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Proceso 1147
June 1, 2005
ISSN 0259-9864
Editorial: An analysis of the first year with Saca
Politics: A first glorious year?
Economy: Saca’s first year of economic administration
Economy: The reactivation of the economy and the evolution of the prices.
An analysis of the first year with Saca
President Saca has completed his first year at the head
of the Executive power. If back when he pronounced his inauguration speech and
when he announced his social plan he needed to act prudently, now it is
necessary to look at the President without any condescension at all. Even if a
year is not enough to see substantial results connected with the most critical
issues of the Salvadoran society, it is enough time indeed to define the
governmental master plan for the rest of his administration period.
About the style of the Saca administration it is necessary to say that his first
year at the head of the Executive power has been widely covered by the media.
The President has been a marketing product in this sense: his constant presence
in the news media, many interviews, many pictures, a lot of smiling… Practically
everything was arranged for Saca to look his best before the cameras. The most
important news media –some more than others- were part of this game of images
and advertising. The President, of course, was into character, doing what he
knows best: to strike a pose before the cameras, to display a friendly smile,
and to say what everyone likes to hear. Certainly, to judge by the sympathy that
he awakens inside a considerable portion of the population, it could be said
that his performance as a media personality has been more than successful.
However, not everything has been about smiling and about being kind during this
first year. His populist side has come along with an authoritarian face that
sometimes has even reminded us about the worst moments of the Flores
administration. The Saca style has created a dangerous combination of populism
and authoritarianism that, if this remains the same for the next four years, it
will become one more obstacle for the development of democracy in El Salvador.
The problem is that President Saca adopts a populist attitude not only when he
plays a friendly character, but also when he leads a project to fight against
poverty with economic aid granted by the State to the families that live in
extreme poverty. Being kind is not bad, it is a good thing to offer direct and
immediate help to those in need. However, being kind does not improve the
President’s performance, and to help the poor does not resolve the problem of
poverty in the long-term. Populism is a way to govern a country, a process that
creates connections and political loyalties through a mechanism of assistance,
subsidies, or privileges for certain sectors of the society. President Saca has
a populist charm that, without creating a wave with the masses -as it has been
the case with the traditional populism- has seduced a considerable part of the
Salvadorans that have placed all of their hopes in his hands.
However, populism is not all –that is, the kinder side of the President-, since
he himself has conducted his administration with a clear authoritarian
component, as it has usually happened in other occasions with populism. To begin
with, it is necessary to discuss the starring role played by the President: just
like in the Flores administration, everything seems to revolve around the
decisions and the persona of Saca, as if he were the lord and the master of the
country’s destiny. This perspective, has turned into a considerable number of
authoritarian decisions –just like the tax reform, the promotion of Francisco
Flores as the candidate for the General Secretariat of the OAS, or the
authorization granted for the presence of the Salvadoran troops in Iraq– a
problem that has a considerable number of consequences in the social and in the
political field.
It is difficult to be populist without being arrogant and without playing a
starring role in the political scene. The Venezuelan President, Hugo Chávez, is,
perhaps, at present, an extreme example of this. Francisco Flores was arrogant
and not populist at all because he has no charisma, and it never occurred to him
that it was necessary to offer food to the poor instead of a nauseating dose of
oriental wisdom. Saca, saving the distances, is closer to Chávez and far away
from Flores. The arrogance of Flores is just a bad memory shadowed by the charm
that Saca portrays through the media, as well as by his widely advertised
commitment with the poorest sectors of the country.
Up to this point, Saca has succeed, and if his first administration year will be
judged by how he has combined populism and authoritarianism –being discreet at
mixing this formula- there is nothing more to ask of him. The point is that
people have to demand more from Saca, and, in this sense, he has to be judged
with a different criteria. For instance, it is necessary to evaluate his
performance through aspects such as the way he has fulfilled his commitment with
the social priorities. And, form this perspective, this is not a pretty picture
for Saca. Up to this point, that commitment has not been guided by any relevant
public policies, that is, by public policies aimed to turn the social factor
into the main concern of the government.
Regardless of the amount of publicity given to this administration’s social
plan, and to the assistance plans that would be implemented by the government in
different social sectors, the economic aspect was, during the first year, Saca’s
actual priority. The priority was the interests of a segment of the business
elite that saw its companies grow under the protection of the government. All of
their investments and their banking transactions grew. The Saca administration
has put the cards on the table when it comes to take advantage of this sector.
However, the transformations are intended to work with a lukewarm tax reform
that only scratches those interests, and that rests over the frustrated and the
indebted average sectors. The social aspects will never be a priority while the
Saca administration is content with the “business-social responsibilities”. The
social aspect will barely become a dish on the side of an economic logic
followed by the ARENA administrations –including Saca’s-, something that they
already consider a solid factor of the party.
A first glorious year?
Before the information that the opinion polls will reveal
about what the Salvadorans think of the governmental performance of Saca, the
reader should have an idea about the turn that national political events will
take the on the next months. In the mean time, the President and his team savor
the approval –a bit upsetting, given the critical nature of the problems that
the same opinion polls reveal as well- of the population. On the other hand, the
opposition is trying to unveil, thinking about its own survival opportunities,
the most controversial issues.
The different interpretations of the opinion polls.
For this case, in the line of the political antagonism between the official
power and the opposition, there have been different interpretations about the
opinion poll conducted by the UCA. The most emblematic defenders of the line
followed by ARENA repeat, ad nauseam, that the President has done a fabulous job
during his first year. “The achievements of the government have been a positive
factor for the first year of the Saca administration –published an editorialist
of El Diario de Hoy-, a presidency that has stood out because of the way it
projects itself to the people, its legitimate effort to get closer to all of the
sectors, and its undying energy. The electoral promise, to work for the country
and its development, is being fulfilled. Now it is the time to keep heading in
the same direction and create proposals that allow the country to do many things
with the small amount of resources that a poor country has”. The way things are
going, no miracles should be expected, especially no economic miracles because
this is a poor country that does not have much to give to its children.
The thoughts of the editorialist from La Prensa Gráfica follow the same line as
El Diario de Hoy. Commenting on the basically positive evaluation received by
the Saca administration, it mentioned that “these high percentages must be seen,
in the first place, as a successful answer to the administration style of Tony
Saca. Politics is a science, but to administrate a country is an a form of art.
It is mostly about being sensitive, and not much about having a technique. In
that sense, Tony Saca is a natural communicator, and that allows him to
establish an immediate connection with the average citizen. And that is the
foundation of a flowing relationship, a relationship that grows with confidence
among the population”.
The detractors of the President indeed place their comments precisely in this
point of the allegedly close relationship that he keeps with the population.
Some people are talking about a shameless manipulation tactic to deal with the
public opinion. In more than one occasion, the political activism of Saca
resembles itself to a continuous propaganda strategy of a government concerned
with communicating its good intentions that cares less about solving the
specific problems that worry the population. The evaluation of the FMLN about
the first year of the Saca administration analyzes this specific aspect. In a
space paid to the press, those responsible for the left-wing party published the
unfulfilled promises made by the President, and they call him a liar for using
unfounded propaganda, a propaganda that is far away from the economic reality of
the Salvadorans.
In reference to this, another voice of La Prensa Grafica that intends to be fair
and rational, clarifies the perspective of the opposition. According to this
position, the good results and the merit of President Saca, "is not just the
result of the advertising strategies of his administration. In these times,
there cannot be such an effective publicity or so many people willing to be
manipulated, as to generate such high levels of acceptance if everything were as
bad as some people insist on putting it. It is true that the country has serious
problems, but most people understand that it would be absurd to expect magical
transformations or to give a government more responsibilities than it already
has because of the results or because of the persistence of the problems".
A considerable portion of the favorable opinions about Saca seems to belong to
the line of the previous commentary. In spite of all the adversities, the
Salvadorans give the benefit of the doubt to the team of the present
administration. The serious social and economic problems, many times indicated
by the citizens, do not prevent them from feeling a certain sympathy for the
President and endorsing the ineffective policies of the right wing.
In the political field, the Salvadorans also believe in the efforts of the
President to get closer to the opposition. In this aspect, the presidential team
indicates that "one of the features of the Saca administration is a philosophy
that intends to search for consensus, for approaches, to create spaces of
discussion, and to promote good will, in order to create the conditions for
governance, social harmony, peace and opportunities to improve the life of the
people".
There are different interpretations about the governmental action and about the
appreciation of the citizens concerning the information revealed by the opinion
polls. In any case, it would be convenient to underline that the opinion polls
are nothing more than that, a scientific effort to approach the way in which
each Salvadoran evaluates the performance of the people that represent the
country. However, what is the point of the evaluation made by the Salvadorans
about the governmental performance? Is it true that the population has been
manipulated with a dishonest intention? Or is it that the overwhelming support
in favor of Saca is a sign of the deficient performance of the opposition?
The other face of the national politics
No one should be surprised by the fact that Saca has done everything he can
during his first year to gain the support of the Salvadorans and, at the same
time, to win the political race against the opposition. No one has to paid much
attention to this issue either. This is one of the elements that make the
democratic version of politics more exciting. What seems to be important,
according to the experts, is if the competition occurs in fair conditions and if
the opponents are able to freely express themselves.
With these two elements that allow to examine the performance of the democratic
regime, it is necessary to say that Saca counts with many advantages. He does
not only count with all of the institutional weight of the State and the money
of the Salvadorans for "doing his job", the most important news media have also
supported and pampered “their” Mr. President. This means that any attempt to
evaluate the President must get started by underlining those elements.
In addition, the opponents have not had anything on their side to pronounce
themselves against the government. The press, as well as the State’s apparatuses
of coercion, have both supported the cause of ARENA. In reference to the
behavior of the press, it cannot be said that this has been a specific decision
of the President. The identification of the most important mass media with the
interests defended by ARENA is a decision that goes beyond the existence of Saca.
However, about the use of the institutions of the State, such as the National
Civilian Police (PNC, in Spanish) and the Organism of Intelligence of the State
(OIE), President Saca is fully responsible for the control of the opponents.
During this first year in the government, his ministers of Internal Affairs and
Security stood out for using these institutions in a perverse manner against the
opposition.
In this sense, during his first year, Saca has not contributed to improve the
democratic character of the institutions in El Salvador. No matter how much his
apologists strive to present him as a negotiator and as a man of peace, the
President has actually reproduced the worse vices that defined the style of his
predecessor. Those who think that his declarations of good will are enough to
deal with the opposition, forget that in the political game actions speak louder
than words.
In this line, the pact that Saca made with the National Conciliation Party (PCN,
in Spanish) through which the PCN managed to avoid its cancellation according to
the established terms of the electoral law and that, in addition, took control
of a position in the Electoral Supreme Court (TSE), is a pact that proves the
little respect this administration has for the rules of a democratic
coexistence. In addition, as a result of this decision, it had to take one step
further in the line of domestication of the Supreme Court of Justice, because
this institution’s representatives -although, in the case of the cancellation of
the parties that did not reach the required legal percentage of votes, a
magistrate saved her vote against the legal monstrosity that was taking place-,
participated without problems to approve of the political decision of ARENA.
Saca did not help either to put the political debate at the height of the
circumstances as he once promised. The discussion groups, according to the less
combative opponents, have not worked out. The most important political decisions
of the President were not discussed. Neither the fiscal reform nor the approval
of the Free Trade Agreement (TLC, in Spanish) with the United States have been
discussed by its members. That is why it has been more like an opportunity to
display governmental propaganda, as it proves the special publication resented
in the newspapers about the report of the first year of the Saca administration,
which includes a photograph with the leaders of the main party of the
opposition.
Before this panorama, however, the question about the sense of the support to
this administration remains unanswered. The speech and the declarations of good
will made by Saca seem even more relevant due to the incapacity of the
opposition. While the members of these parties do not offer a coherent strategy
to face the populist demagoguery of the right wing, they will hardly be able to
resist the attack of the Presidential House displayed in the media. On the other
hand, the public opinion is being manipulated. Those who wonder if the public
opinion can actually be so easily manipulated, would have to pay attention to
the fact that more than 44% of those interviewed think that the level of
approval that the President has is due to the propaganda in the media.
After this first year, in the up-coming pre-electoral conjunction, it is very
probable that Saca keeps offering more of the same. There are many incentives
for that, and the popular approval that this administration boasts about is,
without a doubt, the main incentive. In that sense, if anything new can be
expected from the political life, it would have to come from the opposition.
Otherwise, the next year will reveal, perhaps through different facts, that an
authoritarian populism, made up with a spectacular media strategy, once again
defined the national political life.
Saca’s first year of economic administration
The results of the opinion polls to evaluate the first year
of the Saca administration indicate that, in general terms, it has managed to
keep a good image between most Salvadorans. However, the surveys also show the
discontent of the population, due to the difficult economic situation of the
country. In this sense, the surveys present a vote in favor of the President,
but, at the same time, they reveal the country’s bad economic situation. In the
beginning of his first year, Saca faced a critical economic situation inherited
from the Flores administration. At the time, the country had a low level of
private investment, a slow economic growth, a high indebtedness level in the
Central Government, a high level of commercial deficit, and the prices of
petroleum were increasing. All these elements shaped the scene of the country in
which, day after day, the Salvadorans kept losing their purchasing power. When
Saca became President, a series of economic measures were implemented with the
purpose of reactivating the economy, facing the debts of the State, and
palliating the deteriorated economic situation of the Salvadorans. The most
important economic measures impelled by the new President were the tax reform,
the antipoverty plan, and the bet for the Free Trade Agreement between Central
America, the U.S.A. and the Dominican Republic (CAFTA-DR).
The tax reform
Saca inherited from the last administration the growth of the breach between the
expenses and the income of the State. In only five years, former President
Flores led the country to a situation of fiscal deficit that the different risk
rating international companies warned the people about. In an economic model
based on the investments, the parallel presence of the fiscal deficit
discouraged the private investment. In order to try to close that breach, the
new President announced a tax reform to collect more money in taxes. For the
President, the measurement did not contemplate the increase of the tax rates,
instead, it was focused on fighting the fiscal evasion at all costs.
During the Flores administration, the increasing breach between the expenses and
the income of the State led the government to finance the deficit with loans
that would come from abroad. In other words, the increasing fiscal deficit had
certain repercussions in the state of the international indebtedness. By 2004,
the situation was already a delicate issue. The external debt reached the
maximum level established by the International Monetary Fund (the IMF): $5,992
million, equivalent to 38.1% of the GNP.
In 2005, the fiscal reform announced back in 2004 was implemented. The goal of
the reform was to reduce the imbalance between the expenses and the income of
the State. In addition, a higher revenue level would have to be transformed into
a better social policy for the Salvadorans that live with limited resources.
During the implementation of this measure there was a series of interests in
conflict in the private sector. For the businessmen, the measure could intensify
the country’s cycle of low economic performance. Some sectors -especially the
micro and small companies- looked at a dark perspective in the future, due to
the new tax collection mechanisms.
After the implementation of the measure, it should be understood that the tax
reform is nothing but a short-term solution. In order to face the increasing
expenses of the State and the high level of the international debt it is
necessary to have a much higher revenue level than the one that has been
considered with a fiscal reform that only intends to expand the tax base. In
addition, what the growth of a tributary base such as the present one does is to
reinforce the regressive nature of the fiscal policy in the country.
This means that the present reform reinforces the existing tendency according to
which the economic agents with an inferior level of income are those that
contribute more with the State’s treasury. There will always be some companies
that will have to pay more, but in relative terms, the highest amount of income
of the State will come from the people with a smaller income level. Therefore,
it is possible that a taxation structure such as the present one is able to
intensify the social differences and, with it, deteriorate the economic
conditions of many Salvadorans.
The Anti-Poverty Plan
Saca announced the creation of a program destined to fight against extreme
poverty in the country. This program would include five areas: FOSALUD, “connect
yourself” (a program aimed to young people), the Solidarity Net program, and a
program of micro-credits.
With the FOSALUD they intended to provide four million people with medical
assistance in the next few years. For the first year, the plan would count with
$20 million. However, this plan has not been implemented yet, and this is
because there are not enough funds to finance it. Another one of the programs
that has been advertised through the media, but which has not come up with any
results yet is the Solidarity Net Program. This program is about delivering
subventions to the poorest 100 counties of the country. With this plan, they
intend to distribute $50 million every year between the families that live in
extreme poverty. This program, just like other measures announced by the
President, has not been defined yet. Several public officials say that the plan
is still trying to identify the geographic areas where it will be implemented by
the government.
Another one of the features of the anti-poverty plan is the implementation of
micro-credits aimed to create and develop micro-business companies in the
country. With this measure the government intends that many Salvadorans are able
to create their own micro-business company and have a steady source of income.
They intend to give away $50 million each year in amounts that go from $100 to
$300. Just like the Solidarity Net Program, this plan has not been implemented
yet, and it is an evidence that proves that the government has not obtained any
specific results when it comes to the economic matters that could favor the
Salvadorans.
The measures such as the Solidarity Net Program and the micro-credit plan –very
particular ways of public investment- are not a reality yet. According to the
design of these plans, their results should be visible by the second year of the
Saca administration. However, plans such as the FOSALUD should be already
working out and fulfilling the promises made by the government.
The CAFTA
One of the main objectives that the Executive Power has in the short-term is the
existence of a commercial agreement with the United States. That is why the
President has done everything he can to travel abroad and influence the
decisions of the American Congress in favor of the agreement. The President
presents the CAFTA as a great opportunity to increase the employment level, a
higher level of investment and, as a consequence of this, a higher level of
economic growth.
Lately, the President seems to be placing his bets on the Free Trade Agreement.
However, differently from the speech he gave last year, how he is more cautious
when it comes to discuss the possible results of the treaty. It is clear that
the President sees the Free Trade Agreement as an important device for the
economic performance of the country. He should not forget that the CAFTA could
turn into a knife that cuts both ways, given the contrast between the efforts
concentrated in the treaty and the very few results actually obtained.
Everything seems to indicate that due to the high expectations created by the
treaty, the Salvadoran government is still not using an independent or a
systematic economic policy to improve the situation of the economy. There should
be more efforts to adopt a systematic policy of productive transformations, and
less expectations about the ratification of the CAFTA.
In this area of commercial policies, just like in the anti-poverty plan, no
specific results have been accomplished yet. Such results would be evident if,
once the agreement is ratified with the United States, the treaty becomes
effective. However, as far as the economy is concerned, the situation is still
critical.
The reactivation of the economy and the evolution of the prices.
In matters of economic growth, the most recent information
revealed by the Central Bank of Reserve (BCR, in Spanish) shows a critical
economic contraction. By March of 2005, the Volume Index of Economic Activity (IVAE,
in Spanish) for the industrial, the commercial, and the construction sectors
revealed a negative variation. Only the agricultural sector, the sources of
electric energy, and the transportation business have increased their Index. The
situation is so delicate that the financial sector –which usually reveals high
growth rates- is now slightly stagnated. One of the reasons that the President
gives to explain this situation is the long period of time taken to approve the
General Budget of the Nation last year.
In matters of prices, the situation is equally delicate. Due to the increasing
prices of petroleum in a world-wide scale, and most of all, due to the fact that
the country lacks a national policy to face these increasing prices, the actual
income level has been deteriorated. During the last week of August in 2004, The
General Direction of Statistics and Census (DIGESTYC, in Spanish) reported a
considerable increase on the prices of the basic food products. The prices of
beans and corn were increased since May of the same year.
By the beginning of 2005, after the Christmas Holydays, several of the basic
food products increased their prices. However, the government did not choose a
specific policy to stop the fluctuation of the prices and said that this was due
to a low level of supply in the local market. By April of 2005, the accumulated
level of inflation was 2.1%, this is a high figure supposing that this is just
the way that the prices increased during the first months of the year. If this
tendency remains active, by the end of the year we could have an inflation level
similar to the one of the last year.
A tax reform that reinforces a regressive fiscal policy, an anti-poverty plan, a
free trade agreement with the United States (which seems to be a propaganda
strategy more than a reality), and an economic stagnation along with a set on
increasing prices, are elements that all together reveal that we have not
managed to achieve any specific results in the economic matters.
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