What spiral of silence are they talking about?

The development of the campaign

Up to this point, the presidential electoral campaign presents several characteristics, and it would be convenient to review them in order to understand them. This is the third presidential campaign that we have ever since the Peace Accords were signed. It is necessary to wonder how did the social elements absorb a culture of competitive elections, the kind of elections that are part of the aspiration to build the democratic country that the people dreamed about back in 1992.

The derailment of the electoral institution
Violence has characterized the electoral competition. There are dozens of injured people and several deaths, the product of the hate between the followers of the two most important political parties of the country. That is why ARENA and the FMLN have had more headlines in the press during the campaign.

The presence of these political parties in the press (because they presently control more than 70% of the seats in the Legislative Assembly) is due especially to the violent relation between the parties’ followers. This situation has become the topic of many discussions about the situation of the political culture of the country twelve years after the Peace Accords, and about the lack of credibility of the Supreme Electoral Tribunal (TSE, in Spanish). The facts have proved that it is necessary to implement a series of reforms in order that the TSE acts according to the present reality of the country.

The absence of this issue in the different platforms of the presidential candidates indicates once more that for the parties the questionable performance of the TSE is not a relevant problem. What actually happens is that the different political parties treat the problems of the TSE as a minor complication that does not deserve any attention at all.

Even if the parties do not feel that the lack of competence of the magistrates to apply the electoral law is a disadvantage, it has actually left many victims behind. In the first place, there are the citizens who have died and those who have been injured during the confrontations between ARENA and the FMLN.

The discredit of the political system increases in the minds of the Salvadoran population. The generalized perception is that there is a certain negative tendency to keep an inefficient electoral institution that has nothing to do with the spirit of the Peace Accords.

In the second place, it is impossible to forget the victims of a weak TSE. As paradoxical as it might seem, there are many parties that have been affected by the lack of power of the electoral magistrates. The simplest answers would be to say that the lack of will to transform the performance of the TSE obeys to the fact that the parties do not feel affected by its omissions. Not yet, anyway. However, nothing can be further from the truth. In fact, many parties –big and small- are affected by the weakness of the TSE and by the absence of clear regulations connected with the elections.

The fact that ARENA and the FMLN launched their campaigns earlier was an important issue that affected in a negative manner the activities of the smaller parties –the PCN and the coalition between the CDU and the PDC-. The same thing can be said about the way in which the Executive power used the public money to promote the official party. For instance, it is enough to mention the overwhelming amount of propaganda about the alleged accomplishments of the present government or the case of the recent “Fair of Progress”. In both cases, the money of the contributors is used to demonstrate the advantages of the social and the economic model promoted by the official party. There is no doubt that during the electoral periods the interventions of the Executive power should be controlled.

On the other hand, several cases of an apparent dysfunction of the Electoral Register have not been resolved yet. The duplication of the identity documents has been denounced; at the same time, some institutions are already talking about the irregularities presented by thousands of documents delivered by the TSE. Although the parties do not seem to be alarmed because all of these problems, it is important to notice that the register of citizens has not been “cleaned up” yet despite the alleged advantages of the modern procedure to issue the new document of identity.

The perspectives of the campaign’s development
In spite of all of the deficiencies of the TSE, and despite of all the doubts that might emerge about its capacity to make a truly clean, transparent, and democratic election, the present electoral campaign is developing itself in an environment of a closed competition between the parties. In fact, with the information revealed by the last public opinion polls, which already announced a very narrow gap between the most important political parties, the competition between them seems to have found a new strength. It is enough to notice the increasing electoral violence in order to have an idea about the formerly mentioned situation.

In this sense, independently from the certainty or the doubts about of the proclaimed electoral results, there is a certain tendency through which we can notice how the mutual discredit between the FMLN and ARENA has been activated. A leader from ARENA recently declared that the growth of the FMLN is possibly connected with a lethargy effect between its followers, who have relaxed themselves due to the abysmal distances presented by the former opinion polls. On the other hand, for the left-wing party, this is a prize for their restless efforts to explain to the electorate the advantages of their governmental project and the firm compromise of their candidates to change the situation of the country.

It would still be necessary to confirm if this is a drastic transformation in the course of the campaign. In any case, beyond the explanations that the parties might find about why the positions of the parties are now so close, there is a fact: the possible political death of Hector Silva. Beyond the multiple reasons that can be given about his political death, the truth is that the Coalition is preparing itself to face an electoral destruction of great proportions. If something like this happens after the elections, on March 21st, the loser will be, without a doubt, the former mayor of San Salvador. It will be necessary to reflect again later about the announced defeat of the so called alternative project of the third force. At the moment, the Silva case shows that it is not enough to count with the sympathy of the people to win the presidential elections in El Salvador.

A campaign without proposals
Besides the confrontation between the militants of both parties (ARENA and the FMLN), at this point of the campaign no one has talked much about the proposals of the different candidates. In the very few occasions when the subject has been mentioned, no one has discussed the way in which their projects will be financed or what are the differences between these projects. There is no doubt that the news media are partially responsible for this silence, because the trivial matters have gained more importance than the crucial ones in the press. The media have played the game of the official party. Ever since the beginning of the electoral race, ARENA has used the concept of Anti-Communism as the main feature of their campaign. The leaders of this party keep betting that it will be enough to spread the fear about the lack of stability in order to gain back the support of the Salvadoran electorate.

The FMLN, on the other hand, claims to give more importance to the public presentation of its governmental plan through a direct contact with the population. That is why the party is promoting a series of home-by-home visits and delivering a synthesized version of the party’s governmental program. Even if this strategy seems to be efficient enough to neutralize the propaganda of discredit promoted by several news media that are following the game of ARENA, these visits are not enough to enhance the seriousness of the proposals. The responsibility to carry on with the offers made during the campaign or the possibility to find the necessary resources to make the transformations possible need more than a door to door set of visits.

It can be said that both ARENA and the FMLN are in the middle of a negative campaign. In the case of ARENA this is true because it uses the fear against the alleged Communist menace as its main political argument. In the case of the FMLN this is true because it uses the rejection that the population feels against both the social and the economic situation as the main weapon of its campaign. ARENA treats the Salvadoran population as docile and naïve infants that will adhere themselves immediately to the Anti-Communist crusade. The FMLN thinks that hunger, unemployment, and poverty will be enough to defeat its main contender.

In this context, the so called alternative parties have not been able to say what makes them different from the rest. The opinion polls put the alternative parties in the distant spot of a third and a fourth place, without any apparent possibilities to disturb the leading parties. The coalition (CDU – PDC), and the PCN have not been very creative during the campaign. They have not been able to get out of their disadvantageous position, and they have seemed too naïve to play the image and the speech game imposed by ARENA and the FMLN.

There is no doubt that the polarization of the campaign has been an obstacle for the immature political system of the country, and an obstacle for the discussion of the issues that concern the Salvadoran population. In this sense, it can be said that the third presidential campaign since the Peace Accords, besides the high levels of violence that it has brought along, it has not been any different from the former campaigns. The parties have not become mature enough. Probably to this point it is necessary to wonder what is the best mechanism to neutralize the negative starring role that ARENA and the FMLN play.

The purchasing power and the Basic Food Basket

According to the General Direction of Statistics and Census (DIGESTYC), approximately 32,000 homes that live under the poverty line (that is, 14.2 % of the homes) do not count with the necessary means to consume the essential products. This is a conservative figure, because it does not estimate the actual cost of the Basic Food Basket. However, this indicator is the only one available at present. That is why it would be important to wonder what do people refer to when they say that 14.2% of the homes “do not count with the necessary means to consume the basic products”? What do they mean with “the basic”?

It is important to remember that back in 2003, the official cost of the basic food basket was $129, in the urban sector, and $96, in the rural areas. The average real salaries established in 1995 have been $91 for the city and $46.8 for the countryside. It is evident that the real salaries of the last eight years have never been able to cover for the basic expenses that are necessary to subsist. The urban real salaries have come close to cover 70% of the value of the basic food basket used by the DIGESTYC, while the rural salaries have only covered 51.4%.

The real salary is used to measure the weak purchasing power. From an economic perspective, there are two types of salaries: the real salary and the nominal salary. The latter is the amount of money that a worker receives for the tasks he performs. On the other hand, the real salary is the “purchasing power” that a worker has with the money earned. We are talking about a purchasing power that does not consider the effects of inflation.

Generally, the goods and the services that are found in an economy might increase or lower its prices. For a nominal salary to keep its purchasing power, it should be increased in the same percentage that the goods and the services are increased. For instance, if the salary of a worker increases by 8% in reference to the last year, but the cost of the goods and services of the economy are increased by 13% (remember, for example, the case of the Value Added Tax), the salary reduces the worker’s purchasing power. Therefore, in real terms, the salary is actually lower than it was last year, even if nominally speaking it seems higher. This would be so because of the application of the Value Added Tax (a 13% charged on food products), and because of the inflation spiral caused by rounding up the prices after the dollarization process was adopted.

The PNUD questions the reliability of the information provided by the DIGESTYC. According to this international organism, the DIGESTYC reports that the cost of the basic food basket has been reduced since 1998 to this date. However, the behavior of the Price Index for the Consumer (IPC, in Spanish) of food contradicts this tendency and does not even reflect the impact of the elimination of the exoneration of the IVA (back in 2000) that was applied to certain consumption goods.

The problem is that the economic model of ARENA has not promoted the growth of the people’s purchasing power. On the contrary, the minimum salary has been virtually stagnated and it barely goes beyond the price of the basic food basket.

In 2003, the minimum salary was $142.85 in the urban sectors and it had a slight increase by the end of that year. The rural salary oscillates between $80 and $90. This is an obstacle to reach the necessary minimum level to enable a person to cover its fundamental needs. This is because a person’s needs go beyond the nutritional levels. What about health, housing, clothing, education, security, and other goods that might allow a person to lead a decent life?

When questioned about this situation, the presidential candidate from ARENA responded: “I hope that now the model starts working”. Work for whom, for the wealthy? Let the statistics answer these questions. In 1992, the family income per capita of 20% of the wealthiest homes of the population was 18 times higher than the one of 20% of the poorest homes. For 2002, that relation increased to 24. It is clear that the gap between poverty and wealth is growing wider.

The effects of dollarization
With the circulation of dollars as the national currency, the government intended to reactivate the economy. From the governmental perspective, a measure of this nature would have the capacity to create a better environment for investments. This would happen because of a couple of reasons. In the first place, to use dollars would reduce the monetary exchange risk and the country would become attractive for the foreign investors because they would know that that their economic assets would not be affected by a possible devaluation. In the second place, this measure would considerably reduce the active interest rates. This reduction would encourage the credit demand and with those infusions of capital the depressed sector of the economy would become active once more. The government expected dollarization to bring along better investment conditions, for both the national and the international individuals.

The measure was fundamentally implemented to improve the development conditions for the business companies. They hoped that through the reactivation of the business companies, the benefits would also become a reality for the employees. However, for a considerable amount of businessmen the benefits never came along. A quick glance at the behavior of the credits after the implementation of dollarization shows that it was not until the end of 2002 that the credit lines of the private sector managed to achieve a positive growth rate. Just one year before this, the credit lines were practically stagnated. In addition, the Direct Foreign Investment (IED, in Spanish) has not grown as substantially as the government expected it to. In fact, many of the international business companies that have invested in the country have actually reduced their level of economic activity.

Dollarization also had an effect on the purchasing power of the population. In the past, the behavior of the prices was steady. Therefore, there were no inflation problems that could have justified such a measure, as it had happened in other countries. In fact, in December of 1999 the level of prices was negative. After the implementation of the dollarization process, the behavior of the prices went through a slight transformation. The prices went up due to speculation and because the merchants and the growers “rounded up” the prices.

In order to verify these considerations it is necessary to observe the behavior of the IPC before and after the monetary integration law was established. According to the Central Bank of Reserve, the aforementioned index has grown since the beginning of 1999 until the end of 2003. This is not anything new. Every time that we observe the evolution of the prices of several products in the medium term (in the case of the IPC, we refer to food, housing, and clothing, fundamentally), these always tend to increase. The interesting aspect of the matter is not to observe the evolution of the prices, but the behavior of its variations.

By observing the variations of the level of prices, it is evident to see the instability of the IPC. This behavior follows a defined tendency in one trimester. However, during the following trimester a sudden change generally takes place in the indicator. In other words, after dollarization, the variations of the index went through a dramatic transformation.

In order to notice these aspects, it is enough to remember the inflation level of January 2001. In reference to the variation of prices, that period presents the most dramatic fluctuation recorded in the last four years. From 1999 to 2003, the highest level of the monthly inflation was recorded in the formerly mentioned month, reaching a value of 1.8%. During the same month, the annual inflation rate reached its most critical point of the last years (5.5%).

From that moment on, the annual inflation has descended and it has had a more stable behavior. However, the monthly variations in the prices of the products that are used to calculate the IPC are highly volatile. By the end of 2003, the behavior of the monthly inflation became more stable. After January of 2001, the abrupt monthly variations can be found between the end of 2001 and the first months of 2002. During October of that same year, the variation of the prices in reference to the last month was –0.9%; November had a similar percentage; December had –1.1%, and by January of 2002, it jumped to 1.2%.

During the first couple of years after the implementation of the dollarization process, the purchasing power of many Salvadorans was seriously affected by the increasing monthly variation of the prices. Before replacing colones for dollars, there had always been substantial changes in the level of the prices in reference to the former months. However, it is necessary to notice that these changes became more intense during the first couple of years of the dollarization process. After this period, the behavior has been more stable.

In this sense, it is interesting to wonder why do prices behave like that. If we speak about the offer, we have a depressed economy, far from a boom that might lead to a growth of the prices. If we speak about the demand of goods, most of the population has a low level of purchasing power, then why do prices tend to increase? It is very probable that the increase in prices that took place after the adoption of dollarization is a product of speculation, the result of “rounding up” the prices. This situation became more evident during 2201 and 2002.