PANAMANIAN police last week seized 80.4 kilos of explosives they said were made in Costa Rica and on their way to Colombia in exchange for a large shipment of cocaine.

Panamanian National Police Commissioner Alvis Santana said that along with 67 rolls of explosives – which weighed 1.2 kilograms each – police also seized 99 electronic detonators. Experts said the explosives were enough to destroy two city blocks.

Erick Karolekee, director of weapons and explosives for the Costa Rican Public Security Ministry, confirmed the explosives were of a type called “Lodex,” manufactured by a Costa Rican company for controlled sale, La Nación reported.

Officials also discovered a shipment of 441 kilos of cocaine in the province of Colón, 70 kilometers northwest of Panama City, which they believe was to be exchanged for the explosives.

In the province of Chiriquí, near the border with Costa Rica, Panamanian police last week also seized a shipment of 687 kilos of cocaine, officials there said.

Ten people were detained during the operations, which were the result of a month-long investigation. Police believe the suspects are part of a gang specializing in exchanging explosives for drugs with Colombian guerillas.

PROJECTS to reduce illegal arms trafficking and promote peace among young people in Costa Rica received an economic hand Monday from the Japanese Embassy here.

Japanese Ambassador Tadanori Inomata signed an agreement to donate $124,818 to the Arias Foundation for Peace and Human Progress.

Approximately half the donation is directed toward the Arias Foundation’s campaign against the illegal movement of arms in Costa Rica. This campaign is generating informal discussions among politicians and the public about the possession and circulation of arms in civil hands in Central America, according to the embassy.

The other half of the donation will be used for a project to educate youth about peace and democracy, including strengthening tolerance and peaceful coexistence among Central American youth, the embassy said in a statement.

The Arias Foundation was founded by former President and Nobel Peace Prize laureate Oscar Arias (1986-1990).

FUNERAL services for renowned Costa Rican TV reporter José Angel Monge were held Wednesday afternoon at a church in the south San José neighborhood of Desamparados.

Monge died Tuesday morning of pneumonia. The 46-year-old journalist, originally from Desamparados, passed away shortly after 8 a.m., less than two days after being admitted to San José’s Hospital Calderón Guardia on Sunday evening.

During his 25 years with Televisora de Costa Rica (Teletica), Monge covered numerous political and athletic events, including Pope John Paul II’s historic visit to Costa Rica in 1983 and the U.S. military invasion of Grenada later that year. He also reported on every national election from 1978 to 1998.

Monge began working at Teletica in 1979 after briefly working in radio. He spent the last several years with Teletica Deportes and Deporte 7, reporting on the Costa Rican national soccer team and regional professional teams.

RICHARD Hinkle, a businessman and former pastor facing extradition by U.S. authorities for allegedly swindling 30 people out of $3.6 million, is also wanted in the Caribbean island of Grenada, La Nación reported.

Hinkle, 38, is currently serving a two-month preventive prison sentence at the San Sebastian jail in San José, according to sources in the Judicial Branch.

Hinkle has ties to the now-defunct Cornerstone International Savings & Investment Bank Ltd in Grenada (TT, Nov. 7, 2003). The bank was ordered to liquidate its assets in July 2003, according to a release from J.A. Seales & Co., a West Indies law firm.

Jerry A. Seales, of the same law firm, was in Costa Rica this week with another lawyer, Garvey Louison, to explore the possibility of extraditing Hinkle to Grenada, La Nación reported. Louison was commissioned by a Granada court to supervise the bank’s liquidation, while Seales is representing investors.

Prosecutors allege that Hinkle, arrested Feb. 27 in Heredia, used the bank to commit 19 counts of wire fraud and 40 counts of money laundering, paying investors $640,000 while diverting money to his own accounts (TT, March 5).

Hinkle, who also owns the Brand Fashion clothing store in the Real Cariari Mall, was kidnapped in October of last year, which he speculated then might have had something to do with his involvement in Cornerstone Bank.

He was rescued in Escazú by a special police unit three days after his capture (TT, Oct. 31, 2003).

IN 2003, the Costa Rican Electricity and Telecom Institute (ICE) reported ¢3.35 billion ($78.7 million) in revenues – 18.2% more than in 2002.

The increase in revenues was attributed to three main reasons – sales from second-generation GSM cellular telephones, an increased demand for electrical services and better control over expenses, according to ICE.

At the end of last year and the start of this year, ICE issued $100 million in bonds that will be used to finance future electricity generation and telecom infrastructure development projects.

The first bonds, totaling $40 million, were issued on Dec. 10, 2003 and quickly sold out after being released on the international market. The bonds were negotiated at 7.10% interest over 10 years.

The second set of bonds, totaling $60 million, were issued Feb. 3 of this year and also sold out shortly after their release. The bonds were negotiated at 6.45% interest – a lower rate than the latest series of foreign-debt bonds issued by the Costa Rican government – over 10 years.

The bonds sparked controversy because in May 2003, the Central Bank had refused to allow ICE to issue them, fearing they would negatively compete with government bonds and could lead to an increase in interest rates. In response, ICE workers’ unions went on a threeweek strike.

Eventually, the government agreed to allow the bond issue (TT, Dec. 24, 2003).

SEVERAL Costa Rican sportsbook owners hailed a recent World Trade Organization (WTO) ruling ordering the United States to provide justification for the restrictions it imposes on Internet gambling that affect countries where online gambling firms are located.

On Monday, the WTO’s dispute settlement body issued an initial ruling validating charges filed last year by the Caribbean island nation of Antigua and Barbuda against the United States.

The Antiguan government claims U.S. laws making it illegal for U.S. financial firms to transfer money to offshore gambling firms – by processing credit card transactions, wire transfers or any otheractivity – have cost that nation millions in lost tax revenues and left thousands unemployed.

“THE announcement is huge for our industry,” said Dalton Wagner, an investor at MVP Sportsbook.com, an online gambling firm whose customer-service operations are based in Costa Rica.

“The WTO ruled online gambling is absolutely legal and the actions taken by the United States to stop it are illegal. Hopefully, this ruling will help us,” Wagner told The Tico Times on Wednesday.

However, the WTO’s final ruling won’t be announced until April. And if the United States loses the case, it most likely will appeal, online gambling experts said.

Sportsbooks are online gambling call centers whose operators take wagers placed over the phone or over the Internet.

Sportsbook call centers do not have an actual physical presence for taking bets and process payments through credit card transactions, wire transfers and, more recently, Internet-based money transfers (TT, Sept. 12, 2003).

IN Costa Rica, 36 sportsbooks are formally registered with the government, although insiders say there may be almost twice that number operating here, along with at least 59 online casinos. These businesses employ at least 5,000 Costa Ricans, mostly college students.

Despite the lack of a law regulating the industry, in January 2003 the government charged sportsbooks a one-time operating fee under its Emergency Tax Plan.

Revenues from the permits generated ¢557.17 billion ($1.46 million at the January 2003 exchange rate) in revenues for the government, according to the Ministry of Economy, Industry and Commerce (MEIC).

THE initial WT O ruling comes two weeks after the New York Times reported that Federal prosecutors in Missouri have been threatening to take legal action against companies there that run advertisements from and do business with sportsbooks and Internet casinos.

By doing business with online gambling firms, prosecutors claim, companies are “aiding and abetting” an activity that has been declared illegal in the United States.

In response to the pressure, several major media firms – including Infinity Broadcasting, Clear Channel Communications and the Discovery Networks – stopped running print, radio and television advertisements for offshore gaming.

The advertising bans, according to some sportsbook operators, have already had devastating effects on the industry and stand to hurt it even more next fall when the online gambling high season – the U.S. National Football League season (NFL) – begins.

WAGNER says MVP Sportsbook has been “significantly impacted” by the ban.

The company has had $1.7 million in print ads and $1 million in radio ads for the upcoming NFL season negated by U.S. advertising companies as a result of the pressure, he said.

MVP was scheduled to publish ads next fall in Sporting News – a weekly sports news magazine read by 4.3 million sports enthusiasts. Wagner said the company also lost a $400,000 contract with Fox Sports Radio, a $250,000 contract with Sports Digest, a $175,000 contract with Athlon Sports and dozens of smaller contracts.

Without advertising, Wagner said he fears many customers will not be able to find the gambling firm. This will jeopardize MVP’s finances and the jobs of the 202 Ticos it employs, he said.

BET on Sports (BOS), the country’s largest licensed sportsbook, says it also has been affected. BOS ads recently were banned from the outside of city buses in New York and several of Clear Channel’s 1,200 radio stations, according to company CEO David Carruthers.

Despite this, Carruthers said he remains optimistic that the sector and his company, which employs 1,800 Costa Ricans, will continue to thrive even with the advertising ban.

“There has been no material effect on my business whatsoever,” Carruthers said. “We have many advertising opportunities. We have seen some entrenchment in advertising in radio in the United States because of the decisions of Viacom and Clear Channel. I believe the Department of Justice investigation will be unsuccessful in its attempt at frightening advertisers and suppliers out of businesses.

“I’m very confident about the future of online gaming in Costa Rica and my confidence is fortified by the decision in the court of the World Trade Organization,”

he said.

COLE Turner, C.E.O. of BoDog.com Group, which operates a sportsbook in western San José that employs 60 people, said he is not very concerned, either.

“The BoDog.com Group of companies has accounts from all over the world and as such is partially insulated from the actions of any one government,” Cole told The Tico Times via e-mail. “We monitor what happens in the United States as well as many other countries worldwide.“… Nothing has recently changed, but a bit of pressure being brought to bear on a few suppliers to our industry,” he said. “It is not clear if this approach is even constitutionally legal in the United States, but either way, it will have no impact on us.”

Cole said BoDog does most of its advertising through companies located outside the United States and over the Internet, which shields it from the ban’s effects.

“It might even have a favorable impact if it makes it harder for some of our competitors to attract new players using some of the advertising channels we are not currently using,” he said.

EDUARDO Agami, president of the Costa Rican Association of Data- Processing Centers and CallCenters and president of SBG Global, one of the country’s oldest sports-wagering operations, said he believes online gambling firms will continue to thrive.

“There are a lot of ways to advertise,” he said. “…People want the business; they want to wager. The people have spoken. They will look for companies where they can place their wagers, even if advertising is limited. I’m sure the pressure from the United States won’t end. But the customers will try to find us and we’ll be around.”

(Next week: A look at the different proposals to regulate sportsbooks in Costa Rica.)

BETWEEN January and December 2003, the average salary of private sector employees increased 3% in real terms (taking into account the effects of the colón’s daily devaluation), according to the Social Security System (Caja) statistics.

Average monthly salaries rose from ¢142,708 at the end of 2002 ($395.40 at the time) to ¢160,914 at the end of 2003 ($402.56 at the time).

By law, all employers are required to register their employees with Caja and transfer a portion of their salaries to the institution in the form of mandatory social security dues. This makes Caja’s figures a valid indicator of formal jobs. It does not, however, include the increasing number of informal and independently employed workers.

Last year, the total number of formal jobs increased 2.2% from 548,253 at the end of 2002 to 560,309 at the end of 2003. A total of 12,056 jobs were created, according to Caja.

CENTRAL Bank president Francisco de Paula Gutiérrez has downplayed growing concerns over inflation and the increase in the prices of several products reported in recent months.

“We are not in the middle of an inflationary process that affects the whole of the economy,” Gutiérrez explained. “Instead, we are witnessing an increase in the prices of very specific products.”

After monitoring recent increases in prices of several commonly used goods and services, the Central Bank concluded the price increases, for the time being, are isolated and unrelated cases and not a sign of a widespread increase in inflation.

Inflation concerns have been sparked by recent increases in the monthly Consumer Price Index (CPI) – a measure of the average change over time in the prices paid by Costa Rican consumers for a market basket of basic goods and services.

IN the past five months, this index has registered a 7.02% increase in prices (TT, March 12). This figure is worrisome, analysts say, considering the country has been averaging 10% inflation a year during the last decade, and the Central Bank had targeted 9% inflation for this year (TT, Jan. 16).

However, the Central Bank’s primary inflation indicator, the Underlying Inflation Index – a more technical inflation measure used to evaluate inflationary trends excluding volatile products prone to sudden increases and sharp drops – remains on track, having grown only 4.44% over the last five months.

Essentially, this means the increase in the Consumer Price Index has been caused by increases in the price of oil and agricultural products, such as eggs, rice and potatoes, a worldwide shortage of steel (TT, Feb. 27, March 12), increases in electricity and, as of last week, water rate hikes.

These price increases have not, however, spread throughout the rest of the economy and are therefore not part of a larger inflation trend, Gutiérrez said. This week’s cab fare hike also is likely to result in increases in the price index.

EVEN if the CPI globally reports an increase in inflation, the prices of most products have not risen faster than the Central Bank projected. Other important variables, such as demand for credit and import growth, are also stable, according to Gutiérrez.

For the moment, the Bank is not overly concerned about inflation, he said.

However, it will keep a close eye on changes in prices over the coming months, and Gutiérrez said particular attention will be paid to the price of oil, which last week rose to $38 a barrel – near a 17-year high.

“What we’re interested in is the pace at which prices are increasing,” Gutiérrez said last week. “It doesn’t worry us if, as a result of the increases in the price of specific products reported during the first months, we are unable to meet the 9% inflation target we had expected between last December and next December.

“If what we see is an increase in the rate of inflation that begins to accelerate the growth of all prices, we’ll be forced to take corrective actions,” he warned.

IF inflation does become a threat, the Central Bank will attempt to curb it by restricting consumer demand for goods and services. According to Gutiérrez, this would entail restricting credit (by raising interest rates) and/or increasing the rate of the colón’s devaluation against the dollar.

Both measures would slow the economy’s growth, the Central Bank president said.

Félix Delgado, of economic consulting firm CEFSA, believes the fast increase in prices will most likely subside soon.

“The evidence does not suggest the trend in prices will continue,” he explained. “Prices will still show a strong increase in March as a result of the readjustment of water rates. This will affect the index this month, but won’t continue during the remainder of the year.

“The agriculture issues will be resolved,” he said. “The increase in the price of eggs and legumes is a short-term effect caused by weather conditions and other specific supply problems. Once these conditions subside, their prices will likely drop. The only conditions that could continue for a while longer is high oil prices.”

HOWEVER, Delgado warned, if prices continue to rise, they will likely result in higher salary increases when many private sector salaries are adjusted to counter inflation at the end of June. Higher salaries could result in higher actual inflation, he said.

Given what has happened during the first quarter of 2004, CEFSA believes the Central Bank’s 9% target is unrealistic.

“From the start, we considered the 9% target difficult to meet,” Delgado said.

“We’ll have to wait to see what will happen. CEFSA considers a figure of less than 10% is now almost impossible.”

Gutiérrez, however, said the Central Bank remains committed to keeping the rate of inflation at 9% in 2004 and will do what is necessary to make that happen.

IN their intense concentration on the descent of man, anthropologists have virtually ignored the fact that evolution, which brought us from Pithecanthropus to Homo the Sap, also continued to work on other species.

Some years ago, I was privileged to visit the home of the Hranci Hogs in a remote corner of the Peruvian jungle that had escaped the developers. They look like a small capybara, but with a disproportionately large head and huge soulful eyes.

Somehow they had contrived to make, or more likely steal, the gene set for   articulate speech, and were communicating in what turned out to be a very primitive form of Quechua. Which of course suggests that at some time in the past they must have had intercourse with Amerindians, though who taught whom how to speak must remain a mystery.

ALTHOUGH they live in ground burrows, they have developed a range of philosophies to which they frequently allude, much as humans used to quote Shakespeare or the Bible to support a shaky argument. I was particularly impressed by one elder who, in answer to my suggestion that they should now invent the wheel, replied, “We are lovers of the beautiful, yet simple in our tastes, and are not ashamed to cultivate the mind.”

That was an almost direct quotation from Thucydides, who flourished in Greece around 450 BC. Explain that if you can.

Their forepaws have an opposable thumb, enabling them to construct primitive agricultural implements, though in line with their peaceful philosophy they have absolutely forsworn weapons, so they are necessarily vegetarian.

They believe in life after death, though so far as I could understand with my limited Quechua, their anticipated afterlife was so similar to their present dispensation as to constitute a belief in reincarnation. Indeed, they frequently spoke of events that must have occurred hundreds, if not thousands of years ago.

NOW, I wouldn’t be bothering you with all these details were it not obvious that the human race will become extinct within the next few hundred years. Lethal mutations in our genome are multiplying unchecked as our physicians strive to keep us alive when natural selection would have killed off the bad apples long before they had a chance to breed. But if a corrupt inheritance doesn’t do it, failure of nerve, that destroyer of empires, will win in the end. I just want you to know that we have admirable successors who, living underground, will likely escape a nuclear Armageddon and have the brains to enjoy life without blowing each other up or fouling the environment.

Of course, the Hranci are the only potential successors I have personally met, but doubtless there are many other candidates, such as the porpoise, or the Bonobo monkeys who share 98 percent of their genome with us. And there are many others who will be delighted to replace us, and may well make a better job of it if they can recapture the record of our mistakes.

HAVING now learnt about the Hraci, you will doubtless want to bomb them, cut down their forests and poison their rivers, but don’t bother to do it in Peru; I wouldn’t reveal their true location for all the gold in FortKnox.

ONE of Costa Rica’s more striking traditions is the mascarada, bands of people in towering costumes topped by fiendish, creepy and friendly painted masks (payasos) who dance in the streets to the music of horns and drums.

The idea is adopted from Spain, but Jorge Acevedo, an organizer of Santa Ana’s cultural festival, said it has become Costa Rican and is in need of a rescue.

The II Cultural Festival, called “Light of the Summer Moon Santa Ana 2004,” is the event that should do the trick. Six groups of mascaradas, 15 people in each group, will parade the main streets of Santa Ana, about 25 kilometers west of San Josee, disguised as awkwardly tall police officers, Death, and other mythical and political figures.

Jazz bands, Caribbean music, a choir and a chess champion will flesh out the activities in the six-day event.

It takes place in front of the Centenaria Iglesia Parroquial in Santa Ana March 30 – April 4. Things get rolling each evening at 7 p.m. and continue until 10 p.m., except Sunday, when events begin at 4 p.m. and continue until 10 p.m.

ENTRANCE is free and open to everyone. Organizers are trying to raise funds for a cultural center in Santa Ana and will pass out information and ask for donations. For more info, call 282-8662 or e-mail jacevedo@racsa.co.cr or see Calendar, W-14.