The problem of the middle class in El Salvador

The social requirements for the Salvadoran democracy

The result of an investigation about the situation of democracy in Latin America made by the Development Program of the United Nations (PNUD, in Spanish) has been recently published. The report indicates that the region is generally in a stable democratic situation, and that El Salvador goes beyond the average level of democracy reached by the rest of the Latin American countries. This article will reflect upon several pieces of information regarding the formerly mentioned report from the perspective of a theory connected with the social requirements of democracy.

The report of the PNUD is based on a crucial criterion that makes this research a relevant study of the situation of democracy in the region. It understands democracy in the context of a wider perspective about the subject. In fact, there is a tendency well-known by the political analysts that conceives democracy strictly in terms of a political regime without stopping to consider the social and the economic criteria that could affect the validity of the term. The premise sustained by the UN indicates that democracy is more than a political regime. Therefore, there is a need to examine the connection between democracy and human development. The report includes a key question about the human development of 1993, something necessary to elucidate the democratic quality of any regime: up to what point does democracy satisfy the authentic needs of the population?

Therefore, it is necessary to go beyond the extremely published idea that indicates that the celebration of periodical, free, and transparent elections is enough to certify the democratic level of a country. It is necessary to wonder about the conditions in which the population lives, their political culture, and the amount of support given to the democratic institutions. According to the philosophy of the report, it is necessary to wonder about “how to increase the opportunities of the civilian participation in the public administration, how to strengthen the political representation system, how to improve the methods to request information and the presentation of the results that are actually achieved by an administration”. All of this means that in the case of Latin America, it is necessary to urgently confront “the challenge of improving the quality of these democracies in order to maintain and multiply the achievements that have been reached, and strengthen the practice of the rights and the obligations of the citizenry”.

In the Salvadoran case, the report of the PNUD indicates that this country is above the average. El Salvador has been placed in a select group of those who are leading the democratic pathway, since for more than a decade it has been celebrating an election process where all of the actors of the political life are allowed to participate. In addition, a respectable majority of the population, approximately 61%, would not change democracy for any other political regime. The successful retirement of the army from the political life is celebrated, as well as the political stability that has been reached. However, the report also accepts that there are still certain crucial challenges that the country has to face if it intends to keep walking on the pathway of democracy. As a sample of all this, more than 54% of the population would be willing to accept an authoritarian government if it would help them resolve their economic problems.

This context goes to show that it is crucial to connect democracy with the economic situation of the poorest sectors of the society. The PNUD believes that “its perspective can be helpful to establish better relations between the paradigm of a sustainable human development and the theories about democracy; and it also could become an original idea with potential to affect the debate about the present situation and the democratic perspectives of the region and the actions to strengthen it”. In other words, it is not acceptable to hide behind a critique about the lack of political culture of those who say that they prefer an anti-democratic regime if that were the solution to their economic problems. That is why it is necessary to connect democracy with the poverty level and the economic welfare of people.

This line of investigation is not new. Seymour Martin Lipset, back in 1959, said that “men have stated, since the times of Aristotle, that only in a prosperous society, where only a few citizens live in a condition of authentic poverty, the masses could be able to intelligently participate in politics and develop a precise sense of self control in order not to fall into the trap of the irresponsible demagogues. A society divided into an enormous impoverished mass of people, and a small elite can be turned into an oligarchy or into a tyranny”.

It is a well known fact that Latin America has had quite an experience with both types of regimes. Just as there are political flags that have been raised in the name of the oligarchies. There have also been terrible fights in the name of the masses that have nothing. The scars of the violations against the human rights that the region still has to deal with are the result of the stubbornness of the members of the army, who intend to keep alive the privileges of a small group. In the name of the liberation of the exploited masses the war was embraced, and it made the population bleed. In Colombia, for instance, the war keeps causing an incredible amount of pain.

The discussion about the social requirements to maintain democracy alive, and, with that, the political and the personal freedoms of Latin America is an important set of topics. The region is still very different from the rest of the world, as far as the distribution of the people’s wealth is concerned. Latin America, even if it has made a certain progress in the last few years as far as the assurance of the political freedom of its societies is concerned, they still have plenty to accomplish in order to guarantee that the social differences will not destroy at some point the levels of democracy that have been reached. In the Salvadoran case, reality is even cruder. Not only the index of human development leaves a lot to be desired, but the economic elite does not seem to be willing to approach the issue of a fairer distribution of the country’s economic resources.

At this point, the most important businessmen have been evasive about a democratic consolidation achieved through a better distribution of the resources of the country. They usually organize pompous meetings to speak about governance and to blame the opposition for the crisis that the poorest sectors of the society suffer. When there are dramatic transformations in the social and the economic structures, the relation between certain political parties and the economic elite becomes critical. The scheming against the opposition that took place during the last electoral campaign is a sample of this statement.

Some people rave about the achievements of the countries that have improved their democratic pathway –specially in the case of Costa Rica, which the elites usually like to use as an example-, but they keep themselves quiet when it comes to talk about the actual achievements of the country. In a document recently prepared by the ANEP, the businessmen even dared to accept that “it is still necessary to reach certain conditions in order to occupy a privileged position inside the Index of Human Development, according to the international standards”. At the same time, they are not willing to contribute with their share of taxes in order to create the necessary level of social solidarity to cover the deficit of the social expenses.

The Salvadoran elite is speaking in two different languages when it comes to discuss the strengthening of the democratic governance of the country. On the one hand, they have publicly stated that it is permanently necessary to strengthen the process of governance; on the other hand, they refuse to support the political and the social measures that could allow the country to reach an improved level of stability. They do not only refuse to be supportive with those less fortunate, but they also practice some kind of a continuous political, a social and an economic extortion against the rest of the Salvadorans who do not agree with their conservative opinions.

The responsibility of the World’s Bank in the economic destiny of El Salvador

The responsibility that the World’s Bank has to guide the nature of the economic policies of the less developed countries is nothing new. The Programs of Structural Adjustment and Stabilization implemented by the governments of Latin America during the eighties are a sample of the degree of intervention in the economic destiny of the region that the oligopoly of the global power has had: the World’s Bank (BM, in Spanish), the International Monetary Fund (FMI), the economic policy of the United States, and lately, with more presence, the World’s Organization of Commerce (OMC).

Inside this “field of power”, the Latin American countries have had to create their own economic policies; however, their actual field of action has had its limits, and these countries have become nothing but followers of the economic model that favors the interests of some of the wealthiest countries of the world and those of the national economic elite. In such context, democracy becomes fragile and deceiving, and the internal political process seems superfluous since the guidelines of “what to do”, “how to do it” or “who to do it for” are not dictated by the people, but by finances. Why vote if the government does not have the power? How to dream about independent economic alternatives? What are the opportunities that the elected government actually has to act in the name of the majority if its economic program is nothing but an extension of the Neoliberal model?

The World’s Bank has taken advantage of the present context to link its economic recipes with the guidelines of the economic program prepared by ARENA; Antonio Saca, who was recently elected as President of El Salvador, will follow this program. The BM has created a document called “El Salvador: growing in the new millennium”, where this institution establishes the main guidelines of the economic policy for the short and the middle-term.

The title of this document reflects one of the main concerns of the BM regarding the country’s situation: it is necessary to keep growing, that is, to intensify the economic growth of the country, strengthening the productivity. For the BM the economic growth is a priority, and it has to be enhanced with social policies aimed to alleviate problems such as poverty, the lack of both education and health services, and the quality of the life standards, among other issues.

Growth and development: to invest in commerce, technology, and human resources
The aforementioned document was presented with the support of the Salvadoran Foundation for the Economic Development (FUSADES, in Spanish). This institution has usually played an important role when it comes to define the economic plans of the ARENA administrations since 1989. Therefore, this is not a new style of economic policies: they are the same actors and the same proposals without any structural changes, without creativity.

It is assumed that the strategy chosen by the government, that is the materialization of free trade agreements with countries of all kinds is the right decision to grow. This is a formula that has been dogmatically conceived: the free trade will increase the exportation level and the profits of the country. According to this belief, the free trade will activate the economy and the growth rate of the real GNP will increase, and therefore, the society will overflow with welfare. The BM accepts the “mea culpa” of those responsible for the Neoliberal policies. However, the recipes are the same: to liberalize whatever they can at the same time that the social policies are implemented. It is extremely easy to adopt the recommendation to liberalize the economy, since this has been the strategy used by ARENA in the last fifteen years. However, the government is not in a smart position in relation to its fiscal policy. Due to its high index of indebtedness, what kind of social programs will the government be able to launch, if its credit its not approved? Will it follow the same line that Argentina did?

What seems ironic is that the BM approves the free trade agreements as development strategies, without accepting that its conditions are negative for the industry and the national agriculture. In connection to this point, the document indicates that “as for the expectations about the CAFTA, in global terms, the agreement should be able to bring an important number of opportunities to increase exportation, investment, growth, and employment. A wider and a more steady access to the market of the leading commercial partner, as well as the investment frames and the resolution of conflicts, will be accepted by both the foreign and the local investors in a positive manner (…) and opportunities will be therefore created to take a step ahead and improve the growth through the CAFTA”.

This vision is a classic example of a fallacious perspective about the composition of the economy. There is the intention to assume that what might be true for a portion of the system is true for the entire system. In other words, there is a certain intention to generalize the idea that any free trade agreement automatically creates development, because key elements such as the growth of the amount of exportations, investment, and employment are the consequences of such an agreement. In theory, it is true that free trade can create the conditions to get certain benefits from this type of negotiations, but these benefits depend on many variables. For instance, it depends on the level of competitiveness of the national industries of the country, and on the support provided by the government to its productive sectors (subsidies, temporary tariffs for the emerging industries, investments in technology, and the educational level of the people, among other aspects).

The BM seems to recommend all of these items in its document; however, it tends to forget that the investment on the productive sectors and on the human resources has to be done before thinking about any kind of liberalization. On the other hand, the BM accentuates the ambiguity of the benefits of such treaty, since it is not actually clear how many job positions it might create, or what could be the potential content of the commercial balance, which presently reflects a deficit. This means that the recommendations do not have a proper foundation beyond the base of the regulatory economy.

No one can guarantee a positive result in an unfair and an uneven commercial race. It would be necessary to remember the double moral standards of the United States in the CAFTA. As the Noble Prize of Economy, Joseph Stiglitz, puts it, what the United States dictates to the less developed countries does not have to be done, because the recommendations are to eliminate the tariffs and the subsidies, while the United States does not adopt those measures for its own economy. It is and it is not free trade at the same time, since there is not a competitiveness in equal terms.

It is probable that the level exportation will increase by a certain percentage, but it is also true that the importation level could grow. And what is worse, the document explains that “agriculture is one of the sectors that will possibly receive more benefits with the CAFTA. Despite that most of the agricultural products have a preferential access to the American market because of the Initiative of the Caribbean Basin (ICC, in Spanish), it is considered that approximately 68% of the potential agricultural exportation of El Salvador will face a certain kind of commercial obstacles. The existence of these barriers suggests that there could be a number of potential increases, in the short term, for the Salvadoran exporters that have more access to the market because of the CAFTA”. With the CAFTA, the benefits will be visible, but they will not be perceived by the exporters. In this context, there is a question that remains unanswered: how many Salvadoran exporters are qualified to triumph in a competitive American market that uses the highest levels of technology, and that counts with subsidies? Probably only the most important countries; however, what will happen with the small farmers?