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Standard & Poor's sees stability in Costa Rica's Chinchilla

SAN JOSE, Costa Rica — In a vote of confidence to the newly elected president Laura Chinchilla, Standard & Poor's Ratings Services said last week that the outlook on Costa Rica's long-term ratings remains stable.

A Chinchilla administration is widely predicted to be four more years of the policies practiced by President Oscar Arias, which have been praised by the likes of the International Monetary Fund for helping to stave off a worse crisis during Costa Rica's first recession in decades.

Put purely in S&P speak, here's what the press release said:

"Standard & Poor's Ratings Services today said it affirmed its 'BB/B' foreign currency and 'BB+/B' local currency credit ratings on the Republic of Costa Rica. The outlook on the long-term ratings remains stable. At the same time, we affirmed our 'BBB-' transfer and convertibility assessment. We also affirmed our 'BB+' ratings on Costa Rica's foreign currency senior unsecured debt. The foreign currency issue-level ratings are one notch above the foreign currency issuer-level rating, reflecting both default and recovery prospects."

"The affirmation follows the results of recent national elections for the presidency, members of Congress, and local governments in Costa Rica," said S&P credit analyst Joydeep Mukherji.

Chinchilla takes office on May 8, and the new show of credit confidence will no doubt deliver an early boost to her administration. She will need it when faced with a more diverse Legislative Assembly, where her centrist National Liberation Party won't hold a majority.

Another economic + sign

Official employment figures, which hit a more than 20-year low in July, have begun to rebound. By looking at the number of workers paying into the Social Security System (an estimated 70 percent of the job force), December showed a 1.4 percent increase, signaling a small but significant turnaround in employment trends, according to a report La Nacion newspaper.

The official unemployment — gauged and published by the National Statistics and Census Institute only once a year in July — reached 7.8 percent in 2009. The year before, the jobless rate was just 4.9 percent.

During her campaign, Chinchilla promised to help create "green jobs" (sound familiar?) to see further increases in the country's employment numbers. In order to do this, she hopes lawmakers will crack open the next biggest state-run monopoly, the energy sector, to make way for creative private firms to compete and build renewable energy infrastructure.

"It's not just about creating more employment, but also taking advantage of the crisis to make decisions to allow us to transform the crisis into an opportunity so that Costa Rica creates better jobs," Chinchilla said, talking about green and better paying jobs.