Proceso 912
July 26, 2000
ISNN 0259–9864
 
 
 

INDEX

Editorial The gringos are back
Society Concerning confidence in private enterprise
Economy ANEP’s “Salvadoran Manifesto”
 
 
 

EDITORIAL

    The announcement by the Flores administration of the arrival in El Salvador of a team of US detectives —which will be complemented by Israeli agents and advisors financed by the European Union— caused hardly any reaction at all, in part, perhaps, because, according to official declarations, they come to good works: to aid an overwhelmed and disorganized National Civilian Police in their struggle against the wave of kidnappings and, in part, perhaps, because Salvadoran society has already accepted the return of the gringos to El Salvador either as detectives to confront kidnapping activities and other variants of organized crime, or as military personnel to keep and eye on narcotics traffickers or as an army to carry ought joint maneuvers with the Salvadoran Armed Forces. This return is not simply the result of chance. Rather, it appears to respond to a plan which does not take into consideration the experiences of the recent past.

    The establishment of a US military base at the International Airport at Compalapa, however, was not received with the same passive activity. In the Legislative Assembly, the right-wing block was in agreement with the ratification of the treaty signed by the US and Salvadoran governments. The treaty in question converts airports, ports, airspace, sea lanes and unspecified government installation which are considered pertinent to the presence of US troops who will enjoy diplomatic immunity of the highest level during a ten year period. This treaty is complemented by two other agreements which the Salvadoran Foreign Relations Ministry pulled out of its sleeve, in addition to the collaboration of the detectives mentioned above. One of the programs of collaboration has the deceptive name “Healthy Youth”, but is designed to allow US military personnel to train the National Civilian Police in their fight against narcotics trafficking. The other part is related to military practices directed by the US Army. Under the provisions of these agreements, the military base at Comalapa, to which Salvadoran authorities will not have access, is to be complemented by advisory training for police and specialized training for the Salvadoran Army.

    The US Ambassador to El Salvador applied pressure to a degree not seen since the war to get this series of accords approved, and which have been unveiled in a gradual way. The US initiative has been opposed by the FMLN, which demanded that the conditions under which the said military base would operate should be put in writing, but the US Ambassador opposed this, arguing a shortage of time. At the basis of the discussion, the FMLN observed with more than sufficient reason that El Salvador does not so much need the military aid on offer from the US, as social and economic assistance. Nevertheless, the right-wing block decided to approve the treaty at all cost and opted to ignore its categorical nature and approved the treaty by a simple majority vote. In the face of repeated warnings of the unconstitutional nature of the approval, some of the deputies made light of the Constitution, unloading their responsibility onto the Supreme Court and claimed that they would not comply with constitutional norms. The US Embassy did not dare to make declarations on their allies’ unconstitutional way of proceeding. The US Embassy, rather, contributed in an active way to the consolidation of the judicial insecurity currently obtaining in this country; this undermines the credibility of their project.

    The US Embassy, the Salvadoran government and the right-wing legislative block present these accords as the ideal solution to stop narcotics trafficking, while simultaneously emphasizing, the weakness of Salvadoran institutions. To this a curious photograph of a boat supposedly moving along the Lempa River and presumably transporting drugs has contributed not a little. The Attorney General, for example, reached these conclusions basing his analysis on the color of the skin of the boat s occupants. In reality, the boat could have been intercepted by the very helicopter which took the photograph. In order to underscore the importance of the US Army intervention, the US Embassy in this country and Salvadoran authorities resist calling the installations established in Comalapa a military base. They prefer, rather, to call it a monitoring station. To those who raise the argument opposing this as a violation of Salvadoran sovereignty, the Salvadoran government has responded that it is not ceding national territory. This argument, taken in its literal sense, is certainly true. But what is being ceded is something more important than territory. With these treaties, advisory training and collaboration, the Flores Administration is turning over some of the essential functions of the Salvadoran state to the US Army, which is a foreign power, and turning over, as well, an important part of its security and the legitimate use of force: all of this under the pretext that El Salvador is incapable of looking out for itself.

    Experience demonstrates that this kind of US intervention does not produce positive results. The weakness and corruption of the National Civilian Police are beyond doubt. But such weakness and corruption, certainly, will not be overcome by means of intervention by US military personnel. On the contrary, this will weaken the police as an institution even more. In South America, US Army operations have not lessened narcotics trafficking; they have, rather, created additional difficulties. The multi-millionaire Colombia Plan is a military option aimed at intensifying the war, which, moreover, is an obstacle to the development of that country. The plan is proposed to repress small producers, but the structural causes which favor the illicit cultivation of drugs are forgotten and the Colombian conflict is left out of the picture. In addition to the fact that the plan includes a clause, according to which the President of the United States “for reasons of National interest”, can suspend respect for human rights in Colombia. One could say that it is not merely by chance that the new assignment of the former US Ambassador of the US in El Salvador is in Colombia. At the beginning of the last century, the US intervened in Nicaragua in order to put that country in order. US troops took over the economy, dictated policy and determined Nicaraguan culture in good measure. When they decided to leave Nicaragua, in place of the democracy which they believed they were constructing, they left a thirty-year dictatorship in place. Instead of strengthening and empowering Nicaraguan institutions, US intervention weakened them and left the countries in worse condition than they found them.

    Doubtless El Salvador is a place where drugs are transported and pass through the country and one cannot doubt, as well that public security is in the throes of one of its worst crises. But the US intervention which is en route will not contribute to resolving any of these two problems. In the first place, because it proposes a military solution to a problem which is eminently social and political. This is an old error already committed at the end of the 1970’ s and 1980’ s. In second place because while the US applies military measures outside its own borders, inside its own borders the US is more permissive with regard to drug trafficking and the selling and consumption of drugs. As it was during the war when the military people in the Pentagon and the US State Department officials lost interest in El Salvador, US troops will leave the country and its government and leave them to their own devices. The gringos have not only returned to El Salvador, but they are doing so while committing the same errors.

SOCIETY

    The most influential sectors of private enterprise in our country issued a call to work together… but not everyone answered that call, simply because not all were invited. This detail notwithstanding —which so many government functionaries as well as businessmen have forgotten in their declarations on the National forum on Private Enterprise, ENADE 2000—, the confidence deposited in the very willingness of those who presented themselves as the prime movers of development in the country remains untouched. Representatives of the National Association for Private Enterprise (ANEP); organizer of the event, put their best foot forward, animated, as never before, by the docility of President Flores and the group of government functionaries who accompanied him. Now, what is left is optimism: the proposals of the Flores Administration —set down in The New Alliance [La Nueva Alianza is the government platform of the Flores administration. Translators’ note]— seems to have received the backing they needed for its imminent inauguration and, as part of this process, private enterprise will have an outstanding leadership.

    Nevertheless, this optimism is overflowing only for those sectors whose links with the current government assures them of a privileged place in society. And, in the case of private enterprise represented by ANEP, that place has allowed them to whisper in President Francisco Flores’ ear what they wish for the country, what is most convenient for them so that they might be less harmed by the course taken by the national economy. Independent of the economic implications of the Proposal for the Reactivation of the National Economy (analyzed in this number), calls attention to the scandalous unconditionality with the Flores Administration has responded to the call of private enterprise. The confidence deposited in the criteria which gave shape to the ANEP proposal seems not only to go beyond the limits of common sense, but also reaffirms the president’s tendency, and that of his team of ministers, to deal only with those whom they consider devotees of the ideals of his administration and of his party.

    It would seem, then, that the nature of the document presented at ENADE 2000 presents certain considerably positive characteristics in virtue of the necessary —and almost absent— democratization which the country requires. But the supposed capacity for creating consensus-building which is attributed in an incessant manner to the leadership groupings of businessmen is not altogether equivalent to the capacity for reflecting upon common objectives which goes beyond merely sectorial interests. The effort which the drawing up of ANEP’s economic proposal presupposes, on the contrary, is significantly reduced if the fact that the greater part of the content of their proposals arise from consideration of the results of polls —which results presuppose a fundamentally quantitative interpretation. So it is, then, that the real capacity for opening up room for consensus-building inside national big business enterprises is not to be demonstrated only by launching proposals engendered from premises at the heart of its very own staunchest principles. Instead, if and how they are willing to include the visions of other sectors in their proposal: without the proposals of other sectors, of course, their document is incomplete.

    But it is not only the excessive confidence demonstrated by the president in the ANEP proposal which causes one to question it. It is, of course, also the pulling out of all the stops with which Flores immediately began the public dialogue concerning proposals on topics of national interest presented by a group outside the working groups of the Executive Power. This was not the first proposal placed in the hands of the president so that work could be begun once and for all in favor of national progress. In fact, the protests which he had to deal with during the early months after he took office have to do with that necessity for finding definitive solutions to problems which some sectors of the country are experiencing, and that Flores has not been capable of implementing since taking office. Moreover, his rejection of the National Commission on Development’s proposals for working on a national plan does not coincide with his heavy emphasis on the need for dialogue which ANEP has inspired. Why respond, at this point, to the call by one single sector and not respond to the results of a consultation in which the broadest spectrum of social actors participated?

    If the aim of private enterprise is to go along with a substantial improvement in economic activity, and this from the broadest and most integral perspective, Flores should highlight, with greater precision and firmness, the commitments which correspond to that vision of a development in which participates most of the society actors (desarrollo mancomunado) to which Ricardo Simán, President of ANEP, recently made reference. Instead, however, this highest representative of the sector in question declared his commitment in the most logical —almost obligatory, as some would say— of terms required from the great enterprise. Given that “salaries and fair benefits” ought to be part of the fundamental and ineluctable goals of any businessman, the promise expressed on this matter by Simán should not be received with anything but cynicism. The same occurs on the question of the commitments taken when dealing with the state to pay taxes and make judicial law and order prevail. All of this is what might logically be expected from a professional business sector in exhibiting its real competitive zeal together with a minimal strategic vision of its role in national development.

    On this note, then, what is really odd is that the leadership body of ANEP does not speak with the same level of vehemence of the necessity for harmonizing all of those interests which might be affected, in greater or lesser intensity, should a state of affairs come about in which the implementation of the impresario sector’s proposals might become a reality. For now, however, his declarations are based upon the certainty that the President has approved of them and that, therefore, no one at all will be able to place greater obstacles in the way of his intervention in the definition of a state coherent with their needs. And, effectively speaking, among these necessities is to be found that of ending up as solvent as possible on the matter of the implications of the supposed national development which is so desired. Petitions for indulgence and tolerance towards the business sector abound in the proposal currently under examination, if what is under consideration is obtaining a safe conduct on the terrain in which the economic behavior of the country might place obstacles in the way. The fact that these petitions in some measure affect other sectors of the country —i.e., the labor sector—, is nothing other than a necessary sacrifice in virtue of the commitment acquired by private enterprise on the matter of the so much desired leadership of the country toward a better future.

    Definitively speaking, the ostensible confidence which has been given to the national private enterprise big business proposal does not coincide with the identification of some objective reference points which uphold it. Much is yet to be done before ANEP might be fully thanked for the task which it took up in systematizing the aspirations of a sampling of the country’s businessmen. In this sense, the Flores Administration has not failed to congratulate itself without thinking twice on the content of the document long before the ministers designated to provide follow-up have studied it thoroughly. In any case, if, after their study of the business proposal, it continues to appear to the president as positive as it does now for the progress of the country, the president ought to concern himself, at least, to offer a clear and defined space for the participation of the public and labor sector at the time of discussing the application of the measures it contains. Should this not come to be the case, Flores and his team will be echoing a call which does not include a good part of the population which, today, is debating the future at the highest level this sector does not enjoy the possibility for expressing their opinions with the same capacity for influence that private enterprise enjoys.

ECONOMY

    More than four years ago, ANEP’s first economic proposal for overcoming the restrictions on growth and development in El Salvador was made public. In spite of the debate it generated, its proposals did translate into significant action by the government. The “Salvadoran Manifesto” of ANEP proposed measures which would include aspects which are not traditionally to be found in such an explicit form in business strategies: i.e., (1) empowering the government’s social policy (though without implying greater fiscal deficit) and (2) combating environmental decay.

    Four years later, ANEP returns to the fray with a new proposal for economic reactivation which, without exhibiting so explicit a vision of social and environmental policies as his predecessor, yet proposes diverse objectives which include the creation of a greater number of jobs and even the reactivation of specific sectors (commerce, agriculture, construction, industrial activity, small enterprise and tourism).

    The fact that it is the business sector which has declared itself with greater clarity on the subject of the current state of affairs draws attention to a reality which, although it is not new, does not cease to be worrisome: the paralysis of the labor sector and its incapacity to formulate alternative economic models or, more, to formulate specific proposals which would improve the situation of the workers.

    On this occasion, ANEP posed measures which aimed at the adoption of sectorial policies, towards the reduction of the participation of these in economic activities and towards making the labor market flexible, to mention only some of the more important measures proposed. So now, the important problematic topics of social development and the sustainable use of natural resources may not appear to be very clearly developed and, at most, point out the need to construct “economic, social, environmental and political bases” for dealing with globalization. Below, the contents on the question of the modernization of public administration are briefly reviewed, as well as the matter of making the labor market flexible and reactivating some economic sectors.

    Two measures with the clearest implications for the public sector are, in the first place, the proposals pursued for reducing fiscal pressures which the state is experiencing when attempting to cover its obligations to those retired persons who receive pensions. In second place are those focussed on reducing the size of the state by means of contracting or concessioning. Among the first might be highlighted the proposals to add five years onto the mandatory age for retirement and the fusion of two institutions which are remnants of the old pension system (ISSS and INPEP) in order to create a single fund for public employees and employees of private enterprise who are still paying into the collective pension system. The concessioning of services includes, for example, the Puerto de Cutuco, the Airport at Compalapa, the post office system, the national printing press, national radio and the National Lottery.

    So then, the proposal of the businessmen’s association seeks to reduce the state’s income, which, in practice, would lessen the importance of a basic topic: the ineluctable increase in tax income from taxes on business. It is worrisome, as well, that a reduction of tax obligations at the cost of a greater sacrifice by the salaried sector is under consideration, without mentioning the possible implications of the proposal for the labor market, which will be examined below. On the other hand, the proposal for concessioning out public services seems to be based on the fact that these are operating in the red. Were this to be true, it would still not necessarily mean that they could not be made into a source of tax income.

    The proposals for reforming the labor market, on the other hand, involve aiming at a greater flexibility in contracting workers and a greater amount of discretionality at the moment when minimum salaries (defined by days worked on the basis of hours calculated on a weekly rather than a daily basis, would permit piecework contracts and the revision of minimal salary norms for part-time work). The “massification” of technical training programs is also being proposed. These kinds of measures suggest that we would confront greater rates of underemployment (which is currently set at approximately 30%), because an immediate implication would be the reduction in the number of hours worked on a weekly basis (and in the salaries received) by workers, which would obviously benefit the employers.

    On the question of sectorial policies, two bread and butter demands should be mentioned:(1) the evident desire to reactivate economic sectors on the basis of projectionist and aid measures (as in the case of agriculture and construction); and (2)the permanent demand to reduce the state in order to allow for new lucrative activities for private enterprise. The proposals for the financial rescue of highly indebted businesses, increases in duties and customs on agricultural and livestock products, together with the subsidizing of the purchase of homes (which could be seen as assistential in two ways: for contractors and for families buying homes), the contracting and subsidizing of public works are examples of projectionist measures. This, which are certainly not positive or negative in and of themselves, aim to create the conditions for inducing growth for sectors which have been feeling a tight constriction in recent years, such as agriculture and construction, although very concrete proposals are also included for aid to small and tiny businesses (laws for fomenting banks), which could be feasible. Measures which aim to reactivate agriculture and industry by means of greater fiscal income in order to stimulate the captivity of these sectors are also included (i.e., establishing funds for industrial reconversion and for the creation of a bank for rural development) or even by means of greater quotas of fiscal sacrifice (tax incentives for investment in industry).

    Sectorial policies, moreover, reveal a new kind of interest by private enterprise in their incursions into activities which until now were mainly implemented through the state (as in the case of construction and maintenance of public works). Along this line are to be found concessioning out of public services as well, as was noted above. As the backbone of these sectorial policies, proposals tending to reduce interest rates are to be found, together with increasing credit to businesses.

    The connotations of ANEP’s proposal will depend on how the strategy assumed succeeds in transferring the benefits arising from growth to the least favored sectors of the country —which is to say, the workers and peasants. In principle, the proposal has a clearly defined vision in favor of the business/employer class, which is completely legitimate, but aims principally to favor those who are already broadly benefiting from growth (i.e., big bankers, big industrialists, coffee growers, sugar cane growers, big businessmen, etc.), but who feel concerned about reduced growth rates for income and profits. It is difficult to imagine that within this proposal exists a genuine interest for favoring the workers, especially considering the punishment of salaried sectors in order to favor the businessmen and employers.

    Although it is not a question of saying that there is nothing which might be rescued from this proposal, the blank spots on the question of the redistribution of value added can be perceived as well as on the question of increasing income and salaries for the working sectors. The same might be said on the topic of sustainable use of natural resources, an aspect fundamental for guaranteeing high economic growth rates in the medium and long run. These are two areas which ought to be strengthened because past experience has shown that given the economic structure of El Salvador, high growth rates do not necessarily imply development.