Costa Rica: Public Employment bill returns to Legislative Assembly; IMF conducts first review

  • The full court ruling on the Public Employment bill returned to the Legislative Assembly this week, nearly two months since the Constitutional Chamber completed its review and found no procedural issues but identified 35 components of the bill to be unconstitutional. 
  • The Public Employment bill is a structural benchmark under the IMF program and one of the six bills comprising the IMF legislative agenda. It is the most advanced bill, having received approval in the first debate with 32 votes in favour back on June 18, 2021. 
  • From here, the Legislative Assembly appears to have three potential routes for the bill: 1) correct the components that were deemed unconstitutional and then vote on it again in the first and second rounds; 2) vote on the bill as is but would likely face future challenges; or 3) it could be outright rejected. 
  • Changes to the bill could result in the final approval requiring just a simple majority (32 votes) compared to the previously expected qualified majority (38 votes). 
  • Passing this bill would help to simplify public employment, reduce wage inequality, and help contain the increase in spending on salaries charged to the state budget. However, Costa Rica’s heightened social unrest owing to the IMF programme and proposed legislations, is still a significant blockade to the support and passage of the bill. 
  • The other IMF legislative agenda items are still scattered across various commissions. Most are expected to head to the Assembly floor shortly, with concern that they have not been fully socialized in the commissions prior to their deadlines.

(Source: Oppenheimer & NCBCM Research)