/** reg.elsalvador: 37.0 **/ ** Topic: Proceso 776: 1 oct 97 ** Center for Information, Documentation and Research Support (CIDAI) Central American University (UCA) San Salvador, El Salvador Apdo. Postal (01)575, San Salvador, El Salvador Tel: +503-273-4400 ext. 266 Fax: +503-273-5000 E-mail: cidaiuca@es.com.sv ******************************************************************* 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 on the UCA's Web Page: http://www.uca.edu.sv ******************************************************************* PROCESO 776 October 1, 1997 EDITORIAL: Criticisms of Cristiani's "reign" Alfredo Cristiani has begun a new reign in ARENA. It will be marked by his zeal to reduce the FMLN's political potential, the growth of which appears to be one of the chief concerns of the new head of COENA [ARENA Executive Committee] in view of the 1999 elections. "I believe the FMLN will not continue growing, it is a very dogmatic party in which there is no room for broad ideas," Cristiani has said, perhaps as a way to convince himself that the challenge posed by this left party is not as serious as many in the ARENA ranks believe. But leaving aside the potential significance of the political strengthening of the FMLN for ARENA's electoral aspirations, there is no question but that this party must first confront the challenge of its internal quarrels. These are not new, but have lately reached an unusual intensity, leading even one of the principal figures in the debate (Orlando de Sola) to lay the blame for that right-wing party's ills at the feet of Roberto D'Aubuisson himself, who, he said, "committed the mistake of bringing mercantilism [into the party] using Cristiani." The principal critics from the right-wing perspective, de Sola and Alfredo Mena Lagos, have made the "mercantilism" brandished by ARENA's current leadership their principal target of attention. There is, of course, a personal component in de Sola's discontent with the party, which goes back to his removal -by the President himself- as Superintendent of Energy and Telecommunications. He believes the firing was based on "unjust motives, as if I hadn't fulfilled my duties and had spent too much money." De Sola also has no sympathy whatsoever for ex-president Alfredo Cristiani, whom he terms a "man who very much likes to accumulate material wealth, not intellectual. And for that he uses political power. He was a wealthy man before entering politics, but came out of the presidency very much wealthier. Money should not be a motive for political activism." Alfredo Mena Lagos also has more than enough reason to be upset with ARENA and its leadership, since he was stripped of his power as Presidential Commissioner for the Modernization of the Public Sector. Furthermore, although he says he respects what Cristiani achieved as president, he cannot conceal his misgivings about the ex-president's penchant for obtaining business privileges on the basis of his political power. The fiercest right-wing critics of ARENA's current situation, therefore, have very strong personal motives for being upset with the party which used to protect and shelter them. But above and beyond their undeniable resentments, both Orlando de Sola and Alfredo Mena Lagos have unearthed more fundamental questions about the current ARENA leadership: for diverting the party toward "mercantilism" at the expense of the neoliberal values which used to inspire the party. Mena Lagos explains it in the following fashion: "ARENA's origins are eminently nationalist, but principally neoliberal, and its success in the future will depend on its ability to get those two tendencies to converge." De Sola levels harsh attacks against mercantilism, against that "type of monarchic socialism, in which the king of the moment offers his friends all sorts of privileges, at the expense of the citizens. The same thing is going on today when certain activities considered to be in the national interest are protected, but then end up benefiting a specific group, thus harming the rest of the people because they obstruct competition." Thus, the former superintendent of energy and telecommunications' greatest concern about Cristiani's rise to power in ARENA is of an ethical nature. Since the new ARENA head is a sponsor of "mercantilism," not only can he be sympathetic to corruption ("mercantilism contains a degree of corruption") but will also be inclined to "take advantage of political power in order to enter exclusively into certain economic sectors. That is what in economic terms is called an abuse of the monopolistic or oligopolistic situation," says de Sola. One could oppose neoliberalism and its values, but no one can deny that a large part of Salvadoran business owners are neither entrepreneurial nor competitive nor respectful of the law. Nor can anyone deny that political power is used to grant favors -at the expense of other economic sectors- to privileged groups who, protected by political elites, obtain outside the market what they cannot achieve through fair competition within it. It is these mercantilist political and economic sectors who are the most brutal apologists of market forces, those who proclaim its virtues and achievements high and low. However, they are also the first to break its laws, the first to enrich themselves illicitly, the first to use their political power to block the emergence of other, truly competitive economic sectors. One could argue against the market for being inequitable and for generating injustice, but that does not prevent one from recognizing that business competition is merely a dream in El Salvador, and that the market -no matter how loudly the economic and political right preach about its wonders and effectiveness- faces serious obstacles in the way of its becoming the most dynamic force in the national economy. For whatever the reason, de Sola and Mena Lagos have ventured to point out one of the sources of those obstacles. One might hope that their criticism hits home in the ruling circles of the economic and political right wing, and that it provokes responses and attitudes which go farther than the mumblings of Cristiani, who merely said that the criticisms come from "frustrated" and "resentful" individuals. Calling de Sola and Mena Lagos resentful and frustrated does not get to the bottom of the matter; the issue is whether or not ARENA is truly committed to free enterprise, or if its pledge is instead to mercantilist cabals. POLITICS: The PCN back to the fold; the rights unifies (Part I) In El Salvador one cannot speak of a homogeneous political right. As history has shown here, the need to maintain a political bloc which represents the interests of big capital has had more to do with administrative formality than with any desire to crystallize an ideological bloc capable of bringing people together. For a time, power was in the hands of the oligarchy itself, when concerns for making this piece of Central America something of a nation were not taken very seriously. Then there were the military, who defended the power of their predecessors. With the passing of time, the need grew to incorporate true technocrats into the leadership of party activity, but that did not achieve the configuration of a social group which could keep the right unified around a common political ideal. The variety of interests and conflicts these technocrats produce appears to be the fundamental problem which is still plaguing us today. The unity that has made these groups which dominate the economy get to where they are today can be seen only when their primordial interest for staying in power is threatened. The latest occurrences in the legislature, and concretely, the conflicts which have surfaced between the PCN and ARENA, have uncovered one of the features which have characterized national reality since the March elections: the right wing in El Salvador is immersed in a crisis which threatens it with the loss of its current share of power, and which requires it to negotiate -no matter how- an alliance which will allow it to hold together amid this uncertainty at least until the 1999 elections. This is an issue to which the right must devote a large part of its efforts. This dangerous situation for the right began to take shape last year, when a group of "malcontents" from the ARENA party -led by Antonio Cornejo Arango, Mauricio Gutierrez Castro, Francisco Merino and Sigifredo Ochoa Perez- joined the PCN, citing their exclusion from the ARENA leadership. These dissidents found in the PCN enough room to give free rein to their ambitions. If no one stopped to assess the consequences of this move, it was because the imperatives of the elections validated anyone's wish to join another party if that meant increasing its voter base. What those who defected to the PCN failed to take into account was the lack of real power on which they were staking their careers. The forecasts that the relationship between the PCN and ARENA would be strengthened by the defections were shattered once the PCN legislative bench's voting positions became public, when it supported the reconsideration of the privatization of telecommunications, the interpellation of the president of the Central Reserve Bank and the recommendation to remove him from his post, all measures in which Ochoa Perez played a key role. The problem that was foreseen was the splintering of the right-wing political bloc. But there was a question which the public was forced to ask itself: could anyone expect the PCN to take an opposition attitude before the ruling party that would be capable of situating it as an independent force capable of leading the nation toward a true climate of democracy and pluralism? If this had indeed been the case, then the PCN would have been a very attractive choice for the electorate, and thus a dangerous rival for ARENA in the 1999 elections, since it would have brandished the value of independence and true commitment to national interests. But given the danger of a political setback of such a magnitude, the right decided to defend itself: on the eve of a general assembly that was crucial for the official party, the PCN leadership decided to remove Ochoa Perez as head of its legislative bench, and warned deputies that the party would tolerate no more divergences from party principles. This reaction was confirmed in the most recent PCN convention, since efforts to revoke Ochoa Perez' removal were declared out of order by the party leadership. The consequences of this posture began to be revealed over recent days, since the possibility that the party with the most electoral experience in the entire nation would begin suffering internal divisions could not be concealed behind the removal of its legislative chief. Of the eleven PCN deputies in the Legislative Assembly, nine supported most of the positions headed up by Ochoa Perez, which invalidates the argument that his personal motives led the PCN legislators to act independently of party dictates. The news that Gutierrez Castro decided to resign from the party executive council, just before the removal of Ochoa Perez, clouded the climate even more, amid rumors that his decision was in reprisal for the rulings the party was already discussing. Furthermore, the controversial declarations of [PCN member] Horacio Rios about his party's move to oust Ochoa made it clear that even within the party, it was impossible to keep quiet about ARENA's interference with PCN leadership decisions. In any case, the language used to explain the convention frame the entire conflict in terms of "disobedience" and "misunderstandings" which could be happily resolved if room were provided for all parties to express their points of view. It appears as if any reaction which could demonstrate the power of Ochoa's supporters in the legislature to reflect not only the interests of the political institution to which they belong (if indeed it has its own set of interests), but also the needs of the people they represent, is far from becoming a reality. If this is the case, perhaps there is still reason to believe that democracy and pluralism cannot exist in the Salvadoran legislature as long as groups prevail whose interests validate or invalidate the work of other parties and -why not say so- that of the majority of government offices whose constitutional mandate is to establish the true rule of law in El Salvador. Can the dream that [PCN leader] Ciro Cruz Zepeda has proclaimed far and wide -the possibility that his party could run as a serious alternative in the 1999 elections- actually come true, given the rules of the game established in his party's latest convention? It may be true that the PCN has no economic ties with any organization or political party, but it is also true that its parliamentary record leaves little room to hope that its ideological line ("native-born," as they labeled it during the event) would allow it to bring a new type of thinking to the Salvadoran right. However, despite all the negative angles Ochoa Perez' work might have had, no one can deny that in this precise moment of history, given the current makeup of powers in the legislature, this former head of the legislative bench was capable of laying out a workplan which could have led the party to revolutionize the face of the right-wing bloc in the Legislative Assembly. However, with the recent national convention, the possibility that the PCN could free itself of the political guidelines of the ruling party seems increasingly remote. In his latest public declarations, the PCN's secretary-general lost no opportunity to reassert his claim that autonomy continues to be the trait that will lead his party into competition with the nation's principal forces. But instead it appears as if his party has no skill in assessing the situation in which it finds itself following the convention; or, in the final analysis, it will never stop paying attention to the calls to order coming from outside forces. In this reshuffling of forces, there are two key bits of legislation which must not be lost from sight: on the one hand, efforts to get the vote that recommended Orellana Milla's removal to be reconsidered, and on the other hand, a reevaluation of the party's decision to support the forgiveness of the agrarian debt. The party has already stated that it will continue to support forgiving the agrarian debt among its short-term objectives, although it has yet to clarify how much of the debt it will be willing to forgive. It seems suspicious that this reconsideration has emerged after ARENA announced that it will give some ground in its opposition to such a move. In terms of the Orellana Milla case, everything seems to indicate that one of the most controversial initiatives ever undertaken by the PCN legislators under Ochoa Perez will be laid to rest. The thirst for victories in the legislative ring is overwhelming to the ruling party, and no one can deny that what appears to be a coincidence of interests between ARENA and the PCN will be highly beneficial to the former. At bottom, it is a question of getting the public to swallow the idea that the right wing is still strong, even if concentrated in a political party whose internal problems have loosened the iron grip it exercised over most of the state apparatus for the past eight years. What does appear to be clear on the national front is that the right's marching orders are still being dictated by the top echelons of one party alone, and that the existence of two parties with a right-wing ideology responds to the need to bring together voters who still believe in the legacy of the PCN. The legitimacy of claims about the beginning of PCN independence will depend exclusively on the reactions from those members of the party who gave rise to hopes for a change in its course. POLITICS: The CD and the uncertain future of the small parties Recently, the center-left Democratic Convergence (CD) announced that it was breaking up its political alliance with the FMLN. According to the Convergence, the separation has to do with the "populist and demagogic leftist" discourse the FMLN stubbornly maintains. Now, it comes as no surprise that the CD might want to declare its independence, since one might hope that the small parties with chances of staying alive would seek to consolidate themselves as centrist alternatives in order to counteract the nation's political polarization; what is strange is that in order to achieve that independence, the party has resorted to arguments which appear to be aimed more at discrediting the FMLN than at reasserting the CD's autonomy. The rupture comes as no surprise given that the coalition was started as a strategic move in which both parties sought their own benefits. The Convergence contributed capital, the FMLN gave it votes, and the triumph of Hector Silva was advantageous to both. The alliance was, therefore, a strategic and momentary affair, not a definitive union based on ideological grounds. But if the political alliance worked and everything worked out, probably even better than the parties themselves expected, then why break up with a confrontational attitude? It is possible that, with the 1999 elections in mind, the CD has decided to seek autonomy by divorcing itself from the FMLN, justified by a series of arguments aimed at distinguishing itself from that party, and positioning itself in the minds of voters as a centrist political choice and a better version of the left than what the FMLN has to offer. If that in fact was the CD's goal, then it was certainly not necessary to accuse the FMLN of populism, demagogy and pandering to voters. The charge loses force for a number of reasons. First, ever since the FMLN immersed itself in democratic life, it has maintained its political postures, and one could even say it continues to be the same party it was six years ago. In other words, if the FMLN is populist, demagogic and panders to voters, then it has also been so ever since it existed as a party, and that type of criticism could have and ought to have been made a long time ago. It is hard to believe that the CD has just now realized that the FMLN suffers from these ills, and hard to understand how they can be used only today to break up the alliance. The fact that the CD has decided to wait to reap the benefits of the coalition before expressing its disagreements with the FMLN is questionable and contradictory. Isn't the CD then suffering from the same flaws for which it criticizes the FMLN? How could that accusation crop up overnight if not as an electoral tactic? Another factor which weakens the CD's charges is that leaving the alliance with bad feelings could be much more harmful to the CD than to the FMLN. As everyone knows, the FMLN is one of the most important political forces in the nation, and for one of the small parties to make simplistic declarations against it will do little harm. The FMLN has been up against far more difficult adversaries and more serious accusations. The CD's horizon is much more limited than that of the FMLN. Making the FMLN into an enemy could cost the CD any chance of setting up new and better alliances, since everyone knows that the Convergence is not much of a vote-getter. Finally, we must not forget that any impasse within the left can be capitalized on by the right to win points in its favor, and once again this would be much more unfavorable for the small parties than for the FMLN, which already has a certain stable base of sympathizers. The fact that the smaller parties are struggling for autonomy from the two poles is the healthiest thing that could happen to them and to the political system as a whole. The problem is that if this struggle is not undertaken with caution and dexterity, the small parties' yearning for independence could lead to their own ruin instead of becoming a panacea for growth. We must not forget that it would be convenient for ARENA if the left breaks up, since that would serve as another reason to brag about its granite-like unity which, in spite of everything, its leaders persist in proclaiming. The negative consequences for the CD which may ensue from its breakup with the FMLN lead one to wonder about the future of not only that party, but also of the rest of the nation's small parties. A political system as polarized as that of El Salvador is far from favoring the parties along the intermediate points on the political spectrum; they tend to disappear or to have serious problems surviving under highly adverse conditions (lack of funds, difficulty in obtaining votes and new members, etc.). But the external factors are not the only obstacles which prevent minority parties from consolidating in the democratic system. The difficulties inherent in the milieu are compounded by the gaps inside each party. It is hard to compete against a "known negative," but even more so when one is not sufficiently prepared to take on that battle. We are not only talking about preparation in economic terms. In other Latin American countries, there have been cases of candidates who leap into the fray with a minimum of resources, but with a maximum of novel proposals which distinguish them radically from traditional politicians. Nor is it a matter of believing that the minority parties must try to come up with any type of novelty whatsoever, merely in order to differentiate themselves from the majority parties. The problem, in the case of El Salvador, is that the "small guys" have been incapable of demonstrating that the "positive unknowns" could be worthwhile, simply because so far they have been incapable of figuring out how to package themselves as something new. Instead, they have given the impression of being more of the same, and thus have failed to profit from the generalized discontent with the party extremes. Worse yet, the existence of many of the small parties which barely squeaked by with the legal minimum of 3% on March 16 is largely thanks to the voters' decision to punish ARENA and vote for a center party in order not to vote for the FMLN. This is a serious problem, because it means that those who prefer center parties, for whatever the reason, do so not because they are convinced of their political program, but because they are trying to punish the "big guys." A more or less equitable political panorama, with similar opportunities for all parties, ought to be one of the chief goals of the democratic transition. It is hard to believe that the nation's top political forces will undertake that task, since polarization is convenient for them. Thus, it is the task of minority parties to ensure their own future in the marketplace of political offerings. But in order to achieve this, they will have to stop being satellites or appendices of the "big guys," and as a consequence, go beyond the criticism, learning to be creative and take initiative. ECONOMY: The proposed 1998 budget Last September 29, the Ministry of Finance sent the legislature's Finance and Special Budget Commission its draft 1998 General Budget. These figures could serve as accurate indicators of the priorities of a government, while at the same time revealing the degree of congruency between the programmatic offerings and specific policy measures. This year, there are at least two clear contradictions. The reduction in social spending and the government's refusal to award 6% of the budget to local governments contradict some of the offerings made at different times by the government, specifically to gradually increase social spending to 50% of the total budget by 1999, and to promote local development. The draft budget also reveals that despite partial forgiveness and renegotiations with creditors, service payments on the debt are still a heavy burden on public finances. In general, the budget continues to rise, this year by 10.4%, and continues to show a trend toward a permanent deficit, which for 1998 will reach 1.9% of the GDP. However, these increases are not for the most neglected areas, such as social spending and decentralization. This article will study the budget, with special attention to the areas which have received the greatest increases, as well as to social spending trends and municipal financing. Chief beneficiaries of the budget increases A first aspect of the makeup of the budget which calls for attention is the fact that six areas remain unchanged: public works, defense, agriculture, prosecution, general ombudsman and human rights ombudsman. As a consequence, the overall share of each of these areas in the budget has fallen. In contrast, the areas which did receive appreciable increases in their share of the budget were education, service on the foreign public debt, the judicial branch, justice, the legislative branch, and financing for municipal governments. However, the greatest increases went to education and service on the foreign public debt, which received approximately 300 million additional colones each. This means that for 1998, service on the foreign debt could account for a higher share of the total budget, even more than education. The budgets for education and service on the foreign debt increased from 16% to 16.1% and from 8.8% to 9.7%, respectively, between 1997 and 1998. New drops in social spending Despite the assigned increase for education, the overall area known as social spending (education, health, housing and labor) has seen its share of the budget reduced for 1998. In 1996 and 1997, 24.35% and 25.1% was allocated for social spending, respectively, while in 1998, social spending will account for only 24.5% of the total budget. This percentage is the result of the sums of the budgets assigned to education (16.1%), health (7.9%), housing (0.2%) and labor (0.3%). Instead of increasing allocations for social spending, as the social development plan states, the draft budget drops it back to spending levels of two years ago. As part of this behavior, the most questionable part is the reduction of the share for health. This has gone from 8.6% in 1997 to only 7.9% in 1998. Although its budget is increased by 16 million colones, this increase was proportionally less than the increase in the overall budget, and thus its overall share decreased. An examination of the remaining components of social spending (labor and housing) shows that they remained at their same proportional levels as in 1997. However, it is significant to note a drop of almost 1.2 million in the budget for housing and urban development, not because of the absolute amount, but rather because of the context in which it occurred. This area receives scarcely 0.2% of the overall budget, despite the fact that housing is one of society's most pressing needs. Financing municipal governments As a result of the latest legislative and municipal elections, the drafting of the budget has opened a historic debate between the legislative and executive branches. The chief point of discord is the percentage to be assigned to finance municipal governments. Although the legislature passed a decree stating that the local share should be 6% of the national budget, the executive branch, in the person of the Ministry of Finance, followed its usual practice and assigned only 2% for that rubric. The President said he is "willing to increase funds for municipalities if the [legislative] opposition tells [him] where to find the money," since in his view, in order to fund the increase already included in the budget, efforts were made to reassign portions allocated to the Ministry of the Interior and to the Municipalities in Action program. Opposition representatives argued that the 6% figure had been accepted by the President himself before being passed by the legislative plenary. Although the government claims it is in favor of decentralization and strengthening municipalities, in practice it is blocking initiatives which could make a significant contribution to improving their ability to run their own affairs. This is particularly questionable if we consider the fact that the problem is less a matter of insufficient funds and more one of reallocating funds from other institutions, for example public works. Considerations As has been the custom over previous years, the proposed 1998 budget maintains a clear growth tendency but without any shift toward sectors linked with the government's social functions. It is especially interesting to note the fact that the areas which receive the greatest increases will be education and service on the foreign debt. This suggests that debt service payments could enter into competition with social spending, municipal spending or any other state function. The composition of the budget reveals, once again, that one of the greatest gaps in government programs is in the area of promoting social development. For example, although it is not necessary to argue any further about the inadequacies and constant deterioration of the national health system, in practice, budget allocations for health are entirely inconsistent not only with national needs, but also with official discourse on social development. The legislative proposal to increase municipal spending radically is important; however, the same level of debate ought to be awarded to the government's unimaginable policy to reduce social spending. ----------------------------------------------------------------- 1998 PROPOSED BUDGET 1998** 1998** 1997 UNIT Amount* Percent Percent ----------------------------------------------------------------- Primary units 11310.9 67.0 69.9 ----------------------------------------------------------------- Legislative branch 123.3 0.7 0.6 Judicial branch 1031.1 6.1 5.0 Auditing Bureau 75.8 0.4 0.4 Supreme Electoral Tribunal 72.9 0.4 0.3 Social Service Tribunal 1.1 -- 0.01 Attorney General's Office 69.8 0.4 0.4 General Ombudsman 49.9 0.3 0.3 Human Rights Ombudsman 27.0 0.15 0.2 Presidency 336.5 2.0 2.2 Ministry of Finance 355.4 2.1 2.4 Ministry of Foreign Relations 189.0 1.1 1.1 Ministry of the Interior 273.8 1.5 1.8 Public Security 1339.3 7.8 8.9 National Defense 885.6 5.2 5.8 Ministry of Justice 248.1 1.5 1.3 Ministry of Education 2726.5 16.1 16.0 Ministry of Health 1333.7 7.9 8.6 Ministry of Labor 51.6 0.3 0.3 Ministry of the Economy 103.5 0.6 0.5 Ministry of Agriculture 314.4 1.8 2.1 Ministry of Public Works 1765.6 10.4 11.5 Ministry of Housing and Urban Dev. 32.8 0.2 0.2 ----------------------------------------------------------------- Public Debt 2895.7 17.1 17.2 ----------------------------------------------------------------- Domestic 1246.4 7.4 8.4 Foreign 1649.3 9.7 8.8 ----------------------------------------------------------------- General obligations 1198.0 7.1 7.52 Fund for war disabled 208.0 1.2 1.6 Financing local governments 330.0 2.0 1.0 Miscellaneous 119.1 0.7 0.8 Economic and Social Reactivation 120.8 0.7 1.8 Integral devel. and tech.assistance 21.9 0.1 0.1 Stability and economic development 155.0 1.0 n.a. Merit compensation 380.0 2.3 n.a. Fiscal modernization 116.8 0.7 n.a. Local Development Fund 30.0 0.1 n.a. ----------------------------------------------------------------- Totals 16886.3 100.0 100.0 ----------------------------------------------------------------- *millions of colones **proposed Centro de Informacion, Documentacion y Apoyo a la Investigacion de la Universidad Centroamericana "Jose Simeon Can~as" (CIDAI-UCA) Apdo. Postal 01-575 San Salvador, El Salvador Tel: +503-273-4400 Fax: +503-273-5000 E-mail: cidaiuca@es.com.sv ** End of text from cdp:reg.elsalvador **