The list of the business companies’ elite

A rupture or a campaign strategy?

The news of the last days announce an alleged political rupture between the Party of the National Coalition (PCN, in Spanish) and the Republican National Alliance (ARENA). Ever since the beginning of this legislature, both of these parties sealed some sort of a pact between the allied with a right-wing tendency. The results of such alliance are evident, and have been efficient so far because its ultimate objective is to counteract the effects of any political initiative of the left-wing party. Along these three years, ARENA and the PCN have encouraged the most controversial laws, ignoring the political effects that it can have on the fragile democracy. This is how, making a general review of the activities of the Legislative Assembly, a series of polemic decisions are highlighted, and they go from the approval of the dollarization process (a decision made without consulting all of the sectors involved) of the national economy to the installation of an American base in the country. Two laws that, to the eyes of many, throw away the remains of the national independence.

However, putting those records aside, there is the fact that La Prensa Grafica, in its July 19th issue, it informs to the Salvadorans that “the historical romance between ARENA and the PCN is in crisis: the PCN’s petitions, aimed to close the casinos and to question the Minister of the Public Works, generated the collision only a week after a similar encounter in another plenary session”. Therefore, if this press article is taken seriously, we would have to be paying close attention to the new scenery that is taking shape in the political competition inside the Legislative Assembly. It would also be necessary to expect –if this logic goes on like this- a certain rearrangement between the three parties that have more members in the congress. In this sense, the FMLN would have to play an important role in this new political context –in which it has the option to decide the possible alliances with ARENA or the PCN-, only a few months away from the next general and municipal elections.

There is no doubt that such possibility would inject a new dynamism into the national political life. The Legislative Assembly would become an actual discussion arena for the national problems. ARENA –if a FMLN/PCN alliance takes place- would have to become a part of the democratic game, which, until now it has not been able to respect. The President would have to leave behind his authoritarian attitude to negotiate with the legislative power. Another possibility is that –in a hypothetical alliance between ARENA and the FMLN-, the PCN members would have to be content with being an audience in the collaboration of the two largest parties. A democratic understanding period would have been opened between the parties and the politicking that now prevails would have been left behind. In any case, the country would have grown stronger in its way towards the democratic consolidation, supported by the extraordinary capacity of the political leaders to proceed collaborating closely to make the decisions.

However, to imagine an scenery such as the one formerly described, as it could be inferred from the last information available about the alleged rupture between ARENA and the PCN, someone would have to be either completely naïve or understand very little about the national political dynamics. The power relations inside the Legislative Organ do not allow to predict such possibilities. The further the PCN members have gone is to call the last confrontations that they have had with the legislators of the official party “a bad fever”. That is why the differences between ARENA and the PCN in the Legislative Assembly have to be understood as passing misunderstandings, which do not mean a rupture of its solid alliance.

Another explanation of the former idea could also be elaborated –although the argument would have to be extrapolated-, following the rules made by Giovanni Sartori (1992) to count the parties. In those rules, Sartori considers that the parties that “do not have any possibilities of becoming a part of any coalition, nor the possibility of a blackmail” do not have to be included. The first possibility “coincides, technically, with the parties that have actually participated at some point in a coalition government, or that have granted the governments with the necessary support to achieve the power or to remain in it”. And the possibility of blackmail that a party has is equivalent to its veto as far as the promulgation of the law is concerned.

If we leave behind the fact that, in the formulation of his criteria to count the parties, Sartori refers to the parliamentary systems, there is no doubt that they can be applied to the case we are concerned about. In other words the same measure can be used to determine the importance of the FMLN for the present Legislative Assembly. We can also measure the possibility of an alliance of the FMLN with ARENA or the PCN. If the first rule is considered, which refers to the coalition capacity of the party, it is immediately evident that there is a technical impossibility of this kind of alliance between the left-wing and any of these right-wing political organizations. Actually, what happens is that the FMLN works as an authentic anti-system party in its relation with the right-wing parties. The FMLN probably has more congressmen inside the Legislative Organ, but technically it will keep being ignored by the right-wing when it comes to define the alliances to carry out legislative projects.

On the other hand, as far as the second rule is concerned it can be verified that the FMLN has lost its blackmail capacity for the system. From an arithmetic perspective, it can be perfectly discarded for the good performance of the Legislative Assembly. This has been technically corroborated in the decisions made by the right-wing alliance (when only 43 votes are required) or with the complicity of the other small parties (when 56 votes have been required). The irrelevance of the FMLN for the performance of the Legislative Organ is evident. Therefore it is improbable to talk about a rupture in the political cooperation between ARENA and the PCN. These parties have more things in common than it seems at a first glance, and the existing political competition in the system makes it impossible to brake up of the pact between them. A political disaster of incalculable proportions would have to take place for that possibility to emerge. And the reasons offered as proof so far do not allow to think in such scenery. This is what those who speak about a rupture in the right-wing coalition have not understood, that is why they also speak about a possibility of a rearrangement of the competition inside the Legislative Assembly.

Once it is clear that a rupture between the ARENA and the PCN alliance cannot be contemplated at this moment, it is necessary to speak, however, about the possibility of more discourses connected with a possible rupture between those parties. It seems that this is what it has been happening in this context. Even during the last few days, one of the PCN leaders, Francisco Merino, spoke about the need to dissolving his union with the official party. He said that the PCN was no longer willing to support the official party in all of its projects. In his opinion, ARENA is not fulfilling the terms of the pacts, and this has led to a certain resentful attitude and a lack of understanding between both parties.

Some discourses of this kind coincide with the electoral arrangements in the PCN. The press reveals that most of the PCN congressmen of this legislature are willing to look for a reelection during the next general elections. It is almost a fact that the fifteen present legislators will want to keep their positions during the 2003 elections. Some people refer to the lack of new figures in the party to explain such situation. However it is necessary to see that this party is exclusively governed by its general secretary, Ciro Cruz Cepeda, who administrates it with an iron fist over a base of a disseminated loyalty in the country, that is why a possible explanation might be that the last discourses about an alleged rupture with ARENA obey to the regular movements of an electoral moment.

In order to aspire to positive results in the next election, the PCN should explain to the Salvadoran voters in what extent it is a party different from ARENA. Otherwise, it is licit to suppose that the voters will decide to support the official party when it comes to consider their choices. To vote for the PCN, in this context, would be useless. It would not have a major effect in the configuration of the political system. On the other hand there is no doubt that this need to distinguish the differences is also urgent in the case of the voters who are not necessarily happy with the way the right-wing has administrated the country. From any perspective it is necessary that the PCN separates from ARENA -at least when it comes to prepare the next elections-, in case the former is interested in attracting the attention of the Salvadoran voters. Some people even predict the irremediable disappearance of the PCN, because the competition between two clearly defined poles (in terms of the right and the left-wing) established in the Salvadoran political system is pushing it to that direction. This is what others call the impossibility of becoming the “center” in the political competition of the Salvadoran system.

The “dissociation from ARENA” discourses made by the PCN are crucial for them in the next electoral results. The group of the recently formed parties that are looking for a certain key role in the political life make it even more urgent to differentiate the PCN to assure their presence in the political scenery. In the political discourse of these “new parties” they speak about the need to moderate the political dynamic by becoming a link between the two poles established by ARENA and the FMLN, in other words the PCN is not fulfilling this role even if everyone knows that they have the means to do it. The emergence of these “other” parties is a direct critic to its political performance, and a direct challenge that intends to undermine its foundations of support. That is why it is understandable that the PCN wants to differentiate itself from other parties, and the panic that seems to be invading its leaders.

The business sector takes the word again

There is no doubt that the 13 years of administration of ARENA have encouraged to unsuspected levels the power of the business sector. In the third edition of the National Encounter of the Private Business Companies (ENADE, in Spanish), the business sector made new proposals for the public policies, that go from the promotion of the free market to certain recommendations for the businessmen to collaborate with “the judges, so that El Salvador can achieve an immediate and a respected administration of justice, with qualified judges and lawyers”. These last words came from the host of the event and the president of the National Association of the Private Business Companies (ANEP, in Spanish), Antonio Saca.

According to this perspective, the business sector should be at the front of the most varied expressions of the civil and the political life: From the economy, going through the government and the judicial system. Due to the eminently business-like character of ARENA, the business proposals seem to find a place inside the official circles, as Francisco Flores accepts it when he assures that “we are satisfied that in less than a year we have implemented most of the proposals presented in the ENADE 2001”.

It is not about denying the fact that the private business companies have the right to express their visions and proposals to transform the reality, but it is necessary to reflect over other aspects, such as the apathy and the inertia of the government to achieve an efficient economic planning system; the lack of spaces for a wide social concentration; and, of course, the issues of the most recent ENADE and its possible contribution for a sustainable development.

The disdained economic planning
Inside the measures contemplated for the modernization of the state, the elimination of the Ministry of Social and Economic Development Planning was contemplated. This ministry disappeared in the mid nineties. With this, the governmental efforts to systematically elaborate development plans were sensibly reduced. Although this does not mean that they do not continue to elaborate proposals for the development plans, with electoral or eventual reasons (as when they intend to face the crisis of the agricultural sector with bland credits), this fact did have an influence on the reduction of the regulatory duties that the state has.

It is simplistic and irresponsible to pretend that the development will only be achieved with the commercial openness, the dismantling of the state, the privatizations, the concessions to the private business companies, and the free trade agreement. The apparent sustainability of the Salvadoran economy is actually very precarious, and the competitiveness of its business sectors still has plenty of things to accomplish before intending to compete with the nations that have a higher level of development. To think that by reducing the state’s regulatory responsibilities they will lead the country to a development process is equivalent to say that the privatization or that the commercial openness have taken place spontaneously.

The first ARENA government proposed a very clear plan for the economic reorientation and its stabilization, and it set the foundations for the reform (or the dismantling) of the state, a process that is still being implemented. This shows that even to liberalize the economy it is necessary to design different plans; it is necessary to do so to correct the weak features and take advantage of the opportunities.
The proposals of the ENADE 2002 follow that line: They suggest that the reforms must be implemented after analyzing the solutions and the alternatives. The fact that the effort made by the ENADE is only the vision of an evidently small (but economically powerful) sector inside the Salvadoran society is a different issue. The legitimacy problem sets new challenges for the public policies that are not discussed by the business proposals; on the contrary, they seem to be careful enough not to mention those topics.

The closing of the settlement spaces
In the context of the Peace Agreements, the parts agreed on establishing the Social and the Economic Settlement Forum (FES, in Spanish), where the national problems would be discussed among the representatives of the private business companies, the government, and the workers. The effort did not prosper, and afterwards it seems that the only ones who can discuss the future of the country are the businessmen and the central government.

This does not mean that there are not other sectors with the right to formulate proposals, but there is a historic tendency to exclude most of the population when it comes to make decisions. The governments are elected by a minority, and now more than ever, they are clearly inclined in favor of the interests of the business sector.

This phenomenon is not new, and it has been frequently transformed into social explosions, such as the indigenous uprisings of the 19th century and the armed rebellion of 1932, as well as the political and the military conflict that took place from 1979 through 1992. The solution to this conflict with the Peace Agreements was a tacit acknowledgement of the need to reach a settlement, and a clear example that it is possible to bring together apparently opposing forces. The incorporation of the former FMLN guerrilla to the political life could have enlarged the ideological spectrum of the parties, but it has not opened a space for a wider political participation.

The new proposals of the ENADE
After what has been formerly said, it is important to quickly review the new proposals of the ENADE 2002, which includes ten areas: education, health, the environment, juridical security, civilian safety, infrastructure and transportation, labor policies, the modernization of the state, the fiscal policy, and the commercial policy. This article will describe the essential contents of each one of those areas.
In general terms, the proposals of the social area are progressive, since the intention is to improve the access to the basic social services, and they even propose to subsidy the education of the poorest sectors and modernize the Salvadoran Institute of the Social Security. This last aspect is connected with the progressive settlement of the supportive services, although the proposal does not indicate the increase in the public health expense that it would include.

In reference to the environmental issue, the proposals are ambiguous, since while they offer measures to control pollution, they also ask to make certain reforms to the Environmental Law to “harmonize the environmental preservation and the economic growth”, or to expedite the process to issue the environmental permits, and the participation of the private business companies in the environmental audits. The juridical and civilian security areas basically pursue the depuration of the judicial system and the lawyers, as well as the prevention of both delinquency and the organized crime. In regard to the infrastructure and the transportation area, on the other hand, they propose the reinforcement of the General Superintendence of Electricity and Communications, the reform of the transportation system, the regional electrical interconnection, and the decentralization of the sewage and the potable water systems.

The labor policy centers its attention in the reinforcement of the institutions that must remain vigilant at all times to check the fulfillment of the labor legislation, and that must provide an easy access to the procedures followed to obtain the pensions of the workers who have incomplete records at the ISSS. In the fiscal policy area, they ask for a higher control of the expenses, the adoption of a fiscal sustainability regime to limit the deficit and the public debt, and the approval of a single taxation simplified regime. The commercial policy, according to the businessman should be included in the negotiation of a Free Trade Agreement (TLC, in Spanish) with The United States, and adapted to the state’s institutional performance in order to negotiate the agreements and supervise the authenticity of the procedure.

In reference to the modernization of the state, there are different proposals, but those that stand-out are three different areas: the control of the public expenditures (the reinforcement of the functions of the Comptroller’s Office, the fight against the illicit wealth, the reports rendered to the local governments), the guarantee of an easy access to commercial activities (the modernization of the customs office, the creation of single window offices, the promulgation of trademark laws, the simplification of administrative and governmental procedures that the companies need to make), and the search for the state’s efficiency (to implement the career of the public server, the reduction or the closing of the number of institutions “that already accomplished their mission”, reinforce the different superintendence offices and improve the administration of the taxes).



Final considerations
El Salvador faces economic, social, and environmental challenges that are different from most of the general proposals formulated in the most recent ENADE. The business meeting includes a portion of the most crucial problems of the country, such as the fiscal situation, the deficit of the social services, and the pollution; however –in the end- it can be detected that these “consultation and proposal” instruments are custom made for the private business companies. The demands for higher concessions (of the public services), the execution of environmental audits, and the access to the commercial activities cannot be more eloquent. The incorporation of the working sector’s vision is still a task for the private business companies and the society in general.

The other problems, those that are more complicated, and which evidently have a more complex solution, represent an enormous challenge for the development process, and the businessmen do not seem to notice it: the “frozen” salaries, caused by the romance with the textile maquila; the expulsion of the workers, and the economic dependency on the remittances; the structural crisis of the agriculture, and both the industrial and the technological setback are only a few examples of the most obvious problems.

The globalization problems have critically punished El Salvador, and because of the inertia of the government and the setback in the business sector, that globalization is turning into a threat instead of an opportunity. The adaptation to the new global reality requires a higher capacity to define the policies, and not only to be content by taking advantage of certain situations, pretending that the free trade and the dismantling of the state will inexorably lead to a development process. A long term vision, a strategy, and a plan are required to build the foundations for the development process. The foreign investments and the immigration are not solutions on their own, It is also necessary to increase the productive capacity, and to have a successful insertion in the international economy.