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Editorial Note: We have received a lot of positive feedback on the magazine, and we would like to thank those who took the time to let us know. We have been asked by some of the writers to ask for feedback specifically on their submissions, so I would like to request this from all of you. If there are any particular articles you have found helpful or interesting, or a certain writer, please let me know. Also if there are any topics you would specifically like to see covered in a future issue, we would be happy to try and provide it for you. The magazine is here to inform and entertain you, please let us know how we can continue to improve it. Thank you. - Ryan Piercy
Have you renewed your membership?
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This magazine has been published every two months for 8 years as the official communications media of the Association of Residents of Costa Rica. Our organization provides service to thousands of foreigners who have chosen Costa Rica to reside for short periods or for permanent residence. Over the last 20 years the Association of Residents of Costa Rica has been offering reliable SERVICES, INFORMATION and ADVOCACY to Costa Rica’s foreign residents. We have the experience and ability to help you with your residency application, immigration, business and financial management, real estate purchases and rentals, property management, insurance, pet importation and much more. If you wish to place an ad in El Residente, please contact the ARCR main office.
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Bob Miller
scanners that you are replacing. Give them to us and we will check them out and bring them up to snuff before giving them to the public schools.
Well here we are again. I must be having fun. You know that wise old Chinese saying, “When you are having fun Time Flies”. Well it flew and here I am. However I don’t know about the fun part.
We are also in the initial stages of setting up an operation similar to United Way to disburse charity to the needy. Presently we have several other clubs in San Jose who are interested in doing this with us.
Presidents Report
We will now get down to business. Charity! Well by the time you read this report, Accopane our current charity should have received the panels, paint and a contractor to install and paint the panels for their new roof. Our Charity Committee led by Earl Tomlinson has completed their job. I would like to send a special thanks to Atillio Gilberti for securing the materials for this project and to Terry Renfer for keeping every body on their toes. We are always looking to help the schools. As we all know that Costa Rica’s public schools compared to the States or Canada are basket cases. So we try to help. If you have computers, monitors, printers or
We are also investigating the possibility of starting a Welcome Wagon to help newcomers to Costa Rica feel welcome. Please note that if you are interested in helping us. Join us. We need your help and input. We still have people coming into the office with inquiries ranging from “how do I get my rentista papers?” to “are the doctors and dentists capable?” Fair questions all. We of course answer them all. To a lot of these people we remind them of our monthly two-day seminars. Many say they don’t know anything about them. So here goes to one and all. Continued on page 4...
COVER PHOTOThe Costa Rican National Flower: The orchid species Cattleya skinneri, popularily known as the Guaria Morada, was designated as the national flower in 1937. When the flower was chosen by vote, it came as no surprise, being one of the most common orchids found throughout the country. Campesinos cherish the flower for its beauty and they associate it with the beauty of Costa Rican ladies. According to Native Costa Rican traditions, the “Guaria Morada” brings fortune and good luck. It brings union and family understanding and channels the best cosmic experiences. It evokes peace and love as well as hope for the future. Its flower does not have a special fragrance because it is filled with dreams to be accomplished.
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The ARCR has a two-day seminar the last Thursday and Friday of every month. These seminars cover most topics that persons coming into the country are in interested in knowing about. The lecturers are professionals in their fields. Now if you have gone to some similar seminars you will hear the lecturer for example in the field of real estate tells you “Have I got a deal for you�, and what he is doing is giving you a sale pitch. Our people are professionals who will tell you what to watch out for in their field, the good and the bad. At the end of their session they take all questions, the good and the bad. If you want to inquire if they have any property to sell, you can see them later after they have finished or in their office. Their only purpose at the seminar should be to tell you about conditions in their profession in Costa Rica.
Many of our members attend these seminars at least once every couple of years, the reason being that things change. To attend these seminars, call up the ARCR to make reservations. The staff will be glad to give information. The phone number is (506) 2338068.
The seminars cover the legal, real estate, medical, banking, investment, transportation and travel professions. We also cover computer use in Costa Rica.
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New fishing law
El Residente Update Jay Brodell- AM Costa Rica www.amcostarica.com President promises improvements President Abel Pacheco promised Feb. 13 to improve the business climate in the country and listed 13 improvements he has or would make. Pacheco said his administration had embarked on a program of simplification of official permits so that whoever wanted to start a business and create jobs would not have to “walk a long Calvary.” Among other accomplishments, Pacheco said that his administration has reduced the time a farmer has to wait to get a tax waiver on his machinery and equipment to only 45 days instead of six months. The president also used the example of a small landowner who wants to build a wall valued at perhaps 50,000 colons, some $108. The landowner might be forced to seek permits through the use of lawyers and officials stamps, among other expenses, that might cost 100,000 colons, twice the value of the wall, Pacheco said.
Transport woes Bus operators have been urged to eliminate money and adopt some form of ticket system to cut down on robberies. The Cámara Nacional de Transportes has been demanding an immediate solution to a wave of robberies that have plagued the industry. Transport representatives have met with police and officials of the security ministry. María Fullmen Salazar, vice minister of Seguridad Pública, told the bus operators that they could help by eliminating money that drivers carry in their sponge compartments. Most drivers have a piece of four-inch deep sponge some two feet square in which they have cut compartments for each denomination of coin and currency. They carry these with them when starting and leaving work.
March-April, 2005
Environmental Organizations have cautiously welcomed the approval of a new national fishing law. The law was passed Feb. 11 and aims to establish more regulated fishing of Costa Rican waters that will ensure the conservation of marine wildlife. The creation of a fishing law has been in debate since 1995 when part of the old 1948 law was declared unconstitutional. The new law prohibits the de-finning of sharks in Costa Rica. Fines and prison sentences will be handed out to those who are caught. In addition there are also strong personalities for those caught harming turtles. The law also demands that shrimp fisherman use a special net that allows turtles to swim free. “Finally Costa Rica has a law that regulates the fishing industry. The law establishes 17 new types of fines that that authorities will impose.” said Maria Virginia Cajiao the legal director of MarViva. MarViva is a non-profit organization, which works to protect marine life in Central America. Ms. Cajiao said that the new law is not based on conservation of marine life but on making the most of fishing resources in a sustainable way. The Programa Restauracion de Tortugas Marinas has said that it opposed parts of the new law. The group said that the law promotes the exploitation of marine resources in Costa Rica. “The last thing national fisherman and marine species need is more fishing boats in our waters, in our region,” said Randall Arauz, president of the organization. Arauz said that despite the new law marine species would still be threatened.
Local meat inspections OK’d The United States has lifted a two-year ban on the selfinspection of meat by Costa Rica; the Ministerio de Agricultura y Ganaderia said Feb. 14. Since 1995 Costa Rica has been off the list of countries that could do their own meat inspection for U.S. importation. In the past 10 years much has been done to improve the processing plants in the private sector and revise the inspection methods, said Rodolfo Coto Pacheco, the minister of Agricultura. Coto also thanked the U. S. Embassy staff that helped lift the barrier to Costa Rica inspecting its own meat. Meat that is exported from Costa Rica will no longer have to be re-inspected when it arrives in the United States. Inspections will be carried out in Costa Rica by technicians from the ministry.
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Association of Residents of Costa Rica We are looking for more volunteers to help with the Charity Committee and upcoming events. We have many ideas and are looking to work directly with other groups. If you are interested please contact Bob Miller or Earl Tomlinson at the ARCR (233-8068 or 221-2053) www.arcr.net
Send us your club news or activities for free publication in this column
PC Club of Costa Rica Canadian Club Calling all Canadians...Join us on the Third Wednesday of each month for our luncheon and meeting. Find out all about our various groups and charity work around the country, and meet some fellow Canadians Call Bob or Elsa at 228-1250 www.canadianclubcr.org Bird Watching Club Monthly trips around & out of Costa Rica For information of any of our current of future trips Please contact us Tel 267-7197 E-mail: johnphyl@racsa.co.cr The Toastmasters Club Improve your public speaking skills 1st and 3rd Monday of each month 9 A.M. Contact Natalie 296-3059
This computer Club meets on the third Saturday of each month at Pan American school, in Belen, 9 am to Noon 2 months Free Trial for newcomers For information call Chuck Jennings. Phone 266-0123 www.pcclub.net Republican Abroad The Republicans Abroad of Costa Rica meets the second Tuesday of each month Contact Francis 286-6060, 386-1420 Radio control Sailing Club Meets at Sabana Park Lake For information contact Walter Bibb. Wwbbsurf40@yahoo.com Wine Club of Costa Rica Please mark your calendars The wine club usually meets at 1 P.M. on the last Sunday of each month. Join us to tantalize your taste buds and expand your education on one of the finer things in life. For more information on upcoming events please contact us Phone 279-8927, 257-2223, 285-1276
Democrats Abroad Women’s Club of Costa Rica The Democrats Abroad of Costa Rica meets the last Saturday of each month at The Grand Hotel Downtown. The business meetings begin at 11 a.m., lunch at noon, followed by a guest speaker at 12:30 p.m. For further information, please contact Ruth Dixon 494-6260 or Jo Stuart 225-3101 Golden Era Movies A film club: Classic films, World Cinema, PBS, BBC, books, discussion Michael Bowman Phone 272-5492 Newcomer’s Club A women’s social organization that meets the 1st Tuesday of each month. We welcome English speaking women who reside in Costa Rica. New and long term residents-contact Carol phone 232-3999
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Founded in 1940. The Women’s Club of Costa Rica is one of the oldest, continuously operating service clubs in the country. The name has changed in 63 years, but our motto “friendship and service” has remained the same,. An English-speaking organization, our club has approximately 350 members, originating from over 30 countries. Please join and help us to continue to grow. Remember that you can contact us or keep in touch through our website www.wccr.org White Artist colony (for David & Julia) The colony is now holding a concert on the third Saturday of each month. All are welcome For price and details, please E-mail bwhite@forjuliaanddavid.org
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Insurance in Costa Rica David Garrett “INS” MEDICAL INSURANCE VS CCSS SOCIAL SECURITY The medical care provided by Costa Rican Social Security (“La Caja”)is controversial: some people swear by it, other people swear about it! Following is a broad comparison of the medical protection afforded by INS and that of the Caja. Nature and Scope of the Institutions. INS is an insurance company, plain and simple. It affords coverage to persons who contract insurance and pay the premiums. The Caja’s primary function is to give health care to enrolled persons by means of its hospitals and clinics. Costa Rican labour law says that all employers must enrol their employees in the Caja. As coverage is extensive to the employees’ dependants, most Costa Ricans are covered. Amount of Coverage. INS’s medical insurance policies have a limit as to the maximum amount they will pay per year or per ailment, and once that limit is used up the policy holder has to cover his own expenses. The coverage afforded by the Caja is openended, with no limits. Payment vs. Reimbursement. With most INS policies you have to pay, up front, for your medical care and then claim for reimbursement. With the more modern policies, only the deductible has to be paid up front, and the rest is handled my means of a card system. With the Caja there is no payment for treatments - unless you want to upgrade one of their services. For example, if you are to undergo surgery at the San Juan de Dios hospital, you can pay to have a private room in one of the special, more luxurious wings known as “Pensiones.”
El Residente
Deductibles. INS medical plans have a system of deductibles, and payment of claims is based on a complex point system established for every foreseeable type of surgery or service. The Caja gives necessary medical attention within its facilities without payment or deductibles. Pre-existing Conditions. INS excludes, forever, all ailments which the applicant has at the time of buying a policy, and any sickness or condition which the applicant had in the past and which has a habit of recurring - for example, asthma, diabetes, malaria. Some other conditions have waiting periods starting at the date of issue of the policy, during which you cannot claim; for example, pregnancy and childbirth have a waiting period of 10 or 12 months. The Caja has no restrictions in this regard. Someone can be at death’s door, purchase Caja coverage, and be treated right away. Eligibility. INS’s Plan 14 and Plan 16 policies will insure anyone, man, woman or child, Costa Rican or foreigner, Resident or Pensionado, tourist or illegal alien. For the “INS Medical” plans, foreigners must have legal residency in Costa Rica, or to declare by means of a notarised affidavit that their legal residency is in process. Plan 14 and INS Medical have an age limit of 70, whereas Plan 16 cuts off at age 100. The Caja will only insure Costa Ricans and foreigners who have legal residency status in Costa Rica. There is no age limit. Cost. The premiums of all INS policies follow an upward trend as the age of the insured increases. With the Plan 16 policy, every year INS jacks up the premiums and internal parameters of the policy in order to offset inflation.The most modern policy, “INS Medical”, is denominated in US Dollars, so premiums do not undergo inflationary adjustments. The cost of Caja coverage is either a percentage of an employee’s wage or, in the case of non-wage earners, it is a fixed amount, regardless of the number of dependents. The rate decreases at age 55. Medical Services. INS plans allow you to go to any doctor, hospital, clinic, lab, pharmacy, or Continued on page 9...
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provider of medical goods and services of your choice. But there is a list of “affiliated” providers, and it behoves you to stick to those on the list because their charges are regulated by INS. The Caja gives medical care through its own hospitals and clinics. You are assigned the hospital or clinic which corresponds to your address, where you will be attended by the doctor who happens to be on duty. Medication. With the INS policies, you can buy prescribed medication anywhere – even abroad, over the Internet, etc.
The Caja service does not have any deductible. However, the Caja’s bureaucracy and seemingly interminable queues discourage patients from using the Caja service for minor treatments or items. Preventive Care. The Colón based medical policies do not provide for preventive care: no yearly check-ups, Pap tests, prostate examinations, etc. The Dollar-based “INS Medical” policies pay $100 for a physical and an eye test every year starting with the policy-holder’s second year. Caja service includes preventive care and tests.
The Caja has its own pharmacies, where patients can obtain their prescribed medication, no charge. But supply is irregular and most of the time the Caja pharmacies do not have available a full spectrum of medication. Quality of care. Health care in Costa Rica is excellent. Quality is hard to measure, but a good indication is life expectancy. In year 2000, average life expectancy in Canada was 78 years, in the USA it was 77, and in Costa Rica it was 76 – an excellent statistic for a third-world country. And take into account attrition due to our homicidal taxi drivers!
Summary of Advantages of INS and Caja Coverage. With INS, legal residency is not required; you can choose your own doctor and hospital; there is coverage abroad; no waiting for surgery; the best private hospitals; a full spectrum of medication; the system is efficient; pays for private hospital rooms.
The Caja coverage does not exclude pre-existing conditions; no age limit; no deductibles; unlimited coverage; no claim process or paperwork; preventive care is covered; cost is lower than INS premiums.
The service of private hospitals such as Clínica Bíblica, CIMA, and Clínica Católica is widely acclaimed. The Caja has excellent equipment, and often the surgeons giving service through the Caja are the same ones you would get through private practice - in other words, they work part time for the Caja and for their own practices. But Caja hospitals tend to be overburdened, and there is often a delay of several months for an appointment or hospital bed. Coverage outside Costa Rica. INS policies give you coverage when you go abroad. The coverage afforded by the Colón-based medical policies is not very good, but the Dollar-based “INS Medical” plans are designed for either regional or worldwide coverage, and do a pretty good job abroad. The Caja coverage is only for Costa Rica, as it only provides for treatment in their hospitals or clinics. Deductibles. INS policies all have deductibles, basically to discourage people from claiming for insignificant items or treatments.
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In the Cocina SALADS One thing that many people enjoy about Costa Rica is the ready availability of fresh fruits and vegetables. One can easily find a great variety in the markets held in each town, and many look for ways to create new combinations and flavors. Salads are a great way to enjoy fruits and vegetables together, and enjoying them in their uncooked form helps retain the goodness. Here are a few salad ideas for your next dinner party.
Mango-Avocado Salad with Lime 1 ½ cups shredded cabbage ½ cup diced cucumbers 1 ripe mango, peeled, cut from pit and diced 1 red bell pepper, cored, deveined and diced 1 avocado, peeled, pitted and cubed 6 green onions, thinly sliced ¼ cup watercress, stemmed 2 limes, juice of 1 clove crushed garlic salt & pepper
Heart of Palm Parmesan Salad 1 can (14 ounces) hearts of palm, drained & rinsed. 2 medium tomatoes, seeded & chopped 3 cloves garlic, finely chopped 2 green onions, chopped (use white & green parts) 2 tablespoons extra virgin olive oil salt and pepper (Use fresh cracked pepper) 2 ounces parmesan cheese, freshly shaved 2 tablespoons fresh basil, chopped 1. Cut the hearts of palm into 1/2” wide pieces. Combine all but the parmesan ingredients in a large bowl. 2. Toss and allow to sit at room temperature for 30 minutes allowing the flavors to blend Serve with shavings of Parmesan on top of the salad.
1. Combine everything. 2. Chill at least 30 minutes before serving.
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ARCR member author of New Guidebook Erin Van Rheenen began her career as a serial relocater at the age of five, when her parents moved the family from Oregon to Nigeria. Most of her adopted locales, however, would turn out to be in Latin America, and have included Ecuador, Guatemala, and Mexico. She moved to Costa Rica in 2002, and became a member of the ARCR. Erin is pleased to announce the publication of Living Abroad in Costa Rica and the launch of www.LivingAbroadinCostaRica.com. The book is the most comprehensive, up-to-date guide available for those who want to move to (or just visit) this Central American republic famous for great its natural beauty, political and economic stability, and an enviable tradition of pacificism (they abolished their army in 1949). Visit the web site to learn about: --The top ten places to visit in Costa Rica --Costa Rica’s excellent health care and affordable real estate --Why people move here and how they make a living --When and where the author will be speaking and signing books. The site is still a work in progress; Erin would love your feedback. Click CONTACT on the site to send her an email.
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LEARNING THE LANGUAGE - Christopher Howard Answering Questions Comprehending and answering questions is one of the most important steps in learning how to speak Spanish. However, you won’t be able to master this skill without first learning the most common interrogatives below. Notice that all of these key words carry a written accent mark. Also be aware that in Spanish we write an inverted question mark at the beginning of a sentence. ¿Qué? ¿Qué deportes practicas? ¿Quién? or ¿Quiénes? ¿Quién es ese hombre? ¿Cuándo? ¿Cuándo comienza la película? ¿Cuánto? ¿Cuánto vale el libro? ¿Cuántos / as? ¿Cuántas personas son? ¿Cuál? or ¿Cuáles? ¿Cuál es tu disco favorito? ¿Por qué? ¿Por qué vives en Costa Rica? ¿Dónde? ¿Dónde vive Usted? ¿De dónde? ¿De dónde es Usted? ¿Adónde? ¿Adónde va mañana?
What? What sports do you play? Who? Who is that man? When? When does the movie begin? How much? How much is the book? How many? How many people are there? Which? (Singular or plural) What is your favorite album? Why? Why do you live in Costa Rica? Where? Where do you live? From where? Where are you from? To where? Where are you going tomorrow?
After you have studied the words above, the next step in learning how to answer questions is to understand how we form questions in Spanish. In order to make a question in Spanish you reverse the order of the subject and the verb as we do in English. For example look at this sentence; Los niños hacen mucho ruido. (The children make a lot of noise.) By putting the verb hacer before the word niños (children) we can turn this sentence into a question. ¿Hacen mucho ruido los niños? (Do the children make a lot of noise?) You can do this with any complete sentence to form a question. To answer you just use the original statement proceeded by si or no (yes or no) If you are lazy to form long sentences, you can also just use si or no alone, as we do in English. Practice the above phrases and vocabulary and you should find it easier to answer in Spanish. Here is your Costa Rican expression or tiquismo for this week: “chunche” is the commonly used word to refer to any ‘thing’ or object in Costa Rica. The correct Spanish word is cosa.
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Tropical Plants by Carol Marujo I had not been in Costa Rica long enough to know the best way to receive packages from the United States when my son mailed Christmas gifts in November. I waited and waited for them to arrive. I then e-mailed him in January saying, “They were probably put onto an oversized container ship and sent by way of the Straits of Magellan.� They finally arrived in February and cost me a stiff import tax. One of the gifts, a book titled Tropical Plants for Home and Garden, is filled with beautiful photographs. Soon I was on the veranda, in my hammock, reading the book, drinking a glass of vanilla iced coffee and thinking how much better the weather was here than up north. Then I looked out over the top of the book and saw that most of the plants in the photographs were right before me, growing near the house. I saw hibiscus, bougainvillea, ginger, croton, canna lily, heliconia, various palms and much more. A bush called, yesterday, today and tomorrow, produces lavender flowers which gradually fade to white. Then it suddenly occurred to me - these bushes and trees did not just sprout up from the earth on their own. Someone planted them. I began to wonder about the f a m i l y who lived here for
23 years, especially the wife who was probably the person whose labors created this landscape. I knew she had seven children. What were her hopes for her life and home after the children were grown?
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Did she think she would be here today enjoying this beauty? I remembered an afternoon back in Illinois several years earlier. A friend who had recently divorced was selling her house. She gave me many cuttings, bulbs, and other plants from her garden. There were lilies-of-the-valley, ferns, tiger lilies and various colors of iris. She shared a memory of her mother whose garden in Ohio was started with gifts of plants from friends. Many generations of women in the United States have started their gardens that way. I wondered whether the beautiful plants growing around my house in Costa Rica had started as gifts from one neighbor to another. Later that week, some neighbors introduced me to their niece, a young woman who was one of the seven children raised in what is now my house. With my limited Spanish, I expressed as well as I could, my appreciation for the flowering trees and shrubs, but I could not converse enough to ask the many questions I had. I resolved to learn Spanish to get to know the people around me.
Continued on page 15...
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About Culture Someone once told me that teaching people to be aware of their culture is like trying to teach fish to think about water. Under ordinary circumstances, it doesn’t happen. However, when you are in another country, and people do not act as you expect them to, or your actions are interpreted differently from how they were back home - that’s when the cultural differences grab your attention. For the first several months here, there was so much to learn and so much frustration involved in learning it. I’m not the first North American to observe that Costa Rica is not an efficient place to get things done. I felt as though I wasn’t “doing it right,” that there was a hidden way to accomplish things smoothly - patience and charm help a lot - and that as soon as, “things settle down” I would feel better. It’s been over a year, and I think I am just beginning to understand the ways of doing things here. Costa Rica is a modern, democratic country with educated people who have had a lot of contact with Europeans and North Americans. For these reasons, it is easy to initially overlook the cultural
differences. They are subtle but important. I used to think that by now I would know the culture well enough to be writing about those differences. But I have only begun to understand Tico culture, and learning about it is a labor of love that will take a long time. Meanwhile, readers can find useful information in the writings of others who have been here much longer than I. The Neighborhood Our farm is in the canton of Puriscal. From its capital, Santiago de Puriscal, the nearest city large enough to have an Internet cafe, one can drive or take a bus south about 75 km. (46 miles) to the Pacific coast town of Parrita. For the first half hour, a well-maintained, paved road winds though farmland and forested mountains. After that the pavement ends, and a gravel road continues the rest of the way. During the rainy season, the road becomes difficult and sometimes impassable. Continued on page 16...
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Electricity began to arrive in this area about 15 years ago, and some areas, far from the main road, still do not have it. The cables for landbased phone lines and Internet connections are slowly coming this way. Those of us with cell phones often need to walk far from the house to get a signal. Future issues of El Residente will contain stories from my neighbors about the way of life out here in the campo.
Nearby Cangreja National Park is a biological reserve said to be home to some species of life not found anywhere else. Peaks in the Fila Cangreja range rise above several rivers and the towns of La Palma, Salitrales, Tufares, San Martin and Mastatal and the Zapaton Indian Reserve.
About the author: Dr. Marujo is a freelance writer and retired psychologist who reside in Costa Rica as a pensionada. She and her husband moved from the United States to a small farm in the mountains of the Central PaciďŹ c region. These are stories of her early experiences in the new country. More will follow in future issues of El Residente.
The air and water are pure and the soil is rocky. The area is peaceful to the ears except for an occasional motorcycle or rooster. Wind passes through the trees with a pleasant sound, background for the calls and songs of many birds. Sounds of howler monkeys and the lowpitched growl of something like a large species of feline have been reported. There are many poisonous snakes. Most of our neighbors are campesinos and raise coffee, sugar, vegetables, fruit, cattle and chickens. Some have a car or truck, and many do not. Many travel by horseback, and a few still use oxcarts. There are at least two working sugar mills near our farm, called trapiches. These are where farmers grind sugar cane into juice, cook it down in large, wide kettles over wood-burning fires and then let it cool and harden in molds to make brown sugar.
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U.S. Citizens Living in Costa Rica, Why File U.S. Tax Returns? Randall J. Lindner E.A. U.S. Tax and Accounting Okay, so you are no longer living in the United States. You moved all of your assets and belongings to a foreign country and your intentions are to never return. Other than the fact that U.S. law states that all citizens must file an income tax return on their worldwide income, regardless of where they live; why file a tax return? What problems can you encounter with the IRS or the U.S government for not filing a return? What is the risk for not filing? How can the IRS get information about you, your business and your income? Here is some food for thought. 1) You marry a foreign person, and you and your new spouse want to travel to the U.S. to see your family. One of the requirements for your spouse to obtain a U.S. visa is for you to produce copies of your tax returns for the past three years. 2) You decide to return to the U.S. You have not filed a tax return for years. How will the IRS react when you start filing returns again? How do you answer the question, “How were you able to support yourself?”
8) Your child wants to go to a college or university in the U.S. He or she may need some financial assistance. Will you have to prove your income? Will you have to produce copies of your past tax returns? 9) You have not filed a tax return for years. You have met all the minimum requirements for Social Security, and now you want to receive your Social Security benefits. 10) If you are working in a foreign country, you can exclude from tax over $80,000.00 of earned income. The key here is exclude. Before you can exclude it, you must first include it by filing a return. If you do not file a tax return to exclude the income, you risk losing the exclusion. If you lose the exclusion, the IRS can include it in taxable income. Why take the chance? File a return. As a professional tax preparer for over 25 years, specializing in U.S. citizens living in a foreign country, these are just a few of the most common ways a U.S. citizen can find himself in trouble by not filing a tax return. Feel free to contact me at 288-2201 with any questions you may have.
3) You made some money and you want to invest some of this money in the U.S. stock market or a U.S. bank. How do you explain where the money came from? You had better have the paperwork ready to prove what you say. 4) The statute of limitations on a tax return starts when the return is filed, so if you do not file a return when does the timing for the statute of limitations start? The answer could be never. 5) You did well in your foreign country and would like to return to the U.S., buy a home, and put money into bank accounts. How do you prove where the money came from? Will the government have a suspicion that the money is illegally obtained? 6) While living in a foreign country, you acquire assets and would like to leave these assets to family members who are living in the U.S. How do they explain their inheritance? What problems will they have? Could they be faced with your non-compliance penalties and taxes? 7) Passport renewal. At present you are not required to present copies of you prior years’ tax returns to the embassy to renew your passport, but with new and advanced technology; could this soon be a requirement?
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Wild Side XIX Heron your chest Ryan Piercy The family Ardeidae don’t exactly have hair, but the do have very special feathers on their breasts that distinguish them from others of their order. These short, oily feathers, called powder-down, yield a powder when rubbed and broken used for cleaning and drying the plumage. The family is made up of Herons, Egrets and Bitterns, with at least 18 of the 58 species sited in Costa Rica.
The more commonly found varieties include the Pinnated Bittern, Cattle Egret, Black-crowned Night Heron, Green-backed Heron, and the Fasciated Tiger Heron. Herons have long necks designed to be able to snap forward rapidly, using their sharp bills to spear small insects and others for food. When flying they hold their necks kinked and tucked in. Found on shores, waters and marshes, they are colonial birds whose colouring is very similar between the sexes.
There are several varieties of Tiger Herons found at various times of the year. The largest is the Barethroated variety, at almost 1.2 kilos and 80 cm. It is a beautiful bird, with a long yellow neck and black crown. It often appears olive-coloured from a distance and prefers larger bodies of water than other Tigrisoma. Larger still are the Great Egret, largest and l o n g e s t- n e c ke d of the all-white herons, and the incredible Great Blue Heron. This winter resident can be found all over, though it is not common. There can also be found some i m m a t u r e residents at other times, though they don’t appear to breed here. These normally solitary creatures can weigh up to 2.5 kilos at 132 cm tall. The Great Blue boasts a grey crown with a broad black stripe, and the belly and sides of the head in white. The body is mostly a blue-grey with a black patch on the side of the breast, and a long yellow beak. They have a slow wing-beat in flight. Watch for them in the lowlands, particularly Guanacaste.
When nesting, the male Heron gathers sticks to present ceremoniously to the female who builds the nest. Both share in the incubation, as well as feeding the downy young after hatching. The incubation period is about 16-30 days, with the nesting period of 30-50 days.
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POTENTIAL BRIGHT SPOTS FOR 2005 Alan Weeks Some issues have significant potential to affect performance of various investments again this year. They include further US dollar devaluation and the trade deficit; the US consumer and the economy; commodities and stocks; and the China factor. Thought provoking prognoses from different, well respected, economic and investment gurus are being presented to help us assess the likely economic climate ahead in order to identify some of the potential investment “bright spots” for 2005. DESTINATION USA “Just because the United States (US) has its largest trade deficit ever, doesn’t mean it is living beyond its means. Far from it!” according to Arthur B. Laffer (1) . In fact, he says, “the characterization of the US as a land of chronic over-spenders, hell-bent on selling themselves into global servitude doesn’t make sense at all. And, once the over-consumption model is put into question every policy remedy based on the presumption of squander looks pretty weak”. “In an era of floating exchange rates, the current account deficit is one and the same as the capital surplus. The only way the US can have a trade deficit amounting to 5.6% of GDP is if foreigners invest that amount of their capital in the country. It’s a matter of simple accounting. But once you realize that the trade deficit is, in fact, your capital surplus, you would clearly rather have capital lined up on your borders trying to get into your country than trying to get out. Growth countries, like growth companies, borrow money, and the US is the only growth country of all the developed countries. As a result, the US is a capital magnet”. Laffer further argues, “The only way foreigners can guarantee a dollar cash flow to invest in the US is if they sell more goods to it and buy less goods from it. Thus, the US trade deficit is not a sign of a structural flaw in the fabric of its economy but is a stark reminder of its privileged status as the most pro-growth, free-market, rule-of-law economy the world has ever known. Why on earth any American would want to change US policies to emulate foreign policies is beyond me”.
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“China has realized the pre-eminence of the US model and since 1979, has reduced the percentage of GDP flowing through its government from about 82% to today’s level of about 30%. That is a supply-side tax cut par excellence. China also realizes that the US has the best monetary policy ever. By fixing the value of their currency, the Yuan, to the US dollar, it has literally imported Alan Greenspan to China. Talk about outsourcing!” “To guarantee the dollar value of the Yuan requires that China hold more than $US 500 billion of liquid dollar assets. China doesn’t hold those dollars as a favor; it holds them to benefit itself. One needs only glance at the financial disaster that ensued when former Argentine President Rua broke the peso currency bond to the US dollar, why China won’t break its currency link to the dollar. It’s elementary, my dear Watson!” Laffer states. He concludes, “As far as I can tell, the decline in the dollar is about over; soon we will see the US capital surplus falling back to more normal levels. When the global economic system works as well as ours does, we should just leave it alone.” According to a January 24th New York Times article (2), US Administration officials apparently support this view. They, along with a number of like-minded economists, contend that the US record trade and current account deficits are not particularly worrisome, a reflection more of strong foreign interest in investing in the American economy than any sign of global weakness. They also contend that the large US budget deficit is being firmly addressed. Treasury Secretary Snow reports that greater tax revenues are finally flowing again from an improving economy, and that (government) spending has to come down, and will come down. Meanwhile, European and Asian monetary authorities, as well as many economists, remain gravely concerned about a potential global economic crisis. One reason is they doubt the US economic team is recognizing the seriousness of the problem of record budget and current account deficits or of a further significant decline in the US dollar. In response Continued on page 21...
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to this, Mr. Snow rightfully suggests some in Europe are seeking a convenient scapegoat and need to do much more to get their own economies growing again. For all these fears, foreign investors are still buying American; enough to easily handle the trade gap. And, as an analyst at the Cato Institute (3) said, “Our growth rates are still higher, over the long term, than Europe’s or Japan’s”. Thus, “there is no reason to think that foreign investors will sell.” Therefore, the whole issue of US deficits or plunging currency touching off a global crisis may be no more than a “tempest in a teapot” at this time.
SELFLESS SPENDING TO SAVE THE WORLD Now, here is an interesting slant on the value of the US consumer to the world’s economies. Financial writer, William Handley (4), voted the Person of the Year Award, not to a US leader or even a Chinese entrepreneur, but once again to the US consumer. “Bless her (or his) debtdefying, shopaholic heart, which is surely bigger than the giant Mall of America. She may not be able to save a dime, but she’s been helping to save the world economy, buying stuff she doesn’t need with money she doesn’t have”, as David Rosenberg of Merrill Lynch so neatly put it. “The US consumer, who has shopped until she dropped and picked herself up selflessly again and again, has once more made all the difference in the markets last year. Consumer spending on goods and services, including plenty made in China, accounts for two-thirds of the US economy, by far the world’s largest. If it were not for the consumer’s ability to keep shopping against all odds, the US would stop being the major engine of world growth, and corporate earnings and equity prices would suffer accordingly”. On the subject of economic growth, the Economic Cycle Research Institute (ECRI) (5) has been the most accurate forecaster of US economic activity and every recession since 1981, to paraphrase The Economist (6). The ECRI has been projecting for many months that US growth should remain disappointing at least until mid-year but that no recession is on the horizon. Their projections are updated weekly so that we shall soon know whether the recent rise in the index values continue to project a sustainable pickup in the US economy thereafter. In January, HSBC (7), the world’s largest bank outside the US, presented a somewhat different, but also weaker forecast. The Bank projects US economic growth to slow by mid2005, to about half the rate currently being projected by most economists, the FED, and the OECD. These projections seem to suggest that US consumer spending will slow significantly this year. THE COMMODITIES BULL RUN Jim Rogers (8), the New York based investment guru, author, and one of the co-founders of the high-octane Quantum Fund, has recently written a book advising people to “hop on the commodities investment bandwagon,
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and predicts the bull could run another 15 years”. “It’s simply supply and demand,” he said. “Mines deplete, and there has been little investment in new capacity in recent years. Oil fields don’t run forever, and there have been no major new discoveries.” And, Jim says, “When you have a bull market in commodities, you don’t have one in stocks.” This is because rising commodity prices mean higher expenses for most companies. Higher expenses mean lower earnings, and lower earnings mean lower stock prices. SHARP MINDS WEIGH IN Commodity prices have already been on a three-year tear, with strength across a broad range of materials, including oil, gold, copper and other base metals. According to John Waggoner in a recent article for USA Today (9) said, “Some of the sharpest minds on Wall Street are betting that they’ll make more money in metals than Microsoft the next few years. The new bull market is in stuff (real assets) that you can touch and see, not stocks, they say”. And, he quotes John Brynjolfsson, manager of Pimco Commodity Real Return Strategy fund, who says: “A soaring commodities cycle can go on for years, if not decades”. AND CANADA HAS THE STUFF Canadian resource producers and investors have done very well recently and they should enjoy further significant profits in metallurgical coal, iron ore, uranium, oil and gas, and pulp and paper. With accelerated energy demand, conventional crude oil supplies have already started to decline. Existing cheap sources have become increasingly more “geopolitically uncertain”, and most of the untapped oil and gas fields remaining in the world are “geographically undesirable”. They are in very remote locations or in very deep water, making them much harder to find, and thus are much more expensive and require long lead times to develop. For example, new, very long, large diameter pipelines would need to be built through difficult environs to transport high volumes to the major demand centers. Because of the surge in oil and gas demand, another Canadian energy boom is already underway. The higher oil prices and very tight supplies are also spurring the continuing demand for heavy oil from the Alberta tar sands. Hence, existing projects are being expanded and new ones are being planned. And, the approvals for construction of natural gas pipelines from the arctic through Alberta are also being pushed hard again. Thus, Calgary is finally enjoying another boom, as the latest bumper sticker says, “G--, thanks for giving us another oil boom. This time we promise not to piss it all away”. “We have ignition! An explosive move in natural gas is under way;” exclaims an OUTSTANDING INVESTMENTS (OI) (10) article in the November 2004 issue. The current favored alternative energy source, natural gas, has been the fastest-growing component of energy consumption since the late 1990s. It is preferred Continued on page 22...
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over oil and coal for power generation, because natural gas is clean and because gas-burning plants can be built relatively cheaply and quickly. Some predict that natural gas will exceed coal use within a decade but others believe gas will price itself out of the market before that happens. Another OI article states “coal and nuclear power are the only feasible sources of mass energy with current technology. All other commonly discussed alternatives face distinct disadvantages or are years from mass commercial viability. The looming energy shortage has even become clear, however belatedly, to the US Department of Energy (DOE). Because coal is an environmental nightmare compared to nuclear energy (in spite of what the scaremongers would have you believe), the DOE recently announced incentives to encourage US power companies to apply for licenses to build new nuclear plants (the 1st in 25 years). This is a huge change from just a few years ago, when talk was of shutting down the industry in the US and worldwide”. Finally, the OI article states: “Because no one is willing to freeze in the dark, one needs to look beyond the hysteria about nuclear power and realize its value for protecting the environment. In this regard, British eminence Green, James Lovelock, published an impassioned plea last May to phase out fossil fuels. Nuclear power is the last, best hope for averting a climatic catastrophe, he argued”.
China you can get with one hand, and buy commodities with the other. Don’t panic, get involved”, Rogers said. I personally believe that Rogers approach to investing in China is an overly simplistic one. As concluded in my May 2004 Dollars & Sense article (12), those of us without mega-dollars to gamble with, need to take a much more cautious approach and treat China as one would any booming emerging market. This is because China has had, and should continue to have, the same potential for major crises as any of them. This article also pointed out that past results of regular investing in China had been unimpressive. And, it was illustrated that even the best China related equity fund had more years of significant losses and an inferior total return than the US S&P 500 market index, over the 10-year period to 2003. The Platinum Dynasty Hedge Fund (13), with good risk controls and the ability to make money even in bad times, was recommended as the preferred alternative to invest in China for the long run. For more information or marked reference details, please contact Alan Weeks at 256-5848
What about supply? The OI reports that: “Uranium is 10 times more abundant than silver. But there has been a chronic supply/demand imbalance for many years and the industry has been living on inventory since 1985. Few new mines have come on stream, largely as a result of poor prices”. That is now changing and uranium mines are one of the most favored ‘picks’ for 2005, with prices expected to move significantly higher. Canada and Australia are the big producers and the Saskatchewan-based Cameco, is the world’s largest uranium miner. MORE BULLS IN THE CHINA SHOP Underlying all of this, China will loom ever larger, gobbling up natural resources, snapping up foreign companies, and enticing international merchants with its billion-strong consumer base. “China is the biggest change in the condition of the world economy that any of us are likely to see in our lifetimes and possibly in the history of the world”, says Carl Weinberg (11). Asia’s forecasted long-term growth is more than double the rate in the ‘mature’ North American and European economies. And, with ever rising income levels, India and China are going to continue to be the growth leaders for the foreseeable future. Jim Rogers predicts China will be the global powerhouse of this century. “There could be a hard landing in the next while, but when the headlines are saying there’s turmoil in China, buy all the
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Modern technology can provide a better Classic wood quality. Eco Jardines is part of a group whose main company, Ecomaderas del Sur S.A., has 8000 square meters of facilities in San Isidro del General, two kilometers from the Central Park. They work exclusively with cared pinewood of South America (Argentina, Venezuela and Brazil) of genetically improved plantations, not natural forests. The preservatives used come from the United States, from the company Arch Wood Protection, a world leader in the development and commercialization of preservatives for wood. Arch carries out the quality control directly in its laboratories in Atlanta, Georgia, and Ecomaderas uses top technology with two-cared immunization Plants out of the United States and three drying ovens imported from Italy. The company’s processes are certified
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by the American Association of Injecting Woods of the United States (Asociación Americana de Impregnadores WPA) and the Technological Institute of Costa Rica (Instituto Tecnológico de Costa Rica), which allows us to guarantee the life of our products in writing. Furthermore Ecomaderas del Sur is the only company in their field that fulfills the regulations of the Agency for the Protection of the environment of the United States (EPA) and the Ministry of Health of Costa Rica. This highly Costa Rican Company specializes in the design and construction of adjusted residence and recreational solutions for your new Costa Rican lifestyle, as well as rustic furniture for gardens and interiors. Since the shops machinery allows them to have the largest variety of sawed wood and molds, the company can adjust to the preferences and necessities particular to each client. They invite you to visit www.ecomaderasdelsur.com
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Exchange rate of the Costa Rican ¢ to the US Dollar 443.41 August 446.98 September 450.73 October 454.27 November 457.58 December 461.06 January Basic Interest Rate 14.00% August 14.00% September October 14.25% 14.25% November December 14.25% 14.50% January Exchange rate of other currencies to the US Dollar Japanese Yen 103.43 Swiss Franc 1.1869 Canadian $ 1.2408 Giro (DEG) 1.5205 £ Sterling 1.8867 Euro 1.3038 Mexican Peso 11.238 Korean Won 1,025.6 Danish Krone 5.7078 Norwegian Krone 6.3400 Argentine Peso 2.9262 Colombian Peso 2,364.8 Brasilian Real 2.6291 Libor Rate 1 month 2.5900 % 3 month 2.7500 % 6 month 2.9600 % 12 month 3.2613 % Prime Rate
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Holidays Of Costa Rica March 19th “Feast of St. Joseph” March 24th “Holy Thursday” March 25th “Good Friday” April 11th ‘Battle of Rivas’ May 1st ‘Labour Day’ ********************
A Touch of Wisdom “Forewarn’d, forearm’d.” Ben Franklin (1706-1790) “If the shoe fits, wear it.” N. Breton (c1600) “Never say die.” unknown ******************** More infamous errors in communication... One of Germany’s largest pharmaceutical manufacturers wanted to open markets for its headache pills in the Middle East. Their marketing “experts” noted that illiteracy is widespread in the Middle East and concluded that the advertising should be visual, not dependent on reading. They introduced ads and billboards showing three photos: on the left, a picture of a grim looking man with a bad headache; in the middle, a photo of the man taking a pill; on the right, a photo of the man smiling, looking relieved and happy. The campaign failed miserably. Why? Analysis: Arabic is read from right to left, not left to right like the English language. So the message was reversed. Feeling good? Take our pills and get a really bad headache!
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