VZCZCXYZ0028
OO RUEHWEB

DE RUEHSJ #1162/01 1461439
ZNR UUUUU ZZH
O 261439Z MAY 06
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5186
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS SAN JOSE 001162 
 
SIPDIS 
 
SIPDIS 
 
WHA/CEN 
STATE PASS TO USTR FOR AMALITO 
 
E.O. 12958: N/A 
TAGS: PINR EAGR EIND PGOV CS
SUBJECT: ALFREDO VOLIO, MINISTER OF PRODUCTION 
 
 
Summary 
- - - - - - - - 
¶1.  Alfredo Volio was appointed by President Arias to head a 
new Ministry of Production which is a combination of two 
traditional ministries, the Ministry of Agriculture (MAG) 
and the Ministry of Economy, Industry and Commerce (MEIC). 
Volio is a 46-year-old businessman who has worked in food 
trading and processing companies related to macadamia, dairy 
products, cattle raising, and citrus fruit.  He has little 
previous government experience. His priority will be to 
manage the merger of the ministries into an efficient and 
functioning new combined ministry.  End Summary. 
 
Background 
- - - - - - - - 
¶2.  Prior to assuming his new position as Minister of 
Production, Volio worked as a manager of various food 
trading and processing companies with operations in Costa 
Rica and North America related to macadamia, dairy products, 
cattle raising, and citrus fruit. He was a director of 
numerous trade and producers' associations over the past 
decade.  Volio also served as President and board member of 
the National Bank, the International Bank of Costa Rica 
(BICSA), and the National Stock Exchange. He has spoken at 
several international conferences related to the macadamia 
industry, international banking, and sustainable 
development. 
 
¶3.  Volio has a B.A. in business administration from the 
University of Costa Rica.  He speaks fluent English. He is 
married with children, one of whom currently attends West 
Point. During initial contacts with the Country Team, Volio 
has been personable and has had a business-like attitude. 
He is known to the Embassy Agriculture Affairs staff due to 
his involvement several years ago in the macadamia nut 
industry and participation in the screwworm commission. 
 
¶4. The new Ministry of Production will require legislation 
transferring powers to the new combined ministry. At this 
stage it is not clear whether the legislation will grant new 
authorities to the Ministry of Production beyond the 
existing authority granted to MAG and MEIC.  Minister Volio 
is going to need every ounce of leadership and management 
skill he can muster as he seeks to merge functions and 
cultures of MAG and MEIC into a cohesive unit. 
 
¶5. MAG, in particular, appears to be a ministry barely held 
together with duct tape.  Major programs, e.g., animal and 
plant health surveillance and meat and poultry inspection, 
are funded in good part through a regional organization 
(OIRSA - Organismo Internacional Regional para la Salud 
Agropecuario) and a hodgepodge of trust funds derived from 
user fees. Strict budget ceilings and a lack of authority to 
charge user fees have given rise to a proliferation of 
unusual financial arrangements, the staffing of programs 
outside of civil service parameters, and the failure to 
execute regulatory functions in full conformity with law and 
regulation. Serious questions have also been raised about 
MAG's program to regulate pesticides and the alleged failure 
of the ministry to remove dangerous chemicals from the 
market and to obtain required safety data from chemical 
manufacturers. 
 
¶6.  Costa Rica's financial watchdog agency, the Contraloria 
appears to have MAG's failings and lack of transparency and 
oversight on their radar screen.  This presents an immediate 
challenge for the new minister to eliminate irregularities 
and impose adequate controls.  In the waning days of the 
Pacheco Administration, the Contraloria pushed hard for MAG 
to bring programs and administrative procedures into 
compliance with the law.  The Contraloria even went so far 
as to force the trust fund administrator for the 
Phytosanitary Service, the agency responsible for the 
inspection and certification of all plant product imports 
and exports, to send dismissal letters to its employees. Had 
the Contraloria not granted MAG an extension until August 
2006, the suspension of plant health inspections would have 
jeopardized Costa Rican food exports and imports. 
 
 
¶6. COMMENT: At a recent breakfast meeting with Embassy 
staff, Minister Volio described the differences he noted on 
the first day between the two ministries he is now trying to 
combine.  He said he arrived at MEIC to find his desk well 
organized, computer and telephones working, and briefing 
memos ready for his review.  Quite the opposite scene 
greeted him at MAG where no one had bothered to clean out 
his desk, which he found full of papers and old files as if 
his predecessor had simply left for the day.  There was no 
computer, and he still didn't know his own telephone number 
a week after being sworn in.  He said he could see he had 
his work cut out.  Minister Volio is one of President 
Arias's closest confidants.  The embassy finds him to be a 
person who is eager to learn and is interested in working 
with the U.S. END COMMENT