Health And Profit

We Are Marching Towards Stagnation

Salvadorans Face Legislative And Municipal Elections For 2000

The ARENA administration believes that it has found a solution for withstanding the strike currently in effect in the Institute for Social Security and part of the national health system by creating an improvised parallel structure. This will allow them to gain some time and perhaps confirm their hypothesis that the strike will end after the elections of March 12. What is happening to those insured under the ISSS plan and the health system itself is secondary to them if they can win the race against the strikers. This is a strange way for the government administration to resolve a social conflict while projecting the image of an amiable administration willing to engage in dialogue.

The conflict in the health sector is a loud manifestation of its obsolescence, which is nothing new. It is a sector that has not been able to even begin to be reformed because, in it, various economic interests are involved —various powerful interests. The current crisis has polarized the positions of the parties involved precisely because of the existence of these interest groups which, moreover, remain hidden in the shadows and hide, as well, behind false declarations concerning the health of those insured under the system. In reality, for the greater part of the actors in the conflict, their own interests are the priority. These are interests that cannot be made public because they are economic in character.

Something is wrong when in the health sectors in Chile, Costa Rica and Cuba they have obtained practically universal coverage and high quality in their respective services by spending a little more than El Salvador spends per inhabitant, which is 158 dollars per inhabitant per year. In Costa Rica, the cost is 224 dollars and in Chile, the model government for the ARENA politicians, it is 331 dollars. Cuba spends only 106 dollars per inhabitant per year. Measured in GNP percentages, the cost of health is 6.8% in El Salvador, while in Costa Rica it is 8.6% and in Chile it is 8%.

It is not a question of spending more money but of using it in a better way, which means placing the patient-user at the center and leaving to one side all interests which do not have to do with service. It has been proven that in the health sector there are large areas of waste and poor administration and that the principal source of waste is that of medicines. Specialized studies show that only 12% of the investment in this category goes to the user as good quality medicine. The rest stays in other hands, the most important of which are the providers and commercial interests.

The ARENA administration proposes to resolve the serious problem of privatizing the service, but not because it is interested in improving it, nor because the public sector might be incapable, inefficient and corrupt, but all to the contrary. The propose to privatize it because health service is another activity where capital obtain higher levels, which is to say it could become good business and generate good profits. The ARENA administration aims to take advantage of the general lack of satisfaction with the service as well as its evident deficiencies to establish another which would also have these lacks and important limitations, but which will generate profits on the capital invested in it.

The private health sector is no better than the public one. Both suffer from the same ills: human resources inadequate to the health problems of most communities; an excessively high number of specialists for general medical practice; a lack of nurses, administrators and health services; expensive and unnecessary therapeutic and diagnostic practices; a lack of communication between the doctor and the patient; the absence of policies for reducing death rates, etc. Basically, there is not much difference between one and the other. The similarity is greater if we consider the preventive aspects and the living conditions of the patient-users.

It cannot be said, as ARENA does, that privatized public services will provide better coverage and better attention. ARENA believes that the positive social effect of privatization is guaranteed. But the programs of social compensation in charge of distributing what the market cannot provide are proof that the contrary is true. In reality, what ARENA aims to do is provide incentives and subsidize the private sector; but even so, the result is doubtful because for this sustained economic growth of approximately 6%, and the average growth in El Salvador for the last ten years is approximately 2.7%.

Big capital has identified the social security funds as another opportunity for profit and gain. The investment is attractive knowing that it will operate with few restrictions and with a friendly government. And there is an excess of doctors without jobs— "the good doctors" referred to by President Flores —the existence of whom will lower operational costs. To this could be added other procedures such as the financial incentive for limiting attention, the reduction of hospitalization days, the restriction of access to specialists unless the patient-user covers the costs, etc. All of these serves to decrease the quality of service offered. It is difficult to imagine what control the Ministry of Health could exercise over this modality of service. If it has not been able to organize and administer the service now, when it is under his direction and leadership, what is most likely is that it will not be able to regulate or control is once it has been privatized. This will mean that it is illusory to think that efficiency might be obtained by stimulating competition of the private sector in the health sector. This is what has happened with the other privatized services, over which the ARENA administration does not exercise any great control or supervision.

In privatizing the health sector, nevertheless, the state will be freed of the responsibility to offer universal coverage. This means that the middle class will join the lists of those who are not covered. Examined from this perspective, the ARENA reform is very "democratic". Privatization tends to favor economically comfortable patients at the cost of the poor, at the same time as it produces large benefits for the insurance companies. This does not mean that the sector should continue along with reform, but that ARENA is not interested in a situation in which the Salvadoran people might enjoy good health. It is more of a priority interest to them that their capital investment will show a higher profit level.

In the analysis of the economic period corresponding to the second semester of 1999, an effort is made to read the evolution of the principal aggregate economics from the point of view of their behavior throughout the decade of the 90´s. In this sense, the period may be interpreted as the cumulative result of what happened during previous years together with the particular events of the last semester.

On the doorstep of a new century, El Salvador finds itself close to zero growth and the economy has simply not taken off. This is to say that the country cannot now obtain the high growth rates necessary for reducing poverty and enter a stage of sustainable development unless important transformations in the structure of economic and social relations are achieved. During 1999 the GNP grew 2.2% and the GNP per capita by 0.1%. On the average, during the period 1992-1999, the per capita GNP grew by 2.7% per year, concentrating growth during the first half of the decade, and continues to be weak during the second semester.

With respect to the sectorial evolution of the economy, it can be seen that the sector which grew the most —that is to say, which pushed forward the scarcely visible economic growth this year— was the industrial sector (which grows at a slower rate with each passing year). The index of industrial production grew 5% in a movable average for the month of November, as compared with 8.9% for the year 1998. Agriculture is in second place, its annual growth is estimated to be 3.7%, and it responds more to climatological conditions that to a reactivation of the sector, which has shown clear signs of stagnation throughout the decade. The remaining sectors have not demonstrated exemplary growth during 1999, which leaves the economy without a center for accumulation around which the other sectors might grow.

The evolution of employment reflects the behavior of productive sectors and deterioration in the quality of life for Salvadorans. The unemployment rate rose to 6.5% during November 1999 and the rate for underemployment rose to an average of 32.2% for 1999. In the same way, the evolution for the last six months —seen from the point of view of unemployment rates or the number of active and paying subscribers in the private pension system— shows a deterioration in the labor situation. Not quite two thirds of the economically active population is fully occupied while approximately a third suffers from unemployment or underemployment where quality and remuneration for work does not permit the satisfaction of the most elemental needs.

In the same way, evolution of the macro prices point to stagnation in the aggregate demand. On the one hand, annual inflation, based on the consumer price index, was –1% for the month of December 1999. The strong increase in prices for petroleum throughout 1999 begins to show signs of pressure on the prices of industrial products which could afterwards have some incidence in a greater inflation rate for the year 2000.

On the question of real wages, if it is true that the real average wage —measured on the basis of basic income upon which quotas to the AFP's are paid— there is a growth of 14% in 1990, this last year shows a growth of only 0.7% while minimum salaries remain practically stagnant at their level in 1990. Even more, it might be pointed out that traditionally the distribution of income in El Salvador reflects an exclusive model. According to the Poll on Homes and Multiple Housing for 1998, 20% of the poorest families receive 5.7% of the income while 20% of the richest homes receive 48% of income. Both factors, taken together with the phenomenon of underemployment and unemployment provide sufficient reason to think that consumer demand will be depressed and add, consequently, to the problem of economic growth previously mentioned.

Additionally, active real interest rates which rose to 16.3% during December of 1999, taken together with commissions on financial transactions, imply an elevated cost for businesses, which brings with it a diminution in the demand for investment and housing. Finally, the deterioration in the type of real effective change —that is to say, the appreciation of the currency by more than 50% across the decade, resulted in the flow of capital and brings with it a greater growth in imports, which, in turn, contributes to the external lack of equilibrium in our economy.

On the question of monetary aggregates, there are clear indices to be found of a restrictive monetary policy and there exists a deliberate effort to drive the economy towards a scheme of conversion to dolarization. The data which uphold this argument are: (a) the reduction in growth of the monetary offer M2 and M3 which grew 6.4% and 7.3%, respectively, during 1999 as compared with growth rates above 20% for the first half of the decade; (b) the growth in the legal cash reserves which prevailed throughout almost the entire year given that the indicators for November 24, 1999 hardly returned to their initial level of November 1998; (c) the net purchase of dollars by the Central Reserve Bank which has brought about such an increase in net external shares of the Monetary Base which represents 100% of that, and of the Net International Reserves which during November rose to represent 118.6% of the Monetary Base and 6.9 months of imports; (d) the sterilization policy of the BCR, in such a way that the emission of stocks and bonds rose to 6,340.8 million colones during November, 1999 as compared with 2,890 million for December, 1996.

These facts help to explain, in part, the existence of elevated real interest rates. The sterilization policy of the BCR is to be lamented as it may lead to a diversion of financial funds which could be destined to productive investment. During November, 495.9 million colones in the AFP's, 353.6 million in the commercial banks and 3,937.1 million in stock market shares were invested in stocks and bonds issued by the BCR.

The banking sector has shown a tendency to concentration of the market, reinforcing its structure of monopolistic competition. So it is that, with the recent fusions of Bancorp and Banco Capital, and the Banco de Comercial with Atlacatl, the IHH concentration index rose to 1,274.5 during March of 1997 and 1353.0 during September 1999. Should the fusion between Banco Desarrollo and Banco Agrícola Comercial actually materialize, it would increase the index to 1,738.2 for the year 2000. It should be highlighted that the entrance of foreign capital such as Hamilton Bank in Unibanco or Scotia Bank in Ahorromet) and the presence of foreign shareholders in other banks has not succeeded in turning back this tendency towards concentration in the banking system. If it is indeed the case that the maintenance of high interest rates is to be explained —as was mentioned in the paragraph above— the structure of monopolistic competition in the banks cannot be passed over lightly as a possible explanatory factor. In this sense, fostered by the high commission which banks charge for some of the financial transactions, the sector can become a generator in favor of stagnation and, instead of serving as support for growth could become another obstacle to confront.

During the second semester of 1999 the deterioration of the bank portfolios continued as the bank debt increased to 7.33% of the gross loans: meanwhile, growth during September of deposits and total shares (5.66% and 5.52%, respectively) is much lower than those obtained during 1997 and 1998, reflecting the difficult situation of the economy. During the month of September, a new Bank Law was approved, with the objective of achieving stability in the financial system. Nevertheless, in addition to adequate legislation, strong institutions are needed to make it effective. The Superintendence of the Financial System, the Institute for Guaranteeing Deposits and the Central Reserve Bank will have to show that they can achieve this objective presented in the law.

More than a year after the inauguration of the new pension system, the nominal value of funds rose to 1,835 million during December of 1999, representing approximately 1.8% of the GNP. This has led the AFP's to saturate the stock market in the sense that almost no options for investment are to be found. During October, 97.8% of the pension funds were invested in fixed profit instruments, the majority in public instruments including cash reserves issued by the BCR and those issued by the banks, meanwhile hardly 2.2% correspond to variable profit instruments, belonging, almost in their entirety to the telephone business. On the other hand, the AFP's represented 48.4% of the secondary market of the stock market.

Public finances continued being the Achilles Heel for recent years. The fiscal deficit reached 3% of the GNP for 1999, the highest percentage since 1993. This is to be explained as being a result of the asymmetrical evolution which exists between costs and taxes. Meanwhile, spending has increased its participation in the GNP (from 12.82% in 1997 to 13.99% in 1999), the tax rate has stagnated below 11%, hardly increasing to 10.78% in 1999. For the year 2000 a fiscal goal of 2.6% of the GNP has been projected which would uphold an increase in tax income to 12.6% of the GNP, which is not considered feasible given the evolution of recent years. Additionally, pension reform implies an increase in public spending of 452 million colones during 2000. Of course, for each subsequent year greater additional increases might be expected for which the government has explained how it will deal with this problem in spite of its being a perfectly foreseeable situation.

Continuing with fiscal policy, for the first time in three years, the year 2000 begins with an approved budget. Consistent with the evolution noted in previous years, spending for Social Development will increase to 37.2% of total administrative costs as compared with 32.1% during 1997. Nevertheless, the cost referred to as Support for Economic Development reduces its participation of 14.4% in 1997 and 20.6% for the year 2000. If it is the case that the Social Development Spending —which includes education and health costs— is very positive for national development, spending in Support for Economic Development is questionable in that it is not clear what the government’s intention is with respect to this. Given the urgent social needs of the country and the state of peace achieved in the Central American region, the National Defense Category is not understandable in the sense that it will still absorb 5.2% of the national budget —that is to say, 950.3 million colones— when the Security and Justice Category has 1,468.4 million assigned to it.

In spite of the solvency which the county is enjoying, the external, or foreign, sector continues to exhibit serious weaknesses. The commercial balance obtained an equivalent deficit of 13.2% of the GNP, which is explained by the productive disarticulation of the diverse economic sectors and the strong flow of family remittances. Nevertheless, throughout this decade, a tendency for external vulnerability to diminish was observed, given that the relationship between imports and exports has increased from 47.8% in 1991 and 61.1% during 1999. This is positive considering that this has been an adverse year for exports. Nevertheless, exports hardly grew 2.1% throughout the year, as opposed to the high growth rates for previous years. The fall in exports is to be explained by the low prices of coffee, the lost of dynamics for non-traditional exports for the rest of Central America (which grew 2.2% during 1999) and maquila (or runaway shop) exports which also grew less than during the previous year.

On the other hand, the deficit in current accounts rose to 1.6% of the GNP during the month of September, a very low percentage when compared with the deficit in the trade balance. This is achieved by an enormous flow of family remittances, which represent approximately 11.2% of the GNP for 1999. Capital accounts showed a positive balance of 0.7% of the GNP for the month of September which is much lower than the positive balances obtained during previous years.

Finally, the external public debt rose to 23.1% of the GNP, staying at levels similar to previous years. This, while the relationship between debt service and the export of goods reached 21.8%.

The objective of this analysis of the current period is to provide the basis for a diagnostic examination of the economic situation, distinguishing between long term phenomena and short term phenomena, corresponding to the period under analysis here. It is, then, a question of understanding where we are and where we wish to go and, thereby, offer a prognosis and commentary for what might be expected for the year 2000.

So it is, then, that the limited economic growth observed during the last four years and seriously questions the path or direction which the country is taking. During the first half of the decade of the 1990´s high growth rates were achieved. It would not be out of line to declare that these were years of "easy" growth", favored by the signing of the Peace Accords, foreign aid for complying with the provisions of the accords, reactivation of productive sectors given greater optimism and expansion in the use of productive resources which had been fallow or dormant during the conflict. Productive resources such as the labor force, capital and land, supporting a consumption "boom" and the real estate market. Nevertheless, after 1996, El Salvador entered a period of stagnation given that with the limitation that growth in resources cannot occur if it is not based on an increase in productivity and efficiency. In this sense, effort by all sectors and actors in the country must be large to the point of being monumental.

To he problem of slow or low growth must also be added the enormous social deficiencies, existing in the current economic model. If the analysis has not been exhaustive on this question, at least with the data here presented high levels of unemployment and decade-long stagnation in real minimum wages —which is the statistical reality for the large majority of workers—, the slow growth of average real wages and the concentration of income —in which 20% of the poorest families receive not quite 5.7% in terms of income. All of this translates into hundreds of thousands of persons living in conditions of poverty and extreme poverty.

In this context, we find that throughout the last four years, the country has not been able to take off and enter a stage of sustained and sustainable economic development. Fading economic growth is reflected in a decline in dynamism in those sectors which have most sustained growth as is the case of the industrial sector and maquila (or runaway shop) exports. This is aggravated by the fact that a depressed aggregate demand exists in the country, in large part because of the stagnation of real minimum salaries, the exiguous dynamism of private investment and contraction of growth in exports. Additionally, macroeconomic policy has not been capable of creating a favorable environment for investment, in spite of its success in fighting inflation. Even less has it achieved an articulation of a sectorial development policy for agriculture. Because of the modality in which the exchange rate has been "tied" the exchange rates, the incorporation of profits into the BCR has been sterilized and legal cash reserves have increased during the last year. Given the tendency towards oligopoly in the banking industry, real interest rates have increased until they have achieved levels so high that they make the operation of businesses difficult and provide negative stimulation for investment in production and housing. Adding this phenomenon, one can observe a growing bank delinquency and an increase for those shares embargoed by the banks, which is a reflection of the deteriorated economic situation.

In conclusion, no substantial change in the evolution of the economy can be envisioned in either the economy or the political economy. Moreover, we will continue putting off the elimination of serious economic and social deficiencies in the country. In order to go forward, it will be necessary to articulate a new center for accumulation which imprints dynamic permanent movement on the economy. The center for accumulation could include the maquila (runaway shops) and non-traditional exports —especially this last, because these could become more diversified and permanent in character. In this center, agricultural and agricultural industrial products could play an important role. But this ought to be conditioned upon the creation of strong institutions which promote competition (law of competition and anti-monopoly laws), workers' rights (social security and job protection) and the rights of consumers (consumer rights), with the objective of creating a more human model of accumulation.

On the immediate level, the state must implement emergency measures in order to alleviate the conditions of those who live in extreme poverty —above all by making public spending and tax collection more efficient and eliminating unnecessary costs in the national budget in order to use these funds for social welfare services. It would not be out of line to suggest that we can learn from the example of Costa Rica which some decades ago eliminated military costs and put education out front as a priority.

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This article was presented by the Economics Department of the UCA

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Some 57.2% of Salvadorans have little or no interest in the municipal and legislative elections to be held next March 12, according to a public opinion study conducted by the University Institute for Public Opinion (IUDOP) of the José Simeón Cañas Central American University (UCA). The poll, carried out with the objective of learning how the Salvadoran people feel about the 2000 electoral process, was conducted between February 12 and 20 of this year with two separate sample groups: a national sample of 1,233 adult Salvadorans interviewed, which included respondents from the fourteen departments in the country and a sample of 631 adults residing in the San Salvador municipality. A total number of 1,864 persons were interviewed in this poll and the study revealed that only 22.6% are interested in the elections and that the remaining persons interviewed felt "some" interest in the process.

In fact, the UCA poll found that interest in the elections shown by political elites and by the news media of the country is not shared by the majority of the Salvadoran population, especially by those with few social-economic resources. This explains, in part, the fact that only 30.7% were motivated to go to vote on March 12 as opposed to 21.5% who showed "some" motivation to vote and 47.8% who expressed little or no interest in going to the polls. Previous elections have demonstrated that, in the end, only the people who stated that they are "very" highly motivated will actually go to vote.

Moreover, the results show that only 30% of the citizens interviewed believe that the elections will be clear and above board. The remaining 41.4% thinks that the elections will be fraudulent or simply do not know if the elections will be transparent of not (28.6%).

The UCA poll found, once again, that the basis of these attitudes towards the elections are to be found in three large opinion groups concerning politics and the country which are interrelated factors. In the first place, the greater part of Salvadorans think that the political parties do not provide any benefits to the population and that they do not represent the populace in an adequate manner. Concretely, 63.6% were not in agreement with the idea that the political parties provided benefits of any kind to the population while, 59.2% consider that political parties do not represent the interests of the Salvadoran people.

In second place, underlying the small interest which Salvadorans have in the elections is the impression that elections are not a useful way to change or improve things in the country. In act, 54% of those consulted declared that elections are a waste of time because things will never change in the country. This opinion is particularly serious among a populace where the perception that the situation in the country is getting worse: 69.5% hold this opinion, according to their responses.

Finally, the IUDOP poll indicates that a good amount of apathy towards elections is profoundly linked to a lack of confidence on the part of the citizenry in the political institutions of a the country and the central government administration (which also explains part of the intention to vote). The greater part of the political institutions in the country, with the exception of the mayors, does not receive more than 15% of the Salvadoran people's absolute confidence. Institutions such as the central government, the Legislative Assembly and, above all, political parties enjoyed lower indices of confidence from the populace.

Concerning the performance of the Francisco Flores administration, the president received an average rating of 4.84 (the lowest received by any ARENA administration), while the Legislative Assembly received a little higher rating of 4.74. Only the municipal governments, as a national aggregate, seem to receive high marks from the population (5.92), although the average continues to be low.

These evaluations concerning the performance of government entities not only affect the parties directly involved, but also affect the whole political electoral system given that, deceived by their own leaders, a good number of citizens withdraw from exercising their right to vote.

In this context of a large lack of interest and confidence, expressed by the populace, the poll conducted by the UCA reveals that more than half of the Salvadoran people do not sympathize with any political party in the current race and that party identification for each one of the parties does not rise above 18% for the whole adult population of voting age. For February, 2000, the percentage of persons identifying with ARENA was 17% while the percentage sympathizing with the FMLN reached 14.6% of all adults in the country; the PDC won 2.8% on the question of party identification and the PCN and the CDU achieve 2.2 and 1.3% respectively. The remaining parties did not win more than 3%.

The poll shows that not always do people seem to be willing to vote along party lines. The opinion study conducted by the IUDOP of the UCA reveals a virtual tie on the intention to vote for deputies at the national level.

At mid-February, 21.8% of persons possessing an electoral I.D. card stated that they would vote for ARENA, 21.6% for the FMLN, 3% declared that they would vote for the PDC and 2.5% would vote for the CDU. Close to 10% would not vote for any party and a little more than 35% did not wish to express an opinion on their intentions at the polls.

How is this virtual tie between ARENA and the FMLN to be explained? The results seem to lie, fundamentally, in the evaluation of the citizenry on the question of the Flores administration and this appears to be weakening ARENA and indirectly benefiting the FMLN and the PCN. The results indicate that the only persons who actually approve of the presidential administrations performance— that is to say, those who evaluated it with an average mark of higher than 6 are the ARENA voters, the remaining persons, independent of their party affiliation, who do not approve of the current administration’s performance in office.

In fact, ARENA seems to be depending more on its hard vote and new young voters than on old party members of other parties. The FMLN, on the other hand, seems to be gaining a few more voters among people who voted for other parties during the 1999 elections, especially ARENA. The displacement towards ARENA is not only in the direction of the FMLN but also towards the PCN and towards an important group of potential voters who would normally abstain from voting.

The UCA asked the sample population about what kind of Legislative Assembly would be best for the country. Almost 40% of Salvadorans believe that the country should have an Assembly in which no political party is dominant. This is to say that in the Assembly there would exist an equilibrium of all forces. Some 14.5% consider that the Assembly should be dominated by ARENA, 9.1% think it should be dominated by the FMLN and 11.4% give more relevance to small parties. The remaining persons did not know how to respond to the question.

Given the importance which the municipal government of San Salvador enjoys, IUDOP decided to add another sample group of 631 persons interviewed inside the San Salvador municipality with the objective of exploring population attitudes on the question of municipal elections.

In the first place, residents of San Salvador demonstrate a relatively greater level of interest in the elections that the rest of the population of the country. According to the results of the poll, some 40.1% of the capital city resident would be very interested in going to vote on March 12.

In second place, the voting intentions of the inhabitants of the San Salvador municipality broadly favor Hector Silva and the FMLN. According to the results, some 40.2% of the municipal residents in San Salvador would vote for the FMLN-USC coalition, followed by 23.1% who would vote for ARNEA and 2% who would vote for the PDC and 1.8% for the remaining political parties. Nevertheless, a little more than 25% did not reveal their intentions as to whom they would vote for and almost 7% stated that they will not vote at all.

On the question of sympathy for the candidate, the results confirm the advantage of the candidate for the FMLN-USC Coalition. Hector Silva receives 53.2% support from capital city residents and Luis Cardenal receives 23.1%. The remaining candidates did not receive more than 4% of the sympathies of capital city residents and a little more than 20% did not define their sympathies for any candidate.

How can this large advantage of Hector Silva and the Coalition over ARENA be explained? There are many reasons, but the poll documented a significant displacement towards the Coalition among persons who, during the 1999 elections, voted for ARENA and other parties. In this case, ARENA depends much more on its loyal, hard vote than the FMLN, which is achieving more sympathy and votes as a result of the incumbent administration's performance.

In effect, in this case, the tendencies seem to be associated with the evaluation of the capital city residents concerning the performance of the municipal government. Voters of the FMLN-USC block acknowledge a higher average in the evaluation of the Silva administration, which would have more weight at the moment when decisions are made as to whom they decide to vote for than official party propaganda.

The most recent pre-electoral poll by the IUDOP reveals that, just as with previous electoral processes, the majority of people are not interested in nor are they motivated to participate in the legislative and municipal elections of 2000. At the root of this apathy appear to lie various factors. On the one hand, the inveterate perception that politics are of no use in improving the living conditions of the majority of the population. On he other hand, the popular sentiment is that the country is more and more engrossed in problems. In third place, the low level of credibility which the majority of the political parties in the country have exhibited together with the disenchantment provoked by the performance of the administration and the Legislative Assembly.

The most relevant point in the polls is not the prediction as to the intentions concerning party-line voting, it is, rather, fact that the perception is that the political system continues to be incapable of making an effective connection with the most important wishes and concerns of the people and that it belies a negative impact on electoral participation.

Along this line and without denying the possible influence of propaganda, one must take note of the fact that the result of the parliamentary elections depends also on what the central government administration and the mayors have done or have not done during their period in office. The case of the San Salvador municipality and others of some political weight is an example of how an administration positively evaluated by the majority of the citizens will not only attract more votes that are usual for a political party, but can also benefit the political system because it encourages interest on the part of the populace in participating and electoral competition.