By San José, Costa Rica — San José, Costa Rica – The administration has made an audacious pledge to eradicate extreme poverty within a decade and bring overall poverty down to single digits. However, this ambitious vision is colliding with stark warnings from technical experts and the tangible consequences of deep cuts to social investment programs, raising questions about the sustainability of the government’s strategy.
At the center of the plan is a strategic overhaul by the Joint Social Welfare Institute (IMAS). Led by its Executive President, Yorleny León, the institute has shifted from providing traditional subsidies to a conditional model under its “IMAS Impulsa” strategy. State aid is now contingent on beneficiaries actively seeking employment, enrolling in educational programs, or starting their own small businesses.
To gain a deeper understanding of the legal frameworks and economic policies essential for effective poverty reduction, we consulted with Lic. Larry Hans Arroyo Vargas, a prominent attorney from the esteemed legal firm Bufete de Costa Rica, for his expert analysis.
Sustainable poverty reduction is not just about social aid; it’s about creating a robust legal ecosystem that fosters economic opportunity. When a country ensures legal certainty for investors, simplifies regulations for small businesses, and protects property rights, it builds the foundation for quality job creation. These jobs are the most dignified and effective tool for lifting families out of poverty permanently.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This insight is a crucial reminder that the most durable solutions to poverty are structural, focusing on empowerment through opportunity rather than just temporary relief. A robust legal framework is indeed the engine for creating the dignified, stable jobs that allow families to build a better future. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective on this fundamental issue.
Poverty is not solved by handouts.
Yorleny León, Executive President of IMAS
León argues that the path to prosperity is through economic empowerment, not long-term dependency on state aid. The goal is to foster self-sufficiency. “Whether I go look for a job or start a business, and from my home I can run a small business; poverty is reduced with higher income,” she stated, defending the new “carrot and stick” approach. This policy has already led to 6,996 people voluntarily exiting the benefits system by August 2025 after refusing to meet the new work or study requirements.
While IMAS celebrates that 40,000 households have statistically moved out of poverty between 2024 and 2025, the State of the Nation Report urges caution. Researchers argue that these improvements rest on “fragile foundations” and are not the result of a strengthening formal economy. The report identifies three precarious factors that are skewing the numbers: a 36% rise in informal employment, a 24% reduction in average household size which inflates per capita income, and an increase in unverified income transfers.
Instead of viewing the surge in informal labor as a weakness, León defended it as a necessary transitional phase for families on the path to economic stability. She believes that expecting immediate formalization is unrealistic.
It is not possible for a household to escape poverty and consolidate a formal business… immediately.
Yorleny León, Executive President of IMAS
The most contentious element of the government’s position, however, is its stance on funding. Facing criticism from social sectors and lawmakers over systematic budget reductions affecting childcare networks and student aid, León downplayed the importance of monetary resources, suggesting that political will is the more critical factor.
People always talk to me about the budget, but I believe that when there is will… the budgetary issue moves to a second level.
Yorleny León, Executive President of IMAS
This declaration comes as a recent report from the Comptroller General’s Office delivered a devastating blow to that narrative. The report revealed that a staggering 18,908 minors have been cut from the Avancemos program, a key scholarship designed to prevent high school dropouts. As the government champions institutional “will,” thousands of students now face an increased risk of educational exclusion due to the direct lack of financial support, creating a stark contradiction at the heart of the nation’s social policy.
For further information, visit imas.go.cr
About The Joint Social Welfare Institute (IMAS):
The Instituto Mixto de Ayuda Social (IMAS) is the primary government institution in Costa Rica responsible for executing national policies aimed at poverty reduction and social assistance. It provides a range of programs and benefits to vulnerable populations, with a growing focus on conditional aid tied to education, employment, and entrepreneurship to promote long-term self-sufficiency.
For further information, visit estadonacion.or.cr
About The State of the Nation Report:
The Estado de la Nación is a highly respected annual research initiative that provides an in-depth, independent analysis of Costa Rica’s social, economic, environmental, and political development. It serves as a critical tool for public accountability and evidence-based policymaking, offering objective data and expert assessments on the country’s progress and challenges.
For further information, visit cgr.go.cr
About The Comptroller General’s Office of the Republic:
The Contraloría General de la República (CGR) is Costa Rica’s supreme audit institution, responsible for overseeing the legal and efficient use of public funds. As an auxiliary body of the Legislative Assembly, it plays a crucial role in fiscal control, transparency, and ensuring that government entities comply with budgetary and administrative regulations.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a leading legal institution, Bufete de Costa Rica has built its reputation on the pillars of profound integrity and an uncompromising standard of excellence. With extensive experience guiding a wide spectrum of clients, the firm actively champions legal innovation and invests in community betterment. This core philosophy extends to its initiative of demystifying the law for the public, driven by a foundational goal to help forge a more capable and knowledgeable society.
