One hundred days later

Flores: another Calderón Sol?

The social housing fund (FSV) and the housing crisis

To arms....

News Briefs

ONE HUNDRED DAYS LATER

Some call him the absent president, others the invisible president and there are those who, making of him a parody of the philosopher king of Plato, call him the "philosopher" president, but not because he has the gift of wisdom to govern, but because he appears to want to direct public affairs by stringing together ready-made phrases accompanied by good manners —which are always a sign of good education, the advantage being that he is able to win people over.

It is not only that the new president has delegated to his employees the relationship with the media and with society, but also that he does not seem to be really aware of what is happening in the country and when dealing with real problems, he does so in the abstract. The Sunday sermon which, for some weeks, he has begun to present to the nation suffers from the same lack of content and leadership. In these proclamations from the presidential palace, Flores makes no reference to problems affecting the majority of the Salvadorans and those to which he does refer are referred to in such a way that they are incomprehensible and even boring for the average citizen. President Flores not only has problems with communication, but also with national reality.

The absence of the President of the Republic from the national situation in a strongly presidentialist administration such as is the Salvadoran case, and in a society in which the transition is only half-fulfilled and still lacking in a clear and fixed direction can be dangerous for its social and political stability. When he took office as president, Flores had much to offer. On the other hand, there was a lot of discontent for the bad government of his predecessor, for the traditional ARENA politics and for the generalized situation of poverty and insecurity; but, on the other hand and in order to counteract these reality, his youth, good manners and direct contact with the population were in his favor as well as his distancing of himself from the traditional politics of ARENA and big business together with his promise to provide technical services to the most needy among the population. All of this created some expectations that have not been satisfied during the first three months and it is doubtful that they will be in the upcoming months.

The first disillusionment was that of the presidential cabinet which is not living up to the expectations created by the President himself and his allies. The mix of ministers and high functionaries from traditional ARENA circles with young people lacking experience was not the most ideal mix to project the new image which Flores undoubtedly wished to project. The results speak for themselves: the cost of living has become more expensive; broader and stronger malaise among employees of the public sector; lack of propane gas; an arms law which, instead of restricting and controlling, actually encourages the free use and circulation of almost every kind of armament and generalized corruption (a multi-millionaire loan to provide liquidity to the two biggest banks in the country, misuse of 10 million colones, a burdensome contract with Nejapa Power, tolerance with regard to abuses and arbitrary actions of the businesses which provide public services, bridges and highways which cost disproportionally more than planned because testing of the land was not performed, a millionaire radar system, the true use of which is very doubtful, a recently-constructed bridge pulled down by the rains, etc.) It is true that the Calderón Sol administration is responsible for these phenomena, but the Flores administration has to deal with them; in spite of the fact that both belong to the same party. High government officials have not been able to deal with this either for lack of experience or for lack of freedom to do so.

The social program of the new government which is the most important part of the alliances which Flores promised during his electoral campaign and which could constitute something authentically new, is stuck in a growing fiscal deficit —in part inherited from the previous government, but not unknown by the new one—, by lack of administrative ability and inexperience. The paralysis of social reforms is not a problem of a lack of willingness, but of structural limitations. The macroeconomic balance which is so touted by theoreticians of the neo-liberal model, has begun to disappear, swallowed up by a decrease in economic growth and an increase in unemployment, by a very low inflation rate and by a greater and greater deficiency in demand, by a recession in the offer and growth of bank delinquency in payment, by a fall in the prices of traditional exports and a consequent deficit in the balance of payments. The economic austerity announced by Flores as the grand measure for counteracting the negative effects of those lack of balances is synonymous with more poverty and exclusion.

Given this panorama, the Flores Administration is limited to declaring that the national economy is going in a very clear direction and indicating help for bankrupt businesses, fiscal accounts and the serious problems which traditional business associates in the country are suffering; in a word, pronouncements made without implementation. The impression left by these last three months is that this administration has no clarity with regard to the direction and future of the Salvadoran economy, and if it does not soon succeed in articulating a coherent plan the country can expect is the up and down movement of the measures taken by and characteristic of the previous government together with its burden of waste and lack of productivity. Meanwhile, the needs of the broad population are not attended to for lack of resources.

The most optimistic believe that Flores inaugurated a new way of doing politics and, with it, laid the foundations of the political renewal of the right-wing. Doubtless, it had possibilities and could count on some advantages in order to effectuate this, but in a little less than three months, Flores has not been able to set up the government he offered. His capacity and credibility is found to be seriously questioned. The progressive wasting away due to his permanent absence from national reality has distanced him more and more from compliance with the goals which he himself proposed. El Salvador needs presidential leadership which is familiar with the serious macroeconomic problems but which also adheres to and is sensible to the enormous problems of the majority. The nation expects his president to explain these problems with clarity, offering viable solutions as well as solutions of short, medium and long-range which open up horizons based on verifiable realities.

FLORES: ANOTHER CALDERÓN SOL?

On September l, Francisco Flores will have been president for three months. As things go, this should be sufficient time to form an idea of the kind of president that the country might expect for the next five years. According to the image sold to the electorate, it is to be supposed that Flores would be, if not the best friend of the dispossessed, at least a dynamic and efficient man whose professionalism would become evident from the moment he took office. However, the only thing which has been perceived up to this point is a president who is more concerned with exploiting his poetic-philosophical bent than in governing.

Flores’ passivity is astonishing. While workers attempt to make their needs felt in demands for salary increases and energetically reject the economic measures the president attempts to implement, nothing more occurs to Flores than to "call for reason and dialogue", with which he demonstrates ever more clearly the inability of his administration to respond to the wave of demands which, even though they may be questionable in certain aspects, clearly manifest the lack of agreement between the people and a government which continues to ignore the problems of the majority.

In relation to the case of the ex–Civil Patrol Agents, Flores, with folded arms, argues total ignorance of the misuse of funds to APROAS and denies having anything to do with the matter. Once again his incompetence and lack of interest in taking control of the direction of the country is evidenced in the fact that he decides to travel outside the country the very day in which the ex–Civil Patrol Agents hold another public demonstration, not before threatening to go to war in case they are not listened to. It appears that the president prefers to ignore —as a way of denying reality— the gravity of the situation. As if his call to reason and his "rejection of violence" were all that he is required to do in order to solve the problem with the ex–Civil Patrol Agents once and for all and present explanations to the citizenry about the misuse of funds which presumably helped him come to power.

Of the famous "alliances", only two have come to light publicly and more have been late in becoming known than in exhibiting their weaknesses. First was the public security plan. An ambitious but hardly realistic model with regard to budgetary concerns which is still stuck on the focus of reacting to the anti-crime struggle. But it is, moreover, the case, that certain of Flores’ behavior patterns flagrantly contradict his supposed interest in fighting crime. Specifically, the economic model he plans to implement —the second "alliance" to be made public— and the nefarious Arms Law which he supported without thinking twice.

It is already well known that to speak of fighting crime without recognizing the need to combat poverty is hollow rhetoric. So then, neither in the public security model nor —and this is even more worrisome—, in the economic model as palpable results to be seen after the next five years, El Salvador will be less poor and more secure than it is now. On the contrary. Privatization, which has been one of the big banners on matters of economic policy for the ARENA administrations, has not yielded the expected results. Far from this being the case, basic services have been more expensive and their quality has decreased considerably. Things threaten to get worse if Flores decides to implement the idea of applying IVA to the basic food basket and to medicine. It is, moreover, evident that nothing that this government is doing on the economic plane gives leave to think that there will be a considerable increase in the unemployment rate (another of Flores’ promises).Will this be the way to fight crime in a radical way?

On the other hand, the Legislative Assembly authorized the arming of civil society —a misconception for which Flores simply argued that "the perfect is the enemy of the good". It is, today, still a mystery that the president could consider "good" that Salvadorans, with the deeply rooted violence which characterizes them, could legally carry instruments of death. Examples of our daily violence are numerous: a man killed his neighbor because his car broke down as he was parking it and in the process ruined his garden; a professor killed his wife and then committed suicide, in front of their son; a bus driver killed another for having blocked his passage.... Could it be a good thing to facilitate arms for a population in a country in which life is not respected and where violence is usually the first resource for solving conflicts?

The fact that the president has surrounded himself with "technicians" to help the government has also not presupposed any considerable change. The greater number of ministers will perhaps be competent, but it is obvious that they are not qualified to administer a society so needy and conflictive as this one is. And if this is not enough, those who really hold the high-level power to make decisions are the same traditional and ultra-conservative figures. Mario Acosta Oertel is the most palpable proof of this. Moreover, the presence of Mauricio Sandoval in the National Civilian Police does nothing to improve the image of that "new way of doing politics" which Flores announced ad nauseum before taking office.

Neither is it clear that Flores and his cabinet know where they are leading the country. In spite of the efforts at formulating a National Plan and the widely published presidential government plan, El Salvador is groping its way along, awaiting the daily news and a response to the current state of affairs. Let us recall how many marvelous things the past government said of the National Plan, how many times it insisted upon the importance which that document could have assumed for any political group which held executive power. Now, Flores does not even take it into account. And, even worse, his notorious lack of leadership has to do, in great measure, with the lack of a medium and long-range project which directs the country in one single direction.

As things go, the personality which would seem to have a qualitative difference with respect to his predecessors is nothing more than one more classical ARENA party member. What is different about Flores is his strategy. Certainly, it is more comfortable to be quiet and avoid sleight of hand when taking charge of some of the problems which seem not to touch him, in spite of the fact that they are the very same poverty and violence which he considered to be "his true enemies" during the electoral campaign. How indulgent these "enemies" have found the president to be!

Definitively speaking, an evaluation of the first three months of government cannot but cause pessimism. Ill did those who believed that Flores would do better —even a little—than Calderón Sol did during his administration. "Paquito" is, let us say, a new version of the ex–president. The lack of planning, corruption, the absence of leadership, the lack of capacity to deal with poverty and violence, are, up to this point, the characteristic notes of this government. Many measures already implemented, such as the Arms Law, the naming of certain functionaries and the model of public security, will doubtless determine the route to be followed. And this is the most serious of all: the future of the country depends on a brusque change of direction to which no one in this administration shows signs of being committed. Given such a panorama and such a president, will not the virtues of presidentialism be undermined in order to advance in the process of the democratization of the country?

THE SOCIAL HOUSING FUND (FSV) AND THE HOUSING CRISIS

With the introduction of the System of Pension Savings the deductions from the workers’ checks for disability, old age and death for the Salvadoran Institute of Social Security (ISSS) were eliminated and the deductions for the Pension Funds Administrators (AFPs) were created. On that occasion, as well, deductions from workers’ checks were also eliminated for the Social Fund for Housing (FSV) as a way of alleviating the heavy increase in the deductions for disabilities, old age and death which the creation of the AFPs implied.

The FSV has been in charge of the financing for minimum housing for the working sector under conditions of easy credits; that is to say, with interest rates of the lowest on the market and better payment plans, on which workers and employers could count. With the elimination of the latter, the FSV experienced a reduction in its income, which, in principle, aimed to be compensated for with the authorization of the emission of bonds which could be bought and sold on the stock market and which could be acquired by the Pension Fund Administrator, but which would not exceed 30% of the total investments. This seems to be a schema which is not sufficient for the financial needs of popular housing.

In this context, last August 25, FSV, The Salvadoran Chamber of Commerce for Construction (CASALCO) and the Salvadoran Banking Association (ABANSA) formalized an agreement b y which ABANSA would extend 2,500 million colones so that FSV could finance the acquisition of 30,000 homes for the popular sector. The funds for this financing will be implemented by the emission of bonds which the FSV will sell on the stock market to ten banks of the banking system. This will be a benefit for the businesses engaged in the construction of minimum housing, which has high inventories together with a reduction in sources of financing for its potential clients.

The agreement under discussion will alleviate the scarcity of resources for the financing of popular housing, but only in a temporary way because the current schema for financing popular housing developed through FSV is not sustainable under the conditions imposed by the privatization of the pension system. This is recognized by the Vice-Minister of Housing, Rafael Alvarado and the president of the FSV, Edgar Mendoza, in whose opinion new funds are required in order to finance the operations of the FSV because those obtained through the AFPs are insufficient. According to these sources, the aim is to obtain the funds by means of the creation of a secondary market in mortgages and the contracting of an easy credit loan with the Central American Economic Integration Bank (BCIE).

What is certain is that at present there exist considerable inventories of homes which cannot be sold, given that, although there are families interested in acquiring them, there are no channels for financing the purchases, neither in the bank nor in the FSV. Given the foregoing, it again becomes pertinent to make some considerations with regard to the supply and demand of housing and the perspectives for financing popular housing as we face the FSV crisis.

When the market for homes is examined, one notes that the demand does not necessarily reflect the existing needs, in such a way that it can be decided that there exists an effective or real demand and a demand which is not satisfied —a potential demand— which is equivalent to the need for of effective housing. This is to say that of the total number of families which need housing, only some of them have the capacity to pay for it—through financing—and so convert their need into a demand. In El Salvador it is estimated that there exists a deficit of approximately 500,000 housing units, but that this figure could grow if construction is suspended and soft credit financing for popular homes is cut off, as current tendencies appear to indicate.

In fact, according to evaluations by the president of the Ahorromet Scotiabank, Federico Salaverría, the most probable scenario is that no more homes of the popular model will be constructed until the 30,000 homes on inventory which are projected to be financed by the purchase of FSV bonds by ABANSA are sold.

On the other hand, an additional problem arises owing to the reduction in income affecting the FSV and the consequent reduction in the financing of popular housing. Had the FSV-CASALCO-ABANSA agreement not existed, 30,000 more families would not have had adequate housing and an inventory of 30,000 houses would not exist which, given the impossibility of selling them, would represent an elevated financial cost for the construction business and problems for the delinquent credit portfolio of the financial sector.

On the supply side, it is noteworthy that the construction sector has accumulated such a high inventory. In spite of the fact that we have seen this phenomenon coming for some time back, it has now, however, reached worrisome proportions. Since the beginning of the year, CASALCO complained that it was feeling an economic recession owing to the restrictions on financing, a product of the increase in the interest rates and the procedures required by the financial system (see Proceso, 847).

The current situation suggests that there are fewer and fewer possibilities that a strategy of reducing the housing deficit might be developed, owing to the financial restrictions to which the FSV has been submitted in order to introduce the pension savings system. Even private enterprise has been prejudiced by the elimination of the deductions for the institution because a recession has been generated in the construction sector owing to the fact that there is no financing available for popular housing. So, the profit for the AFPs has been translated into loss by the construction businesses and the more restricted access to credit for housing for the low-income population.

The FSV-CASALCO-ABANSA seems to be a product of the need to support financially the construction sector and prevent the businesses which operate in the industry from feeding the delinquent accounts of the financial system. Nevertheless, at the same time, the bank would set up a precedent for financing credits for the acquisition of popular housing under conditions offering soft credit, which is a good sign for the low-income sectors.

As things go, the bank would offer long-range credits and lower interest rates in order to absorb the demands for credit for popular housing or to offer financing to the FSV for its activities, but not only in cases in which the construction industry is in a squeeze, but also as a permanent policy for reducing the housing deficit and democratizing credit. At any rate, it is important to establish new sources of financing for the FSV, given that in the current situation this seems to be on the road to disappearing or to having the credit it can extend for the acquisition of popular housing severely reduced.

TO ARMS.... 

A young man who witnessed the theft of his mother’s car decided to follow the thieves —in order to arrest them? Along the road he picked up four police and, under a hail of bullets and grenades, led the chase for the criminals. A hero? Or a very imprudent person who put his life and that of pedestrians in danger? According to La Prensa Gráfica, the first situation was the case. Some days before, the passenger of a bus shot four bullets —as if one were not sufficient— at an individual who was assaulting the passengers. When the police arrived on the scene, the witnesses refused to give a declaration. A businessman, angry, it appears, at the police willingness to deal with the anonymous person who wanted to do justice in the situation, declared: "if the police cannot deal with the thieves, they should not complain when we defend ourselves". But, who was protesting?

The state simply cannot. Not if the measures and justifications given for the citizenry to take justice into their own hands. Why should an "honorable citizen" have to hold back from giving free rein to his frustration faced with the criminal act and become a "hero" of the week if the state has allowed him to be armed to the teeth in order to defend himself against the criminals while many state functionaries are of the opinion that the laws are only a little less than useless for adequately dealing with those who commit crimes? If the state delegates to the individuals the responsibility for their own security and undermines, with this attitude, the confidence in the legal framework, why would it protest when faced with the excesses of those who feel threatened by the criminals?

Against all logic, the common citizen is now a substitute police. Although with important differences: police must adhere to established police procedures, while the citizen operates in the fog of his impulses; while the police ought to respect clear criteria in order to move from a defensive to an offensive attitude, the "honorable citizen" enjoys the privilege of attacking first and, only afterwards, of giving the pertinent explanations, in case those who surround him do not allow him to escape and do not cover up the action with their silence. Likewise, the relationship between police and citizen becomes deformed: more than understanding it as an object of his protection and service, the police agent sees the citizen as a comrade in arms —not legally, of course— and vice versa. This explains why four police happily helped the young man with a talent for being a vigilante instead of making him desist in his lack of prudence. This explains why, in a similar case, another group of police used a private car-owner in order to pursue and trap with bullets some criminals who had committed the attack.

In Guatemala, lynchings —a group version of the anonymous Salvadoran version of vigilantism— are seen as a serious social problem which points up the weakness of the state and the mechanisms of justice. Here, the citizen who takes justice into his own hands is seen as an example to follow; it is the perfect crystallization of what the state expects of him. In this way, his action is more than a solution to a problem, more than a phenomenon which awakens delight and satisfaction than one which occasions social concern and which obliges us to question ourselves about the rationality of the society from which this kind of person arises.

In this utterly desperate context, a first sign of rationality has opened the way for the naming of Salvador Samayoa as President of the Public Security Council. Samayoa is clear that the treatment of the common criminal goes more along the lines of prevention than of repression, and that the use of arms ought to be more an exception than a norm. It will be a consummately difficult task to convince the government of this, but, doubtless, less arduous than that of constructing the manner in which the citizens might understand that the law is not written with bullets; that the Kalashnikov is not the best guarantee of legality and justice.

TEACHERS. The head of the Ministry of Education presented to President Flores, on August 31, the proposal for a review of the salaries for teachers. The possibility, nevertheless, of a general increase in salaries for this year was annulled. The project translates into an increase in the budget line item of some 123 million colones. The basis for the plan arises from the Law for the Teaching Career. This law establishes the salary of teachers is fixed by taking into account the position, with a review no less than every three years, taking into account, as well ,the base salary level and the category in which the teacher is imparting his or her classes. The salary review will take into account the zone or area in which the school is located, be it rural or urban, and the number of students who attend the school. This clause, although it has always been a provision of the law, was never applied when the moment came to estimate the salary of teachers. In a first poll, according to Evelin Jacir de Lovo, the Minister of Education, there are 8.196 teachers who give classes in two sections, and for this work they receive one thousand colones. The increase for the next year would be in the amount of 200 colones each one. In the case of the incentives for rural teaching, some 11,700 would receive a benefits. The proposal for salary review is subject to the approval of the deputies who are charged with approving the budget for fiscal year 2000 (El Diario de Hoy, August 1, p. 6).

PEÑATE. The Legislative Assembly took up once again, on August 31, the questioning of the Ombudsman for Human rights, Eduardo Peñate Polanco. The political Commission ruled favorably on the petition presented by a group from the PDC to investigate the work and conduct of the functionary. René Aguiluz, Secretary General of the PDC, was the deputy charged with drawing up the project for the investigation. Various denunciations against Peñate exist for supposed misprisions committed before he became Ombudsman. The most recent allegations refer to dealing in an unauthorized way with employees, abusing power and administrative irregularities. It will fall to the deputy members of the investigative group to prove or disprove the questionable acts. "The first [thing] is to determine if [Peñate] has complied with the constitutional obligations which his position demands and if he has respected what is established in the Organic Law of the Ombudsman’s Office", commented Aguiluz. An extraordinary meeting of the Political Commission has been programmed for August 2 to call the group together. Some eight party representatives in the Assembly have declared their support for the PDC petition. Schafik Handal of the FMLN, Kirio Waldo Salgado of the PLD, Rita Cartagena, of the USC, Alex Aguirre fo the PCN and Aguiluz are committed to advance the topic (La Prensa Gráfica, August 1, p. 18).

PENALTIES. The deputies of the Legislative Commission agreed, on September 1, to increase the maximum penalty in prison from 30 to 35 years, this being a modification contemplated in Article 45 of the Penal Code. Likewise, the deputies approved some 21 other reforms which are only awaiting approval by the leary. The decision, which will be brought before the legislative plenary next week enjoys the support of ARENA, PDC, PCN and the USC. The deputies recognize that increasing the maximum penalty to 35 years will not bring the crime rate down. Nevertheless, for the president of the commission, Abraham Rodriguez, it is a positive message for the population because it strengthens the penalties. The FMLN and the members of the extinct CDU abstained from voting. The FMLN deputies hold the opinion that "the population is only being deceived" by the measure. Benito Lara, Deputy of the left party, explains that "it would only prolong the release of the criminal". The FMLN holds the opinion that the government ought to be concerned with implementing programs for social reinsertion of thousands of those who broke the law who are now in prison. On August 6, the discussion will continue on the pending reforms. It remains to be defined if the incorporation of the undercover agents will be accepted in PNC investigations. Also to be determined if total reserve will continue to be decreed in some cases which are now being heard in national courts, among others (La Prensa Gráfica, September 2, p. 14 and El Diario de Hoy, September 2, p. 10).

BORDER DISPUTES. El Salvador and Honduras finally signed a document, on August 27, guaranteeing full rights to the peasants affected by the ruling of the International Court of Justice of The Hague, in 1992. President Francisco Flores of El Salvador and Roberto Flores Facussé of Honduras exchanged documents which ratify the Convention. With this the lingering doubts between Salvadoran and Honduran peasants, who, after the ruling, moved to the neighboring country were resolved. The major problem confronting the Salvadorans was the insecurity surrounding the possession of their lands which are now on the Honduran side of the border given that the Honduran Constitution prohibits foreigners from being owners of the first 30 kilometers on the border between El Salvador and Honduras. The document guarantees Salvadorans and Hondurans, who live in the border zones, that their rights will be respected, especially the right acquired regarding their properties. Moreover, the governments have committed themselves to effectuate, in the measure possible, social projects in the border zones such as the construction of schools and health facilities. With the border demarcation, both governments have manifested their interest in increasing financing for the guarantee of the rights of those who live there (El Diario de Hoy, August 27, p. 6).

ARAUJO. Walter Araujo, legislative whip for ARENA, on August 26, corrected his statements regarding the source of the 10 million colones issued by the previous administration to a group of ex–Civil Patrol Agents members of APROAS. Araujo asked for pardon for his mistake. Last week, Araujo declared that the funds for the ex–Civil Patrol Agents were taken from foreign aid monies, possibly from the fund destined to help those affected by hurricane "Mitch". According to his explanations, it was all the result of some confusion because at one point in time the Technical Secretariat for Foreign Financing (SETEFE) dealt only with the administration of international funds. Araujo affirmed that he was under no obligation to make himself aware of the proceedings which the Executive Office of the President followed in approving the administrative procedures for emitting any kind of aid. Araujo now shares the government version: the 10 million for APROAS were taken from national and not international aid funds. On the other hand, the deputy categorically denied the existence of a Special Commission for negotiation in which he participated with the Minister for Foreign Affairs Mario Acosta and Colonel Denis Morán. "I only complied with my duties as deputy in asking for support from the government because APROAS came to me", he clarified (La Prensa Gráfica, August 27, p. 12 and El Diario de Hoy, August 27, p. 16).