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Proceso 1146
May 25, 2005
ISSN 0259-9864
Editorial: Forecast and panic
Politics: Did Adrian leave any political lessons?
Economy: Dollarization: a negative factor for some people, a positive feature for others
Forecast and panic
The governmental forecast saved, without a doubt, many
lives and the few possessions of thousands of people who live in highly
vulnerable areas, threatened by an unusual tropical storm that struck the
country through the Pacific. The forecast worked because the central and the
local government used all of their energy to move the people in danger to a safe
place. The governmental leadership activated and coordinated the cooperation of
social organizations and many people of good will. Just as in other crises, the
solidarity of the population was a key aspect to palliate the impact of the
tropical storm. It has been demonstrated that, when the government sets its mind
on something it can set aside the particular political interests, and defend
those of the population. For just once, the old disputes of the responsibility
between the central and the local government were forgotten and both worked
together. All of the politicians also set aside the individual interests of
their parties, which have become an obstacle for the State’s policy, and managed
to project an image of national unity before the crisis. The objective was to
protect the population, and this had enough strength to bring them closer in a
common purpose of vital importance.
The governmental and the political reaction leaves a good lesson and it should
be understood, because tropical storms are very frequent in the country. The
following step was to work united as a whole, with dedication and certainty, in
order to be able to finally eliminate the precarious situation of the housing
projects. The task is not easy, because it involves urban planning, economic
resources and both social and cultural changes. Nevertheless, the neutralization
of this vulnerability, in the cities as well as in the coast and the lower
areas, would allow to face these crises with more serenity and confidence. An
enormous amount of resources could be saved through these actions. The other
crucial move is the reconstruction of the drainages of the metropolitan zone, a
task often postponed because of the dispute between the central government and
the local governments about their individual amount of authority, because of a
careless attitude and a lack of perspective. The interest that should bring the
governments and the politicians together is the same one that has united them
now, the safety of thousands of families. Last but not least, there is a third
task, derived as well from this recent experience, and that is the construction
of a solid communitarian, a regional, and a national network of civil defense,
which would be crucial during tropical storms and earthquakes, and also, why
not, to face the social crises.
The traditional way to work through a centralized committee, has shown its
inefficiency to face the catastrophes. These tasks would be of great benefit for
the most vulnerable sectors, and would be necessary to undertake them for
reasons of basic humanitarian aid, and social and political responsibility.
Without a doubt, there would be electoral political yields for those who would
stand out for promoting unity, beyond the particular interests of their parties,
and for those who would stand out for their sense of creativity in the design of
the solutions, and their efficiency for actually applying the suggested
strategies.
El Salvador would be safer and it would be prepared better to face a crisis like
the one that recently took place if finally the environmental deterioration
issue were taken seriously. A safe environment would make El Salvador a secure
place, it would save lives and properties, it would generate a greater level of
individual and communitarian confidence, and it would release resources for the
social and the productive investment. A considerable level of education is
indispensable to accomplish this task in order to turn the population into an
ally and not into one more obstacle. The governmental firmness is also important
to sanction the irresponsible action that deteriorates the environment, as well
as the political decision to substantially improve it. At the base of these
tasks is the decision to work, for once and for all, with the State’s policies
and not with the biased visions or particular interests that can only be
favorable for certain sectors. The national interest that has emerged in these
days, is a national resource, which can be very useful for a general sense of
well-being.
This positive national experience of unity and prevision, was darkened by the
tendency to alarm people. In fact, the prevention methods were accompanied by
messages, very effective indeed, that promoted a generalized situation of panic
in the population, creating a sort of collective hysteria. The government, but
mainly the media, created an environment of fear. The presence of the public
officials in the media, even dressed for the occasion, in a hurricane style, and
their approach gave the impression that, in fact, they hoping for an
overwhelming hurricane. The devastation would provide material for the press to
inform with the usual harshness. The most important news media managed to keep
the audiences alert to what they had to say, which in fact, was not that
scientific and quite alarming. Even if the government would have to face serious
problems because of its lack of preparation, this would provide an ideal
platform to make the "human face" of the propaganda a more specific subject.
They did not waste the occasion to exploit a sense of fear, just as it has been
done with the phenomenon of the gangs. This does not mean that the dimensions of
the menace remain unknown. It is possible to inform about the probable
consequences of a natural phenomenon of such dimensions without causing a
general state of hysteria.
Perhaps the fear of the government was genuine, since it knows best what are
this administration’s institutional shortcomings before a threat like this one.
Perhaps nobody explained to the government that the volcanic chain usually stops
the hurricanes, and that this is the reason why hurricanes do not affect the
pacific coast of the region when they come from the Caribbean. On the other
hand, if this was already clear, the government probably thought that it was too
complicated to inform the population, since they would trust in the information
and hope for the best. Perhaps they thought that it was an ideal opportunity to
strengthen the sense of fear that is so efficient to keep the population under
control, a population that becomes more and more displeased with the economic
policies. Perhaps the position of the government was a combination of all this.
The tropical storm became a challenge for the country. The storm threat was a
real danger for the thousands of resident families in the highly vulnerable
areas, a typical situation during this season. The first set of storms had
already caused a certain amount of damage. And there will be more negative
consequences even without a hurricane, if long-term measures are not adopted
along with the immediate ones. In this occasion, in addition to the rain, the
country was threatened by winds and hurricanes; but as it usually happens, when
these come from the Caribbean, it is very probable that the volcanic chain stops
them, or, that at least it is able to reduce its speed level, which is in fact
what happened. But the government and the most important news media ignored this
actual possibility, and placed the population before an unstoppable and a
devastating hurricane. Instead of explaining the impact of the volcano, or how
the hurricanes usually lose strength when they touch the ground, the emphasis
was placed on their destructive force. In the end, the winds did not even reach
the usual speed of December or January. Whether they tried to do it or not, an
actual crisis was magnified and this allowed President Saca to appear as the
undisputed leader of the country.
Did Adrian leave any political lessons?
It is fashionable in these days to speak about how the
citizenry is evaluating the performance of the governmental authorities in the
case of the tropical storm called Adrian. The hurricane that was not and the
destruction that never arrived, are a good set of reasons, according to some
people, to say that the Saca administration became the winner of an excellent
evaluation. There were many who wanted “to thank Adrian" (some also said that
God had saved the country) because, according to a contributor of La Prensa
Grafica of May 21st, "it allowed us to realize that, when we are willing to, we
can be a united as a solid town, with a high spirit of brotherhood".
The Saca administration, naturally, takes most of the credit because of this
alleged unity forged in such difficult times. It is important to acknowledge the
fact that the President invited all of the members of the country’s different
political organizations to join the fight against the environmental phenomenon.
Some people even suggested that the cohesion level that has been shown is a good
sign for the country’s political future. Hopefully, some hypocrites say –in
reference to the legislative decree that declared a state of public calamity-,
the congressmen will discuss the issue less and confirm the decisions faster,
those decisions that have to do with other threats that are floating over the
country.
Consequently, some have started using pseudo opinion polls to reveal how the
Salvadorans evaluate the government’s prevention strategies. The headlines of
one of the editions of the formerly mentioned newspaper seem eloquent enough:
"Opinion poll gives a confidence vote to those who handled the emergency". It
does not matter if this alleged opinion poll does not have any scientific value.
In any case, after the presence of Adrian, the tropical storm, to the eyes of
his defenders, Saca has become stronger and his supporters wish to take
advantage of the circumstances to praise the figure of the President. If before
they spoke about his generosity, now one begins to see in the fact that his
opponents are being called to appear before the television cameras, a gesture of
magnanimity from a statesman out of this world.
At the same time, the opposition is being upbraided, especially those who dare
to say that the government deliberately exaggerated the threat of the hurricane
to reach better political results. El Diario de Hoy calls those who think this
way “charlatans” and “red rebels”. "As soon as it was announced that the
emergency had ended, the communist radio and a TV station, in addition to the
poor alcoholic woman, began to denounce the farce of the hurricane. Using their
skillful way of lying, defaming, and slandering the Communists are trying hard
to destroy the actions of the government to protect the population from the
hurricane". The worst thing for the editorialist is that "the treacherousness of
the red campaign to discredit the preventive work, is that if we were under a
similar threat in the future, there will be those who will not listen to the
warnings, and will place themselves under a serious amount of danger".
The virulent attack of the editorialist of El Diario de Hoy, in addition of
being at the edge of vulgarity, was a clear sample of the intentions held by
those who defend the government. This is not only about highlighting the good
performance of Saca, because he is not willing to share some of the credits with
the other politicians who were present during the emergency either. It is
necessary to remember that in this attack against the alleged communists, to
this point they have not been "imprudent" as they have been accused. None of the
members of the FMLN has publicly questioned the efforts of prevention made by
the government. The news coverage has not been discussed either, which can be at
least called biased or alarming, because of the journalists that follow the
official line.
The present administration, unlike its predecessors, tried to prevent and
minimize the impact that the presence of the tropical storm would have in the
Salvadoran territory. In this sense, if the performance of Saca is compared to
its predecessors, it is necessary to mention his capacity to take action with
the society as a whole to prevent any misfortunes. The country is so accustomed
to the irresponsibility of the official party, that it is necessary to display
all the possible paraphernalia because of the fact that the government acted
with a certain good sense.
That situation cannot be stretched that far. Since this was a hurricane that
never took place, it will not be possible to examine if the measures that were
adopted were actually enough to avoid a worse kind of misfortunes. A
dispassionate analysis of reality can just underline the fact that the
government moved quickly based on the emergency, but that it is necessary to
count with a legal frame for this and other cases. In addition, the declarations
of the members of the government are important, since they consider that the
National Emergency Committee (COEN, in Spanish) must improve its procedures and
its strategies to obtain information.
In this sense, the present discussions in the Legislative Assembly that intend
to create a law of disasters are following the right path. In this subject, the
government is not being a pioneer either. Several social organizations of the
civil society presented a while ago an initiative to promote the approval of a
law of disasters. But, as it usually happens in the Creole policy, the
politicians never had the time to look at a project that was not going to create
a considerable amount of popular support. In any case, today it is more
profitable for the official sectors to speak about a law of disasters, not only
because the government wishes to continue projecting an image of responsibility
and concern for the well-being of the Salvadorans, but also because the next
elections (2006) are crucial. It seems that it can always help to pretend before
the voters that the institutional duties are intended to accomplish the
necessary tasks.
Beyond the comments about how the government handled the hurricane threat, it is
possible to mention the hypocrisy that moves the people responsible for ARENA.
While they want to get all the credit for allegedly including all of the
political actors when it comes to discuss how the crisis was handled, they keep
an authoritarian attitude in the decision making process connected with the
country’s transcendental resolutions. Is it more important to speak about
hurricanes than to include the different sectors in a discussion as
transcendental as the Free Trade Agreement with the United States?
Saca gave instructions to the congressmen of the PCN and ARENA so that they
would approve the text immediately. Now everyone knows that the legislators did
not even had time to read the treaty
-and those that approved it, did not even showed their will to do so-, that
allegedly includes so many positive features, that its promoters cannot stop
talking about the subject during their public appearances. With this decision,
the strategies connected with the economic policy are sort of a mortgage for at
least two more generations of Salvadorans. The business elite, the ones that
have always decided what direction the country’s political and economic events
will take, were the ones that ordered the quick legislative approval of the TLC.
Those who want to sell the idea that the initiatives of Saca connected with the
hurricane threat are a test of national unity and an example of the height of
the presidential administration, will do nothing more than to deceive the naive
ones. If it is possible to talk about the political lesson that Adrian left, all
that has to be done is to rescue the manipulating will of the President and his
entourage of defenders and flatterers. It is unrealistic to speak about unity
because of a hurricane that never took place, while the important sectors of the
country remain excluded from the transcendental decisions that will affect their
life and the life of the future generations. In this sense, Saca cannot be
considered as a democrat with a sense of participation, but as a demagogue that
considers short-term actions as the key factor of his performance, a person who
takes advantage of the feelings of the people before the possibility of a
catastrophe, and considers that kind of actions as the main political strategy
of this administration.
Dollarization: a negative factor for some people, a positive feature for others
It seems that dollarization has become a fashionable
subject once again. The magazine called “El Economista” (The Economist) of the
local newspaper La Prensa Gráfica, for example, dedicates a page to this issue.
El Diario de Hoy also published an interview with Michael Cox, an economist from
the Federal Reserve of the United States, who gave his opinion about the
subject. It seems that dollarization was, is, and will continue being one of the
most wanted measures and one of the most hated measures as well by the different
sectors of the country. The important aspect of this issue is trying to
understand the different points of view on the subject and compare them with the
reality of the country. That is the only way to see if the measure was actually
positive.
In El Economista, there are a couple of perspectives about dollarization. In the
first place, the opinion of Claudio de Rosa (the Executive Director of the
Salvadoran Banking Association, ABANSA, in Spanish) is introduced. For him, with
the reconfiguration of the monetary regime the intention was to accomplish five
basic objectives: to eliminate the risk of a devaluation; to defend the value of
the deposits, pensions and wages; to prevent some sectors from taking advantage
of a devaluation; to lower the interest rates; to create certain conditions in
the country for a dollarized economy, something that demands a serious fiscal
discipline; and, finally, to establish a propitious system able to reduce the
inflation level.
For de Rosa, " this goal has been achieved", because the country has the lowest
interest rates of Latin America. Some economic aspects such as inflation and the
concomitant problem of the fiscal deficit have stayed under control because of
the new exchange regime. Claudio de Rosa indicated that "the worst of the
worlds" would be a parallel circulation of dollars and colones in the economy,
since this would bring a devaluation risk again and could intensify the growth
of the interest rates, something that would eradicate all the benefits of a
dollarized economy.
On the other hand, there is also the position of the former minister of economy,
Arturo Zablah Kuri, who considers that dollarization appeared as a measure
intended to reduce both interests and inflation; but the actual results do not
seem to reflect the formerly mentioned benefits. The interest rates have been
reduced all over the world, and, in some countries of Latin America, these
interest rates are even lower than in El Salvador. The former minister mentioned
that the country shows a minimum level of growth in the foreign investment area,
and the second smallest economic growth in Latin America. It is evident that
there is a considerable level of unemployment, and that the exportations are
stagnated. Inflation keeps growing, and this reduces the purchasing power of the
people.
In more specific terms, Zablah indicated that the country has lost more than
$600 million dollars in reserves, and nearly $200 million in interests because
of the indebtedness that increased as a palliative system to resolve the problem
of the fiscal deficit. He also indicated that the country depends of the
external credits, and that there is not much control over the money laundering,
and over the weak monetary, exchange, and credit policies.
In this debate about the convenience to dollarize the economy, the government
seems pleased to highlight the opinions of foreign people who recommend the
adopted economic measures. El Diario de Hoy published an interview with the
vice-president of the Federal Reserve (popularly known in the U.S.A. as FED) of
Dallas, Michael Cox, titled "FED: Dollarization, the right decision". The
headline suggests that among the many sterile internal debates it would be more
important to consult the people that have more experience on the subject.
For Cox, to dollarize the economy was the right decision, "because the most
important resolution is to reduce the inflation level. In addition, the fact
that they have lowered the interest rates is the best answer to that". The other
positive aspect highlighted by Cox was that with dollarization, the discretion
used to apply the monetary policies that can affect the investment flows is
eliminated. In spite of all the positive features brought by the monetary
regime, Cox thinks that it is necessary to try to increase the productivity
level and promote the flexibility of laboring.
Who has the truth?
In order to answer this question, first it is necessary to understand that
although the economists brag about having an objective position that depends
exclusively on the economic theory, their opinions –whether they realize it or
not- ultimately reveal the individual interests that they intend to defend. In
that sense, the economy is connected to matters of a political nature. It is
necessary to doubt of those who think that the economy is a pure science free
from any ideologies. Secondly, it is important to notice that, to evaluate the
effects of an economic policy, it is necessary to corroborate the benefits that,
according to the government, the implementation of the measure brings, trying to
evaluate the results connecting them with the country’s reality. Last but not
least, when it comes to talk about the economy, there is nothing more important
than to listen to the people. Instead of discussing the perspectives of the most
famous economists –and it is worse if we are talking about an economist who does
not actually know the problems of the country- it is necessary to give people a
chance to talk about the economic situation of their daily lives.
Based on the first criterion, it is ridiculous to consider dollarization as an
effective measure, just because a well-known foreign economists says so. The
interview indicated that: "the debate about dollarization always opens old
wounds between those who oppose to this measure and those who find it efficient;
however, to see an important public official of the Federal Reserve Bank confirm
that this was a step forward in the right direction grants a greater level of
important to such decision". It is clear that that this idea is highlighted
because it agrees with the interests of a few business groups of the country.
But it is never mentioned that before the implementation of the dollarization
process diverse economists of international organizations visited the country to
admit that dollarization was far from being that "right measure" that they are
talking about now.
Based on the second aspect, it is possible to demonstrate that dollarization was
a measure that was blown out proportion. It was said that with this process the
country would improve its growth rates. To speak of the truth, after
dollarization was implemented, the economic growth rates have been near 2%.
Another of the objectives was to control the inflation level and promote with
that the economic stability. But before implementing this measure the inflation
rates were already low. In fact, by the end of 1999, the inflation rate was in
negative figures (-1%). Since the implementation of the dollarization process
the prices have increased in a considerable manner. Dollarization was expected
to lower the interest rates by expanding the credits for the investment.
Nevertheless, during the year in which dollarization was implemented, the
private investment area had a contraction of 4.2%. In the first months of 2002,
the same thing happened to a negative variation that was close to 1%. This
situation lasted until November of 2002, when credit seemed to be slightly
reactivated.
Based on the third aspect, an examination of the general lines of the opinion
polls conducted by the UCA’s Institute of Public Opinion (IUDOP, in Spanish)
revealed the people’s discontent caused by dollarization. By November of 2001
the country was before the presence of one question: "as far as your domestic
economy, do you think that dollarization has been a positive or a negative
measure?”. A 55.1% of those interviewed said that it was a negative measure, and
only 28,4% considered that the right decision had been made. In 2003, the
dollarization process, next to the unemployment level, poverty and inflation
-one of the problems that would be allegedly controlled by the formerly
mentioned measure- was one of the nine most serious problems of the country. In
2004, once again, next to unemployment, poverty and inflation, the measure
remains between the seven most urgent problems that the Salvadorans have to deal
with.
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