a lot to be desired. "Low cost" is misleading, certainly, as ICE is heavily subsidized by the government, which merely means the population pays for it via taxes -- and taxes as a whole are quite high in Costa Rica. (I always get a kick out of folks who claim things like "cost little" or "free" just because one may not pay for it directly out of pocket.)

Those old enough to recall when AT&T was the only long-distance phone network in the United States will remember high prices and lousy customer service. What has happened since the giant was "broken up"? Massive competition has resulted in a plethora of [cheap] phone services and excellent service. It seems only logical. Costa Rica has a highly educated workforce that not only national but international companies can take advantage of (and I certainly don't mean "advantage" in a negative way!). Computer chip manufacturing is a huge industry in CR and it's growing; it will serve all ticos well to open up their communications -- and all services -- to competition.

UPDATE (9:01am): Welcome Instapundit readers!

Posted by Hube at November 27, 2005 08:17 AM | TrackBack

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Yo Ticos you want customer service , try " baby ICE's " like in baby Bell's and stay the hell away from Time Warner. Gas is a bragin at $5.00 per gal. compared to cable rates up norte.

Posted by: Fred at November 28, 2005 12:20 AM