San Jose, Costa Rica
Thousands of chanting, banner-waving teachers, peasants, and workers took to the streets here last week - despite a downpour - to denounce government policies and demand wage hikes.
The protest was one of the first signs of social unrest in Costa Rica. With the national currency worth only one-sixth what it was two years ago, inflation raging at 100 percent, and unemployment at its highest ever, reasons for the demonstrators' grievances are not hard to find.
''What has been truly remarkable,'' comments a longtime resident here, ''is that there has not been more unrest.''
The man's comment is seen in part as a tribute to the nation's genuine democratic tradition - and to the easy-going nature of ''Ticos,'' as Costa Ricans are called.
''Anywhere else,'' he said, ''you would already have a riot on your hands. But I fear the worst in a year's time. No one expects an economic upturn until at least 1984.''
The total external debt of this tiny country is estimated at $4.5 billion - higher in per capita terms than that of Mexico. Costa Rica has been unable to pay this back, and is urgently seeking an agreement with the International Monetary Fund, which may provide $100 million as standby credit.
The minister of the presidency, Fernando Berrocal Soto, said in a recent interview that two outstanding areas of disagreement with the IMF have been cleared up. He expects an agreement to be signed in November. Such an agreement would constitute a first major step to sorting out the country's crushing economic difficulties.
The Social Democratic government of Luis Alberto Monge, elected in May, introduced a series of unpopular belt-tightening measures, including hefty price increases of up to 90 percent on previously subsidized items such as petrol, electricity, and some foodstuffs. It is bracing for a backlash.
Costa Rica is widely known as ''the Switzerland'' of crisis-torn Central America. It has a democratic government, no army, an open-door attitude toward asylum for political refugees, and until recently the highest standard of living in the region. But Costan Ricans are worried that the worst economic crisis ever here could erode their democracy and help fan the flames of instability and revolution.
United States diplomats say the large middle class - which used to cushion the country from problems created by extremes of wealth and poverty found elsewhere in the region - ''now exists in name only.''
''If the government cannot pacify the ever-growing number of jobless, you could find people here looking for the traditional man on horseback as a solution to their problems,'' observed one diplomat.
Another compared Costa Rica with Uruguay, which once had the most advanced welfare system in the hemisphere. The Uruguayan economy collapsed under the strain, he said. Uruguay then experienced increasingly repressive military regimes and growth of guerrilla movements.
Officials in San Jose estimate some 18,000 refugees have come to Costa Rica recently, most from El Salvador, Guatemala, and Nicaragua. About 5,000 Cubans are said to have arrived before Monge took office.
Because of the strains caused by Costa Rica's economic collapse, the nation's leaders now worry about far-left groups operating legally in the country. They are concerned that Sandinista leaders in Nicaragua may try to destabilize Costa Rica.
''The left here could become a fifth column,'' an earnest US businessman says.
Relations with Nicaragua have deteriorated dramatically in recent months. At one time Costa Rica openly sided with the Sandinistas, but of late many here have become worried by the continuing military buildup there. Managua is now estimated to have some 60,000 men potentially under arms and an increasingly sophisticated Soviet-supplied arsenal. Costa Rica, on the other hand, has only 7 ,000 policemen, and they are badly equipped.
Although he cites Nicaragua as a threat to the regional peace, hard-line Costa Rican Chancellor Fernando Volio stops short of predicting an all-out war in the region.
Leaders say tensions are rising with the presence of some 1,000 Nicaragua counterrevolutionaries in training camps along the border who seek to topple the Sandinista regime. So far they have not carried out any massively violent attacks, but the situation does worry Costa Ricans.
''We are determined that under no conditions will we militarize Costa Rica,'' said Berrocal. ''But we will tighten up security and end our open-door policy - while allowing genuine political refugees asylum here.
''We cannot allow the same freedom here as before,'' he added, ''but we are determined to remain neutral in the conflict.''