Free, not truthful

The uncertain situation of the 1024 Legislative Decree

Many Salvadorans –who have good intentions, without a doubt- had a celebration last week because the Legislative Assembly approved the already famous Legislative Decree number 1024, which forbids both the privatization and the concession of the health services to certain corporations. With that decision, they not only opened the way to put an end to a strike that has lasted for over two months, but they also opened a possibility to discuss an integral reform for the national health services. That is the least that could be demanded by a population tired of the incompetence, the corruption, and the indifference of the politicians. This is also a population that has been going through an insufferable and a long strike.

The unions of both the doctors and the workers of the Salvadoran Institute of the Social Security (ISSS, in Spanish) and several civilian organizations have received the support of a considerable part of the users of the national health system. This is, however, an important achievement in a very odd context. On the one hand, the strikers had to stand an offensive discredit campaign, planned by a certain sector of the press that supports the governmental positions. And, on the other hand, the Salvadorans somehow feel uncertain about the whole situation. Nevertheless, the doctors and the members of the unions have been able to enjoy the sympathy of a considerable part of the population. The collective discontent is mostly placed on the performance of the privatized companies that were supposed to improve their performance.

However, a few days after the aforementioned decree had been adopted, a number of questionable situations collided with reality. Francisco Flores said that he had been misled by his eternal ally, the PCN. The business elite is complaining about the contents of the Decree 1024, and they will probably fight a legal battle against it. Some congressmen are taking back what they said before. Most of the members of the press are calling them incompetent and “politicos”. In summary, it seems as if the Decree 1024 was born with a death certificate under its arms, unless the Supreme Court of Justice decides not to accept the pressure of the right-wing sector.

The main argument of those who oppose to this Legislative Decree refers to certain ideas that somehow go against the political constitution. Those who are angrier consider that the decree is a “juridical monstrosity”, and this evidently opens the door to the reception of demands at the Supreme Court of Justice. Knowing the actual performance of the System of Justice in El Salvador, it is very probable that the court declares that the decision of the congressmen is unconstitutional. Independently from how founded the arguments of the opposition are, the justice of this country has always been at the service of those who have more power. And they are precisely the ones that are not happy with the Decree 1024. However, the magistrates will probably wait for the conclusion of the Central American Sports Games –which the country presently hosts-, and they probably will also wait until the municipal and the legislative elections are over to make their definitive decision –about the appeals against the decree- publicly available. By then, the President will have his hands free to deal with the members of the union.

Do the political-juridical tactics of the right-wing parties coincide with the urgent need to find an efficient and a prompt solution to the problem of the health system? It is evident that the answer to this question is “no”. All that ARENA and the news media (which cynically speak about the alleged “wave of rejections to the Decree 1024”) care about is the tremendous impact that their profits would suffer if the concession of the health services and the national system of health comes to a definitive end. The privatizing logic that they imposed since the end of the armed conflict – it actually was a tacit agreement made between certain businessmen and politicians to distribute the public assets among themselves- had been working out perfectly. The demands against the corrupt administration at the public companies, against the increasing prices of the services offered by the former public companies (now they are private companies), and against the increasing prices of the products and the services offered by the monopolies, had been evaded without any obstacles.

However, the last activities in which the doctors and the unionists were involved, and the support they received from important organizations of the civil society, threatened to break with the privatizing logic of the public assets. That is why the official sectors chose to make a tactical retreat in an inconvenient situation that should not be interpreted as an abandonment of the position of the business elite about the “benefits of the privatization”. Something similar happened in 1997 with the first intents to privatize the public telephone company, ANTEL. Just like today, they spoke about a victory for the Salvadoran population. The private business sector, along with the press, denounced the legislative decision back then. As it was expected, the happiness of the opposition did not last too long. The ANTEL privatization law was approved later, along with the consequences for the pockets of the users.

That is why it would be politically naive to talk about a definitive victory for the doctors and the opposition over the privatization of the health system that ARENA would like to implement. To appeal is an option that the right-wing sectors still have. They have spoken about their disagreement with the terms of the Decree 1024, and they are ready to fight a crude battle during the next days. The doctors and the unionists will have to improve their strategy so that they are not taken by surprise by the corporate manoeuvres –which are headed by the ANEP and FUSADES- to privatize both the ISSS and the national system of health.

It is a fact that the official sectors do not hide their intention to change the decision of the legislators. The businessmen will not give up, and the doctors and the unionists have to be alert, they have to prepare the alliances to clarify their positions. We will have the opportunity to measure what are the actual possibilities of achieving certain goals that can lead to the necessary reform of the system of health. This struggle will confront the different perspectives about the reality of this country. On the one hand, those who oppose to the privatization process; on the other hand, those who are willing to make a profitable business deal with the health of others.

The impasse about the reform of the health sector continues

The approval of the Decree 1024, which forbids the concessions of the national services of health to some corporations, has unleashed a series of angry reactions at several sectors of the society, especially at both the health and the pro-governmental sectors. The content of the decree and the initial reluctance of the President to ratify it intensified a strike inside the health sector (the strike started two months ago).

Basically, the decree intends to forbid the concession of the national services of health to the corporations. That process is a part of a wider context, which is placed on a higher level inside the reform of the state. This context revolves around the privatization and the opening of a market formerly unavailable for the corporations.

The process goes beyond the frontiers of El Salvador and includes the different Latin American countries, in which the diverse local and international companies are investing and controlling multi-million dollar business deals connected with the distribution of the basic public services. Considerable amounts of money revolve around the health sector. That money is administrated by the state and, without a doubt, would be a lucrative business deal for the private companies.

That explains why the corporations do not agree with the Decree 1024, since these companies would loose a profitable opportunity. However, the character of certain basic services and the technical results of the other privatization processes make the reforms questionable (the one presented by President Flores in October, for example).

The services of education and health, the pension scheme, and the potable water supply are essential for the population, that is why these services should be the object of an economic subsidy granted by the state. These services are so indispensable, that it is not fair to say that the state is having some expenses and that these services have to be privatized. With this, the population is now in an even more critical position. The reduction of the poverty level and the growth of the human development levels depend on the maintenance and the improvement of these services; and to judge by the recent experiences, this does not exclusively depend on the private business sector.

In the case of the privatization of the pension scheme, it is even more evident now that this process did not bring the benefits that were attributed to it. The workers of the rural and the informal sectors have not been affiliated yet. In addition, the expenses that the workers have to face have increased; the state acquired a multimillionaire debt to sponsor the new system; and the fall in the interest rates is causing a reduction in the profitability and in the amount of the pensions that the contributors of the new system will receive in the future. On the other hand we have the new companies, those that administrate the pension funds, which now have a multi-million dollar business deal (the result of the commissions they charge to the contributors).

Another clear example of the profitable business deals that the privatization brought for several corporations is the electric energy service. After selling the thermal generators and the distributors, the users pay for the access to the net and even for the “customer service” departments. That is why even if the cost of the kilowatt/hour has remained relatively steady, now the users pay more for those additional costs.

The reform of the system of health proposed by President Flores in October –which revived more than one labor conflict inside the health system- contemplated four basic aspects: a supportive contribution, the expansion of the coverage, the integral plan, and the freedom to choose. The last component would allow the users to choose to receive medical attention either at the ISSS or with “the doctor they trust, wherever they prefer to be assisted”.

The director of the ISSS, Mauricio Ramos, told a completely different story when he said that new “health companies” would be crated with the same style of the administrative companies that handle the pension funds –which, by the way, have become a single institution that practically dominates the market-.

The health benefits administrated by the ISSS represent an important business deal for the private companies, and, just like any other privatization process, it also constitutes an important opportunity to expand the activities of certain corporations towards an area traditionally reserved for the state or its independent institutions. Revolving around these benefits there are considerable budget amounts that could easily go beyond $346 million in 2003.To this, we have to add the additional charges that could affect the contributors later (the usual commissions for the administration services, and the “customer service” charges).

Without a doubt, the social struggle and the approval of the Decree 1024 have granted a pause for the beginning of the privatization of the health services, and to discuss the problem the sector is going through. It cannot be denied that the public health services have to be improved, but that does not mean that a privatization is the solution.

It would be hard to deny the delays, the negligence, and the deficiencies in the ISSS, but the truth is that the ARENA governments have already had more than 13 years to resolve the problematic situations. The government is also responsible for the present circumstances at the ISSS, this conflict is not necessarily the result of the public sector’s “natural” tendency to become inefficient.

A considerable part of the problem resides in the uncompromising ideology that prevails at the governmental sector, where it would sound silly to talk about the state’s control over the basic services. This can be explained by a recent statement made by President Flores: “to nationalize things is a suicide. If that ever happened, the Latin American systems would collapse”. The President does not only seem to forget that a liberalization can lead to a crisis as well; he is also saying that, for his administration, a reform of the health sector that does not contemplate the possibility of a privatization process is a suicidal reform.

In El Salvador, the reality shows us that a privatization process always involves a higher price for the users, and, in this case, a price that can affect the health of the majority. On the other hand, it is clear that there is a strong social resistance against the governmental proposal (privatization). This should make this administration realize that its members should abandon the dogmatic postures; we need new ways to do politics in order to look after the general welfare and the human development.