PROCESO, 809
June 3, 1998
Editorial
Four years of the Armando Calderón Sol Government
Economy
The economic aspects of the president's speech
Society
San Salvador-La Habana: a frustrated relationship
EDITORIAL
Four years ago, a new presidential administration assumed control of the government: Mr. Armando Calderón Sol, of the ARENA party, replaced Mr. Alfredo Cristiani, of the same party, during whose mandate the peace accords which ended twelve years of civil war were signed. One of the principal challenges to the second ARENA administration was that of assuring compliance with the provisions of the peace accords, various points of which were still pending as Mr. Cristiani left the executive office. Examining matters in perspective, during the four years recently ended, one notes that President Calderón Sol cannot be described as a clear and fervent defender of the peace accords as a whole or in their several aspects, although compliance with the provisions of the accords was and is the responsibility of his government. His government, moreover, on some of the pending points, not only evaded its responsibilities but blatantly offered frank resistance to institutions such as the Ombudsman for the Defense of Human Rights, electoral reforms, cleaning up the situation of the judges, reinsertion of ex-combatant programs as well as the transference of land to ex-combatants...
In spite of evidence easily compiled which would demonstrate the contrary, President Calderón Sol affirmed, in the message he presented before the Legislative Assembly on the occasion of his completion of four years in office, that one of the successes of his administration has been compliance with the provisions of the peace accords. On this, the only thing that can be said is that, for good or ill, the peace accords were complied with in their basic dimensions not because of any effort put forth by the ARENA government, but rather in spite of resistance offered by that government. Obviously there are matters pending, such as: electoral reforms, the delay in which the second ARENA administration imposed its vision and interests, although this placed limits on the achievements in the matter of compliance with the provisions of the peace accords. On the question of the Ombudsman for the Defense of Human Rights, it was the executive office which blocked its work an infinite number of times and is, at present, causing the delay in the election of the Ombudsman for Human Rights. Meanwhile the government shows not the slightest interest in guaranteeing the normal functioning of that institution.
It has become commonplace to mention the educational reform as an illustration of the goodness of the Calderón Sol government. Up until now, except for governmental self-praise, no serious and objective report has been drawn up to demonstrate the government's overwhelming successes on the educational question, though government authorities have made quite a lot of noise about presumed successes. At any rate, at a glance--although a superficial one--an examination of the situation of education in this country cannot help but reveal the situation of chaos in which university education finds itself--a point which was left unresolved by the former Minister of Education--as well as the deficient academic preparation with which students arrive to begin university studies when they graduate from secondary level institutions, even when those institutions have used the new study plans sponsored by the Ministry of Education (MINED).
On the question of education, much remains to be done. To have begun an educational reform is doubtless very important. But to present the reform as a goal which has been fully achieved can only be described as a vulgar piece of political manipulation. For all the rest, it is understood that the government publishes its successes in the matter of education ad nauseum while in other areas of national reality its achievements have been enormously disastrous. This is the case, for example, with its policies for the reactivation of agriculture, in which case policies have been inconsistent and feeble in the extreme. Deterioration in the area of agriculture has reached critical levels without the government having read the signs of alarm and without its having designed or implemented measures necessary for the recuperation of that sector.
During the four years of its mandate, the Armando Calderón Sol administration has not assumed clear leadership in providing direction for the country . On the question of policy, it was dragged down by a pattern of events--arising from the peace accords--faced with which it was left no recourse but to surrender, at least on those aspects which it was impossible to obstruct. In the area of economics--a weak point in the peace accords--it blocked the transference of lands to the demobilized ex-combatants as best it could, fomented the total failure of the Forum for Economic and Social Consensus-building, abandoned the agricultural and livestock sector and tolerated the taking over of the economy by the financial sector. On the question of social matters, except for the gains in education, the situation of the majority of Salvadorans is highly deteriorated as a result of the privatization of public services, another activity sponsored by the current government administration.
We are dealing here with an administration highly susceptible to influence by economic power pressure groups, among which control by finance sectors and the bank has been most noticeable. Whence the continuous ups and downs of the Calderón Sol government throughout the four years of its term of office; whence, also, the absence of a consistent government program which would allow the clear articulation of economic policies which during the previous four years, were implemented, eliminated and implemented again in a dubious process of trial and error. The result of this was a weak government with no demonstrable capacity for leadership and direction, soft on power groups which were always able to lead it by the nose. The Calderón Sol government did not know, nor did it interest itself in learning during its four year in offices, how to distance itself from powerful sectors; it was unable to demonstrate to these sectors in such a way as to make them understand that the government was (or should propose to be) at the service of the majority of Salvadorans and not a government at the service of private goods and interests.
In the last four years Mr. Armando Calderón Sol has been a President, but not a statesman. With only a year to go in office, he will change this fact only with great difficulty. The best advice in this situation might be to leave things as they are, because otherwise the ills of the country could become aggravated or new ills could arise which would make for even more difficult conditions for a new, incoming president of the republic. The ARENA candidate for the presidency has already said it: the legacy to be bequeathed by Mr. Calderón Sol after four years in office, is not as moderate and calm as one would have wished. If, during the year he has left in office, he does nothing to augment the enormity of existing problems he will leave for the new government to deal with, we may well be satisfied
ECONOMY
One does not have to delve deeply before encountering multiple inconsistencies in the state of the nation address to the Legislative Assembly delivered by the President of the Republic on the occasion of his completion of four years in office. On economic matters, the government's performance is especially weak even given the much publicized macroeconomic stability said to have been achieved during recent years.
But not even macroeconomic stability can be said to be an achievement of the current administration, depending, as this much touted macroeconomic equilibrium does, on family remittances sent into the country by emigrant workers. In large measure, the government's economic policy has limited itself to administering the stability and continuity of these remittances without seeking to diversity through other possible ways of stimulating productive activity. Proof positive of this is the reduction in productive volume of the country's principal agricultural products and the stagnation of its industrial production.
The content of the president's speech on this aspect is questionable even when considered in its general outlines. For example, Mr. Calderón Sol states that "one of the most relevant successes obtained during our administration is having complied with the peace accords". This declaration appears to ignore the fact that the peace accords (on social and economic matters) involved measures which have not been complied with, such as, for example: technical and credit assistance for the agricultural and livestock sector and for small enterprise, the Forum for Economic and Social Consensus-building (as rapidly dissolved as it was inaugurated) and measures to alleviate the social costs of structural adjustment.
In the area of economics, Calderón Sol's speech attributed important successes to its government during the last four years, such as: an increase in social investment, encouragement of competition (with a reduction in and refund of taxes), an increase in exports and a reduction of the country's dependency on remittances, a reduction in the public debt and a lowering of the inflationary rate.
Almost all of these successes —which Calderón Sol attributes to his administration— are questionable: some, because they are false, others because they are out of context and others because they are a result of dynamics having nothing to do with economic policy. Proof of the foregoing will be examined in what follows below as we examine and compare the economic successes which Mr. Calderón Sol attributes to himself with available statistical evidence.
According to the president, improvements in the social ambience can be seen in that "we increased investment in social areas by thirty-five to forty-four per cent of total investment". Nevertheless, as one examines the general budget in the areas of social concerns (which include investment and costs of functioning as well), what becomes clear is that the line items for social investment represent a much reduced percentage of the General National Budget. It is sufficient to point out that between the years 1994 and 1998, social spending in education, health, work, social welfare and housing went from 23.9% of the General National Budget to 25.1%, a much more modest increase than that presented in the president's speech.
On the other hand, according to the president, two elements have contributed to the competitive abilities of the private sector. First of all, that "we lowered production costs of productive sectors by three thousand one hundred and forty million colones for the reduction in customs duties and tariffs", and, secondly, that "we transferred two thousand one hundred and seventy-four million colones in tax refunds as an incentive to increase exports and their competitive ability". This assertion is especially dubious, first of all, because the lifting of customs duties and tariffs, while reducing costs, has, in addition, opened national markets to products which can and are substituting for nationally-produced products. On the other hand, there is other evidence which one cannot ignore: during the last four years approximately 4,314 million colones in tax income has not been received; this represents an average of 1,079 million colones annually, which is equivalent to approximately 10% of tax income for 1997. This, then, is especially questionable in a context where a tax reform has been implemented which, far from aiming to reduce tax revenues, aims at increasing them.
As for the increase in investment noted by the president when he mentions an "annual public and private investment increase from ten thousand seven hundred and thirty-seven million [colones] to fifteen thousand five hundred and fifty-seven million colones". Although this may be a true figure, before investment behavior can be authentically evaluated, it is important to review its participation in economic growth. According to data provided by the Central Reserve Bank (BCR), 1993 investment was only barely 13.3% of overall demand, while in 1996, it diminished even more, coming to represent only 11.8%. This implies that, in spite of increases, it has lost importance as a portion of the Gross National Product. Overall demand grows only as a result of strong growth in consumption and the exportation of products from the maquila (or, runaway shops).
Again, no one can deny the role of remittances in the growth of consumption, service activities, stabilization of the external sector, maintenance of exchange rates and inflation control. Nevertheless, President Calderón Sol maintains that "we have changed from exports as the motor force of the country's economy, reducing dependency on family remittances". Nothing could be further from the truth because, although exports have indeed increased, they have not succeeded in compensating for the deficit in the balance of trade which, for 1997 was 1,275 million dollars; this amount was compensated for only by a total in family remittances of 1,221.6 million dollars and 220 million dollars in government loans and donations.
The situation is seen to be even more serious if we consider that maquila exports of clothing are El Salvador's most dynamic export--but not traditional and non-traditional exports. The first activity, carried out in free-trade zones with foreign capital, generated, in 1997, 1,030 million dollars in exports--an equivalent of 44% of all total exports. This is to say that as these investments are moving, exports plummet suddenly and the total balance of trade rose to 2,305 million dollars which could not be compensated for even by the affluence of remittances and other capital.
On the question of inflationary rates, it must be conceded that there has been an important lowering of the rate of inflation, which, according to Mr. Calderón Sol, went from 12.1% in 1993 to 1.9% in 1997. One should not forget, however, that this success would not have been possible without the stabilization in the exchange rates which, in turn, responds to the flow of family remittances.
All in all, President Calderón Sol cannot be said to have complied even with the objectives posed in his own Social Development Plan and in his Plan for the Development of Agriculture and Livestock, both of which have remained in the dead letter file, not even worthy of mention in the evaluation of the presidential administration's accomplishments. One does not have be to a pessimist or a detractor of the current government to take note of the fact that the economic content of the presidential speech is not true to fact and contradicts even official statistics.
SOCIETY
On previous occasions we have already commented upon the ease with which the activities of Mayor Hector Silva have been read in political terms, and upon the consequences which this carries with it not only for the Silva administration but also for the city of San Salvador and for those who live in it. It is certainly useful to ARENA that Mr. Silva's most important projects be boycotted; but it is not useful for the country because such a boycott mortgages the development of the country's biggest and most populous city.
In this line of thinking, the fact that, in spite of some missteps, Mr. Silva has obtained (according to the most recent poll conducted by IUDOP) marks superior to those given to the executive and legislative branches (6.8, 5 and 4.8, respectively); but this may not have cooled the animus directed against the municipality over which he presides. One indication of this is that, although it can be perceived as bordering on the insane and irrational, this has lead to a confrontation between the municipality of San Salvador and some of the official party functionaries.
On May 13, 1998, the press department of the municipality of San Salvador announced that the Municipal Council had decided to sign an agreement with the City of Havana, "in the context of sister-city projects with other Latin American capitals, [as well as in the context] of growing commercial and cultural interchanges which El Salvador is enjoying with the Cuban capital city". According to the press communiqué, the agreement would seek to establish a relationship of cooperation between both cities in aspects such as health, science, sports, business and conservation of cultural goods.
The polemic caused by this new project of Mr. Silva's municipal team began on June 2, or, 19 days after the Minister of the Interior Mario Acosta Oertel made heated declarations to communications media to the effect that he would not allow the Mayor of Havana, Mr. Conrado Martínez, to enter the country as planned, on June 22, for the signing of the sister-city agreement. "I say to them that from the point of view of immigration, no Cuban will enter the country. He may get to the border, but he will not enter", declared the functionary who added, moreover, that it was an "abusive act on the part of the San Salvador Municipality and its Municipal Council to want to establish sister-city relationships with a country [i.e., Cuba] with which we have no diplomatic relationships".
One day later, the Foreign Relations Ministry of El Salvador, denied, in an official communiqué, the ratification of the agreement, arguing that this proposal constitutes "a serious infringement upon the powers of the President of the Republic", because, in the last analysis, the orientations guiding El Salvador in its relationships with other countries are the prerogative only of the president, and this by constitutional mandate.
As can be seen, the justifications brandished about by government functionaries with the object of opposing the municipal project are, fundamentally two: (a) the nonexistence of diplomatic relations with Cuba impedes the establishment of a relationship of cooperation; and (b) the reinitiation of relationships with Cuba is the province of the President of the Republic alone, and to date he has not established such relationships.
Governmental representation of El Salvador in the exterior has certainly made use of every occasion and every means to make clear its enmity with the Cuban government. Even faced with the risk of isolating itself, together with the United States, in international forums and conventions, the Salvadoran government has supported every motion and every sanction proposed against the island. There is nothing more to say on this point.
Nevertheless, parallel to this inflexible posture and in what may be considered a surreptitious way of doing things, the Salvadoran government maintains and supports certain kinds of relationships with Cuba. An indication of this is the tie between the National Institute for Sports (INDES) and Cuba Sports. It is naive to think that this is a simple, unofficial relation having only to do with sports, especially when one takes note of some of the events surrounding it. In the first place, according to high-level sources aligned with the Salvadoran sports institute, INDES, by means of the Olympic Committee, contracts Cuban sports trainers who work in El Salvador. These contracts are not entered into on an individual personal level, but by means of Cuba Sports, a Cuban state institution. Additionally, the money with which the salaries of the trainers are paid comes from the budget assigned to INDES by the Treasury Ministry. Finally, it is well known to all that a good part of these salaries (more than 50%) is paid to the Cuban government as one of the ways that the Cuban government has of obtaining income by offering professional services to other countries.
So it is, then, that the Salvadoran government, at least indirectly, not only engages in a relationship with Cuban state institutions, but, moreover, is providing economic resources to a regime which it publicly criticizes and attacks. On the other hand, neither is it the case that relationships with Cuba are the monopoly of Mr. Calderón Sol. The Treaty of Cooperation with the Center for the Promotion of Cuban Exports, signed by a group of Salvadoran businessmen in August of 1995 ,is only one more example.
What is it, then, that occasions such strong opposition to Mr. Silva's municipal project? It would not be irrelevant to mention that the problem began with Mr. Acosta Oertel, who has made of the Ministry of the Interior a stronghold for the defense of conservative and xenophobic ideas. Mr. Acosta Oertel did not explain his opposition to the project by mentioning his concern for some threat--were it the case that there had been one--that the signing of the agreement might have caused; the Minister of the Interior expressed only an ideological concern which extended to the nationality of the visitors. According to what follows in his declarations, the criteria which the Minister used for deciding who may enter the country and who may not does not extend beyond his own personal political sympathies to include the good of the country. An example illustrative of Mr. Acosta Oertel's hard-line policies concerning foreigners is the long period which those unfortunate persons apprehended residing illegally in the country had to spend in prison in sub-human conditions, in most cases, as they awaited deportation.
It would, nevertheless, be an error to hold only the Minister of the Interior responsible for this problematic. One cannot ignore the fact that it is the ARENA party as a whole which is in open opposition to each and every one of Mr. Silva's projects. It is difficult for the government to give its support so that others--especially a left-wing municipality--might take advantage of Cuban human resources which, given experience, are known to be valuable and fruitful. The government is surely aware that, by means of such an agreement Mr. Silva is brokering these benefits by placing at the disposal of businessmen, doctors and sports enthusiasts a fund of knowledge and experience that one can surely not turn one's nose up at, but which has, nevertheless, been outlawed for ideological reasons which today must be considered obsolete.
The government could possibly succeed in keeping the mayor of Havana from entering the country and then require the agreement to be signed in Cuba by obstructing the entrance into the country of the Cuban advisors. But the same reasons which animate the intention to boycott the sister-city project between San Salvador with Havana cannot be levied against similar agreements with other cities in the world--Barcelona, for example. In this sense, the initial and ostensible failure of Mr. Silva at the hands of his opponents will not last long.
NEWS BRIEFS
INCREASES. The Director of the Salvadoran Institute for Social Security (ISSS), Dr. Maria Julia Castillo, declared that employees affiliated with this institution are paying an increase in their deductions of three more points; this is to say, an increase of 4.5 to 7.5 per cent, as a result of the new Private Pension System. By way of clarification, she indicated that this increase has nothing to do with the resources needed for financing the salary increase promised to the doctors [under agreements reached during negotiations to end their recent strike [Translator's Note]]. According to Dr. Castillo's explanation, the money for the Social Security doctors' salary payments amounts to 70 million colones, which will be obtained by means of an economic policy dealing with both salaries and a paralysis, or standstill, in [the implementation of] infrastructure projects. The salary increases for the public doctors will be covered by means of exacting a reduction in the budget of 18 governmental dependencies, in addition to 16 million colones to be derived from the privatization of the electrical energy distributors. The budgetary reductions amount to 126 million colones, by means of which a total of 196 million colones is obtained, and these are the funds to be invested in the doctors' salaries. With regard to the increase in the deductions for ISSS, Dr. Castillo said that these carried with them the advantage of covering medical disability for public employees, a benefit not previously stipulated. She added that the administrative and financial measures which Social Security is adopting will not affect users of the Social Security system (LA PRENSA GRAFICA, June 2, p. 8).
CRITICISMS. The President of the Republic, Mr. Armando Calderón Sol stated, on May 1, in his fourth annual report on the state of his administration, that his government had achieved "substantial successes", among which he cited the payment of 21,500 million colones for the peace accords, the start-up of the new educational reform and the increase in non-traditional exports. ARENA deputies supported their president's declarations and indicated that the executive chief "had done a good job". Ms. Gloria Salguero Gross, ARENA deputy, said that progress can be observed in the areas of the economy, health and education. For their part, the PDC deputies evaluated the president's speech in the following terms: "very sincere", given than he took note not only of successes but also of problems. FMLN deputies, however, qualified the presidential report as "not very sincere". FMLN head of faction, Mr. Shafik Handal, argued that the president avoided addressing sensitive topics such as unemployment, the expansion of poverty, increases in water and light bills....all of which are evidence of the failure of his administration". In the same way, deputies of the National Conciliation Party (PCN) and the Democratic Convergence concurred on the fact that the report made no sense and did not deal with the country's real problems. They added, moreover, that it was of a propagandistic nature, for which reason they classified it as being of "poor" quality and overly "politicized" (EL DIARIO DE HOY, June 2, p. 3).
CANDIDATES. Authorities of the Farabundo Marti National Liberation Front (FMLN) promoted a presidential formula which includes the former Ombudsman for Human Rights, Dr. Victoria Marina de Avilés, together with the advisor for the abrogation of the agrarian debt, Dr. Salvador Arias, in the course of a consultation carried out in the Department of La Libertad on May 31. Dr. Arias, who publicly became affiliated with the FMLN last week, expressed the opinion that the party's priorities are the formation of alliances with the society. "We are opting for a process of change through alliances with social sectors", he declared. Moreover, he declared himself to be in favor of the positions defended by the FMLN head of the legislative faction, Mr. Shafik Handal, and by the former coordinator of that left party, Mr. Salvador Sanchez Ceren, in the sense of avoiding any rapprochement with center or right-wing political sectors. "An alliance with economic sectors [arising from] fear or [for] thinking that they have the power would be [to commit] treason against the people", argued the candidate. This declaration contrasts with the position of the FMLN Coordinator, Mr. Facundo Guardado, who has contemplated the possibility of entering into negotiations of this kind with other parties. For his part, Mr. Handal declared himself to be satisfied with the aforementioned candidacies given the fact that in some of his earlier statements he indicated that his reasons were that the proposal for the candidates arose from and was presented by farmworkers (LA PRENSA GRAFICA, June l, p. 4).
REIMBURSEMENT. Some 50 thousand electrical energy service users presented problems of unjustified increases on their bills, some of which indicated an increase of between 50% and 450%, according to declarations presented on May 27 by the head of the General Superintendency of Electricity and Telecommunications (SIGET), Mr. Eric Casamiquela. The information was made public after audits were practiced on the procedures used by electrical energy distributors in which documentation relating to the increase in electrical energy rates was reviewed. Likewise, public declarations have been made to the effect that four agreements, or requirements, would go into effect, under the provisions of which a period of 15 days is to be allowed for the electricity distributors to correct the errors detected in the audits, and 30 days more to effectuate the reimbursements to users of the amounts incorrectly charged and unduly paid; the reimbursements will include interest accrued. During the process of the audits, general controls used by the distributors in the area of computer systems records were also reviewed and one of the findings was that a risk exists that rate charges could be applied by personnel not authorized to do so, with the consequent possibility for manipulation and loss of data. Legislative deputies Messers. Roberto Lorenzana, Oscar Ortiz and Ms. Ileana Rogel insisted on the need to charge the distributors fines at the same time as requiring them to implement mechanisms for guaranteeing oversight of the issuance of reimbursements to users to be paid by the distributors (LA PRENSA GRAFICA, May 28, p. 6).
OMBUDSMAN FOR HUMAN RIGHTS. On May 28, the Office of the Ombudsman for the Defense of Human Rights (PDDH) was left without leadership owing to the fact that Mr. Eduardo Urquilla, associate ombudsman, was obliged to leave the post that very day. This last was a provision of the reformation of Article 15 of the Organic Law of the PDDH, which prohibits the associate ombudsman to assume the post in the absence of an ombudsman. Given this, on June 1, Mr. Urquilla made a statement informing the public that he would appeal the constitutionality of the measure and request a restraining order from the Supreme Court in order to prevent his being removed from office. The ARENA, PDC and PCN parties accused the FMLN and the USC of delaying the process of the election of a new ombudsman, while the FMLN and the USC declared that they would not accept unsuitable candidates or candidates with marked political tendencies, adding that it is necessary to expand the list of proposed candidates so that those who enjoy the support of all political factions might form a pool of candidates from which the new ombudsman might be selected. Mr. Ronal Umaña, General Secretary of the PDC, likewise held the left parties responsible for encouraging the absence of leadership for the PDDH. Moreover, informed sources declared that, in order to prevent delays in the payment of salaries to the employees of the Ombudsman's Office, an administrator, with an authorized signature, ought to be named. The deputies agreed to convoke a new meeting on June l for the purpose of continuing the debate (LA PRENSA GRAFICA, May 29, p. 8 and June 2, p. 6).
RESIGNATION. On May 29, Mr. Rafael Herman Contreras, President of the Controllers' Office, declared that he would resign from his post. This after the National Conciliation Party (PCN) decided to propose him as a candidate for presidency in the 1999 elections. "My resignation from the post as President of the Controller's Office is a fact; I am one of the pre-candidates of the PCN", Mr. Contreras declared. The Constitution of the Republic does not stipulate a specific period of time for the presentation of resignations from the Controllers' Office and so a resignation can be effectuated at any time (LA PRENSA GRAFICA, May 30, p. 6).
SWEARING IN CEREMONIES. On May 29 the following officials were sworn in as they entered office: President of the Autonomous Executive Commission of the Port Authorities (CEPA), Mr. Miguel Angel Salavarría; the Executive Director of the Social Inversion Fund (FIS), Mr. Benjamin Trabanino; the President of the Central Reserve Bank, Mr. Gino Bettaglio Rivas; and the President of the Social Housing Fund, Mr. Edgar Mendoza Jerez. The latter's term in office, as opposed to all of the other newly sworn-in officials, was ratified for an additional period of three years. These ceremonies took place only a short time after the directors of the aforementioned institutions left their posts. The new functionaries will work with the Presidency of the Republic during the last year of his administration (LA PRENSA GRAFICA, May 30, p. 5).
