Costa Rican health dispute prompts cabinet reshuffle

Updated: 2011-07-29 10:57

(Agencies)

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Costa Rican health dispute prompts cabinet reshuffle
A Costa Rican patient waits for medical attention along a corridor outside Mexico hospital during a strike in San Jose July 20, 2011. Health workers are protesting against the financial crisis of the Public Social Security System that could affect their working conditions, local media reported. [Photo/Agencies] 

SAN JOSE - A crisis over Costa Rican healthcare piled more pressure on embattled president Laura Chinchilla on Thursday as she announced a cabinet reshuffle to address a yawning funding gap in the popular national system.

Chinchilla, whose ratings are at a record low, said Health Minister Maria Luisa Avila would step down following weeks of criticism of the government for a cash shortfall at the social security system known as la Caja that oversees healthcare.

Avila's departure is the sixth reshuffle Chinchilla has had to make in as many months in the Central American nation.

The deficit at the Caja this month prompted the president to unveil a $166 million bailout - worth about 2 percent of the national budget - and sparked strikes by hospital staff.

Chinchilla, 52, has cut an increasingly isolated figure, antagonizing some of her own centrist National Liberation Party along with rivals, making it harder to reach consensus with opposition parties whose support she needs for reforms.

A replacement for Avila has yet to be named. Chinchilla said Foreign Minister Rene Castro would move to the environment ministry while diplomat Enrique Castillo would replace him.

The environment portfolio has been open since the minister was picked to replace the head of the national electricity agency, who had previously been in charge of the Caja.

He was forced out this month when details emerged of the financial problems at the Caja that emerged on his watch.

The disputes mean Chinchilla's proposed tax reform, needed to rein in a public budget deficit that touched 5.3 percent of gross domestic product last year, is likely stalled for now.

The president's weakness also means a bill pending to open up Costa Rica's electricity monopoly to private competition will probably be put on ice for the time being, analysts say.

Even former allies have attacked Chinchilla for failing to provide leadership on the economy and tackle rising crime.

"What's lacking is mental clarity, intellectual clarity. One can't realistically convey ideas if they are confusing and obscure," Oscar Arias, the ex-president once considered Chinchilla's mentor, said of her at a recent business meeting.

Partly due to rising costs racked up during the Arias era, the Caja is projected to run a deficit of some $146 million this year. The deficit could more than quadruple by 2015, according to a report by the Pan American Health Organization.

Criticism of the government's handling of the Caja's woes increased when it emerged substantial sums were lost on staff sick days during last year's World Cup soccer tournament, fueling accusations its employees were milking the system.

Political analyst Luis Guillermo Solis said he fears a "cascade effect" for society and the economy if Chinchilla loses further credibility.

"The current investment environment is so volatile that little things can generate a lot of noise," Solis said.