As I have noted before Costa Rica is not a Libertarian paradise. Despite that I felt it was pretty good place for those who want a great deal of effective freedom. I am no longer sure about this position.
There are several things that the government has been doing over the last few years that indicate a disturbing trend. Given any one, or even two of these things and I would probably say "no place is perfect" and focus more on the positive aspects, which are still very real. However, lately there have been too many negatives. Things in CR are definitively going in the wrong direction.
Lets start with the "War on (some) Drugs" and its side effects. When we first moved here in 2000 the homicide rate was five or six per 100,000. In 2006 it was eight. In 2008 it was 11. These are mostly gang related and are mostly located in the Caribbean province of Limón. Instead of doing the rational thing and moving towards less government prohibition, as Argentina and Mexico have done, the Costa Rican government has increased penalties for personal possion of drugs (as well as sale). They have taken to conducting raids on high schools with drug sniffing dogs and masked police. They have also passed a really ridiculous "know your customer" type of law which has had the banks running around like crazy hasselling all of their existing customers and makes opening a new account very painful. This law has resulted in many long time customers having their accounts frozen or even closed because they cannot produce utility bills in their names and other very stupid reasons. Additionally they have passed a property confiscation law. If the government decides that property you have came from "non-transparent" means, you must prove that you acquired it "legitimately". If you do not they can consfiscate it. Without going to the courts. This law has not been tested in the courts, and it may not hold up, but it is very troubling.
Then there is the practical xenophobia of the current administration. The last government ranted against foreigners, but really did nothing. The current one says very little but has pushed through an ugly immigration bill, which among other things has employer sanctions for hiring illegal aliens, very high fines (US$ 100/day) for overstaying, limits on the number of times one can leave and reenter as a tourist in a year, limits on getting residency based on marriage, and greatly increased dollar amounts that one must have to qualify for all categories of residency. Oh yes, and Immigration itself issued a decree that to get or renew residency one must be registered with your embassy. All in all, making CR a good deal less friendly to visitors than it used to be.
And finally, what really pushed me over the edge and prompted me to write this: Two days ago the government announced that it would no longer issue gun carry permits to foreigners and that when the current ones expire they will not renew them. In an interview the minister responsible acknowledged that every foreigner who had a permit had completed all the legal requirements, just like the Costa Ricans, and acknowledged that some would lose their job (guards) or be unable to get work because of this, and further acknowledged that it would not reduce crime. The intent is (according to the minister) to reduce the number of guns in Costa Rica. This effectively violates Costa Rica's long standing policy of equal treatment under the law for everyone. It sets a very dangerous president. Not only with firearms. Logically this could lead to foreigners being denied to right to own property, or any other arbitrary restriction that the government of the day desires.
There are a few other things as well, all of them minor (to me) but none the less, you put it all together and Costa Rica is no longer that attractive. If someone asks me today if they should move here, I would strongly advise them to investigate other options, especially if they are oriented towards Liberty. At the very least I would advise them to wait until the next administration takes power (May 2010) and see if they reverse, or at least tone down, some of these policies.
The obvious question is what are we going to do. Good question. We will wait and see what the next administration does with its first few months in office. After that, we do not know, but are discussing it.
All of the above has been reported in the local newspapers, La Nación(Spanish) is where I read most of them.