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Proceso 1132
February 9, 2005
ISSN 0259-9864
Editorial: When private security means more violence
Politics: The struggle for power in ARENA and the next elections
Economy: The negative impact of the fiscal reform
When private security means more violence
The information is unquestionable and shocking before the
passivity, the indifference, and the incapacity of the government, including the
three powers of the nation. The amount of homicides committed in the country
have reached an intolerable level, in fact the Saca administration has replaced
its discourse about the gangs with a speech about acting against crime. Saca
does not speak about the Iron Fist Plan anymore, but about social violence, and
the extreme and the general result of that violence is homicide. It is evident
that the gang members who are behind bars are not responsible for this,
something that makes the President admit the existence of a violence with more
intensity, and the fact that he has not been able to identify the criminals.
This situation reveals the governmental impotence, but it also reveals its slow
reaction to this problem and even its indifference. In its effort to hide this
situation away from the public eye, the new administration insists once again on
making certain reforms to the law. However, it is important to realize that the
government has made an important decision by proposing several “shy” reforms to
the law of gun control. The government has not dared yet to adopt radical
measures such as disarming the society, while people are killing each other with
guns.
The strongest argument not to disarm the society is the fear of leaving the
“honest citizens” without the possibility of defending themselves. The radical
solution is to authorize the use of guns just for the authorities, and with very
severe restrictions for the private security agents. To allow the “honest
citizen” to carry a gun is to make it easy for guns to circulate freely without
any sort of control, and to promote the proliferation of homicides. It is a fact
that the army, the institution that had to control this situation has not been
able to handle the problem. Those who use the speech about the “honest citizen”
refuse to accept the evidence that shows that the people are more exposed to
violence by carrying a gun than by being without one. In addition, no one has
actually defined what can make us tell the difference between the “honest
citizen” and the shameless individuals that also carry a gun.
To accept that a citizen needs to carry a gun to defend himself is to admit that
the government is not competent enough to fulfill one of its fundamental duties.
In this context, the historical coincidences are an interesting and an
enlightening experience. When the members of the country’s oligarchy complained
to one of the last military presidents about the threat that they saw in the
communist menace, he answered that he was not going to be able to protect them
any longer, and that, therefore, the oligarchy itself would have to take charge
of its own security measures. The country’s oligarchy then created the death
squads. To admit that a citizen has to defend himself is to admit the total
failure of the public security system.
The argument about the “honest citizen” cannot stand up by itself, but it is
used to hide away the actual reasons of the free trade and circulation of guns:
money and a state of mind. For a long time, the insecurity and the violence that
the country had even before the civil war, and the lack of control of the
civilian security levels have been a fertile ground, where the stores that sell
guns have multiplied themselves. Many of the owners of these stores are
connected with both the army and ARENA. To disarm the society would be to go
against the economic interests of this small group. That is why ARENA and the
right-wing parties have chosen to give more importance to this small crowd at
the very expense of the insecurity and the lives of thousands of Salvadorans.
This is a very odd position in a party such as ARENA, which frequently raves
about its profound sense of responsibility. The reaction of the National
Conciliation Party (PCN) is no surprise either, because instead of intensifying
the strength of the proposals made by the Saca administration, it intends to
make them less severe. Since the beginning, the PCN has been linked to a
military dictatorship and to violence itself.
On the other hand, the Salvadoran society in general, and, particularly, the
right-wing parties, consider that the authoritarian measures are normal, as well
as the repression to correct violent behaviors. They do not seem to realize that
violence is the factor that intensifies violence. The “honest citizen” that
carries a gun is a source of violence. And by giving him the choice of carrying
a gun, as ARENA does (from President Saca to the members of the Congress) is to
invite him to act even more violently. They fool themselves and they fool the
citizenry, because they make them feel safer, when they actually are more
vulnerable to become the victims of a violent situation, with a fatal level of
frequency.
This perspective has its roots in the national conscience; combined with greed,
they are obstacles that are not easy to remove in order to have the actual
possibility of having a pacific coexistence. In fact, the ARENA administrations
have privatized the civilian security with disastrous and criminal results
because instead of guaranteeing a higher degree of security they expose the
lives of those that carry a gun, and they become potential victims of the
violence that they intend to prevent. Their primitive mentality, which believes
in force but not in reason, fools them.
The new reforms proposed by the Saca administration are not strong enough
because they do not reach the bottom of the matter, and because they do not
belong to a general plan of criminal policies; but, as usual, it has partial
legal measures to pay attention to areas that, in fact, have not been neglected.
The Attorney General’s Office has not paid any attention to the smaller
infractions established by the Penal Code. And it excuses its behavior by saying
that they do not have enough resources for this area. The police indicated that
they cannot do anything without the instructions of the Attorney General’s
Office. In order to take care of this situation, the Saca administration intends
to assign these cases of minor importance to the police. However, this is not
that simple, since the police has demonstrated that they are not capable to
fulfill its basic duties. They only investigate with an incomplete and an
ineffective performance a portion of the homicide cases; in addition, the police
do not carry on with all the orders of arrest issued by the judges. The Attorney
General’s Office, on the other hand, does not bring to court an important amount
of the cases reported by the police because of lack of evidence.
To receive the report of events that could be considered penal infractions, to
investigate them, to gather evidence, and to hand them to the Attorney General’s
Office to promote a judicial action have always been duties that the police is
supposed to perform. Therefore, the modification that has been proposed makes no
sense. The police has to have the initiative to investigate the facts and report
the results to the Attorney General’s Office, unless this office gives the
police different instructions. It seems, however, that the advisors of the
government do not know the legislation and take as the law what is simply a weak
performance of both the police and the Attorney General’s Office. Therefore, the
problem is not the legislation itself, but the work of the police and the
performance level of the Attorney General’s Office. These new reforms, just like
the former ones, more than 20 of them, are just a façade to hide away these
flaws. In spite of the amount of penal reforms that have been established, their
impact is not strong enough. On the contrary, in spite of their existence, the
homicide rate remains shockingly high.
The struggle for power in ARENA and the next elections
The Salvadoran political environment is a jungle, and the
media along with the analysts like to focus on the internal divisions and the
disagreements of the opposition, especially when it comes to the left wing. On
the other hand, they rarely analyze the struggle for power inside the official
party. In those cases that it is just impossible to hide away the internal
disagreements, they usually present the events as if they were genuine efforts
to resolve the country’s problems. The internal actions to designate the
presidential candidate for the elections of 2004 are an example of this factor,
while the situation of the left wing was presented as a deadly confrontation
between enemies among brothers, in ARENA, Antonio Saca already counted with the
support of the most influential news media, which presented Saca as the
candidate with a noble strategy in order to win the credibility of the militants
from ARENA.
It could be sustained that the designers of the strategy promoted by the
official party did know how to handle the internal disagreements, and that they
have been careful enough not to discuss their problems in public. There are also
the “natural” precautions that the journalists take along with their media when
it comes to discuss the issues that involve the official party.
However, what cannot be denied is the fact that there is also a deadly struggle
for the shares of power inside the right wing party, no matter how much they
like to disguise these actions as good intentions and the will to say: We are
here for the country! The most critical factor of this whole matter is that the
struggle to handle the highest level of power in ARENA usually has a crucial
influence on the events of the other political organizations. Because those who
dare to challenge the powers that operate inside that party take the risks of
being politically ignored, receiving economic threats, or going to jail, in the
worse of the cases.
There are those who think that Carlos Perla, the former president of ANDA, now
subjected to a sort of punishment promoted by the judicial system and the media,
would be paying for a wrong decision for wanting to make some independent
business deals without the consent and the blessing of other influential members
of ARENA. That is why some people would have had decided to hand Perla to the
Attorney General’s Office, an institution in charge of prosecuting crime, but
incompetent enough when it comes to catch the “big fishes”. From any
perspective, the Perla case cannot be seen as an institutional desire to fight
against corruption in El Salvador, because this process does not answer many
questions about the tentacles of corruption in El Salvador and the participation
of several members of ARENA in it.
Both the political power and the lack of ethics when it comes to the economic
matters are a couple of situations connected with ARENA. That is why the members
of the party, even in the worst of the cases, know that they have to handle
themselves carefully if they do not want to compromise their future. The answer
can be found in questions such as: why in ARENA everything seems to be in
harmony? Why do they seem to have this “inner peace”?; or, why does not the
press analyze the internal disagreements of the official party? What happens is
that, ultimately, the members of this political organization know very well how
to handle their power. They know that those who have the power, once they agree
with the most important interests of the financial elite, have the authority to
do whatever they want with the party.
This conception of the State as a patrimony of just a few explains the why the
internal disagreements never come out of the party. It also means that the
political leaders are as vertical and as authoritarian as the ones from the FMLN,
even if several of them insist on criticizing the performance of the leaders
from the FMLN, the difference is in the fact that those who do not allow
themselves to be dominated by the leaders of the left-wing party, besides their
political careers, they do not put many other things at risk. On the contrary,
when they behave in accordance with the line traced by the right wing, they have
a greater possibility of improving their economic status and ascend in the
Salvadoran social pyramid.
The members of ARENA who do not obey the orders of the leaders do play with more
than their political careers. For instance, a short while ago the press spoke
about an alleged connection between a famous member of ARENA, Mauricio Sandoval,
with a case of fraud. It is evident that this is an accusation and that the
culpability of the character in question cannot be judged just by a plain
observation of the matters. Nothing else has been published about this case.
Several congressmen from the FMLN have called the District Attorney to ask for
explanations. Once again, this institution has not taken care of an
investigation regarding such serious accusations. That is why many people say
that the key factor here is that this is an influential member of ARENA.
If during the candidate’s designation process for the presidential elections,
the former director of the National Civilian Police would have behaved
inadequately, there is no doubt that the Attorney General’s Office would behave
differently in regard to this case. Even if no one can talk about an eventual
punishment, the fact is that there could have been initiatives to demand the
arrest of the suspect, just like it happens in the cases when the congressmen do
not have important political connections, or when they have fallen from grace.
The reason why the selection process of the candidates from the official party
for the next elections has not been more than gossip is this context. This has
enabled Saca to design a custom made organization, where his friends and his
closest collaborators occupy the most important places. By being sure that he
will obtain good results during the next elections, the President will design a
political party that will fit him like a glove. This is how he will be
strengthening his own share of power in the country and in ARENA.
It is necessary to mention this subject because the Saca case cannot be compared
with any of the three former administrations. Saca intends to control the
destiny of his party and the destiny of the country at the same time. While his
predecessors had to deal with certain politicians of experience that had won
their place in the party through their personal sacrifice, Antonio Saca,
instead, will have a generation of congressmen and mayors where most of them
will be devoted to him because they will owe their political careers to Saca.
Flores went through a different situation. While his party became weaker in the
opinion polls, the important names inside ARENA and the society in general
questioned his leadership and his little capacity to negotiate. Saca, instead,
remains ahead in the public opinion polls, and he is about to have the members
of ARENA at his feet. If things remain the same, Saca could become the new
caudillo of the right wing. In the best style of the Mexican Presidents of the
“perfect dictatorship”, he will have the power to designate his successor, a
rare privilege that not even the arrogant Flores administration had.
The negative impact of the fiscal reform
In former articles, we have discussed the fiscal reform. We
have focused our attention on the opinion of many public officials and political
parties. However, given the complexity of the case, it would be pertinent to
look back at certain aspects and evaluate the possible negative effects that the
application of this regulation might bring. In order to understand the events,
the reforms that have been made to the Value Added Tax (IVA) and to the Income
Tax are explained separately.
In reference to the IVA, the new measures outline a couple of key concepts that
every taxpayer has to understand: perception and deduction. In the first case,
the taxpayers become perception agents when they sell merchandise to a small or
a medium business company with an IVA registration number. The perception agents
are all of those companies that import, produce, or distribute alcoholic drinks,
beers, cigars, cigarettes, snacks, sodas, petroleum, hardware store products,
construction materials, and spare parts. Such perception will be applied when
the major business companies sell merchandise to the small and the medium
companies that will later sell such goods. The 1% tax will not be deducted from
those company owners that buy these products as part of their fixed assets. For
instance, if a store (in the case of a small one) buys snacks from Diana
Industries in order to sell them, it will be subjected to a perception by Diana
Industries, but they will not be able to transfer that perceived 1% to the final
consumer. On the other hand, Diana Industries will report that 1% to the
National Treasury Department in the first 10 working days of the following month
after the perception has been made.
The next concept is deduction. It means that the large companies become a
deduction agent when they buy from a small or a medium business company with an
IVA registration number. This concept is valid for any goods or services, as
long as the purchase is made between this type of companies.
The income tax
In the analysis of the income tax, only those reforms that could affect the
economically active population were considered (the wage earners). Among them,
there are the following: Article 3 of the Income Tax Law, which is about
applying this tax to “the values received by the worker in currency or values,
necessary transportation expenses, accommodations, meals, working materials, and
office equipment, as long as the activities to which those values or goods are
designated do produce a taxable income for the employer”.
The values or the goods received by the workers (those goods that have different
objectives) will be subjected to a deduction along with the remuneration
perceived by the worker. In addition, according to Article 29 of the same law,
the following elements will be taxed: fees, commissions, Christmas bonuses,
compensations, severance pays, fees for legal representatives, directors,
advisors, stock holders, societies, gasoline, staff transportation, the
materials used by the salesmen of a company, as long as these goods have to do
with the creation of income, and while the expenditures are correctly verified
through a receipt or through fiscal credit vouchers. Another aspect that might
affect the workers, especially in the rural areas, has to do with Article 29
also, which establishes the tax level of the agricultural and the cattle-raising
activities (wages, plants, seeds, fertilizers, and other expenses of the kind).
This taxation will have perverse effects on this sector, considering that the
agricultural area is the less productive one in the nation, and that its workers
are people whose salaries barely help them to cover their needs.
The impact of the reform and its influence on the prices
It is important to mention that the main objective of the fiscal reform is to
increase the governmental income in order to be able to invest in the social
expenses, in addition to keep paying for the debts and improve the risk-rating
position in order to increase the foreign investment. It is necessary to analyze
and know what would be the negative aspect of these laws.
In reference to the reforms established for the IVA, it could be said that the
negative aspect is segregation, due to the fact that the large business
companies will only make commercial transactions between themselves. These
business companies will do this in order to avoid the perception of the 1% over
the gross value of the sales made to the small business companies, according to
the reform of Article 162 of the Tax Code. In this context, the small and the
medium business companies probably would prefer to make the transactions between
themselves since this is how they could avoid the perception and the deduction
rate.
Another negative effect would come from the dispositions established to deduct
the IVA, when a small business company buys merchandise from a large one, and
then sells these products to a final consumer, such transaction becomes, if not
a loss, a reduction of the profits. For instance, if a small or a medium
business company buys $1000 in products from a large corporation, the small one
adds an extra 13% (IVA) to this amount; the tax perceived over the value of the
purchase is an extra 1%. All of these amounts add up to a total of $1140, paid
by the small or the medium business companies. Suppose that these companies sell
exactly the same amount to the final consumer, plus 20% in profits, plus 13% of
IVA, the price that the final consumer pays is $1356.
However, if the same example is used without considering the 1%, the small
business companies could have bought that same amount of goods in $1130, to sell
it for $1356, in which case they would have had obtained a profit of $226, an
amount that was reduced with the perception, since this one would be $216, and
this means that for every $1000 that are sold the owner would obtain 16% less of
the profits. This means that the income of the medium and the small companies
that make this kind of transactions will be reduced, and that therefore, there
will be less investments for the company’s improvement. The logical attitude
that the medium and the small business companies’ owners would adopt is to buy
from each other to avoid this kind of situation.
In reference to the income tax, the negative effects that would take place in
this case are the ones of the economic theory. Basically, this creates two kinds
of impacts: in the one hand, it reduces the available income of the people. Such
is the case of the workers that had a commission for their sales, who will have
to give a portion of their extra-income in order to pay for this tax. The same
thing happens with the Christmas bonuses and the compensations. As for the tax
on fuel, the direct impact for the final consumers will reflect on the taxes
that the public transportation vehicles and the delivery units have to pay. Both
of them will see the possibility of increasing their fares in order to
recuperate their income.
One of the taxes that the producers should be concerned about is the tax for the
agricultural and the cattle-raising expenses, since with the increasing prices
the producers will have to raise their own prices, and the consumer will be
affected as well, especially when it comes to the basic grains. In this context,
the price of the Basic Food Basket might also increase, a situation that will
raise the poverty levels.
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