SAN JOSE, (Reuters) – Costa Rica’s Congress yesterday approved a reform to the country’s federal employee salary scheme, bringing the Central American nation closer to complying with a $1.78 billion agreement with the International Monetary Fund (IMF).
After three years of debate and despite resistance from public sector unions, the reform would significantly reduce public sector salary benefits and opts for a universal income.
It will affect some 280,000 jobs.
Costa Rica will save more than $600 million a year, local financial authorities said.
The move is part of outgoing President Carlos Alvarado’s proposed austerity plan, needed to comply with fiscal guidelines set by the IMF in January 2021, as the country struggles to emerge from an economic crisis worsened by the pandemic.
