Please, send us your comments and suggestions
Center for Information, Documentation and Research Support (CIDAI)
E-mail: cidai@cidai.uca.edu.sv
Universidad Centroamericana (UCA)
Apdo. Postal 01-168 Boulevard Los Próceres
San Salvador, El Salvador, Centro América
Tel: +(503) 210-6600 ext. 407
Fax: +(503) 210-6655
Proceso is published weekly in Spanish by the Center for Information, Documentation and Research Support (CIDAI) of the Central American University (UCA) of El Salvador. Portions are sent in English to the *reg.elsalvador* conference of PeaceNet in the USA and may be forwarded or copied to other networks and electronic mailing lists. Please make sure to mention Proceso when quoting from this publication.
Subscriptions to Proceso in Spanish can be obtained by sending a check for US$50.00 (Americas) or $75.00 (Europe) made out to 'Universidad Centroamericana' and sent to the above address. Or read it partially on the UCA’s Web Page: http://www.uca.edu.sv
For the ones who are interested in sending donations, these would be welcome at Proceso. Apdo. Postal 01-168, San Salvador, El Salvador.
Proceso 1128
January 12, 2005
ISSN 0259-9864
Editorial: Shared responsibilities
Economy: The economic scenery for the new year
Society: An agenda for 2005
Shared responsibilities
The new year finds the country without a budget. The budget
for the year 2005 has still not been approved because, formally, the
representatives of the FMLN, whose votes are indispensable, refuse to vote,
until the Executive authority fulfills a series of demands. One of the most
important requests is to control the indebtedness of the country. Other demands
can be added to this one, such as reviewing the law of pensions, and the
circulation of the colones, among others. The FMLN demands a direct negotiation
with President Saca. For that reason, Saca points at the FMLN as the only
responsible institution for the consequences that not to count with a budget has
for the performance of the national economy.
Technically, the situation is more complicated. The Ministry of Hacienda (the
Internal Revenue Service) took too long to present the first draft for the
discussion -which, invariably, is complex and long-, although it did deliver it
in the term established by the law. The Legislative Assembly, that includes
ARENA, took its time to begin with the discussion. The Ministry of Hacienda,
during its appearances in the Legislative Assembly, has not clearly responded to
the questioning of the opposition, particularly when they have asked about the
debt and the destiny of the loans. President Saca did not look for a diligent
way to reach an approval; instead, he used the situation for propaganda
objectives against the FMLN, for what can be interpreted as an advance of the
next electoral campaign. Now that the new year finds the country without a
budget, President Saca has taken the approval issue seriously. This is
incomprehensible, because if the budget is as important as the governmental
speech indicates, how it is that this approval has not been seriously
negotiated? In a word, the FMLN is not the only responsible one if the country
does not count with a budget, President Saca and his party are equally or more
responsible for it, since they are at the head of the Executive authority, and
it is their duty to provide the government with a budget. The skillful publicity
and the absence of criticism in the national press prevent the public opinion
from realizing that this problem has more than one face.
Undoubtedly, the President cannot do everything. That is why he counts with his
cabinet and, in this case, with an endless number of presidential commissioners.
However, if these public officials do not respond to the demands of the
opposition or any social sector, because they are not capable to, because they
are lazy, or simply because they did not receive instructions, then, nothing can
be done but to turn to the President. To a great extent, the presidents are the
ones who have promoted this conduct, because they project their image as the
center of the Executive authority and as the center of the whole country. A
proof of this is the present advertising campaign of the Presidential House,
which revolves around the image of President Saca. Another evidence is that the
Salvadoran president usually attends to a series of events of without any
apparent criterion in such a way that it seems as if there cannot be any worthy
social event without his presence. In fact, it is the presidents themselves who
do not allow their ministers to project their own image and appear as a well
integrated governmental team. The presidents have kept for themselves all of the
public scene, to the point that not even the vice-presidents can fit in. The new
vice-president is not the exception. The predecessors of President Saca have
always promoted this kind of conduct. And he himself has adopted this vice. That
is why he should not complain now because the FMLN requests a direct dialogue
with him and not with his delegates. In an environment where the image of the
president predominates, to negotiate with a presidential commissioner is to
receive a second hand treatment.
This exacerbated presidential behavior, the partiality of the presidents that
belong to ARENA, who only listen to the sectors that are compatible with their
interests or to those who they owe their position to, and in the case of the
2005 budget, the irresponsibility of not having established a negotiation since
the last semester of 2004 to approve it, now places President Saca in an
embarrassing situation, because he will have to sit down to negotiate with his
most reviled adversaries, if he is really trying to count on a budget for this
year. Or probably he will manage to buy the votes that he needs. It is just
that, in this occasion, he will have to pay a very high price, because the value
is higher now. A famous Central American dictator used to assure that there was
no bastion that could resist a good cannon shot, in this case, of a million
dollars or more. The temptation is too strong, even for a congressman from the
FMLN, because it would be a unique economic opportunity for an ephemeral
political career.
The FMLN has taken advantage of the myopic political vision of the present
administration and, it would certainly score a political triumph if, in the end,
it were able to sit President Saca at the negotiation table. That is the same
reason why Saca refuses to do it. The formal arguments on which the leadership
of the FMLN bases its demand -not to waste time with intermediaries, because the
people cannot wait any longer- are as ridiculous as those of President Saca.
This is not a technical matter. In fact, the congressmen usually do not usually
pay attention to the technical aspects of the legislation. An example of this
situation is that, generally, they must correct, amend, extend, or countermand
the legislation. The approval of the budget is eminently a political matter.
The Saca administration, ARENA, and the mass media that share their vision
accuse the FMLN of acting against the Salvadoran democracy. They base this
accusation on the electoral triumph of Saca. Therefore, the FMLN should not
complicate the situation for the executive authority, that is, to accept its
proposals immediately. Not to do it, turns the FMLN into the main obstacle for
the development of the political institutions. But this argument and others that
are similar to it assume that the Executive holds the total amount of power. In
fact, any political party can present the demands that seem advisable to it,
although their viability depends on the party’s electoral strength. In the case
of the budget, the FMLN has a determining specific importance in the Legislative
Assembly. It has, therefore, the right to refuse to approve the budget, unless
the Executive authority and its party agree to negotiate it. The correlation of
forces in the present Legislative Assembly requires ARENA and the Executive
authority to negotiate the approval of the budget. In fact, it is their duty to
negotiate it, since as executive administrators of the government, they are
compelled to provide the country with a budget. The country could count on a
budget by now, if the present Executive authority had been politically more
capable and financially more intelligent.
The economic scenery for the new year
Since the beginning of the year, the official party and the
FMLN have been involved in a discussion about the approval of the General Budget
of the Nation for 2005. The context is the following: the Executive authority,
through the Ministry of Hacienda (Internal Revenue Service), calculates the
budgetary allocations for each one of the institutions that are part of the
Government. Afterwards, these allocations are sent to the Legislative Assembly
for their approval. During the stage of revision and approval, a series of
conflicts are typical. In the last years, the opposition party has intensely
questioned the irresponsible way in which the Executive has administrated the
indebtedness of the country. According to the FMLN, the Government issues a
considerable amount of bonds that, after all, are not actually used to finance
the public investment with the perspective to fulfill the needs of the
Salvadorans.
ARENA, along with the Executive authority, launches a discredit campaign against
the left-wing party because it refuses to approve the budget. The official
party, in order to overcome this situation, would have to admit that the FMLN is
right when it states that it is necessary to have a law of indebtedness for the
State with a long-term vision. The lack of perspective in reference to this
subject in the last ARENA administrations has issued an excessively large amount
of bonds that has taken El Salvador to critical levels of indebtedness in
relation to the international agents. In a democratic country it is normal to
frequently hold discussions of this nature. It is important yet that the
different political fractions arrive at a consensus on how the budget must be
distributed, which is nothing more than the "pie of the house". From this
perspective, it is not democratic that a party, solely by virtue of its presence
in the Executive power, wants to impose, without discussion, its vision on how
to spend the funds of the State.
Is there a responsible economic policy?
The official party established the Law of Monetary Integration, and with it the
possibility of handling the monetary policy with autonomy was lost. On the other
hand, although the fiscal policy exists, the action margins seem to narrow
themselves more and more, due to the problems of the fiscal deficit and the
enlargement of the external debt. In this context, the most important tools to
activate the economy are in terrible shape: one was amputated and the other one
is ill.
The panorama is less encouraging, especially when the national economy is in one
of its most difficult stages during in the last years. Since 1996, the country
does not have growth rates acceptable enough for the economy to develop a demand
with a solid expansion rate. Last year, the GNP grew less than 2%, and it is
expected that, in the next years, the rates are able to grow between 3% and
3.5%. These increases will have to deal with the problems that the Salvadoran
economy has since 1999, which are considered as obstacles in the way towards
development: the increase of the foreseeable debt, the concomitant fiscal
deficit, and the need to increase the public investment rates at a much higher
level.
In this context, the budget would have to play an important role in the search
for the economic and the social development of the country; as it has been said
before in many occasions, a series of circumstances prevent this from happening.
The politicians are responsible for each one of the differences and delays in
the periods of approval, not just the responsibility of a particular group; all
of them have to do with it. They are the ones that should work to establish a
consensus for the benefit of the society as a whole.
Before the exile of the monetary policy and the lack of effectiveness of the
fiscal policy, it seems that the only justification left to reach a higher level
of development is the ratification of the Free Trade Agreement with the U.S.A. (CAFTA).
The government has concentrated most of its efforts to obtain this treaty, and
it has not considered some of the most important observations made by the civil
society. One of them foresees a strong negative impact on the manufacturing and
the agricultural sectors, since the United States is subsidizing its
agricultural production and establishing requirements of origin for the textile
products.
Networks of power
On the other hand, there are those organizations that traditionally have
represented the interests of the official party. The Salvadoran Foundation for
the Economic and Social Development (FUSADES, in Spanish), the Industrial
Chamber of Commerce, and the Association of Industrialists, among others, are
extremely interested in establishing a commercial bond with the U.S.A. The
commercialization of goods on an international scale is ultimately subjected to
the economic interests of the industrialists and the business elite of the
country. Not all of them have the same capability to export, to import, to
commercialize products. It is necessary to understand that the market is not a
neutral organization, but that many interests converge in it, and not all them
are equally important.
The most important economic measures with a higher level of repercussion for the
present year are the new fiscal reform, the Health Fund (FOSALUD, in Spanish)
and the CAFTA, that is, if the North American Congress approves the latter. Each
one of these measures tries to face some of the most important problems that
characterize the economy. For example, the fiscal reform intends to put an end
to the fiscal deficit. The FOSALUD intends to increase, even if it is just
slightly, the levels of public investment in health. The CAFTA is the hope of
both the official party and the business elite to develop the economy. In this
line, the CAFTA is intended to increase the levels of added demand through the
exports; however, this strategy has its limitations. For several experts, the
CAFTA would manage to increase the growth of the GNP approximately by 0.5% for
the first year. If we take as a parameter the GNP reached in the last years
(approximately $15 billion), it would be equivalent to $75 million.
More investment
In former years, the State could not adequately respond to the most important
demands of the population. For that reason, in the new administration, several
commissions have been created to solve those needs that others did not take care
of. The Saca administration will have to solve a series of accumulated demands.
The success of these commissions will depend on their strategies. As for the
social matters, the situation is complicated. A considerable part of the
population lives in poverty, and to attack this problem the public investment
levels have to be increased. Nevertheless, this variable is subjected to the
revenue levels and to the indebtedness level that the country is able to keep.
In reference to the private sector, the situation takes an interesting turn,
because most of the policy of the State from 1999 to this date has been aimed to
increase the spaces for the private investment and to improve the business’
environment. In spite of this, the private sector seems to be stagnated,
suspended, it does not respond to the incentives in order to make the national
economy finally take off.
An agenda for 2005
The Salvadorans have started the year in a conjunction of
acceptable political stability, but with a considerable social deficit that has
to be covered and the need to correct the poor economic results obtained during
2004. There are not many new things to expect for in 2005, other than some
specific modifications, such as the establishment of the tax amendments, which
will affect both the middle-class and the poorest citizens more than any other
sectors. In addition, the FOSALUD is now being financed, and to fulfill the
requirements to purchase a house with the Social Housing Fund has become more of
a difficult task. On the other hand, in spite of the quick reaction of the
Legislative Assembly to approve the CAFTA, this project has not been ratified
yet by the American Congress. It still does not look like the ambitious social
plan proposed by the Executive power was actually established a year ago.
The enthusiastic attitude at the beginning of the Saca administration has now a
higher doses of skepticism among the Salvadoran population because the promises
about the social transformation and the economic achievements do not seem to be
fulfilled, and we have sadly returned to the atmosphere of little political
understanding that characterized the Flores administration. The question is not
as easy or as automatic as it seemed to be. In that sense, 2005 will be
fundamental to sustain a process that has been designed for the long term, but
that apparently promises more than what it can deliver.
Even so, it is obvious that the terrible performance of both the politicians and
politics throughout 2004 has not been enough for the Salvadorans to demand from
the government an improved conduct. The president did well in the evaluations
that were made at the end of the year, and most of the population neither blames
Saca nor his administration for the terrible economic results and the state of
insecurity in the country. On the contrary, for many, a portion of the
responsibility for the problems of the population has to do with a specific
name: FMLN.
An important segment of the population –just partially informed by the most
important news media- thinks that the intransigency of the FMLN (their being
against to the initiatives of the Executive authority) restrains the development
of the country. There it is, for example, the subject of the General Budget for
the present year. In opposition to the levels of acceptance obtained by Saca and
his party, the members of the FMLN still have not resolved their internal
divisions and an environment of intransigence surrounds them since the electoral
results were revealed. In this unfavorable scenery for the left wing, the
municipal work developed by the FMLN mayors has been shadowed by the
overwhelming amount of negative observations made by the right wing and its
allies. In addition, the municipal administrations in charge of the FMLN have
not been able to control with intelligence the negative situations that they
face with a couple of quite aggressive groups of the Salvadoran society: the
informal salespeople and the municipal unionists.
In this context, there are two agendas for 2005: the probable one and the one
that those who want transformations hope for; that, however, is not very
probable. The national agenda for 2005 seems to be favorable for the interests
of the society’s most powerful sectors, and unfavorable for a FMLN that has not
managed to be identified as a political force able to command the Executive
authority. This situation is also uncertain for a population that stays at the
margin of the decisions made by their leaders.
The most complex subjects
In the scenery formerly described, there are subjects that surely will become a
priority in 2005. It is clear that its inclusion in this agenda -the probable
one- does not necessarily mean that they will be considered as such by those who
prevail among the public opinion and by those who will decide which direction
the country will take. The variety of powers in El Salvador -the political, the
economic, and media’s power- will close its ranks against those who try to make
a heterodox interpretation of the traditional national agenda.
As for the political matters, to mention the sector that gets more privileges
from the media’s power, it is possible to expect a continuous electoral
campaign, probably less evident but perhaps effective, which will come from the
main political forces, especially from the official party. Setting aside the
electoral prohibitions, which just allow a certain period of time to launch a
political propaganda, the political parties will be unfolded through each
available media format, in order to incubate themselves in the minds of the
Salvadoran population right before the legislative and municipal elections of
2006 take place. At this point, ARENA is leading the preferences. It is very
probable that the official party, the State’s apparatus that it controls, and
its allies -the business elite and the most important mass media- impose their
criteria in the country’s agenda.
On the other hand, it is not very probable that the rules of game in the
Salvadoran political system become dramatically modified. It can be discarded,
for example, a transformation in the electoral system, a situation that will
delay the necessary electoral reforms. The last cloudy play in reference to the
Electoral Supreme Court and the Supreme Court of Justice in which nobody dared
to write down the death sentence of the PCN and the PDC –a couple of parties
that the citizens had made disappear because the people did not vote for them-
will be a heavy load for the year that begins: a negative precedent that injures
the State of rights in the country.
The activity of the State and its institutions do not seem to be going through
substantial modifications. The concentration of functions in the Executive
authority will put a limit to the aspirations of the municipalities, and these
will remain as second hand institutions, even though they should be closer to
the population. This will happen although in the remote municipalities of the
country, the mayors and their councils are practically the only accessible
authority of the State. The fervor and the excessive secrecy with which the
functions are performed open the doors to discretion and corruption, a couple of
problems that are still part of the Salvadoran institutional field.
In the economic scenery, it would be expected that a development strategy could
allow the country to face the CAFTA with a considerable share of social
resources. Otherwise, if the government is more concerned about the approval of
the United States, the social and the economic deficits of El Salvador will
throw a negative balance during the first years of the commercial treaty. The
results of a tax reform that will affect the most vulnerable people –the poor
and middle-class sectors-, and that will not touch the “regular” crowd, are yet
to be seen.
The great promise of Saca, the social plan against poverty, is until today
nothing else but a confusing draft of something that has neither financing nor a
safe amount of support. Meanwhile, education, health, housing, employment, and
security will be administrated as always: an insufficient budget and not enough
resources, terrible quality standards, short-term visions, and advertising
patches. Only in the subject connected with the public security, the authorities
have the enormous challenge to fight the worrisome increasing level of murders
that besieges the country, and because of this objective it will have to
coordinate a coherent criminal policy that should begin with the unification of
the statistics.
Without establishing a permanent dialogue and without reaching an agreement
between the different national forces the country will not be able to go beyond
the challenges that the formerly described agenda approaches; for that reason,
those who control the destinies of the country will have to promote a state of
national dialogue, conscious enough about the fact that to engage themselves
into a discussion does not necessarily means to grant "honor points", but it
does take a certain level of openness and flexibility that none of the political
forces seems to have.
Tel: +503-210-6600 ext. 407, Fax: +503-210-6655 |