Saca’s challenge: the sustainable human development of El Salvador versus
just a few resources
At this point, the approval of
the General Budget of the Nation is still in discussion and the panorama of
the Salvadoran economy, according to the last statistics of the trimester
provided by the BCR, keep revealing the small level of economic growth and
the stagnation of the GNP per capita. A low economic growth imposes a budget
restriction to the support for the sustainable human development, and it
shows a structural weakness that works as an obstacle to meet the growing
economic and social needs of the population. The main concern is the
challenge that the Saca administration has to revive the country’s economic
motor, and transform that economic awakening into integral improvements
connected with social aspects such as the universal access to health,
education, a decent housing, potable water, and a healthy and sustainable
environment, plus the possibility to get a decent job, among other aspects.
This situation has defined the profile of the country, which became evident
in the speech delivered during the presidential inauguration. The economic
behavior defines everything: it is necessary to save the Salvadoran
population from a crisis in the near future since the worst is yet to come.
The main concern is clear: a decreasing production and a low level of
employment means that the income will decrease as well, and therefore there
will be less possibilities to improve the purchasing power of the families,
as well as the one of the State. The State and the Salvadoran families, in a
stagnated economic context, seem to be confronted, on the one hand, with the
impossibility of dealing with the basic aspects of surviving in human
conditions; on the other hand, the indebtedness of the State keeps growing
and it is necessary to pay the debts and the loans in order that the
governmental machinery is able to work and restrict its influence on the
social matters with programs that do not have the necessary dimensions to
improve the living conditions of the population.
In this context it would be convenient to examine three key aspects of the
situation:
1. A depressed economic context.
2. The challenge to meet the social needs of the population.
3. The solutions proposed by the new cabinet as part of a coherent answer in
accordance with the present conditions of the revenue of the States Treasury.
Less resources available
As for the depressed economic context, statistics are eloquent. The pulse of
the growth rate of the GNP has placed itself in the last three years in the
lowest levels that the country has had in more than a decade, and under the
historical average of the last 50 years (3%). The growth rates of the real
GNP clearly show it: 2.2%, 2000; 1.7%, 2001; 2.1%, 2002; 2.2%, 2003. The
general projection for 2004 is 2.5%.
By examining the GNP it is possible to see that it is precisely the
productive sectors the ones that have become unimportant for the country’s
economy. The agricultural contribution to the GNP has descended from 17-19%,
the percentages that prevailed in the seventies, to levels of 11-12% for the
present time. This percentages keep decreasing. The manufacturing industry
has also been stagnated when it comes to see its contribution to the GNP.
Since 1998, this contribution has been kept between 22.5% and 23.7%.
On the other hand, what has been definitively intensified is the fragility
of the economy, since by describing the structure of the source of currency
obtained by the country we have that the remittances are the leading source.
For instance, according to the information provided by PRISMA and the BCR,
for 2002 the remittances represented 67% of the total amount of currency
that came to the country, while the maquila industry represented 16%. This
means that more than 80% of the currency that keeps the Salvadoran economy
afloat rests over a very vulnerable foundation, since the remittances as
well as the maquila are not internal sources of growth and they are
vulnerable to the external shocks.
If when it comes to production the national economy is in deplorable
conditions since it does not generate enough income, and it excessively
depends on currency resources such as the remittances and the maquilas, its
total is not enough to meet the budget needs of the nation. In this case, to
look for loans as a way to finance the public administration has been a
frequent process for the last administration of ARENA. The balance for the
public debt in 2003 was higher than the PIB by 40% already. This is
something to be concerned about, since 40% is close to the acceptable limits
traced by the international financial organizations such as the FMI and the
BID. If this tendency (indebtedness) is kept under the same pattern of
systematic growth, according to the PNUD, by 2010 the balance of the public
debt would already be representing more than 60% of the GNP, something that
would put any government out of the game, technically speaking, and that is
an obstacle to promote an expansive fiscal policy aimed to improve the
social indicators.
The growing social challenges
As for the challenges of the social indicators, it is evident that the
government should destine a larger amount of the budget to those sectors
that improve the level of human development and welfare of the population.
That has been the slogan of Saca’s presidential inauguration, he stated that
“the Salvadoran population should not resign themselves to a condition such
as poverty. Those of us who have the responsibility to conduct the destiny
of the country should fight poverty in a frontal manner. In that sense, our
government will immediately start to conduct a social welfare net, and its
purpose will be to offer the necessary encouragement to all of those
compatriots who are in a situation of economic disadvantage and social
exclusion, in order to make them part of the productive life”.
Certainly, one of the best indicators of an improvement on the welfare of a
society is to see if in fact the poverty levels of a country have been
actually reduced. By doing so, according to the Economics Department of the
UCA, the percentage of poor homes is approximately 53.5% by 2003. Therefore,
the challenge that Saca has to face would be to reduce these poverty levels
as much as possible. However, from the governmental vision there is already
one obstacle that must be put out of the way: the official statistics have
never told the truth about this issue, and this is a requirement to be able
to go anywhere. During the last few years there has been a tendency to hide
or disguise the true state of poverty using untrustworthy methodologies to
measure the levels of poverty that have been criticized by the PNUD, FUNDE,
the UCA, and other non-governmental organizations. Therefore, the first step
to overcome this problem would have to be a systematic effort to identify
and detect the true levels of poverty of the Salvadoran population: who are
they, how many are they, and what are the circumstances that prevent them
from breaking the cycle of marginality and misery.
In this context, the unemployment levels have been therefore underestimated
by the official discourse, while it is necessary for this government to
react and communicate the truth about unemployment in El Salvador. No one
receives the benefits of these manipulated or biased statistics used by the
General Direction of Census and Statistics (DIGESTYC, in Spanish) in order
to give the impression that in El Salvador there are low unemployment levels
probably lower than the ones of the developed countries. The growing
remittances are nothing but an expression of the growing level of
unemployment in the country. The departure of thousands of Salvadorans who
are part of the Economically Active Population (PEA, in Spanish) from El
Salvador is an irrefutable sign of this problem. These people go to
countries such as the United States looking for the opportunities they have
not been able to find in El Salvador in order to support their families.
In addition, the education and the health levels, and the access to the
basic services should go beyond the present accomplishments. The Human
Development report of 2003 presented by the PNUD states that some progress
has been made in these areas during the last decade, specifically in the
Human Development Index (IDH, in Spanish) in a national level (1999: IDH
0.704; 2002: IDH 0.726). However, when the IDH is analyzed through its
different factors and in accordance with the different areas and
municipalities of the country, it turns out that there are enormous
differences. While in the urban area, the IDH is close to those of the
countries with a medium level of human development, the contrary occurs in
the rural areas, where the indicators can be compared with those of the
African countries (Cabañas, for example, had an IDH of 0.637 in 2002).
The deterioration phenomenon of the life standards in the rural areas and in
the urban marginalized sectors has had much to do with the same Neoliberal
economic model that has concentrated its hunger for profitability in the
sector of services, for instance, towards the financial sector, abandoning
the agricultural and the industrial sectors as well as their corresponding
productive chains. It is the duty of the new government to take care of
those areas if it does not wish to leave more than six million Salvadorans
in misery.
The solutions of Saca: ministers for everything
If we continue with the present Neoliberal model, the vices of the former
administrations will remain the same, and this can become a point of no
return for the country. In this sense, it would be convenient to evaluate
the size of the promises made by the new President to see if they meet the
standards of intensity of the population’s economic and social problems, and,
especially, if those promises meet the standards of the State’s funds.
To increase the Value Added Tax (IVA, in Spanish) from 13% to 15% is not the
panacea of the solutions for the State to rise its revenues, since it is a
regressive tax and its positive effect in the State’s treasury could be
diluted in the negative effect of considerably increasing the cost of
living. This would also have a negative impact on the country’s levels of
poverty.
The real foundation of the promises made by Saca does not exists when it
comes to the social matters. However, the strategy of ARENA has been to
advertise the image that “something is being done” by specifically placing
ministers or commissioners next to each of the country’s problems. The
negative aspect of this decision is that several of those that have been
chosen to face the future of El Salvador are not the best “instruments” to
resolve the present complications.
An example of this line of action adopted by Saca is the one concerning the
officials assigned to positions such as the Vice-Minister of Attention for
the Brothers that Live Abroad (the Close Brothers), Margarita Escobar; the
Minister of the Environment, Hugo Barrera; or the new Minister of Tourism,
Luis Cardenal. In the first place, the “close brothers” have always been
kept away from the economic policies prepared by ARENA, and this is
basically why a considerable amount of them felt like they were practically
expelled from the country, and that is why they now work abroad to support
their families. Therefore, the solution to this problem is presently just a
façade and not a structural project. This situation shows that for the
Neoliberal economic model used by ARENA it is convenient to keep the
remittances and make this source of income last as a life-saving strategy
for the government.
As for the Ministry of the Environment and the Ministry of Tourism, there
are doubts about their actual contribution to the national problems and how
they will create a sustainable human development. The misery of tourism and
the environment do contrasts with some of the quality standards reached by
Costa Rica, Honduras, and Guatemala, for instance. What is the plan? How
much will it cost? Will it be possible to actually use it in this austere
reality? In the case of Barrera, because of his professional background, his
position in the Ministry of the Environment, and his absolute lack of
experience regarding the environmental problems only seems to show how the
interests of the private business companies and its hunger for profits will
prevail, and that they will be more important than the future of the
sustainable development of El Salvador.
|