Cecilia Gallardo de Cano surprised the country when she unexpectedly resigned her post as head of the Ministry of Education, after nine years as minister for this state portfolio. Her definitive resignation took place when speculations arose concerning the possibility that she might become the vice-residential candidate for the official party today and in the midst of the FMLN's questioning of the campaign which the Education Ministry had launched against them for opposing El Salvador's increase in the amount of the external debt. Although the reasons alleged by the ex-functionary are of a personal character, the circumstances surrounding her resignation are sufficiently eloquent.

If it is true that the ex-Minister of Education had been saying for the last year that she would retire from the post when the educational reform reached its conclusion, the context surrounding her resignation show that it had been expected. The reform underway in higher education has not reached a conclusion. The process of accreditation of the educational centers has not been finalized and the consequences to be derived from it have not yet been implemented. Neither can the reform of the Ministry of Education itself be said to have been concluded. The educational reform is in progress, but not consolidated. On the other hand, the vice-presidential candidacy is not the motive behind this resignation; she herself has denied this emphatically.

In any case, if the ex-functionary considered that the opportune moment had arrived for abandoning public administration, the circumstances of her resignation do not correspond to the successes obtained in the educational area. A functionary with the national and international prestige of Cecilia Gallardo de Cano does not resign in such an untimely way. A few words of recognition, spoken in an informal way by President Calderón Sol are not the most appropriate way to fire the most brilliant functionary in his government. The President of the Republic must be ungrateful indeed to dedicate only some few words of praise during the inauguration of a sports stadium.

The real reason for the resignation is to be found in the tense relations between the ex-functionary with her party and with the government of Mr. Calderón Sol. In a public opinion poll, her name appears among the most popular political personalities, with a potential to aspire to the candidacy for president. But ARENA did not consider her popularity, nor her success in the educational reform no her personal ambitions. Nor was she even informed in an official way of the decision of the party on the presidential candidacy. In the presidential cabinet she was the object of constant criticisms because of her openness to sectors and institutions--specifically, to the UCA--that the hard line government did not approve of, but which were for her fundamental for the progress of the educational reform. Not a few ministers envied her success and popularity. With her leaving the government, Calderón Sol loses his best functionary and sows uncertainty for the future of the educational reform.

But the drop which caused the glass to overflow was the government campaign against the FMLN for their refusal to approve new international loans as long as the current status of the country's foreign debt is not clarified. As she announced her resignation, the ex-minister said clearly that neither she nor her portfolio had ordered nor financed that campaign, adding that she did not know who had done so. President Calderón Sol clarified this matter and assumed responsibility, declaring that it was a matter of his government and of interest to the Salvadoran people, confusing these things one with the other in an inexplicable way. What his government considers appropriate is not, necessarily what the people want. One cannot speak of the popular will without having previously consulted the people. The Salvadoran people have the right to an education, but neither this nor any other right can be satisfied by violating the law or damaging the dignity of persons. The President could not explain from which account in the national budget the funds for financing the openly sectarian party campaign had come from.

Once he admitted his responsibility, the president should now clarify why the campaign was attributed to the Ministry of Education without the approval of its director, why the presidential palace used the Ministry of Education and ANDA to hide his responsibility, why he permitted the ex-Minister of Education to be questioned about something that she had not done, where the funds came from, who authorized the evidently illegal campaign--to such an extent that the Supreme Electoral Tribunal, acting officially, ordered a stop to it. The questioning of the FMLN should not now be directed toward the Ministry of Education, but to the President of the Republic. The minister of education was sacrificed to a myopic and short-term government policy.

Cecilia Gallardo de Cano suffers a double and asymmetrical frustration. The standstill of the education loan in the Legislative Assembly caused by the opposition of the FMLN was, doubtless, a cause for frustration; but also and perhaps in greater measure are ARENA and the Calderón Sol government are a source of frustration because she gave the first years of her youth and the best of herself. Her resignation presented before the political commission of ARENA is only a consequence of these frustrations. It should be noted that her work for the party and her service to national education have also not met with the respect and appreciation which they deserve.

One of the aspects of the pension system reform which will have most impact on the economy of the workers is the increase in the quota rates for 1998, which will be in effect also for the next four years. The former does not, however, imply that this is the only important aspect on pension reform that ought to be examined given that other questions persist, such as those concerning coverage, levels of pensions, administrative costs, the role of the state and investment of pension funds .

The increases in the quotas to be paid by workers are not solely a result of the fact that the workers' contribution to his or her pension fund will increase; they are also a result of the fact that an additional percentage has been added to pay for the administration of pension funds and insurance contracts for disability or loss of life. In fact, starting with the initial days of the implementation of the new system, the discount from workers' checks will be applied mainly to the payment of commissions and insurance and not deposited into the individual account.

As the figures below demonstrate, for 1998 it is proposed that what is discounted from the workers' checks will move from 1.0% to 4.5%--which represents an increase of 350%. As can be observed, for the year 1998, the aforementioned 4.5% is a composite of 1% for the individual account for aged status and 3.5% goes for commissions and insurance for the Administrator of Pension Funds (AFP). Nevertheless, this does not account for the total increment projected because, for the year 2002, the plan is to increase the discount to the worker until it reaches 6.25% of his or her salary, from which 3.25% would be deposited in the worker's individual account and 3% would be for the AFP commission.

One should not omit to mention that the deposits into the individual account for aged status of the worker will also account for the deposits of the employers, who would pay 5% in 1998 and 6.75% in 2002. This implies that the workers' accounts will receive a final deposit of 6% monthly during 1998 (1% of the deposit by the worker and 5% by the employer) and up to 10% in 2002 (3.25% of the worker's deposit and 6.57% of the deposit by the employer).

Also, on this point, one cannot avoid mention of the fact that the total deposit of the employers will be lowered with the new reform. At first, it will rise to a percentage of 7% which will be paid now, until 1998 when 5% will be paid; then, in the year 2002, there will be an increase of 6.75%.

In the case of the worker, additional to the pension discounts for old age or an individual account or commissions, the worker will continue to pay 3% of his or her salary in order to continue receive health benefits. So it is that the total discounts to workers' paychecks will move from 4% to 7.5% in 1998; and then to 9.25% in 2002, supposing that the percentage for health stays constant.

The second set of figures below shows the impact of the new pension system for the case of an employee who receives a minimum salary. In the question of pensions, the current deduction will move from 11.55 to 51.98 colones in 1998 and to 79.19 colones in the year 2002. The total deduction will move from the 46.2 colones currently paid to 86.63 colones for 1998 and 106.84 for the year 2002.

This same set of figures [below] shows that the contributions of employers will show a tendency totally different. From a current contribution of 80.85 colones, the employer will pass to paying 57.75 colones in 1998 and 77.96 colones in 2002. In this way, even in the final adjustment of rates, the employer will end up paying less that he or she pays currently.

Although the total amounts presented in the figures below appear to be only small amounts, it is necessary to take into account that the measure in which the rates are applied to higher salary levels, the increases in the contributions will be greater. A worker with a salary of 5,000 colones, for example, will move from a pension discount of 50 colones to one of 225 colones when he or she affiliates to an AFP which charges a 3.5% commission--that is to say 175 additional colones which will not be applied to the savings account, but will end up in the hands of the AFPs and those of the insurance companies. It is not difficult to conclude that the new pension system will add a major financial surcharge for the worker sector and will reduce the surcharge for the employers. The most questionable of all of this is that the most significant increase will not be the result of a greater contribution to the individual worker accounts, but rather the payment of commissions for the AFPs. This situation becomes more worrisome if we consider that no guarantees exist that the new system will offer greater pensions than the actual ones.

For the moment, an examination of the proposals for deductions show that those who will benefit immediately will be the AFPs, the insurance companies and the employers in general. The first two because they will receive the discounts from the workers' checks, their commissions and insurance contracts, and the last because less will be deducted. The workers, in turn, must provide the additional funds in the form of deductions which the AFPs and the insurance companies will receive.

SOURCE: LAW FOR SAVINGS AND PENSION SYSTEMS

Taken from Mesa Lago, C. and Fabio Durán. Evaluación de la reforma de pensiones en El Salvador: Antecedents, Objetivos y Perspectives. Friederich Ebert Stiftung. San Salvador, 1998. *The column for Health is our addition.

Source: Our projection based on data in first set of figures

[Above]

As mentioned in the previous number of PROCESO (#803), as of April 15 a new system of savings and pensions (SAP) went into effect. In this commentary the intention is to present a brief overview of the sources from which this new system arose and the consequences of it for the consolidation of the democratic process.

In the first place the pension system reform takes place in the context of the modernization of the state and the processes of privatization attendant on modernization and, there, it is part of the broadest of strategies implemented by the two most recent governments in order to reduce the participation of the state in the economy and in order to open new terrain for the accumulation of private capital. In this context the Technical Commission has been created for Social Security Reform in El Salvador. After that there were a series of feasibility studies on social security reform and a bill for the creation of a law was prepared. On December 20, 1996 two decrees were approved: the Law for [the creation of] a Savings and Pension System (SAP) and the Law for [the creation of] the Superintendency of Pensions, passed by a majority of 52 to 84 votes in the Legislative Assembly. After January of 1997 the Superintendency of Pensions began to function and took charge of drawing up all of the regulations which had been presented in the new law and to supervise the activities of the Pension Fund Administrative Agencies (AFPs).

Throughout 1997 the Superintendency of Pensions worked intensely to draw up the necessary regulations and to prepare conditions so that the new system could begin to function. Moreover, several national and international investment agencies began to invest in order to create the new AFPs. With all of this, both the public and private sector have dedicated enormous resources, both human and financial. Nevertheless, it must be pointed out that, at this writing, the provisions of the two new laws in terms of instructions and regulations have not yet finally been drawn up, although those which are indispensable for the beginning implementation of the new system are ready. The database containing the work history of the contributors in INPEP and ISSS--an indispensable requirement for transferring the contributors to the new system--has also not been created as yet. This indicates that a new system was begun not because everything was ready for it to begin, but rather in response to political pressures from the executive branch of government and from the new AFPs, and as a result of threats from the opposition to abrogate the law given that, once the new system begins, would be politically and economically inconvenient for the AFPs and for the contributors as well to make drastic changes in the new law.

The fundamental questions which arise during this process do not have to do with whether the new system will function well or not, or if the pensions amounts will be greater, or if the costs will be higher or lower than in the old system. All of these very legitimate questions deserve a serious and well studied response, but, for the moment, they divert our attention from more relevant matters on the issue of consolidating the democratic transition arising out of the peace accords in 1992. Here we will deal with three questions which we believe are critical for the understanding of what is going on with this reform and what has happened with other reforms already implemented and what could happen with those yet to be implemented. These questions are: (1) What efforts were made in terms of technical studies to determine what kind of reform is most appropriate for the country?; (2) Were these studies promulgated in a transparent manner?; and (3) what was the level of participation in the debate which led to the approval of the new law?

These three questions are interrelated, making it difficult to respond to each one in an individual way. On the first question we can mention that there were three alternatives: (i) to reform the old system which is known, in technical terms, as the System for the Partial Collective Capitalization of reserves; (ii) to create a System for Full and Individual Capitalization (CPI), which is what is currently being done; and (iii)to implement a mixed system where both of the aforementioned coexist. There are, moreover, variations of these systems depending on the specificity of the law. Up to the present time, there is no known study providing a complete cost-benefit analysis of the three systems so that a further evaluation of which of them would be most appropriate for the Salvadoran society and if such a study exists, it has not been officially promulgated. As a result of the publication of a study drawn up by a well-known social security reform expert, Mr. Carmelo Mesa-Lago, and sponsored by the Friedrich Ebert Foundation, we know at least that such a comparative study of the fiscal dimensions in terms of costs for the implementation of a CPI system and the dimensions of reform to the old system.

Nevertheless, the work of Mesa-Lago shows that the calculations made were based on a bill for the creation of a law and not on the basis of the law specifically approved by the Legislative Assembly. The change described in this hypothetical case overestimated the costs of the old system, showing a bias in the decision in favor of the CPI. Moreover, a systematic comparison of the fiscal dimensions in terms of costs of the three alternatives for reform. This calls the decision to adopt the CPI system into question. We really do not know if the cost-benefit study was carried out, and, placing our confidence in all of the work performed by the CT, we can assume that some comparative studies were actually made, but that these were not publically promulgated.

And so this leads us to the second question concerning the transparency and promulgation of the information. Why, a little more than a year after the approval of the law and a few days after the beginning implementation of the new system, is the possibility of reform to the law being contemplated? It is clear that throughout the processes described above little was done to inform the population and the diverse social strata concerning the processes of social security reform. The fact that not all of the instructions and regulations had been drawn up in their final form reflects a situation in which the new system was set in motion not because all was ready, but because there was a rush to satisfy political pressures brought to bear by the executive branch and by the AFPs. Moreover, there are a series of lacunae in the law which do not leave some of the procedures for the appropriate functioning of the system clear. Which leads us to the final point on the participation of the population in the debate over reform. Without information, there can be no constructive debate nor citizen participation and it would be difficult to arrive at an informed consensus. Without the promulgation of the information, there is no transparency and the decisions adopted--although legal decisions--lack the legitimacy of consensus.

Given the possibilities for reform of the new law, that these errors should not be repeated. It is important for information to be accessible, that the alternatives, their availability and feasibility be evaluated technically and that citizen participation be promoted in decision-making. It is now time not only to step on the accelerator and implement more privatizations, but also to accelerate as much as possible the process of democratic participation, for which transparency and promulgation of information are fundamental premises. Representative democracy must be accompanied by participative democracy. It is not only a question of transparency, but also of the creation of a culture of participation to guarantee citizen participation.

In the majority of Latin American countries in which wars have been waged against insurgencies or in which there has been some degree of violent repression against the political opposition, in these situations, after the inauguration of democratic systems, the simple mention of the past--especially when there have been formulations in terms of "requiring that military personnel account for their actions" and "human rights violations"--causes painful sentiments and resentment among the newly democratic, and to a greater degree among those who, in one form or another, were involved with this past.

In countries such as Argentina or Chile, the reason is simple: the stability of the pact which led to democracy by means of general amnesties is given more prominence than the clarification of crimes of the past and the necessity to point out publically those who were responsible. In the case of Chile, the opposition coalition in the government prefers to accept the ignominy of seeing Augusto Pinochet in the Senate rather than provoke the military by opening the possibility of opening a case against Pinochet to try him for crimes against humanity.

The unrelenting struggles waged by Chilean and Argentine organisms seeking to clarify violations of human rights during the dark periods in each of their countries have not been able to do anything in the face of the fear of the political class to mortgage the brilliant future of both democracies for questions which, although extremely serious, form part of the past which appears doomed to be forgotten. Nevertheless, the fears are not totally unfounded. The confinements to barracks and the military processions have sent strong messages: in Chile and Argentina military officials continue to be beyond the civil power to judge them, even though this implies that the shame for past unresolved and unconfessed infamy becomes an essential ingredient of the new democracies.

In Guatemala, on Sunday, April 26, this shameful truth was demonstrated again with the assassination of Monsignor Juan Gerardi Conedera, Auxiliary Bishop of the Diocese of Guatemala. Although investigations have not advanced sufficiently to be able to impute the responsibility for the crime to military officials, everything permits us to suppose that his death is a public notice to all who would investigate crimes committed by the army during the 36 years of the Guatemalan war. The fact that Msgr. Gerardi, only two days before his death, had presented a report in which he holds the military forces as well as paramilitary groups responsible for 80% of the cases of violations of human rights gives strength to such a supposition.

For what it implies and for the moment in which it occurs, the brutal assassination of Monsignor Gerardi places a checkmate on the Guatemalan peace process. As his report GUATEMALA, NEVER AGAIN is based on collective memory, the judicial resolution of his brutal assassination will mark the guideline for what can be hoped for from now on in the treatment of human rights violations in Guatemala. Being pessimistic, it might be expected that in the relationship of democracy to investigation in human rights, the annulment or postponement for an undefined period of time in the second case will become a sine qua non in the establishment of the first. In this case, the clarification of the assassination of Msgr. Gerardi would enjoy the same fate as that of the thousands of victims of the Guatemalan conflict: it would be sealed by impunity and the oblivion of forgetfulness.

The pessimism is merited: the investigations on the cases of violations of human rights--violations in which military officials were implicated--have yielded little or nothing. The few exceptions in those that have been reopened or which have achieved a decision assigning culpability are owing to the fact that in them someone of foreign nationality has been harmed; there has been the added aggravation that the cases have been heard in courts outside the country(in the case of Argentina, in Spanish courts, for example) and they were presented and argued by persons who were not nationals (generally family members of the victims).

El Salvador is not exempt from this logic. It shares the same characteristics as other Latin American nations: a general amnesty which saved many military officials from prison and an extremely long list of assassinations and disappearances, the first possibility would be to reopen the cases of human rights violations since the signing of the Peace Accords born of the efforts of a journalist and the family members of the three U.S. nuns and a lay missionary, assassinated in 1980 by five ex-National Guardsmen.

Nevertheless, the possibility of reopening the case of the assassination of the U.S. citizens in El Salvador as well as the investigations of the death of Monsignor Gerardi in Guatemala present themselves as a valuable opportunity for correcting the logic of forgetfulness and silence which has been overwhelmingly the case in countries which have experienced the phenomenon of political repression. In the case of the nuns, a door was opened in order to review the polemical law of general amnesty; in the case of Monsignor Gerardi, there is the opportunity to set the precedent in the administration of justice in the post-war period, especially with relationship to crimes in which human rights were violated during the conflict.

ARRESTS. The Attorney General of El Salvador, Mr. Manuel Cordova Castellanos, confirmed, on April 24, the arrest of 11 National Civilian Police agents accused of procedural fraud. One of those arrested was the Head of the Financial Office, Mr. Mauricio Arriaza Chicas, who, together with 7 colleagues, are accused of "falsifying and manipulating" the investigations in the case of Nelson Martinez Comandari. The three remaining persons are accused, in addition to the previously mentioned crime, of having altered the proceedings for the clarification of the assassination of the radio announcer, Ms. Lorena Saravia. Those arrested were transferred to the Attorney General's Office to present declarations; they were then taken to the central barracks of the PNC where they will remain in custody. The Attorney General explained that the administrative arrest neither implies culpability, nor that the case would be closed, because "there is a judicial proceeding that the new penal code imposes and which must be respected". The Fifth Penal Court is charged with holding a hearing concerning the crimes with which the accused are charged, and, on the basis of the results of that hearing, the judge will determine whether the evidence of the Attorney General's Office is sufficient to issue a provisional arrest warrant. On April 25 the court charged with hearing the case ordered conditional freedom for three persons accused of fraud in the Saravia case (LA PRENSA GRAFICA, April 25, p. 8 and April 26, p. 3; EL DIARIO DE HOY, April 25, p. 12).

NO PROGRESS. Doctors of the Salvadoran Social Security Institute (ISSS) declared, on April 24, that there exists the possibility that a new national strike would begin in protest for the discounts made from salary checks recently ordered by authorities of that institution. The discounts were imposed on doctors who abandoned their workplaces during the four strikes in the month of March. According to the doctors, a new labor stoppage to apply pressure on authorities of the institute to reimburse the doctors for salary percentages discounted for 10 and 17 work days. The Director of the health institute, Dr. María Julia Castillo, said that the discounts were owing to administrative procedures which, had they not been made, would have caused "remedies and sanctions" by the Fiscal Court of the Republic. In another order of things, negotiations between the government and the doctors are bogged down since last week, owing to doctors' demands for a salary increase of 2,600 colones. The doctors rejected an offer of salary increases in the amount of 1,175 per month for one hour of work each day. The doctors considered the government proposal to be "a union-busting maneuver" (EL DIARIO DE HOY, April 4,

p. 3).

STRIKE. The Medical Workers' Union of the ISSS (SIMETRISSS), called on its members to begin a new strike on April 28 for an indefinite period of time in an effort to apply pressure to break the impasse in negotiations between the union and the ISSS authorities. The strike would affect outpatient services and elective surgeries in the majority of clinics and hospitals of the ISSS. Members of the tripartite commission which represents the Colegio Medico, the ISSS trade unions and doctors affiliated with the National Association of Public Health and Social Service Workers (ANTMSPAS), maintain that negotiations have not advanced in spite of the fact that 50 days have passed since the presentation to President Calderón Sol of their platform of demands. The doctors question the lack of capacity for resolution of the conflict demonstrated by the High Level Commission to negotiate demands and have asked the president, on April 21, to remove the members which make it up. They have not received a response to date. Moreover, the leaders of the Colegio Médico criticized, on April 23, the salary increase approved by the Legislative Assembly for medical specialists and generalists, equivalent to 1250 and 1000 colones, respectively, per hour per month, because they consider it to be a government maneuver (EL DIARIO DE HOY, April 28, p. 8).

MANAGING EDITOR. The ex-Minister of Education, Ms. Cecilia Gallardo de Cano, assumed the position of managing editor of

LA PRENSA GRAFICA on April 27, motivated by what the newspaper has called "a journalistic project in progress". Ms. Gallardo assured listeners that her choice was based on the fact that this newspaper has "a vision of the country". LA PRENSA GRAFICA lost, on April 16, its editor-chief, and the head and two assistant heads of information when they tried, without success, to reaffirm the journalistic independence of the paper and begin a project to recover its "leadership" in the publication of information (LA PRENSA GRAFICA, April 28, p. 4).

REDUCTION. The President of the Treasury Commission of the Legislative Assembly, Mr. Julio Gamero, announced, on April 28, the beginning of a debate to reduce the commission to be received by the Administrators of Pension Funds (AFPs) from 3.5% to 2%. The debate, in which representatives of the AFPs will participate, as well as the Superintendence of Pensions and other sectors involved, arose in response to the proposal that factions of the PDC and PCN presented in order to bring about the reduction of the commission. Mr. Gamero declared that he was pleased that the proposal demonstrated that it is possible to balance positions and in this way "avoid harming the worker, the AFP's and the system itself" (LA PRENSA GRAFICA, April 29, p. 6).