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Proceso 1130
Enero 26, 2005
ISSN 0259-9864
Editorial: The FMLN loses ground
Politics: A crisis inside the FMLN or a crisis inside the system?
Economy: The external debt: the eternal economic problem
The FMLN loses ground
The fact that several congressmen from the FMLN have walked
away from this political institution is no surprise, the party had it coming. It
seems peculiar, though, that the most surprised ones are the congressmen from
ARENA, because they caused these new defections. The package was prepared ahead
of time. During the legislative plenary, last week, at the last minute, they
modified the agenda of the day to introduce the opinion of the property
commission, which recommended to approve the coverage of the deficit of the
national budget of this year with bonds. Then they voted and obtained the
expected result, and, immediately, they closed the session. The press was part
of the result, even though the voting took place at night, these news were in
the cover of the newspapers, and, first thing in the morning the governmental
spokesmen were available for the media; the reporters showed their fake surprise
and they were congratulating each other for what they had achieved.
The adjustment needs the implementation of certain reforms that have to be
applied to the electoral legislation, something that would allow the small
parties of the right wing to remain in the official registry, even though they
did not obtain the minimum amount of votes established by the law, in the last
election. Even more so, the reforms have a retroactive effect, an unprecedented
fact in the electoral legislation system, because since they allow the presence
of these parties, they could also, given the case, take away the legitimacy of a
popular election that would not be convenient for them. This reform was
necessary to count with the votes of the Christian Democrat dissidents, who,
along with both delegates of the FMLN, formed a qualified majority. This meant
that the approval of this year’s budget was reduced to a simple procedure, since
a simple majority was all it took.
Since it could not be any different, President Saca and the ARENA spokesmen
raved about the decision of the two delegates from the FMLN that voted in favor
of the decision. They consider that they are both brave and patriotic. Both
congressmen justified their desertion saying that they were concerned about the
children who are in the hospitals, the need for the budget, and the
revolutionary and heroic character of their decision. They are brave indeed, but
the rest is pure demagogy. They are brave because they decided to move away from
the official line of their party, and that means that they will be immediately
expelled. They are more fond of money and privileges, than they are of the
children and the patients, because it was much more probable that what they were
not able to refuse was the offer made by ARENA, a party that, without a doubt,
gave them a considerable amount of money, along with the promise of governmental
positions that can assure a future for them. As it is natural, they all
emphatically denied, without conviction, however, that there was any money
involved at all. To say that the vote against the FMLN is an act of
rebelliousness against the party’s leadership is an inconsistent statement,
because there are many other ways to express their rejection to the direction
that the party has taken.
The facts of this plenary session go beyond the mere approval of the budget. The
defection also means that the FMLN has lost a considerable portion of its
territory in the Legislative Assembly. With these actions, not only the force of
its present demands to the ARENA government collapses, but also those demands
that could have been done in the future. It is true that the FMLN still has a
vote of advantage, since one of the defectors is a substitute congressman, but
it is evident that, in case of needing it, ARENA has the power to buy that
crucial vote.
The surprise caused by these votes is false when it comes to ARENA, but the FMLN
was genuinely surprised. This party so is shocked that its first reaction was to
throw accusations at the defectors, calling them traitors. The party seemed to
be looking for similarities between this situation and the passion of Christ.
However, this is nothing but a way to let go their impotence and their
perplexity. Just a few days ago, the FMLN thought that it still could ask
President Saca to actually sit down and negotiate with them. Before the fiasco,
the FMLN blames the situation on a third party. It particularly blames the Saca
administration and ARENA, which, undoubtedly, are responsible for what happened.
To blame others is easy, but it is not enough, because the FMLN also must take a
good look inside the party. It is true that they cannot afford to watch each
congressman, mayor or leader of the party; however, something is not right in
here, since one of the congressmen who sold himself out was a faultless militant
for the parameters of the party. Beyond all of these circumstances, the
leadership of the FMLN must question the way in which it is directing the party.
It is more evident every time how its authoritarian behavior is not able to
impose an internal discipline, nor to maintain the unity of its members. The
deserters are not just affiliated people, but militants as well. If these have
fallen, what can be expected from those who are affiliated to it?
Conviction and principles are the most effective instrument against bribery; at
least, there would be a higher level of resistance before the attacks of the
adversary. But that is, indeed, what they lack, the politicians of the FMLN as
well as those of the other parties. It is a contradiction to demand morality and
fidelity to the principles when it comes to vote against ARENA in the
Legislative Assembly, and not to demand these qualities in other circumstances,
for example, in the internal elections of the FMLN, in the elaboration of its
policies, or when voting in favor of the public transportation system, as a
result of certain agreements with the right wing, but against the user. The
fidelity to principles and morality cannot be replaced with authoritarian
attitudes. Blinded by the legislative power that it represented, blinded by its
ideology and prisoner of its own stubbornness, the FMLN forced the political
situation to the extreme and lost control. Its power of veto depends now on a
single vote, which, because of what happened, is now a very vulnerable asset.
Another temptation that hunts the FMLN is to abandon the democratic system and
its institutional regulations to send its militants out to the streets to create
disorders with the purpose of destabilizing the country and to corner the Saca
administration. It is not easy to do this, although it has the capacity to
obstruct the national life. But these street-wise strategies are not going to
get them the favors of the voters. And, supposing that they could get away with
their plans, it could not be much what they would achieve by destabilizing the
situation. Experience has already demonstrated that these strategies do not help
them to achieve their goals. The challenge is to fight to dignify the party’s
political activities. The FMLN, or any other political party, cannot demand
integrity from its militants, if the leaders are not an unquestionable example
of it. And everyone already knows that, about the integrity and the honesty of
the political parties, there is plenty to discuss. The institutional performance
of the country must be saved. In addition, the FMLN cannot forget about the
people. To use public demonstrations arouses the feelings of those that are
convinced about their fervor for the party; but, at the same time, it pushes
away the rest of the electorate from the party even more, the source of the
votes to democratically arrive at the State and become an authority.
A crisis inside the FMLN or a crisis inside the system?
To say that the FMLN is an organization that is going
through a crisis is nothing new. But to say that in the chaotic situation that
the left wing party is going through there is a problem that is more complex
than what it actually seems to be because it affects the political system as a
whole, is a situation that deserves to be meticulously analyzed. The recent
events connected with the approval of the international loans to finance the
Budget of the State are not only a symptom of the inefficiency that reigns in
the left-wing party, as some people would want the public to believe. It also
questions the right wing and its dirty tricks used to take control of the
political power. In summary, not only the FMLN is the affected one (and the
questioned one), but also the political system as a whole.
Conscientious congressmen?
The thesis adopted by the supporters of the right wing in reference to the
congressmen of the FMLN that decided to disregard their party’s slogan -and to
support ARENA in the Legislative Assembly- is that they are individuals with a
"clean conscience", concerned about the economic situation of the Salvadorans.
Nevertheless, no matter how slightly the plot of this decision is analyzed, it
is clear that no explanation can justify the conduct of the "deserters". In the
first place, the argument according to which the defectors wanted to avoid a
serious problem, connected with the lack of personnel and medications in the
hospitals, is nothing more than political propaganda. Indeed, to avoid these
catastrophic scenery, the legislator foresaw that, in case that at the end of a
fiscal year the Budget of the new year had not been approved, the budget of the
previous year would automatically be implemented.
Another explanation is trying to prove that this is a heroic gesture of those
who would have sacrificed themselves for the country -without being concerned
about their party- sounds somewhat preposterous. This self-sacrifice raises more
questions than answers. It follows the same arguments that the Salvadoran
politicians have always used since the end of the war; the allegedly sacrificed
ones do not seem to be so unhappy with the decision.
On the other hand, experience has demonstrated that those who leave the FMLN to
undertake new political projects are doomed to failure. Other leaders of greater
importance have tried to do the same, like Joaquin Villalobos and Fermán
Cienfuegos. Other figures such as Robert Roca and Héctor Silva have followed
them. They all failed because they were never able to convince the Salvadorans
that they represent a better option than the FMLN. In addition, differently from
what used to happen in the past, the present dissidents have not played any
political starring roles. On the contrary, they have acted as if they are
running away from the mass media, showing that they are not really willing to
explain their actions.
All that this does is to suggest the shameless attitude of those who said that
they voted according to their conscience in order to make Handal’s plan fail.
This argument cannot be sustained, since it is possible to predict that such
decision consecrates his political death. In addition, one of them is a
substitute congressman, whose presence in the Legislative Assembly was just a
coincidence, due to the illness of one of the actual members of the Congress. In
this sense, there are enough elements to speak about a last-minute
confabulation, with a background that the population knows nothing about.
It is well known, in addition, that each one of the parties that supported ARENA
obtained tangible political profits. The PDC, the CDU and the PCN have managed
to survive as political parties thanks to their support to the debt project of
ARENA. This is how they paid the favor that the official party did to them. That
is why the question now is what did the defectors of the FMLN get in return for
voting in favor of the plan of expenses presented by ARENA. No one will know for
a fact what were the terms of the negotiation. While a reasonable explanation is
not available –or even some information to prove what happened-, the subject of
bribery, conceived by the supporters of the left-wing party, will remain in the
air.
A crisis in the party and a crisis of the system
It is indeed in this context that it would be convenient to discuss the crisis
of the political system. It is not right to say that only the FMLN is facing a
crisis, as the leaders of the right wing keep bringing it up. At this point,
there is no doubt that the political strategy of the leaders from the FMLN has
completely failed. The internal elections did not close the breach between the
orthodox and the renovators. A good portion of the explanation about the
dissidence in the FMLN is in this fact. While they continue to ignore the voices
that demand a new relation with the right wing, the doors will remain open for
this kind of ambiguous decisions.
On the other hand, the last minute alliance between both congressmen from the
FMLN and the right wing, more than signal of the freedom of conscience that they
are talking about, reflects a greater problem of the political life. Why did not
President Saca try to negotiate with the leaders of the FMLN? What will happen
if in the next legislative elections the Salvadoran voters continue granting to
the opposition the key of the qualified majority in the Legislative Assembly?
With how many other competing congressmen -from the FMLN or from other parties-
this administration is willing to do businesses in dark? It is evident that, in
the reactions to what happened with Nicolas Garcia and Jose Portillo, these
subjects have not been discussed.
The key that ARENA granted for the survival of the PDC, the PCN, and the CDU
debilitates the State of Rights. By virtue of the electoral law, these
organizations had to disappear. Nevertheless, to avoid a complex negotiation
with the FMLN about the State’s expenses, both ARENA and the President decided
to break the laws and to debilitate the basic institutions that were actually
designed to strengthen the Salvadoran democracy. On the other hand, the Supreme
Court of Justice and the Electoral Supreme Tribunal supported the initiative of
both ARENA and Saca, aimed to save to the parties that did not get enough votes
to remain in the political life.
These facts support the accusations used by the FMLN about ARENA purchasing the
will of some people. This strategy would be extremely advantageous for the right
wing party. On the one hand, it saves them the trouble of sitting at a table
with the intransigent leaders of the FMLN. On the other hand, they can keep
using the speech about a general feeling of discontent in the left wing party.
If this discourse brings “good” results in the short term, it is possible to
continue winning the elections. Nevertheless, in the long term, it will continue
to discredit the political system even more.
ARENA does not show much respect for the Salvadorans who chose to vote for the
left wing party –almost 30% of the electorate- in the last presidential
elections. The blackmail strategy, the illicit purchase of wills, and the
negotiations with members of the FMLN, are all together nothing more than a
revealing signal of this rejection. But, as those who have reflected about the
necessary elements to strengthen the democratic institutional behavior know, the
latter has nothing to do with arrogance, nor with the low blows that turn the
reactions from the adversaries into unpredictable matters. The last political
events in the Legislative Assembly lead the country towards a scenery of low
blows and mutual recriminations between both of the most important parties. This
fact, as it is possible predict, will do nothing but to reinforce the
polarization between these parties, preventing that those things that actually
matter, the life and the needs of people, get to a first level of importance.
The external debt: the eternal economic problem
CWhen reviewing a little the history of the economy, it can
be said that from the last quarter of century the external debt has played a
fundamental role within the international framework of politics and the economy.
During the seventies, the emergence of the petrodollars, the recession in the
U.S.A. and Europe and, by the end of 1979, the low international interest rates,
offered to the economically underdeveloped countries a suitable frame for an
easy access to an abundant amount of credits with low interest rates. The
leading moneylenders, such as the private commercial banking system, saw in
these credits a good opportunity to make their capital profitable, and consider
the States as privileged clients, because they could not declare themselves as
insolvent institutions.
Each country used the money in a different way, but it generally provided them
with modern weaponry for their armies and to encourage the development of the
public companies. In those places where considerable investments were made, they
were not able to restrain the non-payments that by the mid eighties became
untenable. The interest rates were drastically raised, as a reaction to the
economic problems of the U.S.A. (a negative balance of trade, and the
considerable expenses to finance the war of Vietnam). The result was a
progressive indebtedness in these countries, and the alarm was the crisis of
Mexico in 1982.
The following years were called the "lost decade", since back then no one
actually understood the complexity of the problem, and they kept applying
measures to make the debt sustainable. In fact, the commercial banking system
gained time while the problem was handled by the International Monetary Fund
(the FMI, in Spanish), the Development Banks, and other international
institutions. However, the debt became sort of a vicious circle that still
exists, since the payment of the interests forces the indebted countries to
obtain more and more loans.
In 1996, the indebted Latin American, African and Asian countries owed more than
two billion dollars to States, commercial banks, and multilateral financial
institutions, that is, almost twice as much than they did ten years earlier. At
the moment, nearly 50% of the annual payments that these countries make are
exclusively for the interests of the debt.
El Salvador did not escape from this phenomenon. Since the outbreak of the civil
war, the weaponry used by the army was financed with debts, a capital that could
have invested in other social sectors. Since the seventies, until the day that
the Peace Accords were signed, the external debt grew by almost 50%; and from
1995 to the 2004, it increased to 54.18%.
Starting the year with the right foot?
During 2004 the preliminary numbers, connected with the fiscal matters,
presented by the Central Bank of Reserve (BCR, in Spanish) were not very
encouraging. The external debt had reached the maximum levels established by the
FMI: $5,992 million, equivalent to 38.1% of the GNP.
The BCR calculated in addition certain indicators that show the solvency level
that the country has when acquiring obligations such as a debt. One of them is
the relation between the balance of the debt and the GNP. In this relation it is
calculated how much the country’s economy has to contribute with in order to pay
for the acquired obligations. According to preliminary figures of the BCR, for
2004, this indicator was 30.10%, a percentage that must be taken from the GNP to
pay back.
The government’s economic cabinet does not seem to be that worried by these
numbers, because at this point of the new year it has already been said that the
Ministry of Hacienda (the Internal Revenue Service) has contemplated the
possibility of using the indebtedness to finance the needs of the State until
the end of the present administration.
According to the projections of the Ministry of Hacienda, to finance the current
expenses and investments, from 2006 to 2009, it will be necessary to place a
total of $1,213 million in bonds (defined as long-term certificates issued by a
government with the promise to return the money to those who purchase the bonds,
plus the interests).
The Unit of Analysis and Budgetary Tracking of the Legislative Assembly (UASP,
in Spanish) stated that, with the approval of the indebtedness requested by the
Executive authority for the year 2005, the national debt would become $7,375,8
million, an amount equivalent to 47% of the GNP. It exceeds the level of
indebtedness established by the international organisms for the less developed
countries, which, as a result of the crisis in Argentina, decided to establish
it in 25% of the GNP.
A diagnosis elaborated by the technical advisers of the UASP recommended the
Ministry of Hacienda to evaluate the measures of austerity promoted in the last
three years, in order to reduce the indebtedness level. Nevertheless, they also
calculated a deficit in this year’s report of expenses ($933.3 million).
It is possible to mention that the increase of the debt does not only affect the
country’s capacity to pay for it, but also the investments, because while the
indebtedness increases, the country will become less attractive for the foreign
investors, causing a reduction in the employment level.
When making a comparison between the established policies of indebtedness in the
General Budget of the Nation the emission of bonds requested by the Ministry of
Hacienda, which was already approved, it can be said that these measures
contradict the objectives of this year’s fiscal policy, because "to handle
indebtedness level in a responsible and a prudent manner, which must be coherent
with the country’s capacity of payment, being able to keep its qualification
level and its international credibility."
It is also incoherent with the policy of expenses designed for the public
sector, where the established measures indicate that it is important: "to apply
a savings policy of the sector, to keep a congruent relation between the public
expense and the income levels, based on the fulfillment of the national
objectives".
On the other hand, the long time that they took to approve the budget has led
the Legislative Assembly to propose another measure that will allow the State to
bear the regular charge, that is, $985 million in Certificates of the Treasury (LETES,
in Spanish). Once the LETES are issued, we have a short-term debt, payable in a
30, 60, 180 or 365 day-term; for that same reason, there is more pressure to pay
for it than if the bonds were issued.
This possibility exists because, when not being able perform its duty of
expenses, the government issues LETES so that they are bought by local
investors, and the money is used for the budget.
According to the Minister of Hacienda, Guillermo Lopez Suarez, the LETES will
allow to pay for the wages of the public employees and to make job positions
available, such as the ones of Hacienda in order to go ahead with the fiscal
reform. "It is not a solution, but it was necessary to be responsible with the
pensioners. Otherwise, we would have that $351 million would never get to the
hands of the pensioners in 2005", stated the public official.
Carlos Acevedo, an economist of the Development Program of the United Nations
(the PNUD, in Spanish), thought that the issuing of LETES is "the lesser evil".
He adds that this was the only solution that the government had to finance its
expenses: "it must become indebted itself, unless the taxes are increased, and
that is not a solution in the short term. Technically, the LETES are a debt, and
this would have also required the approval of two thirds of the Legislative
Assembly; however, the Government does not consider this as a debt. They think
that the debt is just the international loan ", stated the economist.
Mauricio Choussy, the vice-president of FUSADES, indicated that it is important
to remember that for the budget of 2006 it will be necessary to include the
cancellation of those LETES, and that we already have others that are
accumulated, that is why the total amount of the debt more will be increased:
"to finance fiscal deficit with LETES is not the best alternative for a country,
since we are wasting the possibility to obtain resources in the long term and
with smaller interest rates through bonds", he indicated.
On the other hand, the reactions of the left-wing party did not take long to be
revealed. The opposition party refuses to finance the budget with a greater
level of indebtedness. The FMLN created a proposal with a series of measures,
some of them based on the studies conducted by the PNUD.
According to the left-wing party, a policy of public indebtedness based on the
human development should be the result of a negotiation. This includes the
renegotiation and the reconstruction of the debt, which suggests the
cancellation of a part or the total of the debt in exchange for the commitment
of the indebted government to activate the national resources for conservation
projects.
The reforms exposed by the PNUD are not far from reality. Nevertheless, it is
important to realize that, as any proposal, this has its benefits and its
limitations. The benefits include to inject resources in development activities,
to strengthen the cooperation between the north and the south in connection to
the shared objectives. The limitations indicate that this is a complicated
process, it generates inflation problems, there are institutional barriers, and
there could be a lack of transparency in the flows of capital. But while the
parties remain in a senseless political dispute, it is not possible to do much,
especially when it comes to a decision such as financing the budget trying not
to increase the country’s indebtedness.
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