The dilemmas of ARENA and the FMLN

The elections of the PCN

To understand what happened on March 16th , we would have to take a close look at the electoral results published by the Supreme Electoral Tribunal (TSE, in Spanish). According to this information –as far as the legislative elections are concerned-, the three most important parties of the system would be the FMLN, ARENA, and the PCN. These parties, which have 31, 27, and 16 congressmen, respectively, occupy an 88% of the total of the positions available in the Legislative Assembly. That is why it can be said that, on the one hand, the three most important parties are those that control the political imagery of the Salvadoran population. And, on the other hand, that the one that occupies the best position is the PCN. It is, once again, the “hinge party”, theoretically in charge to moderate the antagonisms between ARENA and the FMLN.

The first impression that comes to the mind of the spectator would suggest that the PCN is the “fashionable” party in El Salvador. A general appreciation of the electoral record that the PCN has built ever since the 1997 legislative elections supports the former consideration. The PCN has had the most impressive electoral growth, and its number of congressmen has increased.

It is evident that many voters, especially the ones who come from the middle class urban sectors, are astonished before such results. This perplexity would be the result of a retrospective over the political performance of the PCN. Almost everyone agrees with the fact that the PCN and ARENA are equally responsible for the critical social and economic effects, and for the unreliable reputation of the national politics. In addition, the PCN administrates one of the most questioned institutions because of its little capacity to end with the corruption at the Salvadoran State. That is why the good electoral results of the PCN are surprising. This uncertainty is not an obstacle to wonder about the origin of the votes that the PCN received.

In order to answer to the former question, and expecting a detailed study about the subject, a number of hypotheses can be examined. In the first place, it would be necessary to consider the apparent deterioration of the official party. Some sustain that many of the former followers of ARENA belong now to the PCN. It is no secret that both of those parties have an ideological affinity, which is a fact because of their alliance (these parties support each other’s public policies). This idea could be useful to understand why some people say that the decisions of ARENA favor the PCN, and to understand the discontent of many voters who were formerly happy with ARENA. In fact, if the results of the 1994 elections are analyzed, it could be said that ARENA suffered a serious deterioration in its electoral support. That might be the reason why the voters are now supporting the PCN. However, what does seem true, in terms of a general consideration, is only partially true when people intend to take a closer look. The PCN is far from gaining the 200,000 votes that ARENA has eventually lost since 1994. That is why it would be necessary to suggest that only some of those votes were obtained by the PCN, while another percentage of those votes were obtained by the FMLN.

Another way to interpret the electoral results obtained by the PCN, and considering the last elections, would be to examine how the smallest political parties tend to be overlooked. That is why it is not difficult to suppose that the 30,000 votes that the National Action Party (PAN, in Spanish) lost went to the hands of the PCN. In addition, it would be reasonable to deduce that the defection of Orlando Arevalo from ARENA and the incapacity of the PAN to resolve the problems of the former patrol members have lead the latter to support the PCN. Those responsible for the PCN managed to convince the former patrol members of the need to vote for a different party.

The PCN was the party that attracted the attention of most of the approximately 188,443 new voters of this year. This explains the spectacular growth that the PCN has experimented during the last elections. The PCN seems to be the most competitive right-wing option for ARENA. If the number of votes that the right wing parties have gained are considered, there is no doubt that the PCN is beyond the “natural” level of this political sector. At the moment, the PCN seems to be the most attractive party for the voters who abandoned the small parties. However, in the end, it is not clear if the voters only did this because they are unhappy with the performance of ARENA.

The available information does not allow us to talk about an improved PCN, but about a “rational” decision of the voters –mostly professional and organized sectors- that usually supported the small parties and who now decided to support the PCN. This could be the case, for instance, of those unions of farmers, bus owners, and, possibly, former patrol members. For these sectors, before the atomization of the electorate of the two most important parties and the incapacity of the smallest parties to fulfill their promises, it seemed more convenient to support the PCN. This party seems to be more likely to resolve specific problems: apparently, the PCN will deal with the annulment of the public transportation governmental reform and the elimination of the traffic fines of the public transportation drivers.

If all of these ideas are true, it can be said that those who vote for the PCN might be the most volatile and the most coveted electorate for the rest of the political parties. It is possible that the PCN keeps growing among the organized, the professional, and the less ideological sector of voters. In this sense, the PCN counts with the support of this sector as long as the party is able to satisfy the needs of the formerly mentioned unions. But if it is also true that the PCN has the capacity to take away a considerable number of votes from ARENA, even if this not too clear for this year, the PCN is turning into a dangerous rival for the presidential aspirations of ARENA. The PCN could also take away the vote of the most faithful followers of ARENA, leaving the doors opened for the electoral force of the FMLN.

Healing the family economy?

Recently, the President has introduced a series of measures intended to “improve the economy of the families”. Francisco Flores bases his plan on the following aspects:

- To reduce the price of the electric energy.
- To support the Salvadoran coffee-growing sector through a series of credits granted by the banking system.
- And a two-year period for the coffee-growers to pay their debt to the Environmental Trust for the Conservation of the Coffee-growing Park (FICAFE, in Spanish).
- To increase the pensions by 35% for the workers who are on a legal limbo ever since the new system of pensions began to operate.
- To improve the quality of the jobs.
- To create an institution for the defense of the consumer’s rights.

It seems as if the government of ARENA is trying to implement a series of measures that look, in a way, incompatible with the economic model that the present administration has promoted. These slight reforms have the objective to soften the impact that the economic model has had during the last few years. To propose these lines of action for the economic policies does not seem to be the task of the administrations of ARENA. Certainly, as the President himself has stated, such measures respond to the negative critics that the government has received through the results of the last elections. Because of this reason, Francisco Flores intends to deliver a clear message to the Salvadoran population before the next presidential elections. That is why the reforms, rather than improving the country’s economy, have a clear political objective: improve the image of ARENA for the next elections.

Among the diverse measures announced by President Flores, there is a reduction on the electric energy prices. The Executive power also intends to control the increasing prices of the electric energy through a set of electoral reforms. Certainly, the economy of the Salvadorans is harshly affected by the exaggerated prices that the electric energy companies charge –the consumers also pay for the taxes of the companies’ poles-. By the end of last year, people were already talking about a considerable increase on the price of the service. However, the distributors explained that they counted with the authorization of the SIGET to increase the prices.

It is important to notice that everything that is presently going on in the market of the electric energy services is, in a way, the result of the privatization process. There is no doubt that the privatization process of this service, which was encouraged by the former administration of ARENA, has not brought the advantages they announced during that period (they promised better prices for the Salvadoran population). In addition, ever since the beginning of this privatization process there were a series of deficiencies that the present results are showing. In this country, there has never been an actual competition between the electric energy distributors. The privatization process allowed the establishment of a series of captive markets, which have been an obstacle to reduce the prices of this sector. Perhaps one of the most negative elements is the deficient regulation that the SIGET has developed, allowing a considerable increase on the prices.

Another of the measures announced by President Francisco Flores is aimed to the coffee-growers. For the benefit of the Salvadoran families who depend on the cultivation of coffee, there is a proposal that offers a series of credits that come from the banking system. There is also the possibility to count with a period of two years to pay the debts at the FICAFE, in order to mitigate the financial pressure that most of the national coffee-growers are going through. However, it is necessary to say that that same crisis that the government intends to resolve was generated by the same economic model developed by ARENA during the last decade. This is a model for which the growth and the development of the financial services have more importance. It has also generated a crisis inside the national coffee-growing sector, and it is unable to satisfy the nutritional needs of the country’s rural areas.

The governmental policy has generated diverse reactions. One of the most enthusiastic postures has been the one of Jose Roberto Inclan, one of the representatives of the Coffee-Growers Association of El Salvador, who feels “satisfaction, joy, and hope because of what President Flores has announced”. However, other sectors, do not have such an optimistic position before the measure that the Salvadoran President made public. Mateo Rendon, one of the representatives of the Coffee Forum, said that this measure might be able to alleviate the crisis of the coffee-growing sector; however, he considers that the coffee-growers should count with a period of five years to pay their loan to the FICAFE.

The financial break that the coffee-growers would have is also aimed to benefit all of those families who survive because of their cultivation and the collection of the gold grain. The coffee-growers are expected to increase the wages of the workers. Even if this measure has been welcomed by the coffee-growers of the country, the government should realize that they are not the only sector going through a crisis, but that there are other farmers who are going through a very similar situation.

The economic model of ARENA is crumbling away. It seems as if the political earthquake of the recent elections has made even more evident how unfair it is. The government has taken a dramatic turn, since it starts to question the Neoliberal Capitalist model that ARENA has followed during the last fourteen years.

In a Neoliberal model, the foundations of the economic policies are placed in a single point of honor: the most important aspect is to make the Capitalist profits grow. That is why in the Neoliberal economic policies, the means justify the objectives: there is no room for worries about the microeconomic situation of the Salvadoran families, if this affects the national macroeconomic balance, and the interests of the financial elite (a priority for the government).

The blame for overlooking the family economy and the welfare of the population does not seem congruent with the Neoliberal lines of action, the economic policies of ARENA. The Executive power has adopted a series of measures to relief the family economy, in a desperate intent to brake the spell of their economic policies.

What might seem ironic about this sudden change of the government is that the aforementioned measures are not typically Neoliberal. Those measures are employed to alleviate the direct consequences of the model, without attacking the foundations of the problem.

To improve the employment conditions (the minimum wage and the benefits), and guarantee a fair pension system does not seem to be part of a systematic plan of the government’s economic model. These are static measures that do not intend to guarantee a sustainable development. On the contrary, the logic of increasing the minimum wages and the pensions according to the cost of living, becomes an obstacle for the maximization of the capital. And to increase their profits is what the influential sectors of the government are after, such as the National Association of the Private Business Companies (ANEP, in Spanish).

On the other hand, it is necessary to wonder –in the light of the alleged macroeconomic health that the country presently enjoys- if, as in the presidential discourse of April 2nd, “none of those measures breaks the stability limits and the healthy administration of the public finances”. The inevitable question is why those measures were not implemented earlier? It is important to insist on this idea because the poverty in which many families live is not a recent discovery. Three million of people who live in poverty –that is, approximately one half of the Salvadoran population- is a proof of this according to the Ministry of Economy since 1999.

The cost of living has constantly increased. The basic services have gradually become less accessible. Ever since the beginning of the Flores administration (from 1999 to 2001), the electric energy, the gas, and the water services have increased from 2.7% to 4.2%. The unemployment level also increased from 5.96% to 6.96% between 2000 and 2001, generating close to 10,000 unemployed individuals. The minimum wage ($144) has not been enough to cover the price of the basic food basket, and it has not been increased since 1998. The division of tasks in the business companies has increased, the dollarization of the economy increased the prices and meant a low blow for the poorest sectors, the dependency on the family remittances has also increased, and the agricultural sector remains in a critical condition.

The truth is that the family economy has gone through a systematic deterioration process. The solution to this problem cannot be and should not be contemplated from a short-term perspective, simply as a product of the 2004 presidential elections. The problems in the family economy respond to structural causes, and they should be faced as such. In this context, what has been the role that the Consumer’s Protection Direction (DPC, in Spanish) has played in order to help those who have been affected by the unfair increasing cost of living? None, or so it seems.

The benefits that have been announced, besides being cosmetic changes, and because they are not enough to cover the needs of the Salvadorans, do not include all of the population nor all of the most important sectors. In the case of the pensions, for instance, they ignore those who receive the minimum pension, which is presently $100, and this adds up to 20,000 people who will not receive any benefits at all. What about insuring the health of the population? This issue is not even mentioned.

In the case of the minimum wage, a specific amount has not been stipulated, leaving this subject in the air for the “free” negotiation of employers and workers in the Superior Council of Work. This situation might be deceiving, because the ANEP has explained that it will negotiate under a logic that will intend to “make the working hours more flexible”, as Elias Antonio Saca –the director of the union- has announced. Is this narrow perspective a hope to improve the conditions of the population before the presidential elections of 2004?