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     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.
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Proceso 954
June 6, 2001
ISSN 0259-9864
 
 
 
 
 

INDEX

Editorial:  The FMLN does not find its direction
Politics:  What is going on inside the FMLN?
Economy:  The Flores’ economic self-evaluation
 
 
 
 
 

EDITORIAL

     Last week, the Francisco Flores’ government was between the eyes of the public opinion. The evaluations of his second year of administration, the opinion polls, and his speech were in the newspapers, the radio and on television, setting aside any other event, even those that were also important for the country’s social and political configuration. One of these events was the election, within the FMLN, of a Transient National Commission that —ordered by the party’s National Board— will direct their destiny until December of 2001.

     The first aspect that calls the attention about this decision, taken by the end of May, was the idea that filtrated through the press: the “renovators” discontent, some of its leaders even said they felt like outcasts about the Commission. Far beyond the revelations of the press, everything seems to indicate that the renovators discomfort is just one of the aspects —the most superficial one— of the crisis that is being created within the left-wing party, and that could turn into one more rupture among its members.

     As always, the detonator of that possible rupture would be the disputes about the party’s direction; once again, Facundo Guardado and his followers  —candidates to step out of the FMLN— would be questioning Schafik Handal and Salvador Sanchez Ceren’s authority, who with some ability managed to gain control, and still do not want to let it go for anything in the world.

    The FMLN’s presumable division obliges us to reflect about the left-wing party’s contribution to the democratization process of El Salvador; as well as to make some considerations about the future that might await for it, in case it continues trapped into internal disputes.

    It is clear that the FMLN’s incorporation to the political system gave a new breath of fresh air to the political practice in this country. A new electoral option appeared in the horizon of many Salvadorans, who were already tired of the traditional parties. In the period immediate to the Peace Agreement signing, the FMLN presented itself, for a good percentage of Salvadorans, as a possible alternative to renovate the political work. Not even the first rupture within its lines —Joaquin Villalobos and his followers’ departure— was able to slow down the positive expectations that the left-wing party awoke in a wide sector of potential voters. That is how it was in the beginning, when the transformation of an armed movement into a legal political party was still a novelty that deserved some credit. Through time, what the FMLN was  during its armed movement stage has now turned less important for the collective imagination.

     Slowly, but inexorably, this party has grown weaker as an option for the political renovation. Senseless decisions, fights over power, friendship preferences, the absence of a clear ideological profile, reluctance to an internal renovation, traditional leadership persistence… All those factors, accumulated one behind the other after the incorporation of the left-wing party to the legal political life, have driven it into a difficult situation, in which the aspiration to remain as the second political force of the country would be consider as an advantage. Probably many FMLN members refuse to accept it, but it is very clear that the FMLN’s behavior is not only moving it away from the possibility to win the next presidential elections, but it is also drawing it back from the electoral achievements in the municipal and the legislative field.

     With this situation, the FMLN has a serious problem in its hands. To solve such difficulty, it will have to design a political renovation formula that, on the one hand would allow the party to count with the qualified leaders to conduct that renovation; and that, on the other hand allows it to discuss at once the issue of its identity as a left-wing party that accepts —explicitly or implicitly— the rules of the market economy and the demands of political democracy. If the FMLN does not deal immediately with this discussion, it will be condemned to follow the steps of the traditional parties, that is, an irrelevant pathway for the political change in El Salvador.

     For many FMLN leaders it has been enough to be second best; for them, it has been a triumph. Obviously, from the parties’ rivalry perspective, even if being second is important, it is even more important to have the first place. It would have been reasonable to expect the FMLN to achieve the first place in the political field. It actually seems as if its leaders insist on being second best —which initially would not be that bad—, but to take a step backwards to inferior positions in the people’s preferences. Political near-sightedness? Incapability to insert itself into the politics market? The persistence of obsolete ideological outlines? Who knows what is the reason (or reasons) that are leading the FMLN to take a step backwards. What it is true is that if it goes on like that, it will not be easy to know how far its political deterioration will go.

     The counterpart of the FMLN’s deterioration is, on the one hand, the increase of the ARENA party electoral possibilities; and, on the other hand, the increase of abstention. In other words, if a political alternative that allows the relieve of ARENA from the Executive is not structured, this party has a great chance to continue at the head of the government by the mere inertia of the political dynamics. If this is the scenery that is already being structured, at the sight of the next presidential elections, ARENA could continue with the control of the executive. Not because it is a better party or because it counts with the support of most of the population, but because a real option might not appear. The failure of the FMLN is a wining chance for ARENA who, without a doubt, will intend to turn the emptiness created by the absence of a political alternative into a favorable feature.

     What about the abstention? It will surely increase, which is favorable for ARENA, who will fight just one more political battle with the advantage of not having an opponent who actually defies its power.

     In summary, the FMLN, eleven yeas after it was disarmed, cannot find its direction as a party that must assume the market rules and democracy. Meanwhile, ARENA, despite its weariness and its failure in the country’s administration, is foreseeing a new opportunity to renovate its governmental command.
 

    To say that the political parties are decisive electoral instruments to achieve governmental power, is a platitude that does not say anything new about the political debate. It has been so since the end of the nineteenth century, when the first political parties appeared in Europe. Conceived, in the beginning, as organizations divided in sectors and created to defend the interests of certain groups of the society, this structures evolved into national parties that legitimated the governmental power as an adequate space to exercise their vision of what a country was. For instance, in Europe, the different workers’ parties had a fundamental role in the transformation of the beginning of a mind dulling capitalism.

    Ever since then, political parties have been gaining social notoriety, and so they have been perceived as the main indicator of the quality of democracy in the Occidental context. Nowadays, the openness and the amount of freedom in a certain political regime are built over the foundations of the existence or the absence of political parties. In our days, those aspects are an indicator of the political tolerance. In this context, we do not think that the partisan propaganda is a crucial element of the electoral competition. The different political parties that exist in a specific country continuously compete for the governmental power.

    To be "instruments for the power" —a definitive element of the political parties— is the reason why they are constantly involved in disputes to win the sympathy of the voters. The voters are the ones who decide who will hold or will not hold the control of the governmental power. However, the importance of the political parties for the democratic system performance is even greater in a context in which they constitute the only access to the governmental control. This is the case in El Salvador, the law grants this privilege. In the context of the democratic consolidation, they are called to perform a crucial duty for the political activities.

    The formerly described aspects, in addition to causing constant arguments between the different parties, in order to seem more attractive than their opponents and win the sympathy of the voters, it is also a reason for internal disputes that could become as "colorful" as real life dramas. Inside a political party there will always be differences about how its members analyze the social reality in which they plan to intervene, since inside a political party there are also human elements that compete for power. That is the reason why the majority of political parties around the world has never been sure of the unity of its members, despite that they subscribe to the same line of thought.

    This perspective could explain the internal arguments among the different political parties. The FMLN, PDC and ARENA are some of the political institutions that are presently experimenting the internal dispute over power. ARENA, the official party, formerly known for their unbreakable unity, is feeling the pressure of internal groups that that do not agree with all the aspects of the party's direction. As for the PDC, an internal sector has leaded a leadership renovation movement. In one case or another, the electoral results are located at the foundations of the internal cracks.

    In the case of the FMLN, however, the reason of the crisis is different and, because of its possible importance for the configuration of the national politics in the years to come, it is convenient to analyze it thoroughly. We have to consider, in the first place, that differently from the PDC and ARENA, whose leaders are involved in serious trouble because of the last electoral results; the FMLN, instead, had a satisfactory advance in both the legislative and the municipal fields, which opened expectations about the FMLN wining the control over the Executive in the near future. >From this perspective, it was not reasonable to wait for the internal disputes to explode. It would have been logical if the different actors of that party would have designed the strategy to take control over the power in the next presidential elections.

    However, against all logic, the left-wing party has been involved in a dispute that reveals even more their internal division. The “renovators” have made public their disagreement with the “orthodox”, who they consider as anti-democratic and uncompromising. For the formers, to turn the FMLN into an attractive party for the elections means to smooth over their critics against the dominant economic model, and to collaborate with the official party, among other things. The renovators consider the need to end with the Salvadoran political polarization, in terms of a change of attitude in the left-wing.

    You can agree or not with the renovators opinion, but it is convenient to say that the key ideas of their dispute with the orthodox are well known in this country and defended by the elite circles of the national right-wing. In addition, it is important to say that the main renovator leaders have made out of the most important media in the country —traditionally anti left-wing— their main allies in their fight with the orthodox over the control of the left-wing party. It is not clear up to what point it is all about a calculated decision that might be a part of a press strategy of the renovators to remove the orthodox from the FMLN’s control. In any case, it would be naive to think that the right- wing and their communication media would be willing to support the renovators to the detriment of their own party.

    Whatever it might be, in the re-emerging of the internal disputes over the control of the FMLN between renovators and orthodox the logic of the political parties’ existence clearly appears. However, the political parties’ electoral efficiency criteria —which the renovators exalt to defend their left-wing conversion thesis— does not advice this kind of dispute. Could it be that there are other interests involved, far beyond rhetoric and anti-democratic accusations?

    If the main renovator leaders would seek the FMLN’s consolidation facing the next elections, they would be working for unity, criticizing the wrong decisions within the boundaries of the party’s legal framework. On the contrary, they promote irreverence actions that undermine the unity that they claim to seek for and question their compromise with the partisan democracy.

    It all seems to indicate that, in the end, what the main leaders of the renovation movement are looking for is their expulsion from the FMLN. Their actions and declarations of the last few days point to this direction. Could it be that they think that the support they have received from the right-wing news media is enough to become a power option against ARENA?
 

     To evaluate the performance of a government, it is necessary to examine the different statistical indicators. This is particularly true when it comes to evaluate the nation’s economic administration performance. In the case of the first two years of the Francisco Flores government, his performance should be evaluated according to the results obtained by the end of the year 2000 —that is, after a year and a half of administration—, since the first semester of 2001 was not a regular one due to the earthquakes’ brutal impact.

     It is still odd that in his evaluation speech of his second year in the government, and regarding to the economic administration issue, President Flores made no reference to the performance of the economy. Without exaggerating, we could say that this speech has been one of the most questionable ones he has ever made, since he avoids the issue that he should have discussed (the impact of the measures taken during the first two years of government), and he takes advantage of the disasters caused by the January and February earthquakes, to exalt the image of the government and the President.

     The presidential speech starts with an enumeration of the strategies implemented by the government after the recent disasters, in order to discuss the economic issue afterwards. In this field, the presidential speech highlights six aspects that are consider as his “achievements”: dollarization, a family remittances increase, a public investment increase, the extension of the Caribbean Basin (ICC, in Spanish) initiative benefits, the subscription of free trade agreements, and the upturn in the farming sector. Let us briefly examine these six aspects.

     It is not necessarily to say much to sustain the thesis that dollarization is not a measure that will take the economy out of a slow growth phase, but that it does involve high fiscal costs and costs derived from the monetary policy elimination. Just like it has been pointed out before in the pages of this weekly publication, the monetary integration law or dollarization involves the elimination of the government’s income because of the seigniorage, which means a cost close to 6% of the National Gross Product (PIB, in Spanish). In addition, there are other opportunity costs for the use of the foreign exchange reserves to finance commercial transactions, meaning that the government gets rid of its saving in exchange for nothing.

     As if this were not enough, the elimination of the monetary policy means the elimination of a useful     element as well, not only to manage crisis situations, but also to prop the efforts of the productive sectors. The most unrealistic situation is that, in El Salvador, the exchange rate is the same since 1992. This fact makes dollarization totally inadvisable, which can only be recommended as an extreme option to restrain devaluation and inflation.

     The second “achievement” that is attributed to the third ARENA administration, the increase of remittances, is not a result of the Flores’ direction. The remittances were increased because the United States Government decided to shelter a considerable amount of Salvadoran workers who live in that country; and because after the January and February disasters the immigrant workers have increased the amount of money they send to support the reconstruction efforts of their families. In summary, the increase on the amount of remittances is an external factor, which is not likely to be affected by the domestic economic policy.

     To continue with the list of his achievements, President Flores mentioned that  “traditionally, we have invested $350 million on direct investing. This year we will double that amount to invest over $700 million”. But this is just a result of the disasters, and not the result of a public investment policy based on healthy public finances. In addition, public investments are fundamentally destined to reconstruction, not to build new infrastructure. With luck, we will be the same as we were the last January 13, before the first disaster.

     The extension of the ICC benefits was not the result of a governmental economic policy either. Again, it was the result of a political decision of the United States government. Therefore, the effect that this might have had over the production and the use of the textile maquila is a sort of  “social compensation” that our country —and that the other ones that belong to the ICC— receive from the United States.

     On the other hand, —in a serious effort to predict the future, and to avoid the evaluation of the commercial balance behavior during his administration— President Flores stated that with the Dominican Republic, Panama, Chile and Canada’s free trade agreements, an increase of $284 million would be generated by our exports. What he did not mention was the impact that the imports we get from those countries would suffer, which could increase higher than the exports. Even if we thought that imports would not increase, the $284 million would not even represent a 15% of the total commercial balance deficit of the year 2000. It is not besides the point to remember that between 1999 and 2000, the governmental measures and the international market’s behavior strongly increased the Salvadoran commercial deficit in a 26.1%.

     During 2000 the farming activity decreased –08%. Despite this fact, President Flores did not make the least effort to analyze it. He said that “the support to the farming sector” is a reason “to see with optimism the future of our economy”. The support to the farming sector consisted in re-structuring the coffee growing sector’s debt (one of the few non-poor farming sectors), convenient credit for peasant families, farming materials delivery, and educational training.

     In summary, from the presidential speech we would have to infer that his main “achievements” have been a matter of chance, a result of the United States government’s good will, or a result of the reconstruction requirements. In addition, it should be very clear that we are not going to find the achievements in the two years that are being evaluated. We still have to see what is the benefit of policies such as dollarization, the increase in public investments, the support for the farming sector, and the micro-credit, among other aspects.

     An economic evaluation, with at least a small amount of criticism, should have identified the fundamental problems at sight: the crumbling public finances, the commercial deficit’s high increase, and the permanent reduction in the growth rates. But since it has become a tradition, President Flores has followed the example of his predecessors, and has chosen to ignore such fundamental problems. Evidently, he does not want to make public that his economic administration has been the worst, and  he already seems incapable to overcome the country's economic problems.

     It is in this context that the attention to the emergency and reconstruction measures —which had to be implemented by forcing the nation to accept them— have been presented by the government as one of the most important achievements of his administration. It does not matter if we are in a deteriorated economic situation or depending more and more on external factors, such as the family remittances, the ICC or the free trade agreements. He could not care less about the fact that the disasters revealed the deep deficiencies of the economic, environmental and social administration.

     It is about time the Salvadoran presidents act according to reality. But for that, it is necessary that they accept it, and abandon the traditional speech that ignores all the negative aspects, and avoids objective evaluations. With that attitude, they eliminate all the potential benefits of an evaluation: the identification of problems, causes and solutions that could improve their performance.