Newsday – With 80% of Haiti’s population under the poverty level, agriculture in ruins, nearly three in four workers jobless, and drug lords controlling parts of the countryside, even onetime supporters of President Jean-Bertrand Aristide began calling for his ouster.

Last year, a coalition of students, opposition parties, clergy and business leaders known as the Democratic Platform began staging increasingly larger demonstrations, calling for him to step aside. Aristide responded by embracing some of the tactics of the Duvaliers.

He politicized the 4,000-member Haitian National Police and diverted government money to violent gangs, who attacked anti-Aristide demonstrators and murdered journalists critical of the government.

He has vowed to complete his term, which runs until 2006, and is doing little to curb armed attacks by his supporters against the demonstrators.

GANGS once aligned with Aristide have turned against him, drawing former soldiers and Aristide opponents into their fold.

On Feb. 5, rebels took Gonaives, a town astride the main road leading north from Port-au-Prince, effectively cutting the country in two and threatening the north with starvation.

With Haiti spinning toward civil war, the United States pulled Peace Corps workers from the country last week and warned U.S. citizens to leave as soon as possible.

On Sunday, rebels captured Cap-Haitien, the nation’s second-largest city, after just a few hours of fighting. Some boasted that their next target was Port-au-Prince, Haiti’s capital.

SAN SALVADOR (AFP) –Hundreds of Salvadoran soldiers with the Cuscatlan Batallion reunited with their families this week after completing a six-month mission of support for the occupying forces in Iraq.

A hot sun and a special ceremony with President Francisco Flores and hundreds of friends and family members greeted the 360 arrivals at the Special Forces Command Base outside San Salvador on Wednesday.

In his welcome-home speech, Flores applauded the mission and the troops, whom he called “heroes.”

“WE knew the dangers of the mission… but now we applaud the job that you have done and we know that now you will be remembered as heroes for having helped the Iraqi people,” Flores said.

Tears of joy flowed after the speech, when the soldiers were ordered to “break ranks” and go meet their family members.

Santos Elías, 24, saw his daughter Marjory for the first time. She is five months old and was born while he was on duty in Iraq. Visibly excited and teary eyed, he whispered “thank you for this beautiful girl,” to his wife Yanira García, 21.

“She was the handkerchief that wiped my tears while you were away,” García responded.

MAYOR Andrés Bustamante, official Chief of Operations of the battalion in Iraq, said, “Like all military missions, we knew that we were exposed to certain risks, such as attacks. Iraq was an enormous experience for all of the personnel, but we also knew that it was a great challenge to be in an unsafe country when we arrived (last September) and it still is, but we had the luck that the Iraqis in the zone where we were, were really friendly.

They knew how to accept us and appreciated our work.”

Between hugs from his wife, Lieutenant Coronel Sabino Monterroza commented that in Iraq “there is still much to do… the people are in great need.

They lack food, water, they need greater safety, but these things will come little by little.”

THOSE who returned will be relieved by 380 who will be positioned in the Iraqi city Navaf for six more months.

The Salvadoran troops will integrate with troops sent from Honduras, Nicaragua and the Dominican Republic in a brigade called “Plus-Ultra” under the command of Poland and Spain.

TEGUCIGALPA (AFP) – Negotiations for a free-trade agreement between El Salvador, Guatemala, Honduras, Nicaragua and Canada came to a stalemate at the last meeting in Ottawa on Friday, Honduran officials announced Wednesday.

“There were no important results in the last meeting, rather, it gave the impression it had stagnated,” said Honduran Chief Negotiator Melvin Redondo.

He described the last three years of talks as “poor” and said Canada took a rigid stance at the last meeting.

FOR example, the negotiator said, Canada demanded agricultural quotas similar to those that the Central American countries gave to the United States in the Central American Free-Trade Agreement (CAFTA). But Honduras established those quotas based on the demand from the Honduran market.

“If we gave Canada the same quota we would be hurting our national producers,”Redondo said.

Honduran Minister of Industry and Commerce, Norman García, said the Canadian proposal is “not attractive.”

“THE Canadians are practically saying: allow 80% of what we send there to enter free of tariffs and 20% of what you send will enter without tariffs,” García said.

The next meeting – the eleventh since negotiations began three years ago – will probably take place in June in Guatemala, Redondo said.

Costa Rica has had a free-trade agreement with Canada since 2002 and is the only Central American country to have one.

PANAMA (AFP) – This year’s Carnaval had claimed 20 lives by the close of five days of festivities Wednesday.

Panamanian police and the Red Cross reported that nine people died in automobile accidents, six were murdered, two drowned and two died of alcohol poisoning.

Also, an indigenous person committed suicide in the province of Chiriquí, 500 kilometers from the capital.

The deaths occurred despite the fact that authorities had mobilized 12,000 police officers and aid personnel to ensure order and safety during the celebrations.

GUATEMALA (AFP) – Former Guatemalan President Alfonso Portillo may return to Guatemala to defend himself against accusations of corruption in the next few days from Mexico, where he fled Feb. 18.

“I’m going to go back there, and in Guatemala I’ll hold a press conference. I have been analyzing the situation with my lawyers the last few days and we are nearly ready,” Portillo said in a phone call from Mexico to Radio Sonora in Guatemala.

The ex-President avoided committing to a precise date of arrival. “I’ll go back soon,” he said, according to the radio news broadcast.

HIS statements came the day after Judge Saúl Alvarez ordered the investigation of Portillo’s Guatemalan bank accounts to determine the source of the funds in them.

Alvarez explained that the order, which he also imposed on the accounts of former Vice-President Francisco Reyes, two other public officials and four citizens, will attempt to determine whether there was a movement of funds from Guatemalan accounts to banks in Panama. The accounts in Panama are also under investigation.

Portillo left his country for Mexico suddenly Feb. 18 one day after the

stripped him of immunity (TT, Feb. 20).

THE next day, he called AFP in Guatemala to announce that he had decided to leave the country because “they want to condemn me without proof,” for the alleged cases of corruption.

According to the Guatemalan press, Portillo, other former officials and some of their colleagues opened at least 14 bank accounts in Panama where they allegedly transferred public funds.

The local press also reported there have been 11 accusations presented against Portillo in the last two years, and now that he has lost his immunity they will be sent to the Supreme Court.

What began as a disagreement over the proposed tax plan this week turned into a war of words between President Abel Pacheco and the Legislative Assembly’s most outspoken deputy.

During his weekly television and radio address on Sunday, the President accused Libertarian deputy Federico Malavassi of stalling the legislative commission charged with studying the government’s Permanent Fiscal Reform Package and “playing politics with an issue of vital importance to the country.”

“Only deputy Federico Malavassi of the Libertarian Movement was opposed to the agreement and barred the reforms from being approved before Dec. 31 of last year,” Pacheco said. “… Once again, the Libertarian Movement, through deputy Malavassi, is trying to impede the functioning of the commission studying the fiscal solution.”

Malavassi, a member of the commission, this week challenged the President to a televised debate on the potential effects of the government’s proposed tax

PACHECO, however, declined to debate and refused to retract his statements.

“My obligation as President is to tell the people the truth. I’ve done that already,” Pacheco said during Tuesday’s weekly cabinet meeting.

“Debating is ridiculous,” Pacheco told reporters. “He [Malavassi] has already spoken and expressed his point of view. If he wants to sue me, he can go ahead. It’s a free country. I’m pleased we can have this discussion; it’s a sign of democracy. We are both passionate individuals who defend our ideals.”

The Libertarians have suggested a referendum to let Ticos decide how they should be taxed.

FRUSTRATED by the slow pace at which the tax plan is moving through the Legislative Assembly, the Executive Branch last week retaliated by slashing an important part of the 2004 budget, affecting the country’s infrastructure, environment and social welfare programs, among others.

And while the special legislative commission rushes to finish studying and modifying the tax plan before next Thursday’s deadline, a recent poll suggests four in five Costa Ricans oppose any additional taxes.

Different groups that participated last year in drafting the original tax plan expressed concern this week over recently proposed changes to the plan.

IN December, after 15 months of debate, a mixed commission that included representatives from every legislative faction, business chambers and other groups unveiled what was believed to be the final version of the tax plan (TT, Dec. 5, 2003). The government adopted the plan and submitted it to the Legislative Assembly as a bill.

Despite several attempts by Malavassi to block the bill, a nine-member legislative commission was created Feb. 5 to study the tax plan. The commission, which includes Malavassi, was given until Feb. 26 to make last-minute changes (TT, Feb. 13).

With the tax package, the government hopes to increase revenues by an amount equal to 2.56% of the country’s gross domestic product (GDP), thus reducing the government’s fiscal deficit.

This, in turn, would make it possible for the government to reduce the percentage of the government’s budget that is financed through the sale of foreign-debt bonds.

THIS year, 24.7% of the government’s budget will be spent on interest payments on existing foreign-debt bonds. To make matters worse, nearly 50% of the 2004 budget is being financed through new foreign-debt bonds that will result in even higher interest payments in the future (TT, Jan. 23).

Ongoing tension between the Pacheco administration and the Libertarians began escalating last week, when Finance Minister Alberto Dent stormed out of a meeting with the legislative commission reviewing the fiscal reform package. Dent said he lost his patience after Malavassi issued his eighth motion of the day questioning the tax plan.

After leaving the Feb. 11 meeting, Dent accused Malavassi of “deceiving” the Costa Rican people by “purposely and with a grin on his face” stalling the tax plan.

“Deputy Malavassi is applying the same tactics he has been applying over the last 18 months by attempting to impede the detailed study of the bill,” Dent said.

“It saddens me to see how Malavassi, with a mocking smile, has blocked the bill’s discussion, putting at risk the country’s stability as if it were all a game,” he continued.

AFTER returning to his office, Dent fulfilled threats made earlier in the month to make emergency cuts to this year’s budget if legislators didn’t move forward with the tax plan.

The cuts – referred to as “Plan B” –slashed ¢72 billion ($171.4 million, roughly 1% of the country’s GDP) from the budgets of 15 different government ministries and several social programs.

The institution hardest hit by the cuts will be the Public Works and Transport Ministry (MOPT), which will be deprived of ¢24.3 billion ($57.9 million) – about 31% of its annual budget.

The Labor Ministry, which would play an increasingly important role if the U.S.- Central America Free-Trade Agreement (CAFTA) is approved by legislators, stands to lose ¢13.6 billion ($32.4 million) – 24% of its budget.

Large cuts would also be made to the Culture, Planning and Environment ministries, as well as to programs that supply housing bonds to poor families and foster community development.

WHILE the directors and beneficiaries of many of the programs that would be affected blasted the cuts, Dent expressed no regret about slashing the budget.

“My responsibility is to maintain the country’s economic stability, and I am willing to do that at any cost,” Dent said.

On Wednesday, the Libertarians applauded the budget cuts, calling them “proof that it’s possible to reduce public spending.”

In a statement, they said the fiscal deficit should be combated through spending cuts instead of additional taxes –although they did question the government’s choice of budget cuts.

“THE government has two choices,” the party argued. “It can choose to limit the resources for education, health care and security. Or it can dedicate itself to eliminating pork barrel spending on trips, representation expenses, luxury trips and consulting, among other things.

By making this choice, the Executive Branch will show Costa Ricans who comes first – the population or privileged bureaucrats.”

The Libertarians also offered, “free of charge,” to help Dent cut ¢600 billion ($1.43 billion) in unnecessary spending from the 2004 budget.

Dent said the spending cuts will be revoked if the deputies approve the tax plan before the government’s April 30 deadline.

BUSINESS chambers this week blasted Malavassi for obstructing the tax plan. They also expressed outrage over many of the changes the new commission is proposing.

“The commission threw the plan that everyone had agreed to out the window,” said Samuel Yankelewitz, president of the Union of Private-Sector Chambers and Associations (UCCAEP). “What we did in 18 months, the commission aims to do over in 18 days. This is disheartening. This frustrates all the sectors that took part in the discussion. It leaves us with a bitter taste in our mouth.”

According to a poll released Feb. 13 by CID-Gallup and the daily La República, 83% of Costa Ricans, regardless of their income or education, said they were against any tax increase.

Two-thirds (66%) of those polled said the government would misuse the additional funds the tax plan would generate. The poll’s margin of error was not disclosed.

WHEN asked about the potential effects of the tax plan, 44% of business leaders who participated in UCCAEP’s quarterly business-confidence survey last month (see separate story) said the tax plan would be detrimental for their companies, only 16% said it would be beneficial, and the rest thought it would have no effect.