By GLENN GARVIN

 SAN JOSE, Costa Rica -- The two little girls, arms folded across their chests to
 ward off the unseasonable chill of the night, eyed the pair of tall gringo men
 speculatively, then offered tentative smiles. ``So, what's up?'' the older of the girls,
 barely 13, asked.

 ``Nothing much,'' replied one of the men. ``What's up with you?''

 ``Well, I don't know,'' the girl answered, her smile bolder. ``You look like you might
 be looking for something. You look like you might want to buy something.''

 ``Buy something?'' the man asked, glancing around the deserted downtown
 street. ``Like what?''

 ``Like us,'' the girl said. ``Like us.'' Both kids dissolved in giggles, but when the
 older one looked up again, her face was solemn. ``Thirty dollars for my little
 sister, 15 for me.''

 Meet Stephanie, 12, and Ivette, 13, two members of a fast-growing Costa Rican
 workforce: child prostitutes. The country that prides itself as Latin America's most
 stable democracy and the inventor of ecotourism is becoming the hemisphere's
 best-known playground for pedophiles.

 Every night, as many as 2,000 underage prostitutes walk the streets of San Jose
 or cater to more affluent clients behind the walls of stately homes converted into
 brothels in the city's best neighborhoods, according to an estimate by an
 organization that deals with the problem at an international level. Other children
 take off their clothes to pose for lewd pictures that will be passed around the
 Internet -- which, until last year, wasn't even a crime in Costa Rica.

 The problem has been developing for years. In 1996, the World Congress Against
 Commercial Sexual Exploitation of Children, held in Stockholm, issued a report
 noting that Costa Rica was becoming an important center for child prostitution,
 but the government's failure to act has generated increased international scrutiny.

 Last year, the United Nations Human Rights Committee issued a report saying it
 was ``deeply concerned at the high incidence of commercial sexual exploitation of
 children in Costa Rica.''

 Now, the Inter American Commission on Human Rights is scheduled to hear a
 formal complaint from Casa Alianza, a Costa Rican organization designed to help
 the child victims of sexual exploitation, charging that Costa Rica has failed to
 take action to stop ``the increase in the commercial sexual exploitation of boys
 and girls.''

 Costa Rican diplomats have been frantically maneuvering to get the March 3
 hearing canceled, thus far with no success.

 The boom in child sex is being fed from outside, by tough new laws in the United
 States that target pedophiles; a crackdown in Asia, the traditional child-sex
 capital of the world; and the Internet, which has made it easier for pedophiles to
 swap information.

 It is the ugliest corner of a much larger sex-tourism industry that, authorities
 acknowledge, is bolstered not only by bit players like taxi drivers and travel
 agencies, but pillars of the Costa Rican economy, like large hotels owned by U.S.
 chains.

 And it has exposed what some social workers say is an embarrassing secret:
 that children have long been sexual playthings here, and not just for foreigners.
 Eighteenth-century documents show that complaints of sexual abuse of children
 reached the Spanish Inquisition. And a 1999 U.N. report on child prostitution
 noted: ``The sexual exploitation of children has a long history in Costa Rica.''

 For much too long, social workers say, this society has looked the other way as
 children are victimized by the adults who are supposed to protect them.

 ``I know, I know, the image of Costa Rica is that we're very well-educated, very
 refined, with close-knit families, little poverty, hardly any illiteracy, no crime, the
 Switzerland of Central America,'' says a bitter Magda Ramirez de Castro, a
 counselor who works with child prostitutes. ``All that is a myth. Maybe it was true
 10 years ago, but it's not now.''

 As the world's purse strings tighten in the wake of the Cold War, Costa Rica is
 finding it hard to support the welfare state it built when foreign aid rolled in as
 regularly as the tide. The result is increasing poverty (over 27 percent of the
 population, according to the United Nations) and disintegrating families -- 41
 percent of all children are born to single mothers.

 ECONOMIC FACTOR

 The tough times have driven many women to prostitution, which is legal here. And
 although the minimum age for prostitution is 18 (and sexual contact of any kind
 with a child under 15 is illegal), underage boys and girls have inevitably come
 under the sway of a booming sex industry that some officials believe has become
 a vital sector of the economy.

 Snaps Lilliam Gomez, Costa Rica's chief sex-crimes prosecutor: ``It's not just
 that the government is not trying hard enough to solve this problem. Parts of the
 government are actually promoting this. We have advertisements for escort
 services in our own tourist brochures. Escort services! For God's sake! What are
 we doing here?''

 Costa Rica is by no means the only Central American country with a child
 prostitution problem. The length of the isthmus, children can be found selling sex
 to escape extreme poverty and dysfunctional families:

 In Nicaragua, hundreds of teenage girls line the shiny new Masaya Highway
 commercial corridor on Managua's south side every night, sometimes yanking
 their blouses over their heads to lure customers from the passing traffic.

 In Honduras, a Philadelphia special-education teacher, David Gary Rounds, was
 arrested in a hotel room in La Ceiba, on the country's north coast, with two
 12-year-old boys in his bed. Police found a diary in which Rounds described a
 long string of sexual encounters with Honduran kids as young as 8. Wrote
 Rounds: ``How many times I have shook my head and said, this is heaven! So
 many boys.''

 In Guatemala, a survey of street children aged 8 to 14 found that 56 percent didn't
 know the name of the first person with whom they had sex.

 But in Costa Rica, child prostitution seems to be out of control. When word got
 out last September that Casa Alianza -- the Latin American affiliate of the New
 York-based Covenant House, a private organization that works with street children
 -- would investigate reports of child prostitution, the group fielded 130 complaints
 in just three weeks.

 ``The complaints get more horrifying the more you look into them,'' says Bruce
 Harris, Casa Alianza's British-born executive director. ``We've got a case of a
 12-year-old girl being prostituted by her aunt, $120 for three hours. But she only
 works until 1 p.m. After that, she has to go to her sixth-grade classes.''

 A confidential report prepared by the Costa Rican government and obtained by
 The Herald makes it clear that the child-sex trade here has become blatant to the
 point of fearlessness:

 Recruiters from one brothel routinely work right in front of the U.S. embassy,
 using a limousine as bait for kids walking home from elementary school.

 Neighbors report that a woman in San Jose's Paso Ancho neighborhood is
 running a brothel for teenage prostitutes -- including her own daughter -- in her
 house. But police haven't tried to enter the home because of ``threats'' from the
 woman. The report notes that hers is an ``aggressive family.''

 Parents who answered an American man's classified ad in Costa Rica's
 English-language weekly Tico Times, seeking writers and illustrators for children's
 books, were instead offered $8.50 an hour to bring their kids by for nude photo
 sessions. Some did.

 But it's hardly necessary to read secret government reports to learn the details of
 Costa Rica's commerce in juvenile sex. Anyone with eyes can see it -- from the
 teenage hookers who scurry around the lobby of the downtown Holiday Inn,
 conferring with bellboys about likely customers, to the taxi drivers who seemingly
 know the address of every brothel in town.

 ``Taxi drivers know everything, because they form an important part of the
 network,'' explains cabbie Juan Carlos Rojas, who says he's never taken
 customers to brothels but nonetheless was able to point out several on a drive
 through San Jose. ``The taxi driver carries the customer to the pimp, the
 customer pays the pimp $100, and the pimp gives the driver $40. Everybody
 makes a buck. This country is as corrupt as it comes.''

 BOYS INVOLVED TOO

 Not every child works in a brothel. Stephanie and Ivette, the two little girls who
 propositioned a Herald reporter, are part of a group of about two dozen kids -- half
 of them boys -- who can be found on a downtown street corner almost every night.

 Ivette was bundled up in a jacket against the low-60s temperatures, but her
 younger sister Stephanie was dressed like a tiny doll version of a hooker, in red
 hot pants and a tightly cut halter top that left her small midriff bare.

 The two girls said they've been working as prostitutes for a year, since they were
 aged 11 and 12. Even then, they weren't the youngest on the corner; that would
 be 9-year-old Iliana, who left home after being repeatedly sexually molested by an
 uncle and now lives in a nearby hotel on her prostitution earnings. (Iliana came
 racing over when she saw a foreign man on the corner, but backed away quickly
 when she discovered he was a reporter.)

 Ivette and Stephanie view their work matter-of-factly. Ivette says she's been with
 ``a ton'' of men over the past year. ``Am I happy? Well, the men are happy
 afterwards. Me, I just do it for the money, to help my parents.'' Asked what kind of
 jobs her parents have, she replies softly: ``Me.''

 Both of them still live at home. In other Latin American countries, child
 prostitution is practiced mainly by street kids. In Costa Rica, however, the
 overwhelming majority of the children go home to their families, according to a
 U.N. study in 1999.

 ABUSED AT HOME

 Ivette, Stephanie and Iliana are in no way unusual. Most child prostitutes begin
 before their 12th birthday, and 82 percent of them were sexually abused at home
 before turning to prostitution, according to at least one U.N. study.

 ``I go over and talk to those girls a lot,'' says an American who operates a
 business near downtown San Jose's Morazan Park, where scores of underage
 prostitutes line up on Saturday nights to await customers from nearby bars. ``And
 every single one of them tells the same story: She decided to come to the park
 so she could get paid for what she was having to give away free at home. There's
 something wrong in this country.''

 Many Costa Ricans psychologists and social workers agree. ``There's a vast
 amount of incest in the Costa Rican nuclear family,'' says Marta Montel, who
 works at an outreach program for street children. ``People are only just starting to
 see it as a problem. People have always known it's not exactly normal -- they
 know in their hearts that there's something wrong with it -- but it was always seen
 as something traditional, not something to worry about.''

 Concurs psychologist Jorge Sanabria of the Child Welfare Institute: ``The idea
 that foreigners created this problem is wrong. What has happened is that there is
 a culture of sexual abuse of children in this country, and foreigners have taken
 advantage of it.''

 INTERNET SITES

 Nonetheless, there's no question that foreign pedophiles are flocking to Costa
 Rica. Recent criminal cases have implicated British, Egyptian, Swiss and U.S.
 nationals in child prostitution and pornography. Internet sites devoted to sexual
 tourism brim with comments about Costa Rican nightclubs, hotels, and street
 corners where young prostitutes can be found, complete with prices.

 A typical exchange on a site called the World Sex Guide: ``The Hotel Park was
 kind of interesting . . . We notice that most of the ladies sitting out in a little
 courtyard were about 16 or 17.''

 Costa Rican officials believe the influx of foreigners seeking underage sex is being
 driven in part by the general increase in tourism here (1.25 million visitors are
 expected this year, three times as many as in any other Central American
 country) and partly by the increasingly difficult conditions for pedophiles in other
 parts of the world.

 Countries like Thailand, long notorious for child prostitution, are cracking down.
 And some American pedophiles have been driven overseas by the wave of states
 passing so-called Megan's Laws -- named for a little girl raped and murdered by a
 neighbor -- that require anyone convicted of a sexual offense against children to
 register his address as a public record.

 There was only one conviction in all of Costa Rica last year related to sexual
 exploitation of children. ``The statistics don't look very good,'' admitted Attorney
 General Carlos Arias.

 Part of the problem is that child prostitution is a difficult crime to investigate. ``It's
 not like we can just look at a bunch of girls on the street and say, hey,
 prostitution, let's make some arrests,'' said Jorge Rojas, acting head of the Office
 of Judicial Investigations, the Costa Rican equivalent of the FBI. ``You've got to
 infiltrate people and demonstrate that it's really taking place.''

 INEFFICIENT JUSTICE

 Police also have to deal with a creaky and inefficient judicial system. Until late
 last year, possession of child pornography was not illegal and the statute used to
 go after customers of underage prostitutes applied only if a child was ``virginal.''
 That is, unless cops made arrests on the very first day a little girl worked as a
 prostitute, they could forget it.

 Even with tougher new laws, liberal judicial policies on bail make it easy for
 foreigners to stay one jump ahead of the police. Cops busted a child-pornograpy
 studio in December, seizing a huge quantity of photos and video and computer
 equipment. But the two Americans arrested during the raid were quickly released
 on $300 bail. ``They're not supposed to leave the country, but do you suppose
 that will stop them?'' asks attorney general Arias.

 But perhaps the toughest obstacle facing the police is that they get no
 cooperation at all from the children they are trying to help. ``When I've helped the
 police do a raid on a bar, the people who are the angriest are not the clients, but
 the girls themselves, the prostitutes,'' Harris admits. ``The way they see it, we're
 taking their livelihoods away. When they see themselves as an employee rather
 than a victim, it's very difficult to help them.''

 Johanna has been working as a prostitute for 18 months. She's been beaten up
 three times and extorted for sex and money by rogue cops on many occasions.
 Still, she kept working the streets four nights a week even through a pregnancy
 and has no intention of stopping now.

 FEEDING HER CHILDREN

 ``Everything I do is for my two little ones at home,'' she says. ``They have to eat,
 they have to have milk, and I don't know what else to do.'' A few minutes later,
 after the photographer left, she was back on the street, laughing and chatting with
 potential clients.

 It is the seeming intractability of the young prostitutes themselves that authorities
 and social workers find most frustrating. ``Getting them to quit is the most difficult
 part,'' says Ana Cecelia Fuentes, a social worker. ``The money is good, and even
 if they don't like the work, they don't want to lose the money . . . There are no
 easy answers.''

 But, almost everyone agrees, the country has to come up with some. ``When we
 started promoting ecotourism, we learned that we can't cut down trees and
 destroy the rain forest, because then the tourists won't come,'' warns the tourism
 institute's Castro. ``Can you imagine how much greater the damage is going to be
 if we start destroying Costa Ricans themselves?''

 The story was supplemented by reporting from Herald special correspondent
 Catalina Calderon.