A second turn at the helm: Costa Rican President Oscar Arias leads a country long known for its progress on peace and the environment, but this time around he is facing a more polarized society.

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Costa Rica is a delight for visitors--a place of tropical forests and volcanoes set between two oceans, with an extraordinarily beautiful and fertile central valley that is home to its largest population centers. It is a land of great hospitality, and many of its residents children of recent waves of immigrants, such as that of many Nicaraguans in the 1980s.

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Twenty years after receiving the Nobel Prize for Peace for his role as a mediator in the Central American armed conflict, during his first presidential term, Oscar Arias Sanchez is halfway through a second mandate. He leads a country that has a long, peaceful democratic tradition but that faces serious problems related to security and social justice. This is a time of growing political polarization, reflected at the polls in 2006, when Arias achieved a photo-finish victory over rival Oton Solis in the presidential race. A high percentage of the electorate simply abstained from voting.

President Arias welcomed Americas into his office with the formal courtesy that tends to characterize Ticos, as Costa Ricans call themselves. That shilling young man the world remembers as a Nobel laureate two decades ago has given way to the Arias of today: grim and gray-haired, with a gaze that seems focused far beyond the horizon. Asked why he had launched himself once again into turbulent political waters, instead of continuing a tranquil life at the helm of the Arias Foundation for Peace and Human Progress, Arias had a pensive response. "This was a country without a true north, without a clear path to follow, a country that was going off course with a complete absence of leadership," he said. "We spent four years talking about taxes and never voted on them; they were neither approved nor rejected.

"So I found a very polarized society," Arias added, "but I knew what I wanted and took on the challenge of defining a direction for that path--defining that path and getting Costa Pica back on track again."

Arias recognized that he lacked a strong enough popular mandate to carry out such initiatives as the Free Trade Agreement (FTA) with the United States, and said his position as a former president actually worked against him during his campaign. "I convinced a majority, but we still have a good part of the country against the FTA," he said. "Today I have a lot more support from Costa Ricans than in February 2006, when I was elected, because I have restored something that is essential for Costa Ricans--confidence. Confidence that we are doing things right on an economic and social level, but also from an ethical standpoint, which is very important. We have two former presidents who will soon appear before the courts of justice. It turned out to be a major liability to be an ex-president on election day, because people thought my hands might be dirty ... I can't say just like the others, since everyone is innocent until proven guilty. But at least the fact of being a former president wasn't an asset but a liability. A lot of people stopped supporting me in those final days, mainly because of a campaign by my adversaries to the effect that all of us ex-presidents were the same."

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The conversation turned toward a subject that has always sparked curiosity and amazement in Latin America: what it has been like for Costa Pica to live without an army for more than half a century, since it was abolished in 1949. Without hesitation, Arias called it a "very positive" experience. "By not spending on weapons and soldiers, Costa Pica can dedicate those resources to education, health, housing, and infrastructure--to improving living conditions for people and satisfying social needs that were not being met before, and demonstrating to the world that there is no cost more perverse for a government than spending on weapons and soldiers. Costa Rica is a peaceful country."

In the context of security problems, Arias expressed his concern about the rise of terrorism. "It's a new threat throughout the world, and we are not exempt from it in this hemisphere, and not only in the United States. There is terrorism in other sister countries of Latin America, especially in Colombia, and Europe is also experiencing it." Among the new types of threats being faced, he pointed to drug trafficking.

"In these two years we've been in government, we've seized more than 40 tons of drugs. We have been a transit country for drugs, and increasingly, more drugs are ending up here. The proportions, at any rate, have multiplied. Before, only insignificant amounts were seized; that is no longer the case, undoubtedly due to greater help from the United States and greater intelligence."

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President Arias is considered, along with former President Luis Alberto Monge, one of the driving forces behind neoliberalism in Central America. When asked what positive aspects this economic model might offer Costa Rica and Latin America, Arias answered somewhat ironically: "Well, if putting public finances in order, if having a responsible monetary policy, if having an exchange system that is also responsible ... if spending more on education, on health, if getting rid of hovels, if improving salaries in real terms, if bettering pensions, if lowering poverty rates ... if all this is neoliberal, then that is what I believe and that is what we are doing."

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As part of that policy of economic openness, Costa Rica has signed a series of free trade agreements with its trading partners, including the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) with the United States. However, Costa Rica was the only signatory that submitted the treaty for ratification in a popular referendum, in 2007; the result was 51.62 percent in favor and 48.38 percent against, a testament to the degree of division on that issue. Arias acknowledged that he didn't have all the support he needed and called for congressional approval of the implementing legislation required for the treaty to enter into effect. In February, at his request, the United States and its DR-CAFTA partners--El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic--extended the deadline for Costa Rica to adopt the pending legislation for the treaty's implementation until October 1 of this year.

"A free trade treaty is a tool, not an end in itself," Arias stressed, emphasizing his words with a pointed finger, "and that's how we explained it to Costa Ricans. A country as small as Costa Rica--and this holds true for all the Central American countries--very small economies with very small populations need to broaden their markets. The greater risk would have been if the FTA had not been approved for the Central American countries. That would have been catastrophic. The greatest risk for Costa Rica is if we end up being the only ones left out of it. The United States has free trade agreements signed with only 14 of the nearly 200 countries in the world."

As if speaking directly to his critics, he argued, "The ETA is a tool that will allow us to grow more quickly, to have higher rates of economic growth. Depending on our social policies on education, health care, distribution of income, most of all on our fiscal policies, everything we do in the social arena will help determine whether that higher growth benefits not just a few but can be distributed in a better way."

His defense of the FTA opened the door to ask about leftist options in Latin America that are opposed to neoliberalism, and Arias painted the issue in black and white. "On one side are those who don't want to sign a free trade agreement with the United States and on the other, the countries that stand in line to sign it in order to have a market on the scale of the North American market open to its products and raw materials," he said, citing Chile, Peru, and the Central American countries among the latter. Of the former, he added, "Ecuador doesn't want to, and I respect that opinion. If Venezuela doesn't want an ETA, even though it exports a large part of its oil to the United States ... if it doesn't want the United States to lower its tariffs for other Venezuelan products, that is a sovereign decision of President [Hugo] Chavez and one I respect. And the same holds true if Bolivia doesn't want an ETA. However, Nicaragua is part of the ALBA [the Bolivarian Alternative for the Americas], and it, has its ETA with the United States; it's an exception to that rule. When President [Daniel] Ortega was elected, he could have withdrawn from the FTA with the United States but he didn't do so, and I applaud him."

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Turning to another subject, Americas asked President Arias if, based on his experience in seeking peace in Central America, he might be able to help fined a solution to the internal conflict in Colombia. "As a Latin American, it pains me a lot and frustrates me not to be able to do anything," he said. "To mediate, I would need a green light from both parties, and I would not get that from the FARC [Revolutionary Armed Forces of Colombia], partly because I've been very critical of them. It seems unjust to me that they have been fighting for more than 40 years against a country that has been making progress in consolidating its democratic institutions, one that for a long time has had popularly elected presidents and clean elections. These are a very brave people who turn out to vote under gunfire. I think a guerrilla movement was justified when people were not allowed to freely elect those who would govern them. That is not the case with Colombia. Neither do [the FARC] have any possibility of getting into power, and this is nothing more than a way of life for generations of Colombians."

Arias sounded particularly pessimistic on tiffs subject. "We are a long way from finding a solution to the military conflict because there's nothing on the table to discuss. There's no peace initiative, no timetable, the only thing being talked about is freeing hostages. That's something humanitarian, important, and urgent because having innocent people kidnapped by the FARC cannot be justified. We're still a long way from both parties sitting down to discuss a peace process that could lead to the guerrilla movement's demobilization and disarmament."

After a pause, Arias turned the conversation back to his earlier peace efforts in Central America, clearly a subject close to his heart. "The OAS of twenty years ago helped me a lot. It was a forum where I found great support from the entire Latin American and Caribbean community to support the peace plan I had presented. It provided an important stimulus for the five Central American presidents not to get up from the table until we had signed and taken on the commitment to silence the weapons in the region. To a certain extent, it was a counterbalance to the United States, to then-President Ronald Reagan, who always opposed the peace plan; even after it was signed, he tried to undermine all our efforts to comply with what was stipulated in the peace plan. The OAS, by contrast, gave us great support and encouragement."

On the table in the seating area of his office was a beautiful purple orchid--the guaria morada, as Ticos call it. It flowers in February and March, and because it is closely associated with the Costa Rican people, it was named the National Flower in the 1930s, under the government of Leon Cortes Castro. Although the interview was about to conclude, the orchid prompted one last question: How would Costa Rica hold onto its vision to protect tropical forests from the grave threats of global climate change?

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Arias responded with obvious pride. "Recently, we were rated alongside the most advanced countries in terms of protection of the environment, at the same level as Switzerland, Sweden, Finland, and Norway. For many years now, we have managed to protect 26 percent of our territory. We have 4 percent of the world's biodiversity. Just in the Nosara Biological Reserve, which is a true gem, we have 2.5 percent of the biodiversity found in the world. Our tourism is a success because it is ecotourism; people come to see our national parks and see Costa Rica as an example. Twenty years ago, when I left the government, close to one fourth of our territory was forested; today it's more than 50 percent.

"Costa Rica is one of the few countries in the world that has reversed the trend iof deforestation," he continued. "But reforestation is a second option for Costa Rica, a Plan B; the important thing for us is not to cut down primary forests in the first place. About twelve years ago we introduced legislation to pay for environmental services. In other words, we place a tax on fuel so we can pay farmers not to cut down trees and to plant more trees. Last year, we set a goal to plant five million trees. In per capita terms and in square kilometers, no country has planted more trees than we did in 2007."

The planting continues, as the Costa Rican leader wants his country to be a model for the world in mitigating or neutralizing greenhouse gas emissions in the Earth's atmosphere. In addition to increasing the number of trees planted--the target for this year is seven million--"even more ambitious is seeing if we can meet a goal the government has set for itself to become carbon-neutral by the year 2021," Arias said.

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Amparo Trujillo is the managing editor of Americas. Colombian journalist Hector Pena Diaz collaborated on this article. Photographs of Arias are courtesy of the Office of the Presidency of Costa Rica.