/* Written 10:42 AM Jun 3, 1994 by nicarao:izote in igc:reg.elsalvador */ /* ---------- "REPORT FROM EL SALVADOR # 21" ---------- */ Copyright 1994. Fundacio'n Flor de Izote. This publication may ***only*** be printed on condition that Fundacio'n Flor de Izote is cited as the source. FUNDACION FLOR DE IZOTE REPORT FROM EL SALVADOR MAY 23 - 30, 1994 VOL. 5, # 21 On May 24 the Central American heads of state held a regional summit with US Vice-President Albert Gore in Tegucigalpa, Honduras. Business leaders of the area had hoped that Vice-President Gore would announce important benefits the North American Free Trade Agreement (NAFTA) will have for Central America as well as the creation of an environmental technology center, among others. However, following the summit, the panorama for Central Americans, and especially Salvadoran business, changed.Gore offered to apply "the same tariff treatment Mexico would receive with NAFTA" to products from the region. (1) But as Salvadoran President Alfredo Cristiani pointed out the offer applies solely to the "textile [and] the clothing industries" and is contingent on compliance by the beneficiary countries with certain conditions such as competitive prices and, above all, human and labor rights. (2) According to reports in the local press, the majority of Central American textile companies are located in Honduras, owned by Taiwanese, South Korean or Hong Kong entrepreneurs and have been cited repeatedly for labor law violations. (3) While some critics complained that fundamental issues affecting the region were not broached with Gore at the summit, President Cristiani affirmed that Central American is on track toward a future of sustainable development, "self-sufficient and not dependent on donations." (4) In an attempt to overcome differences and salvage the FMLN, on May 25 the National Resistance (RN) and People's Renewal Party (ERP) conveyed a proposal, through party general coordinator Shafick Handal, to the other three FMLN organizations. The proposal outlined steps for ending the impasse that caused a rift in the five-fraction front on May 1. RN Secretary General Eduardo Sancho said that the FMLN must act as a unified force in the Assembly, and he suggested four areas where the party can reach common ground: "1. consolidation of Chapultepec [accords], 2. legislative work of the 21 deputies, 3. work with the communities and 4. the democratization of the FMLN. (5) The head of the FMLN legislative block, FPL member Manuel Orlando Quinteros, while admitting he had not seen the proposal, asserted that he had no problem with opening a dialogue with the RN and ERP in the Assembly: "If here we can reach agreements even with ARENA, the PCN, with the whole world, certainly we can come to an understanding with them, if they are, as I understand it, part of the opposition." (6) Last weekend, the Salvadoran Communist Party (PCS) held a special convention to draft a proposal for reunifying the FMLN. At the close of the meeting, and in more conciliatory tone, PCS Secretary General and FMLN General Coordinator Schafik Handal said the new pact "must accurately contain all that we agree and will continue to agree upon, and we must commit ourselves to struggle together. It should also delineate the minimum rules that guide this understanding, and include how we should consult one other every time we intend to act upon these common points. And it should also state very explicitly that everything not included within this common ground remains a free domain where each may act according to their own identity." (7) "It is a sacrifice for everyone's pocket. But we are convinced it's better to have it cost a little more, than not to have it at all." President Alfredo Cristiani (8) "What the government is really doing are the repairs needed to pave the way for privatization." Democratic Convergence leader Juan Jose' Martell (9) This week the president of the state power company (la Comisio'n Ejecutiva Hidroele'ctrica del Ri'o Lempa or CEL), Guillermo Sol Bang, announced a June 1 increase in the cost of electricity which will boost residential rates by 30% and as much as 76% for businesses. Sol Bang defended the increase, calling it an previous commitment, "made many years ago that had to be complied with during the first half of this year, there's nothing new about it .... it's a done deal that must be carried out ... yet even [with the increase] we will still be below the bottom line in the long term." (10) However, the CEL president declined to comment on the "fairness" of the measure but stressed, "it's a tariff we must shoulder." "We all knew it was coming," he contended, "this increase is necessary to maintain the investment plan and to meet CEL's debt payments. (11) Assembly deputies were quick to respond to the announcement. Francisco Jovel of the FMLN called the rate hike "worrisome," and said the National Assembly should see "what [counter-]measures can be adopted to remedy this situation as much as possible." (12) The Democratic Convergence (CD) charged that the electricity rate hike is part of a new government "neo-liberal package" in anticipation of the eventual privatization of the state utility (CEL, ANDA) and telephone (ANTEL) companies. The CD leaders predicted that increases for telephone and water services would be announced in the coming days as well. Juan Jose' Martell of the Convergence suggested that the rate increases be debated and decided in the Assembly: "Although this would slow down the approval process, it has the advantage of assuring that the political and human dimensions would be taken into consideration, not just the cold technical aspects." (13) PDC Deputy Roberto Viera attributed the rate hike to the poor management of CEL that his party has previously criticized. According to Viera, in recent years CEL has concentrated its efforts on attracting large investments for thermal power plants; now CEL is unable to pay off the debts, and the only solution is to charge more to the consumer. (14) Viera and Jorge Villacorta of the CD concurred that when a rate hike or new tax is being considered, it should first be reviewed by the Legislative Assembly and not arbitrarily approved by executive decree. (15) However, ARENA Deputy Carmen Elena Caldero'n de Escalo'n emphasized that an immediate increase is imperative "because of loans that explicitly require that CEL have the necessary resources to pay them back." (16) For his part, President Cristiani cited damages endured during the armed conflict as justification for raising rates. The electrical infrastructure "has been overused and has not received appropriate maintenance, and, apart from the new turbines, there has not been sufficient capacity to absorb growing demand ... for electrical energy, which has been rising at approximately 12% annually." (17) Cristiani also assured that the hike will not affect the cost of living because it will be balanced with a salary increase "to compensate for the impact, which should be far from 30%." (18) Jorge Villacorta of the CD remarked that the "problem is that the salary increase they keep promising only applies to those who have jobs." (19) "Instead of clearing the table, they are leaving the table served." FLACSO Director He'ctor Dada Hirezi (20) "We believe we interpreted the will of the Salvadoran people in 1989, when they longed for peace." President Alfredo Cristiani (21) During his inaugural address on June 1, 1989, President Alfredo Cristiani made two fundamental promises: 1. find a political solution to the war and 2. dedicate his government to helping the "poorest of the poor." Evaluating these promises five years later, the Catholic Church commended the President's efforts in achieving peace but criticized his lack of progress in alleviating poverty. Assistant Bishop of San Salvador Monsignor Gregorio Rosa Cha'vez asserted that Cristiani failed to meet his pledge to help the "poorest of the poor" who, he said, "are still waiting for the good news announced in the presidential address. We do not believe the social agenda was a priority in the previous administration, and as a result, health, education and housing have deteriorated greatly." Rosa Cha'vez also urged in-coming President Armando Caldero'n Sol to see to it that he meets the needs of the poor majority. (22) According to government officials, however, the current administration has made several accomplishments during its five years in office. According to Planning Minister Mirna Lievano de Ma'rquez, the administration's successes have been: the creation of socio-economic programs that "managed to diminish poverty in the country," and the implementation of economic policies that relaxed controls and led to increased confidence on the part of investors both here and abroad. The Minister also extolled "the highest levels of sustained growth in the history of El Salvador," 5% during the last three years, which she credited with reducing inflation from 23% in 1989 to 8-10% in 1994. The government also revamped the banking system, which now boasts 20 thousand share-holders, and implemented fiscal reforms that simplified the revenue system and reduced the total number of tariffs to three: income tax, IVA (value-added tax) and import duties. Finally, Lievano de Ma'rquez cited the renegotiation of the foreign debt which, by the end of the current administration, has enabled the country "to meet all its financial commitments and responsibilities." (23) Just days from concluding his term, President Cristiani claimed to have "cleared the table" for his successor, Armando Caldero'n Sol, in regard to the Peace Accords. According to Cristiani, the government has complied with all the commitments made in Chapultepec exactly as promised. In political circles, some support the president's claim, but there are those who insist far from clearing the table, Cristiani has left it stacked for Caldero'n Sol. (24) CD leader Juan Jose' Martell asserted that President Cristiani is not leaving a clean slate, he is leaving a new [compliance] schedule" which will have to be taken on by Armando Caldero'n Sol. Martell cited, "the deployment of the National Civil Police (PNC) and the dismantling of the National Police (PN) [which] will not be concluded by June 1." Similarly, the Director of the Latin-American School of Social Sciences (FLACSO), He'ctor Dada Hirezi remarked that, while at times the Cristiani Administration has confronted problems which hampered its ability to implement the Accords, on many occasions it intentionally delayed compliance. This became a tactic that allowed the government to alter the very nature of its commitments along the way, the National Civil Police isone example." (25) Monsignor Rosa Cha'vez also evaluated the human rights situation and criticized the general amnesty granted by the Cristiani administration for those mentioned in the Truth Commission report. The amnesty, charged Rosa Cha'vez, left the door open for impunity, especially for the "death squads." (26) SOURCES: 1. EL DIARIO DE HOY, 5/26/94; 2. TV 6, 5/25/04/94; 3. EL DIARIO DE HOY, 5/26/94; 4. TV 6, 5/25/94; 5. IBID; 6. IBID; 7. TV 12, 5/29/94; 8. TV 21, 5/26/94; 9. IBID; 10. TV 6, 25/94; 11. TV 12, 5/25/94; 12. TV 6, 5/25/94; 13. TV 12, 26/94; 14. LA PRENSA GRAFICA, 5/26/94; 15. IBID; 16. TV 12, 5/25/94; 17. TV 6, 5/26/94; 18. TV 6, 29/94; 19. TV 6, 5/25/94; 20. TV 12, 5/29/94; 21. TCS, 5/25/94; 22. TV 12, 29/94; 23. TCS, 5/27/94; 24. TV 6, 5/26/94; 25. TV 12, 29/94; 26. IBID. Copyright 1994. Fundacio'n Flor de Izote. This report may be reprinted on condition that Fundacio'n Flor de Izote is cited as the source.