Center for Information, Documentation and Research Support (CIDAI)
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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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INDEX

EDITORIAL

    The President of The United States, George W. Bush. arrived to El Salvador on March 24th, in the context of the 22nd anniversary of Monsignor Oscar Arnulfo Romero's death. Those were euphoric days for the government, the private business companies, and the media: even before Bush's arrival, they all did not skimp on ink and words to make everyone see what the visit of the President from the planet's most powerful country was all about. There were countless optimistic opinions about the future that awaited El Salvador once the free trade agreement was signed -alone, or along with the rest of the Central American countries- with The United States. After taking this step, the benefits would come naturally: prosperity, economic growth, and social development.

    As it usually happens, every time the news media make an echo of the official and the business companies' perception, the space left for the critical voices is practically none. Those who did not only doubt about the benefits of a free trade agreement with The United States were barely heard, but were willing to discuss one of the key issues for El Salvador's social and economic stability: the situation of the Salvadoran immigrants in that country. Neither before Bush's arrival nor during his brief presence on the Salvadoran ground, this issue was not openly discussed and it was avoided by The United States' President, as if that attitude could not question the alleged closeness between them, the government, and the Salvadoran population. Whenever someone insisted on that issue, it was made clear that such subject was completely out of the previously established agenda.

    Other affairs, which were not strictly economic -such as the reinforcement of the security systems in the subcontinent to protect The United States' Southern border against any terrorist or drug dealing mafia threat- were set aside in most of the analysis and comments that were made about Bush's visit. The emphasis on economic issues - specially the ones about the implications of a free trade agreement- caused that other issues, which were probably relevant from The United States' perspective, were ignored. Such attitude was an obstacle to evaluate the visit in fair terms. The Salvadoran provincial attitude claimed for its privileges, as if the only aspect that mattered about Bush's visit was the Salvadoran economic interests, and nothing else. The news media -with the right-wing's press heading the line- sold the idea that what was really important -even if they never said why- was El Salvador's economic launching, which became an overnight concern for The United States' government.

    After almost two weeks since Bush stepped on the Salvadoran land -and including the declarations he made before leaving his country, as well as what his visit meant- it is clear that that what El Salvador actually got is far from meeting the expectations of the government, the business companies and the news media.

    As a first reaction, Bush could be accused of promising too much, or in other words, accused of feeding false expectations. However, if what he offered is meticulously examined, it will be clear that it was either too little or almost nothing. In fact, the visit was unnecessary from a purely economic point of view,  since the terms of the commercial agreements that could have been subscribed were not going to be determined or decided by that visit. In addition, Bush's agenda was already known, that is why most of what he said in El Salvador was a mere repetition of what he said before leaving The United States.

    Therefore, Bush's trip to El Salvador obeyed to other reasons, and not exactly economic ones. Everyone has to be ahead of those who congratulate themselves about the fact that Bush's visit was due to a close friendship that bonds him with President Flores. It is probable that, for a fact, Bush considers Flores his friend; that is, that it might not be just a rhetoric way of bragging about a friendship between them. But if it was a friendly visit, the most reasonable thing that Flores could have done was to spent his Eastern vacation at one of Bush's Southern residences -with horses, hills, and barbecues included-, his soul mate and friend.

    Obviously, it was not a trip motivated by friendship, although when Bush says that Flores is his friend he gives him a strong diplomatic and politic path on the back, which the Salvadoran President receives with an unspeakable happiness. What could be Bush's interest? There will be plenty of people who will answer that Bush's attitude responds to the friendship that bonds them together: since he is his friend, that is why Bush promotes Flores, he compliments him and hugs him in public.

    However, if a person is a little more perspicacious, that person can consider that, more than a friendly gesture, what Bush does is to reward the Salvadoran President, not only for his docile attitude towards The United States’ economic and military initiatives, but for his disposition to assume as his own the cause of this country, regardless of the effects that it could have on the internal affairs or even internationally. There are a few examples that can be named: Flores has not doubted for a second to throw public diatribes against Fidel Castro; he has not hesitated either to offer his support for the anti-terrorist war fought by The United States, and he agrees with the installation of an American monitoring base on the Salvadoran ground.

    Bush rewards Flores by calling him "friend", and by visiting El Salvador for a few hours. Those who show a similar docility -that seems to be his message- will also be able to enjoy such privilege. It is not a free privilege, but a gift that is granted in exchange for a favor. It is a gift, it is clear, of very little importance for the Salvadoran population, whose basic needs will not be fulfilled with a visit of the world's most powerful country's President, nor with the joy that Flores feels when Bush calls him his friend.
 

    The visit of  The United States President, George W. Bush, on March 24th, is a debate issue at the country's highest political circles. The aftertaste the spectator is left with is that the most important opinion circles agree, conscious or unconsciously, to establish new perspectives of the national life. Everything seems to indicate that, from now on,  those who want to understand the activity of the national life have to establish either a “before” or an “after” Bush's visit.

    Does this mean that Bush's brief visit has contributed to discuss the main demands of the society? The answer to this question is clearly negative. In fact, in his short statement to the press, George W. Bush did not make any references to the most urgent issues that trouble the Salvadoran population. During this "session of compliments", the future of the Salvadoran immigrants in The United States was not discussed either. In addition, The United States' President did not mention the report made by the Department of State, in which the performance of both the Salvadoran judicial system and the National Civilian Police fail the test.

    For Bush, it was more important to highlight the personal qualities of his Salvadoran friend and colleague, which was evident in a series of compliments for an alleged wonderful leader -Francisco Flores-, who rules a very original country. At the same time, the Salvadoran President, paid countless compliments to his guest. Flores went so far that, so it seems, he would be willing to abandon the responsibility of administrating the country that the Salvadorans granted him by voting for him if he had to choose between his presidency and his friendship with the Texas' cowboy.

    If the visit of The United States’ President did not bring anything new for the Salvadorans, in what sense it might be relevant for the national political life? The answer to this question must be found by examining the attitude that the political actors adopted at the time of Bush's visit. For the right-wing circles and their most outstanding reporters, Bush's visit is the result of the so called  statesman qualities of the Salvadoran President, who has been rewarded by his leadership and his intelligence.

    On the other hand, the official circles do not skimp on efforts to emphasize how much Bush and Flores are fond of each other. The relationship between both presidents would be going through an idyllic phase, without any historical precedents for the relations between both countries. That is the point where the international policy turns into a loving task, administrated according the presidents' feelings. From this perspective -we are told-, El Salvador can take a lot advantage from The United States, thanks to the good relations between its President and the President at the White House.

    In this context, the country's destiny would exclusively depend on it's President's personal charm, who has captivated the President of the world's richest country. At this point, we are just one step away from declaring friendship as the ultimate requirement to have access to the country's political debate. There is no need of an exhaustive analysis to find out that, in this issue, ARENA is playing to win, since one of its leaders is admired by the President of The United States of America.

    In a series of feature stories that were made before Bush's arrival to El Salvador, one of the national newspapers announced with great satisfaction that they were the only national news media invited to participate in an encounter with The United States' President. But they did not explain to their readers that this alleged "award" has nothing to do with the journalistic seriousness of that newspaper; they did not say either that their participation was due to the good moves of their satellites at Washington.

    In the end, what happens is that the right-wing is determined to use personal relations as a political weapon. That is why Bush's recent visit to El Salvador is interpreted as a strong support for the country. However, if this matter is well understood, it actually is a support for the right-wing’s business sector that administrates the country.

    From this perspective, a bet is made to enhance the discredit of the political adversaries, specially the left-wing's. There is no doubt that during the next elections, the left-wing will be reminded that it does not count with such powerful friends as the ones that give international support to the right-wing. That strategy worked in Nicaragua during the last elections, when president Bolaños bragged about his good relations with The United States, in order to discredit the Frente Sandinista's candidate. That is why Bush's attraction towards Flores will be able to become some sort of a support for the official party's aspirations.

    On the other hand, the path on the back that Bush gave to the right-wing leaders will allow them to go further with their Neoliberal plan in El Salvador. In this context, the vindications of the civil society's organizations, who claim for a degree of participation at the free trade agreement's discussion, will not have a strong effect on the power circles. It keeps being symptomatic, in this situation, that the many protests organized because of Bush's visit did not get the attention of the most important news media. And that is because, in this game, Francisco Flores is not willing to share the starring role with any of the national actors.

    In addition, no one can expect either that the friendship between Bush and Flores leads to an improved defense of the Central American cause. Despite the illusions of the young Salvadoran President's unconditional men, he has not showed the national and international leadership qualities that The United States' president gives him credit for. The Salvadorans perfectly know that Francisco Flores has stood out, during his administration,  as a person incapable to establish a dialogue with the opposition, or make any decision that might contradict the opinions and interests of the small sector that forms his party.

    Maybe that is the most outstanding feature that Bush has noticed about Flores. In addition, also the North American President, in his brief experience as a world leader, has stood out for his intransigence and blind defense of the most conservative values. It is no secret that the most important partners of The United States in the world have been particularly critical about its growing unilateral direction and its disdain for any opinion different from their own. It is hard to imagine Francisco Flores as a friendly leader, willing to explain, with an independent criteria the interests of the world's poorest countries. Flores has not been able to do that for his country alone when it comes to deal with El Salvador's business elite; it is not clear yet how will he be able to do that with Bush.
 

    One of the clearest economic messages that Bush addressed to this country during his visit had to do with his interest to promote a prompt negotiation of a free trade agreement with Central America. He left the possibilities open for a bilateral negotiation with those countries that meet the requirements of "the state of rights and respect to the private property".

    This possibility was well known after Bush's declarations before the Organization of American States, on last February, when he announced the possibility of a free trade agreement with Central America. The discussion of the migratory issue, instead, still seemed uncertain for the Central American population, excepting the Nicaraguans, and still is uncertain, even after president Bush's declarations.

    For our country, this is a very delicate issue, since its immigrants send family remittances, and these remittances have turned into one of the main structures of the Salvadoran integration with the global economy.  Another main structure is the textile maquila. The family remittances represent close to a 15% of the GNP, they cover close to a 90% of the commercial balance's deficit, and they have transformed themselves into the main support for a great part of the country's population.

    Therefore, President Bush's visit did not actually have the "transcendental"  connotations that the communication  media and the official discourses intended it to have. It is a fact that Bush did not come to say or offer anything new, although that does not mean that it is not worth to examine his declarations to confront them with reality, and evaluate the possible implications for El Salvador's sustainable development. Issues such as the evaluations about the free trade, the free competition and the migratory situation deserve a special mention.
 

The free trade agreement as a target
    As it was previously mentioned in this article, the celebration's main dish was the confirmation of the united States availability to arrange a free trade agreement with the region. The news were that this free trade agreement could have a sort of a  "fast track", for those countries that meet the necessary requirements before the rest. This disposition that Bush made was already known, and it certainly constitutes a transcendental opportunity for the Central American region to open up its market; however, at the same time it represents a considerable penetration threat for those markets and the loss of employment opportunities.

    The convenience or the inconvenience of this kind of agreement depends on the calculation of costs and benefits. This evaluation will indicate if in the end it will bring certain benefits or a loss for a country that is seeking to get involved in such a project without looking for any specific favorable conditions. The present governments consider as convenient almost any measure that has to do with the deregulation and the opening of the markets, even if there are evidences that that its effects are not necessarily positive in every case.

    There is the case of Mexico and its free trade agreement with The United States and Canada. There are evidences in this case that Mexico got the worst part, since even if it experimented a considerable growth on its manufacturing exportations and the foreign investment, the Mexican economy still resents traditional and common problems of the central American countries: a slow growth of production and employment, a small vertical and horizontal integration of the economy, an increasing crisis of the farm laborers' economy, and an intensification of the migratory flow to The United States, among other situations.

    Without going too far, a year after the free trade agreement established between Guatemala, El Salvador, Honduras with Mexico, the results have been more negative than positive for El Salvador and for the rest of the formerly mentioned countries as a whole. Although if it is true that the exportations were almost duplicated, it is also true that the importations from Mexico grew higher, and the commercial balance with that country got worse. Inexplicably, this element is not considered by the governmental officials when it comes to examine the results of the agreement. Like so, the Salvadoran Minister of Economy only shows his satisfaction with the exportation activities to Mexico, ignoring the importations' effects. This omission might turn dangerous if  its tendency grows worse, and if the necessary corrective measures are not taken, which is an aspect that should be evaluated right now by the economic cabinet.

    This does not mean that El Salvador should be commercially isolated, but that it should make a more objective  consideration of the possible impacts, with a tendency to adopt adaptation measures for a probable intensification of the competition with countries that have a enormously superior relative development. What has happened with Mexico is only a sample of what could happen with The Unites States, although with a potentially superior relative impact.

Free competition in El Salvador?
    Because of one of the questions asked by the Salvadoran reporters, President Bush mentioned the relation between free trade and free competition. When he spoke about the oligopolies he said: "the way to avoid them is to encourage competition and the free markets to prevent them from dominating the economy and hurting people. That is what President Flores has done: to insist on the open markets' issue, to insist on having a good competition".

    In this point, the declarations can make anybody doubt about the legitimacy of the informative sources and the considerations of The United States' President. In El Salvador, neither the present government, nor the former ones that encouraged the recent main economic reforms, have promoted the free  competition. On the contrary,  many of the privatizations and concessions made by the state have consolidated or created oligopolies.

    Some clear examples of the oligopolies’ market are the financial system, the television sub-sector and the petroleum derived  products' market. In the first case,  it can be detected how two or three banks have been acquiring assets and market shares from other financial institutions that either have gone broke, or that have been "absorbed" by much larger organizations. The final result has been the conformation of a financial system with the clear characteristics of an oligopoly.

    In the case of the television companies, it is also clear the role as an oligopoly of the three main television channels, which are together in a "television corporation" with cartel characteristics. The present government and two of the former ones have encouraged this situation through a preferential assignment of the governmental propaganda to this cartel, which, in exchange, broadcasts news and interviews with a clearly favorable editorial line for the government's interest.

    On the other hand, the importation and distribution of the petroleum derived products has been concentrated, more and more each time, in the hands of three transnational petroleum companies, without any law to regulate the prices.

    What shows that the government is not promoting the free competition is its negligent attitude towards the elaboration, the discussion , and the approval of a proposition for a free competition law, which is stuck at the Economy and Agriculture Commission of the Legislative Assembly. Therefore, President Bush's declarations seem to be based on either very little reliable reports or incomplete ones, that do not reflect the present reality.

Migration, remittances and double standards
    Out of all the issues that have been discussed, the most important one is not necessarily the free trade agreement, it could become the most important in a long term horizon. In the short and the mid term the most important thing is to achieve the stability and the security of the migrant population and, with that, prop up one of the main foundations of the Salvadoran economic model: the family remittances. It is in this field where the expectations of most of the Salvadorans are placed, and where El Salvador is also betting for its so much raved about macroeconomic stability. A decisive element is the TPS, a law that grants a more stable situation for Nicaraguans and Cubans, and most people hope that it eventually includes other Central American migrants, including the Salvadoran ones.

    However, in this point, President Bush was not so clear as he was with issues such as the free trade agreement. He only said that "we will thoroughly study the TPS this summer". However,  from the President’s declarations it can be inferred that the TPS will continue in "suspense" and that The United States' migratory policy is pointing out to other objectives. Like that, Bush said that "the nucleus of a good migratory policy is to find a willing employer with a willing worker who can meet". This could mean that the future migration to The United States would be possible only if the worker previously counts with an employment letter.

    There is no doubt that the perspectives of a free trade agreement with The United States are very good; however, no one can afford to think that the United States is moved to sign the agreement for a purely philanthropic compromise. There are geopolitical interests behind this and, in addition, there are evidences that, technically, Washington always looks after is own interests and not for the interests of the others. There are a few examples that can illustrate these ideas: the refusal to confirm the Kyoto Protocol about the emission of gases' reduction of the greenhouse effect; the high subsidies to its agriculture, asking, at the same time, that the other countries do not apply similar measures; and the demands for a commercial openness, while its market remains closed. A more recent example is the sudden increase of the duties for steel.

    In this context, President Bush's statement  "...when there is an unfair trade we respond, and I have done that and will keep doing it because free trade must be a fair trade", still has to be proven right with facts, since history is very different from the discourse. The case of the coffee has to be considered, where the transnational companies  take most of the surplus and the producing countries get weaker with prices that are inferior to the production cost.

    In summary, and because neither El Salvador nor Central America can keep away from the global process, the actions must cover, at least, three complementary lines: an analytical and realistic negotiation that promotes the asymmetry in three sensible areas, a strong modernization policy of the productive apparatus, and a constant examination of the impact, along with the necessary corrective measures. At the moment, the Central American governments have concentrated themselves almost exclusively on the first aspect, neglecting and risking its economic apparatus and its future development.
 
 

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