An
interpretation of the Report about the Human Development in El Salvador for
2003
An interpretation of the Report
about the Human Development in El Salvador for 2003
When the covers of the most important newspapers of the country use
headlines such as “Poverty has been reduced by 22% in El Salvador” or “The
PNUD reports the developments achieved in a decade”, a clear message is sent
to the Salvadoran population: the situation in terms of human development in
the country has been substantially improved, although it might not seem
quite so. At least this is what the Report about the Human Development in El
Salvador for 2003 (IDHES 2003, in Spanish) seems to portray.
In these electoral times, this report seems like an important achievement
for the official party, which has been administrating the country for 15
years, and since both the slight improvements of the human development
indicators and the economic policies of ARENA seem to go hand in hand. For a
considerable amount of Salvadorans, probably these good news tend to cause
perplexity or skepticism. However, the recently published indicators of the
Development Program of the United Nations (PNUD, in Spanish) somehow seem to
support the information made public by the news media.
What are the contents of such diagnosis? How can we interpret the
contradiction between the country described by the statistics of the PNUD,
the grandiloquent discourse of the President, the message of the political
opposition, and all the suffering of the population because of the present
situation of El Salvador? Does this mean that the sustainable human
development of most Salvadorans has actually been improved? And if this were
true, is this the result of the economic and the social policies implemented
by the government?
In order to elucidate the multiple questions created by the aforementioned
report, it is necessary to say that the news media have published the
information that the document contains from a different perspective,
according to the interests of those who dictate the lines of the informative
analysis. The message that they intend to send is not free of distortions,
in a tense environment caused by the activities of the electoral campaign.
Therefore, the situation is vulnerable enough to become the object of an
ideological interpretation of the report presented by the PNUD. That is why
it is vital to read it from both a critical and a realistic perspective.
In this context, it is necessary to describe some of the polemic key aspects
of the report:
1. The human development index (IDH, in Spanish) has gone from 0.692 (1995)
to 0.726 (2002). This means that the average result of the country’s
achievements has positively evolved in favor of the welfare of the
population. Therefore now more people can enjoy a healthier and a longer
life, with more probabilities of improving their education and their access
to better life standards.
2. According to the PNUD, the poverty levels were reduced by 22%, from 65%
(1992) to 43% (2002) in only ten years. Those who live in poverty are
classified in two groups:
a) Those who live below the poverty line. That is, those who are not able to
cover the value of the basic basket of food (CBA, in Spanish).
b) Those who live at the poverty line, those people who are able to purchase
the CBA, but who are not able to finance the satisfaction of other needs (housing,
health, education, clothing, etc.). In El Salvador, according to the PNUD,
the percentage of the population living below the poverty line was reduced
by 12.3%, when it went from 31.5% in 1992 to 19.2% in 2002.
3. According to the PNUD, these improvements are due to “the deliberate
effort of the government to increase the proportion of the country’s budget
and the GNP assigned to the social expenses, to the introduction of certain
funds and innovative social programs in favor of the poorest sectors (…)”
The former affirmations have been polemic in a sense, they seem to
contradict themselves with the economic and the social crisis that many
segments of the population are going through. It is important to say that
the report of the PNUD makes certain observations about the limitations of
the indicators. Something that the news media do not indicate in a clear
fashion: there are many factors that question the reliability of the results
that refer to the poverty levels, given the statistic sources that support
this information. These statistics are based on suppositions that the PNU
criticizes because it is clear that that there are certain methodological
weaknesses and an imprecise analysis of certain variables. And this has to
do with the way in which the General Direction of Statistics and Census (DIGESTYC)
uses the information that it gathers.
Therefore, the interpretation about the reality of poverty is deficient due
to the following aspects: the poverty line conventionally accepted
underestimates the number of people who are involved in that situation. This
is because the poverty line that is used to indicate if a person is poor or
not is too low and it is an selective method. It basically places those
people who cannot purchase the CBA in a category of “extreme poverty”, and
those who are able to purchase the CBA are placed in the “relative poverty”
category.
These criteria are extremely questionable because of the following reasons:
1. The levels of extreme poverty, total poverty, and relative poverty are
calculated based on the possibility to purchase the CBA, and this mutilates
the very concept of poverty, because it does not envelope its multiple
dimensions. The most basic needs to survive and grow do not have to do
exclusively with food; there are other needs that are not covered with that
hypothetical value, that is why these criteria generate the wrong
information.
2. There is a distinction between the urban and the rural CBA that
underestimates the social and the economic differences that exist between
the people who live in either area, and this reflects a notable difference
between the basic goods, especially in the quality of the products. Even the
PNUD accepts that the approximate value of the CBA is questionable. There is
a clear difference between the prices of the food products included in the
CBA and the prices of the food products included in the basket used to build
the index of prices for the consumer (IPC, in Spanish). This leads to
question the performance of the DIGESTYC.
3. The strategies of the population living in poverty, the fact that the
people have to leave the country to send remittances to their families, the
exploitation of the labor, and the informal employment level, among other
problems, are part of a crisis that is not reflected in these indicators.
Nevertheless, they are the vertebral column of the system that guarantees
the survival of many Salvadorans who live in adverse conditions.
Poverty, income, and fiscal policies
There is a very important aspect in the document of the PNUD that has
characterized the country’s economic structure. The very little
accomplishments that have been achieved to reduce poverty are fundamentally
due to an unequal distribution of the income. According to this year’s IDHES,
the differences between the incomes of the poor and the wealthy families
have had a critical behavior during the last 25 years, and not a defined
tendency. In 1979, 20% of the poorest sectors of the population perceived 2%
of the national income, and 20% of the wealthiest sectors perceived 66% of
the national income. In 1992, after the Peace Accords were signed, these
differences were slightly reduced: 20% of the poorest sectors received 3.2%
of the national income, and 20% of the wealthiest sectors of the population
received 54.4%. In 2002, after three administration periods of ARENA, these
differences have reappeared. A 20% of the poorest sectors of the population
receive 2.4% of the national income, and the fifth part of the wealthiest
families obtains 58.3%.
This means that, despite the improvements made to eradicate poverty and
increase the access to the social services, the economy is working in the
benefit of only a few people. In other words, the country’s economic
activity reproduces this unequal structure, while the economic gap between
the poor and the wealthy tends to grow, as well as the income differences
between the rural and the urban areas. That is why it is necessary to create
a fairer distribution of the income, in order that the programs to reduce
poverty can really become effective and sustainable in the mid and the long-term.
The IDHES 2003 seems to indicate that the economic policy implemented by the
official party in the last decade has been far from resolving the most
critical economic problems and the social conflicts of the Salvadoran
population. The taxation structure implemented by the Cristiani
administration plays a very important role, because the regressive taxes
were one of the key aspects of his economic perspective. In other words, the
last decade has worked with a regressive fiscal policy.
A quick glance at the 2004 Budget Law Proposal shows us that most of the
income for the activities of the State comes from the Regular Income (73%).
Inside the Regular Income, 40% of the funds to finance the Budget of the
State come from the Value Added Tax ( IVA, in Spanish), which taxes in the
same way the expenses of the rich and the poor. Only 20% is financed with
the income taxes. This explains why, after a decade, the economic
differences tend to become more noticeable.
That is why the IDES 2003 explains: “As for the tax policy, the country has
to make an effort to establish a tax structure far more equitable”. That is,
a taxation structure able to strengthen the income taxes, the taxes to the
expensive goods, and the taxes to the capital gain of the properties, among
other taxes.
In order to create an effective fiscal reform and to actually succeed in the
fight against poverty, it is necessary to restructure the taxation system in
a serious and in a responsible fashion, in order to improve the flow of the
necessary means to build a better county. The efforts to stop the fiscal
evasion are not enough. A fiscal reform means much more than that; it means
to implement an effective fiscal policy, according to the income level of
the population.
The behavior of the poverty line, the quality of life, and the income level
of the Salvadorans depend on the fiscal policy developed by the government.
The most important needs of the population, and the enormous economic
differences between the social groups can be attacked from the fiscal area.
It is necessary to create a fiscal reform able to finance most of the State’s
Budget with the taxes paid by the wealthiest families, and that most of that
budget can be spent to benefit the families that have less resources to
survive. The IDHES 2003 seems to indicate that the present governmental
administration has not taken care of this situation in the last years.
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