Center for Information, Documentation and Research Support (CIDAI)
E-mail: cidai@cidai.uca.edu.sv

Central American University (UCA)
Apdo. Postal 01-168, Boulevard Los Próceres
San Salvador, El Salvador, Centro América
Tel: +(503) 210-6600 ext. 407
Fax: +(503) 210-6655

     Proceso is published weekly in Spanish by the Center for Information, Documentation and Research Support (CIDAI) of the Central American University (UCA) of El Salvador. Portions are sent in English to the *reg.elsalvador* conference of PeaceNet in the USA and may be forwarded or copied to other networks and electronic mailing lists. Please make sure to mention Proceso when quoting from this publication.
     Subscriptions to Proceso in Spanish can be obtained by sending a check for US$50.00 (Americas) or $75.00 (Europe) made out to 'Universidad Centroamericana' and sent to the above address. Or read it partially on the UCA’s Web Page: http://www.uca.edu.sv
     For the ones who are interested in sending donations, these would be welcome at Proceso. Apdo. Postal 01-168, San Salvador, El Salvador

Proceso 947
April 18, 2001
ISSN 0259-9864
 
 
 

INDEX

Editorial:  From the guerrilla to the pastoral
Politics:  Justice's incidents in El Salvador
Economy:  Dollarization and interest rates
 
 
 
 

EDITORIAL

     The Salvadoran guerrilla's world has turned out varied, and that can be said also about the pastoral world   —which helps to cultivate people's spiritual dimensions. The most curious religious disciplines proliferate in this field, even inside historical churches. We had seen guerrilla men turned into politicians, economists, businessmen, consultants, professors, analysts, public officers, but we still had not seen a pastor, until Joaquin Villalobos arrived. You can only be that versatile from a distance and from knowledge that never doubts, or suspects of itself. That is why he addresses to others with a superiority attitude. Just like other ex guerrilla members turned into right wing thinkers, Villalobos delivers advice periodically to the different sectors of the Salvadoran society. Now it is the turn of church ministers and pastors, who, according to his opinion, should dedicate themselves to the attention of spirituality twenty-four hours a day.

     A lot can be said about the prestige of an ex guerrilla commandant like him talking about pastoral, including his participation in terrorism acts and murder but it is not worth while to stop on personal references. It is more interesting to analyze the ideas that this "new" intellectual proposes from Oxford, about the ideal pastoral for these violent times, which lack principles and moral values.

     The pastor is very concerned about how empty catholic temples are —a questionable assertion- while the masses gather around the ministers of different sects looking for consolation. The explanation he gives is that priests, instead of taking care of what he calls "the salvation of the souls", are dedicated to talk about politics. His advice, therefore, is to be dedicated to the salvation of souls, and forget about the body. He goes further when he demands the right to spiritual attention, besides warning them that concentrating on earthly matters "can only be harmful". This thesis, besides being a curious one, it has false presumptions.

     In the first place, his thesis considers the clergyman from an utilitarian perspective, as a channel to regain certain values that, according to the author, would have been lost. This supposition implies that not too long ago there was plenty of these values. The logic is flawless, religions that pay more attention to the problems of the soul not only have more followers, but also help the poor and contribute to democracy. This new pastor understands democracy from a capitalist point of view, which is the perspective he is most interested in.

    Clerical ministry means more than preaching values to improve a capitalist democracy, without the obstacles of delinquency, social discontent and violence. If this is what he is looking for, Villalobos has gone to the wrong place. For that matter, he would be better off in the American Calvinist tradition, with its austere life, rigorous personal discipline and respect for the established order. However, even in the Calvinist tradition, these values (victims of neoliberal capitalism) are not frequently adopted anymore.

     In the second place, Villalobos judges pastoral from his particular situation. When he belonged to the guerrilla, the priest and the pastor had to support the revolutionary change unconditionally. Even when Villalobos realizes his senseless assertions, he explains that back then it was necessary, but that now it is not. Neither does he dare to question the authority of Monsignor Romero, nor the Jesuit martyrs ones. Both would have been victims of the reprisals of an authoritarian regimen, because they denied accepting the role that this regime assigned to them.

     But now things would have changed; now we would have to support democracy and take care of the poor. Since Villalobos has changed sides, he thinks we all should follow his steps. Having free elections, political parties of different tendencies, freedom of speech, a very analytical press and a supervising civil society, it is not necessary to go to the temple and talk about civilian rights. In the present, when a religious man considers politics as a priority, he is the voice of those with voice, just one of many. Pastoral advice is, therefore, dedicated exclusively to the cultivation of the soul. This analysis of the Salvadoran reality is very questionable, because elections are clean to elect a businessman, political parties represent a small social sector, public opinion and advertisement agencies are controlled by the government, media analysis depend on its owner's agenda, and society has no power to control anybody.

     Villalobos’ assumptions are false. He quotes an unknown rural priest from his guerrilla days, who would have said to him that since they talked so much about the national conflict and the need to fight, people had turned to protestant cults, which cared more about spirituality. That priest's church asked for sacrifices, but the Protestants gave consolation. That contrast is false, because there is no Christian spirituality that won't take care of the social reality or that won't make sacrifices to break free from sin in order to serve others.

    Villalobos is not far from proposing that resignation should be predicated to silence the social demands. Monsignor Romero would be an exception, because "he was a true religious man, concerned about spirituality and about helping humble people to overcome their problems; to him, the rich were a source of supplies to mitigate pain". That is a curious interpretation of Monsignor Romero's ministry, which only proves the little knowledge Villalobos has about both spirituality, and the martyr archbishop's prophetic posture about richness and the rich.

     He does not understand where the social flow of Catholic Church comes from. If the priest or the pastor talk about politics just like politicians and third class analysts do, is just one more voice among many without a doubt. But if they talk about defending the victims of violence and injustice, then they are the voice of those without a voice, a voice claiming in the desert. When there is oppression and injustice, the voice of the pastor is not just one more voice, but the voice of the victims; his voice will stay like the voices of Monsignor Romero and Ignacio Ellacuria did, while Villalobo's voice will be gone with the wind. What bothers our pastor is not that pastors harm themselves, but that they use their credibility and their mass appeal to question an unfair and, therefore, sinful system, which Villalobos considers acceptable because he is comfortable with it.

POLITICS

    Salvadoran justice cannot get it right lately. Every day, its blindness is more evident. The judicial system keeps crashing against the wall of national reality. In other words, the social conflict is oversized for the judicial system's design and its administration. The demands for transparency and efficiency in the justice administration do not match with many of its representatives' attitude.

     That perception is shared by a significant part of the population, which continuously complains about the national institutions´ performance. However, contrary to what occurs with the National Civilian Police (PNC, in Spanish) or the Repubic´s Attorney General’s Office (FGR, in Spanish) —confronted with both critics of inefficiency an corruption, to which they have responded, for better or for worse, with a process of internal depuration— the judicial apparatus has closed itself to any kind of critics, turning immune to the society’s demands for improving the country’s justice administration. Recently, in a report of the United States´ Department of State, the judicial system was considered inefficient and corrupt. The national worries about the tentacles of organized crime, the judicial apparatus´ corruption and its poor performance found an echo in that report.

     Nevertheless, just as it has happened in most of the cases, when somebody denounces the corruption that has pervaded the judicial system, a twisted corporative spirit seems to impede that the high officers  —responsible for starting its depuration— realize the need to do it. That is why we keep going through a stream of constant declarations made by the Supreme Court of Justice’s officers, announcing a depuration without clear signs of actually attacking the problems in all its complexity.

     The last issue that has worn out the patience of Salvadorans has been the denunciation about the “professionals” that have purchased their university professional diplomas, and who have important positions in the judicial apparatus. In the first place, we have to pay attention to the treatment that has been given to this issue. In a clear sign of a scorn for the needs of the population, who claim for a better performance of justice in this country, the judicial officers kept themselves closed in an argument, confronting the judges with the Judicial National Council (CNJ, in Spanish), questioning the ability of the former to evaluate the latter. This gives an idea of the justice’s administrators seriousness to discuss the shameful subject of its members with purchased professional diplomas.

     It is evident that there are many doubts about this issue, and that justice’s administrators should explain to the citizenry what kind of both, evaluation and investigation, have been applied in the past about the qualification of the judges. It is not a secret that some of the closed universities´ administrators counted with enough contacts and support from the Judicial System, in order to place the graduated students. >From that perspective, one can understand the resistance of some judicial apparatus´ members to favor an investigation that could reveal the foundations of this issue. It would mean to expose their own shameful acts of corruption.

     In that sense, one cannot understand what is the purpose of the defense that some guilds of judges and lawyers make about an investigation that they disqualify because of the partiality or the interests that move the “special district attorney”. He investigates the acquisition of fraudulent professional certificates of some members of those guilds. One could not agree with the afore mentioned character. However, one can still question the present context in which the district attorney has decided to investigate the problem. What nobody can ignore is the need that the Salvadoran society has to clarify this subject for its serious implications in the national institutions´ performance. The need to fight impunity setting some cases that can be taken as an example has been brought up many times. This case can be a good starting point. In addition, if somebody can shamelessly establish a university to sell professional certificates and then, with the help of some friends, place these “professionals” in some institutions, the situation is extremely grave. If nobody does something about it, bad precedent is set, throwing away the efforts that claim for a certain amount of decency in the country’s institutional administration.

     Whoever has been able to purchase a professional diploma to be acknowledged for what they are not, we have to question their intellectual capacity to perform the position they hold. This kind of person, apart from being incompetent, does not have enough moral solvency to administrate justice. In the end, the recurrent denounces about corruption in the justice system, are caused by corrupt officers willing to do anything to assure themselves profits and all kinds of favors. No one can know with certainty what kind of officers will be willing to be bought by organized crime or to accept bribery; but it is evident that those who were capable to buy their professional certificates are not people we can trust, and are prone to participate in that kind of game.

     The bottom line is that there are no excuses to stop the current investigations. It is a moral duty that the authorities have with the Salvadoran society, willing to end with the institutions´ corruption and impunity. It is necessary to get to the bottom of the denunciations, in order to establish the corresponding responsibilities far beyond the people that might be affected. In that sense, given the implications of the case, we will know if it has been a serious and deep investigation that will allow us to identify who (both in the judicial system and the ministry of education) have collaborated with the people responsible for the questioned universities, which have had to be closed. Today more than ever, we have the possibility to demonstrate the true motives of the officers responsible for the judicial apparatus performance.

     That is the way to start a fight against impunity in one of the institutions that should have a leading role in this stage of national life. It is the perfect opportunity to implement one of the unaccomplished subjects of the Peace Agreements that intended to provide new energy to the country’s institutional system.

     Almost four months after the Monetary Integration Law (or dollarization) took effect, we do not perceive its greatly advertised benefits yet. The supposed reduction of the banking active interest rates has not taken place; far from it, the panorama does not show significant changes for the financial system users.

     In the first place, the high interest rates of consumption and investment credits stand out; in second place, not necessarily in order of importance, the credit orientation destined for urban activities that have reduced the economic importance of the sectors with more exporting potential (farming industry, for instance) also stand out.

     These problems deeply question the results of the bank re-privatization, which was presented as a measure to overcome micro and macro – economic inefficiencies of the nationalized banking system. Although we cannot say that we are standing in front of a bankruptcy —unmistakable sign of micro inefficiency—, it is evident that the banking system is far away from both its development and promotion roles.

     It is worthwhile to reflect over the nominal and real interest rates recent behavior, in order to prove the prevailing economic contradictions in its fixation. The examination of the interest rates charged by the credit card companies is specially enlightening, since credit cards present extremely high levels, that resembles usurer activities.

     Since the banking system privatization, from the early to the mid nineties, nominal interest rates experimented sustained increases that, according to the Central Bank of Reserve (BCR, in Spanish), reached an average of 16.04% for the passive rates of 180 days, and 19.99% for the active rates up to a year period. From 1996 to the end of 2000, interest rates have experimented new and significant reductions that have reached levels of 7.1% for the passive rates, and 12.21% for the active ones.

     Up to here everything indicates that interest rates have responded to the inflation rates reduction, that we have been experimenting since 1996. However, this is not completely true. If we consider the real interest rates (which consist in the difference between the nominal interest rates and the inflation rate) as indicators, we can prove that the financial system has not delivered to its clients the benefits of a low inflation rate.

     Ever since December 1993 until December 2000, the real active interest rate has experimented an increase going from 5.98% to 7.6%, which implies a raise of 26.7% in the period. The real passive interest rates have had an inverse tendency going from 1.7% to 2.7% in the same period.

     The active rates behavior during this period deserves some attention, because it shows that most of the time the rates were much higher. We have to consider that in December 1999 the real active interest rate was 16.28% and it was kept in levels close to 13% since 1997. Those levels were reached after the rates grew from 5.98%, in December of 1993, to 16.28%, in December 1999, this meant an increase over 170%.

     The highest reductions of the real active interest rate occurred during the year 2000, since between January and December of that year those rates went from 15.81% to 7.6%. That was an important reduction, but still far from the 5.98% that prevailed during 1993, which questions the ideas presented by President Francisco Flores and his officers to justify the dollarization. With this measure, according to them, significant reductions would be generated in the interest rates, but these reductions had actually already occurred.

     Governmental information show that the average interest rates were being reduced even before the measure was announced. In that sense, the blabbered reduction of interest rates will not be significant, since one of the main reductions had already taken place.

     The reduction of the interest rates, however, cannot be taken as an absolute and generalized truth, because, as a matter of fact, the clients of the financial system still have a lot to demand on this subject. In addition to the mentioned raise of the real interest rates between 1993 and 2000, the holders of consumption credits  —generally, mid class employees— must pay high costs for the use of money. Credit cards are the best example  —some companies charge 50% annual rates—, but also personal loans provided by the banking system. These loans are given with rates of 24% (close to the double of the average calculated by the BCR for December 2000) and must pay annual commissions for the account’s managing that can easily raise up to 30% the total cost for using the bank’s money.

     Similar and onerous commissions are charged by the credit cards´ companies, which are basically the bankers.  The Cuscatlan, Salvadoreño,  Agricola, and Capital banks count with credit card departments which are leaders in its kind, although it must be said that not all of them charge such onerous interest rates (these vary from 17% up to 50%).

     On the other hand, the credit orientation is another key problem that obliges us to think over the criteria of their assignations. During the nineties, credit was oriented to both the construction and the marketing field, up to the point that there is still an overflowing housing offer. Additionally, it has become evident that the banking system has supported a real diversification process of the farming sector neither nor the re-conversion of the industry. It must be acknowledged that it is probable that such diversification is not a main purpose. This is extremely important in a moment that the economy is experimenting a prolonged slow down  (for over five years), which demands a change in the economic growth patterns.

     It is necessary to look for macro- economic efficiency in the banking system. It has a key role in the transfer of the savers´ resources to investment projects that might generate production and employment in a sustainable way. Construction and commerce already showed its limits. New sectors must be defined and supported with opportune and adequate financing (with low interest rates and adequate terms for the investment growth). Although liberal discourses propose that there should not be regulations for the banking system functioning, the truth is that the Salvadoran case shows the need to formulate minimum functioning policies.

     After the first ARENA government started the banking re-privatization, the dollarization started with its third government has been one of the most radical measures to eliminate the possibilities for the State to develop an economic policy. The banking re-privatization placed its administration in the hands of private sectors, but it maintained the BCR supervision. With dollarization, the BCR has also lost both the capability to develop monetary policies and, therefore, to regulate the financial system’s functioning.
 

Please, send us your comments and suggestions

---

More information:
Tel: +503-210-6600 ext. 407, Fax: +503-210-6655

---