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Proceso 1142
April 26, 2005
ISSN 0259-9864
Editorial: Energy crisis
Politics: The political tragedy of Latin America
Economy: The political tragedy of Latin America
Energy crisis
The Minister of Economy shows the impotence of ARENA before
the energy crisis. The public opinion demands a solution, but the government
does not have one. The people do not believe what the most important public
officials say when they try to explain something that does not have an
explanation. People reject their interpretation about the crisis and, therefore,
the public officials’ homemade advice about how to save fuel and electrical
energy. Nevertheless, these public officials are right when they say that they
do not have any other solution, but trying to save energy; however, they do not
have it because the administration of ARENA left this matter in the hands of the
market and in the hands of the transnational companies, and with it they closed
the possibility to intervene and exert a recommendable minimum amount of
control. They trusted the free trade and its invisible hand; however, evidence
demonstrates that the market is not as free as ARENA and its ideologists naively
believe it is, and that there is not an invisible hand, all we see is a
voracious market that takes advantage of other people’s lack of control.
Perhaps the populist measures, such as controlling the prices, or adopting
unpopular dispositions such as restricting the circulation of vehicles, are
counter-productive actions. However, it is not a solution either to overlook the
crisis, which is what ARENA has done. This administration’s proposal is to
invite the people to decide how they are going to save so that the high prices
of fuel and energy do not affect their family budget or the economy of the
companies. For that reason, when the Minister of Economy is questioned about how
to face the crisis, she advices to save. It seems as if the sum of the
individual conveniences is more important than what can be convenient in
general, and this is nothing but a coarse liberalism. It presupposes a naïve and
an unrealistic vision of the human nature. The response of ARENA is good, from a
neo-liberal perspective, but it is a bad solution for the present crisis.
The impossibility to apply the solution offered by the government, the fuel and
the energy saving advices, only increases the people’s lack of trust on the
public circles. Fuel cannot be saved with a terrible public transportation
service, anyone with a vehicle would not used the public transportation system.
It is not possible to save with the disorders created by the public
transportation system before the very noses of the police, an institution that
has also abandoned the streets. It is not possible to save either when the
police allow some people to park their vehicles near to the crowded urban
centers. It is not possible to save when the traffic police actually do not
exist. It is not possible to save when the same authorities close certain
streets and they just request both to be patient "for any inconveniences" and to
use alternative routes that usually already are crowded. This is not all, they
have organized a cycling competition and part of the main scenery are some of
the most crowded streets of San Salvador.
The crisis in the energy sector was announced a long time ago by diverse
studies, many of them were already well-known, but to which neither the
government, nor the politicians paid attention. The present crisis seems to have
opened the eyes of the government, to the private companies’ elite, and, of
course, to the most important news media. Years ago, many already knew that the
price of the electricity was calculated based on the most expensive generation
system, in the hours of the highest levels of consumption, and with the less
efficient generators. Ever since the ARENA government privatized the energy
distributors, these distributors charge the consumers with unreasonable prices,
and the consumers have tolerated that irrational way to calculate the cost of
energy for the users. It cannot be understood how, in the middle of the crisis,
and in the dry season, the hydroelectric energy generating system of the State
has an obsolete equipment, which does affect the precarious energy generating
system.
The capacity of the dams has been reduced because of the negligence and the
indifference of those responsible for them, they saw how the grounds rose and
the volume of water was reduced and nothing was done. Thus, instead of
contributing to neutralize the present crisis, the hydroelectric generating
system represents one more vulnerability. The ARENA administration paid to a
transnational company over $96 million to undo a disadvantageous contract of
energy generating systems with nonrenewable sources. They thought that the dams
could be sold, and a portion of the thermal ones has actually been sold, which,
in a few years and because of the way things are going, they will end up
belonging to a to private company.
One of the weakest aspects of the Salvadoran economy is its dependency of
hydrocarbons to generate a little less than half of the energy that it consumes.
The governments, particularly those of ARENA, neglected the development of
alternative resources such as water. The legislation on energy, approved not
long ago, does not encourage the generation of energy with renewable and
alternative sources. The blindness through which the free trade is conceived,
led the ARENA administration to legislate in order to favor the transnational
companies, without paying attention to the impact that this decision would have
on both the economy and the environment. The generation of energy with resources
that come from petroleum, in the long-term, is more expensive and it creates
more contamination.
The same businessmen who now are astonished by the high cost of fuels, never
have favored the alternative generation of energy. The country has natural
sources such as the sun, the wind and water. It already counts with some studies
about how to take advantage of these resources to generate energy, but the ARENA
administrations have refused to listen those that both predicted this imminent
crisis and offered alternative proposals. In any case, if they still they prefer
to continue with the generation of energy by private means, there are also
viable alternatives. In brief, the crisis is due to the lack of a policy on
energy. In 1980, El Salvador generated 98% of its energy; as Costa Rica does
nowadays. In 2005, El Salvador can only generate 55% of it, whereas Costa Rica
generates 98%. The country reached that level thanks to an accurate policy on
energy, and it can go back to that if establishes another one, but the results
are to be expected in the medium and the long-term. In other words, it threw
away a very advantageous position, because of a lack of vision. At the moment,
the country is not prepared to play games with the present crisis. The solutions
connected with energy cannot be improvised.
People are already feeling the economic and the social impact of the crisis. The
inflation has reached a higher level again this year, while the wages remain
frozen and the people lose their purchasing power. The amount of dollars that
leaves the country to pay the invoice of the fuels is even higher, whereas the
amount of dollars that comes to the country turn out to be insufficient to close
the breach between the income and the outcome. The level of social discomfort
will also increase, while the presidential propaganda will try hard to
neutralize it. For most of the population life will now be more difficult, while
the government with a human face, that President Saca tries to present, is
becoming an empty concept.
The political tragedy of Latin America
Politics, understood in the original Greek sense of the
word, is the area that enables people to take care of the polis, the community.
However, the Greeks realized that in the community there were rival groups
competing to defend interests that are opposed in this issue. For that reason,
Aristotle observed that it was possible to identify several forms of government
as long as those who made the decisions would respond to the will of the
well-defined groups. Of course that this author did not agree with the idea of
governing for determined groups based on the interests of the entire community.
Nevertheless, in spite of the good intentions that have been pronounced
throughout the history of humanity, the society is still the place that reflects
the struggle between rival groups for a small amount of social assets.
The duties of the politicians are based on the administration of these few
assets. They must assign the resources according to the interests in conflict.
In this sense, a good political administrator is someone that manages to
maintain the stability of the society by properly handling the little amount of
goods that people are struggling for. Thus, it is evident that the more shortage
there is the more skilful that the politician will have to be in order to avoid
that entire groups feel ignored when it comes to the distribution of the
resources. From this perspective, it is possible to say that the most convulsive
societies are those in which, in addition to the little amount of existing
goods, the politicians are not competitive enough when it comes to assigning the
resources.
In Latin America, politics, has never managed to efficiently develop this task.
For most of the inhabitants of the region, those who make the political
decisions have never considered, as the rule, to look for the general interests
of the country. The distribution of the limited resources has become a negative
factor for the needs of the great majority. People have always demanded a higher
level of both economic and social justice.
The reason for this chronic political instability that has influenced the life
of the Latin American region is the incapacity of its politicians to establish a
certain balance between the interests of the different social groups. How many
times it has been said that the Latin American elites, because of their
incapacity to connect politics with the interests of the people, constitute the
main obstacle for both the political stability and the homogenous development of
the region. According to the last economic figures revealed by the United
Nations, the region holds the sad record of being the most unequal place in the
world, with a higher level of concentration of its wealth in the hands of a
minority. This wealthy minority, in most of the cases, is constituted by
descendants of the European, the children of those who colonized the inhabitants
of the region and reduced their existence to slavery.
From the perspective of both politics and the control of the Armed Forces,
throughout the centuries, the structures that reproduce the inequality have
remained almost untouched. Repression has been the key device to keep this
structure working, despite the abundance of the speeches in favor of freedom,
democracy and human dignity. In this context, some people believe that in the
political culture of the Latin American elites there is no room for democracy.
Claudio Véliz, in the context of the dictatorships that dominated all the
region, with the exception of Venezuela and Colombia, indicated, in the last
years of the seventies, that the distinctive centralist tradition of Latin
America constitutes an insurmountable obstacle for the construction of
democracy, or liberalism itself.
In other words, the people of this region of the world would be condemned to an
insulting level of marginalization by the elites. The failure of the different
armed struggles to change the situation in the region would be an argument to
explain this idea. After the dream of the communist alternative became an
impossible task, from the right wing, those who have always handled the economic
and the political threads of the region assumed that the battle had been won
forever. Therefore they were able to adopt the most radical economic measures to
allegedly assure the macroeconomic balance.
The last political events in the region, nevertheless, seem to deny the previous
asseveration. Since a while ago, those who fight against the increasing regional
inequality have become stronger in a way. Seven of the ten countries that belong
to South America have chosen presidents who openly speak about their rejection
to the market economy, a market economy in a version made by the World’s Bank
and the International Monetary Fund. The presidents of Argentina and Venezuela,
the latter in a little orthodox style, criticized the social disasters that
neo-liberalism has created in the Latin American region.
Last year, the most liberal president of Bolivia, Sanchez de Losada and,
recently, Colonel Lucio Gutiérrez, have not been perceived in a positive manner
by the citizens because of their disposition to pay more attention to the
international organisms than to their own people. Both were dismissed by the
popular pressure that accused them of following corrupt procedures and
neo-liberal games because of the fact that they were at the service of the
international financial institutions.
However, the case of Gutiérrez is the most emblematic one. When he was elected
he used a speech of the left wing, that denounced the negative aspects of
neo-liberalism and the confabulation between the State’s agents and the corrupt
elites. Once he officially held a powerful position, he radically changed his
mind. He became the main ally in his country of the economic orthodoxy that he
used to criticize, and agreed with the sectors that he used to question.
Finally, the Ecuadorian people reacted against his change of perspective and
forced him to leave his position.
In this long tradition of political instability in Latin America, these facts
have a hidden meaning that goes beyond its own boundaries. In the first place,
with these popular uprisings one begins to seriously question the implementation
of extreme liberal economic measures. At this point, the defenders of Capitalism
in a Latin American style had argued that the only way to solve the social
problems was to practice the prescriptions dictated by the United States. But
after more than one decade of applying these measures, it can be observed that
the situation of the poorest sectors has not changed much, they are still living
in misery.
In the end, those who demand political changes in the region live with a simpler
and a less passionate perspective about the events of the past, the events that
were the ground for the war to take the power away from the oligarchic sector.
In a word, the leaders of the left wing have accepted their failures and they
seem willing to compete for a share of power in a context of fragile democracies
that belong to a third wave. At the same time, the people are more willing to
demand that the politicians show a sense of empathy with the needs of the
citizens.
The recent political events in the Latin American region do indicate that people
are waking up. There is still plenty to be accomplished. Such social actors must
improve their organization skills. There is still plenty of things that have to
be done. The social actors themselves have to improve their organization system.
Some people keep using the old story of the Communist and the populist
manipulations to discredit the demands of the majorities.
The political tragedy of Latin America
The sector of tourism has not been important in the country. First, because it has been affected by political factors (like the civil war), that created a negative image of El Salvador abroad, reducing therefore the flow of tourists and currencies. According to the information provided by the Statistical Bulletin of the Salvadoran Institute of Tourism (ISTU, in Spanish), in 1977 the total amount of tourists that entered the country was 278,761. Of these, 65.3% were Central American; 26% were Americans; and 8.9% were European. In 1981, the percentage of European and American visitors went down to 2.2% and 5.6%; however, the amount of Central American visitors increased to 80%.
It was in this period that the government of the United States warned its
citizens not to visit El Salvador. Although that measure was countermanded in
1982, the number of American tourists did not grow in the nineties, as it was
expected; and at the present time the visit of Anglo-Saxons is still very far
from the amount of Central Americans that come to El Salvador. According to the
information of the Salvadoran Corporation of Tourism (CORSATUR, in Spanish), for
2004, the regional visitors were 637,570. However, the number of American
visitors was only 225,910.
Although the number of currencies and visits has considerably grown throughout
the period between 1994 and 2004, the participation that the sector of tourism
has had in the generation of the GNP has not been much. For 2004, the
contribution of the sector to the GNP was only represented by a 2.8%.
On the other hand, the sector of tourism does not have an important allocation
in the General Budget of the Nation. If the numbers of 2005 are reviewed, the
branch receives just 0.01%; and when analyzing the distribution of expenses
through the institutional sectors and the areas of management, in the account of
support to the economic development, it only destines 4.2% to tourism. Within
this percentage, the institutions dedicated to the promotion of tourism, like
the ISTU and CORSATUR, receive only 0.1 % and 0.2%, respectively. This situation
not only reflects the little interest that the nation has in the sector, but the
lack of knowledge about the influence that tourism has in the economic and the
social development of a country.
The effect of tourism on the socioeconomic development
The economic effects of tourism are determined by its relation with the other
sectors of the economy. When increasing the activities that tourism involves,
the agricultural and the industrial projects, the activities connected with the
sector of services and with the international trade have a similar behavior. In
the external sector, tourism acts as an export with an intangible character,
that influences in the growth of economic resources for the country. The
influence of tourism in the farming sector is very important, because the
materials used for the preparation of nutritional products mostly come from it,
that leads to an expansion of the internal market, which involves an increasing
demand of the lands.
The development of the projects connected with the tourism of a country has also
to do with the creation of jobs, since tourism can be considered an intensive
initiative of manual labor, not only in the attention and service provided to
the tourists, but also in the activities that it indirectly promotes, when using
different categories of labor, and not only a specialized kind of labor. In
addition, it has an unquestionable influence on the sector of national arts and
crafts.
On the other hand, it is very necessary to consider that one of the
disadvantages of the sector is its dependency of the external impacts. In
addition, it depends on the demands of every season , and this affects the
availability of the supply. That means that demand and supply vary according to
each season of the year.
This has certain repercussions in the employment level of the services provided
by tourism. When certain events are out of season, it is necessary for both
hotels and restaurants to lower their prices in order to cover their expenses.
Other aspects that have to be considered are the location of the business areas
connected with tourism, since it favors certain areas and not others.
In the places where there is a high level of delinquency, tourism will be low or
there will be no tourism at all. In this sense, it is necessary to count with a
legal frame able to take care of the development of the sector, and able to
implement a well administered and a suitable policy.
The New General Law of Tourism
On last Monday it was revealed that there is a new Law for tourism.
Nevertheless, it is not the first time that they try to regulate this activity
in the country, since for years they have been creating law initiatives. For
example, in 1967 the "Law of Promotion of the Tourist Industry" was created
under a legislative decree, in which it was considered necessary to grant
incentives to the possible investors, specially those incentives that have a
fiscal character, that would allow them to compensate the risk involved in this
kind of projects that do not create profits in the short-term. This law was not
considered suitable for the development of tourism, since it was an unilateral
disposition, that is, it exclusively regulated the activity of the private
companies but not the activities of the organization that was responsible to
promote, plan and carry out that development.
With the General Law of Tourism, they would regulate tourism in four sectors:
the legal security of the companies, order, investments, and the promotion of
the country. This first draft of a law contemplates certain incentives for the
investors in order to increase the activities connected with tourism. One of
those incentives was to obtain fiscal exemptions for up to ten years for the
investors, a subject that was not rectified by Hacienda (the internal revenue
service), and that does not have to be approved, especially now than the country
is trying to recover the fiscal policy. In spite of that refusal, they did
manage to bring into consideration the exemption of taxes on the transference of
properties for those who are dedicated to the sector of tourism, as well as the
promotion credits of the Bank of Multi-Sector Investments (BMI, in Spanish). If
this is approved, the expectations would include that these incentives are
applicable not only to the foreign investors, but also to the national ones, and
that the credit is accessible for the small and medium business company owners
of the sector, because the small and medium companies (PYMES, in Spanish) are
those that own most of the restaurants and the hotels of the country.
On the other hand, the Minister of Tourism, Luis Cardinal, suggests to tax the
lodging in the hotels, with a rate of 5% (already applied in a world-wide
scale), and to increase the taxes that are already charged at the airport for
departures. The resources will be destined to promote tourism. The tax to the
lodging, cannot affect the tourists that come from the developed areas of the
world, like the United States or Europe, but it could reduce the demand of the
Central American tourists, who are the most frequent visitors of El Salvador.
They consider that the prices of several hotels in the country are already high.
That is why it is important to develop a strategy to strengthen the sector, and
to specifically determine what will be the most affected areas with the
dispositions that might be established, and, most of all, if the harmed tourists
represent the highest share of the Salvadoran demand.
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