Costa Rica election gridlocked; Arias in tie

By Chris Aspin and John McPhaul

SAN JOSE, Costa Rica (Reuters) – Costa Rica’s presidential
election was too close to call on Monday with Nobel Peace Prize
winner and former President Oscar Arias failing to sweep to
victory, casting doubt on the future of a trade deal with
Washington.

With votes from 87 percent of polling centers counted in
Sunday’s poll, social democrat Arias had 40.5 percent and
centrist Otton Solis, who once worked for Arias as planning
minister, had 40.3 percent. An electoral official said it could
be weeks before a winner was declared.

Opinion polls had shown Arias, winner of the Nobel Peace
Prize in 1987 for efforts to end civil wars in Central America,
was favorite to win.

The country’s Supreme Electoral Tribunal watchdog said the
election would go to a recount as Monday’s provisional results
were not enough to separate the pair.

“We are not going to announce a winner until we do the
definitive count. That could be in two weeks,” the tribunal’s
president, Oscar Fonseca, said.

Despite the unexpectedly strong performance by Solis, Arias
remained optimistic.

“If I win one more vote than him, I am president,” he told
journalists. Arias said he would respect the tribunal’s ruling.

The country’s elder statesman, Arias, 65, had appealed to
Costa Ricans angry at a series of corruption scandals.

Solis, 51, a technocrat and former central bank official,
said it was too early for claims of victory.

“I think it is a very delicate moment for the country and
we are going to wait until the end, until the electoral
tribunal has processed all the votes because with such a small
difference, anything can happen,” he told Costa Rican
television.

An eventual winner needs more than 40 percent of the vote
to avoid a runoff on April 2.

TRADE DEAL

An Arias victory would help U.S. President George W. Bush’s
free trade plans in the region. Arias wants Costa Rica’s
Congress to drop its opposition to the trade accord between the
United States and Central America, known as CAFTA.

Solis backs the plan mostly but wants to renegotiate it.
Costa Rica is the only signatory not to ratify the deal.

“If certain points in the trade deal, the ones we have
pointed out, are not changed we will vote against it,” said
Solis, of the Citizen Action Party.

Solis says the accord favors Washington too much in the
areas of agriculture, telecommunications and the environment.

Costa Rica, long a haven of stability in a region torn by
civil conflict, poverty and crime, suffered a blow to its image
in 2004 when two ex-presidents were briefly arrested on
allegations of taking bribes from foreign companies.

A third former leader is refusing to return from Europe to
face questioning on similar charges.

Costa Rica has one of the highest inflation rates in Latin
America, at an annual rate of 14.1 percent in 2005, and planned
fiscal reforms have become stalled.

Investors are worried about stagnant government, said Boris
Segura, emerging markets economist at Standish Mellon Asset
Management in New York. “Costa Rica has had eight years without
a government. We have had two lost presidential terms.”

Arias did well in the election for Congress, also on
Sunday, which could help push the trade deal through but his
National Liberation Party looked like it would fall short of a
an absolute majority in the legislature.

Arias, the scion of a rich coffee family, ruled Costa Rica
from 1986 to 1990 when the country stood out as a refuge of
peace in a region torn by conflict.

Leftists have won a string of recent elections in Latin
America but the left in Costa Rica is split into several
factions with virtually no chance of taking power.

(Additional reporting by Manuela Badawy in New York)