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Costa Rica’s Araya Ends Presidential Campaign

Former Costa Rican Presidential Candidate Johnny Araya
Johnny Araya speaks during a press conference on January 17, 2014 in San Jose. Photographer: Ezequiel Becerra/AFP via Getty Images

March 5 (Bloomberg) -- Costa Rican ruling party presidential candidate Johnny Araya ended his campaign today, effectively handing the April 6 runoff to opposition leader Luis Guillermo Solis.

“I’ve listened to the Costa Rican people, I’ve paid attention to their judgments, I’ve consulted surveys that measure public opinion and I’ve witnessed the growing demand for a shift in power away from the party,” Araya, a former mayor of San Jose, told reporters. “This is why, with a firm spirit, I’m announcing my decision to conclude this presidential race.”

Araya becomes the first runoff candidate to withdraw from a campaign since 1932, newspaper La Nacion said. He trailed Solis in polls published since the Feb. 2 first-round vote. In that election, Solis won about 31 percent to 30 percent for Araya. A poll published earlier today by newspaper Seminario Universidad showed Solis with a 43-point lead over Araya.

A former mayor of San Jose, Araya struggled to distinguish himself from President Laura Chinchilla’s government after a series of corruption allegations, historically high unemployment and a drawn-out debate over a fiscal package drained support for the ruling National Liberation Party. Chinchilla, who isn’t eligible for re-election, wasn’t accused of wrong-doing and didn’t campaign publicly with Araya.

“Chinchilla is behind the defeat of the PLN because her administration has been so poorly graded that it was going to be very difficult to start fresh with a new image,” said Manuel Rojas, a political analyst and researcher at the Latin American Faculty of Social Sciences.

Press officials at the presidential palace declined to comment when contacted by Bloomberg News.

$45 Billion

Unemployment in Costa Rica’s $45 billion economy fell to 8.3 percent last year after peaking at 10.9 percent in the third quarter of 2011, according to data from the national statistics office and the United Nations Economic Commission for Latin America and the Caribbean.

The country’s fiscal deficit grew to 5.4 percent of gross domestic product last year from 4.4 percent in 2012.

Solis, a 55-year-old history professor and former diplomat from the Citizen’s Action Party, vowed during the campaign not to raise taxes for two years and said he’ll trim government spending to narrow the deficit.

“I’m worried about the deficit, but I’m not scandalized by it,” Solis said in a Feb. 4 interview with Bloomberg News. “We think it can be managed through sensible policy, a grounded central bank, and a government that does not spend excessively.”

Private Jet

Corruption scandals dogged Chinchilla’s government during her four-year presidency. Finance Minister Fernando Herrero resigned in 2012 after newspaper La Nacion said he avoided paying property taxes, a charge he denied.

The transportation minister also resigned that year over alleged corruption on a road project. Last May, the communications minister resigned and Chinchilla fired her anti-narcotics chief and a deputy minister after questions arose about her use of a private jet to fly to Peru.

The yield on Costa Rica’s 4.25 percent dollar bonds due in 2023 were little changed at 5.28 percent at 3:30 p.m. EST.

According to Costa Rica’s constitution, the April 6 runoff will still take place, Antonio Sobrado, head of the country’s electoral tribunal, said in remarks to TV newscast Telenoticias. The next president takes office May 8.

To contact the reporter on this story: Isabella Cota in San Jose, Costa Rica at icota@bloomberg.net

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net; Philip Sanders at psanders@bloomberg.net

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