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Proceso 961
July 25, 2001
ISSN 0259-9864
 
 
 
 

INDEX

Editorial:  Renovators?
Politics:  The other globalization
Economy:  The Salvadoran economy and the globalization
 
 
 
 
 

EDITORIAL

    In the Salvadoran political environment —although not exclusively— words frequently lose their usual signification, meaning completely the opposite. The next step, in this conceptual deformation process, is the total loss of meaning: words are used in almost every sense, but they do not mean absolutely nothing —it is a pure mechanical utterance of sounds— or they mean the opposite. An example of this situation was Armando Carderon Sol's offer to work for whoever was born poor in El Salvador, so that, in the future, this person would not be condemned to die poor.

    If we examine the results of his government, it is clear that what he meant to say was that his government was going to condemn the poor to keep being poor. Francisco Flores’ promises to fight against poverty and social exclusion should be understood in the same sense as Calderon’s  —that is, in an opposite sense. During his presidential period, poverty and social exclusion have increased as a consequence of the economic policies promoted by his government.

    Since a while ago, the term "renovator" has suffered the perverse effects of semantic deformation. Manuel Seco and Gabino Ramos, in their Dictionary of the present times Spanish, remind us that a renovator is somebody who renovates, that is, a person who replaces an old thing for a new one. By extrapolation to the political environment, we can assume that a renovator is that one who, unsatisfied with an old (ideological) political project, proposes a different one with the intention to replace it.

    This way, at first, what counts in a political renovation process is the contraposition of projects —old and new— clearly outlined. In the second place, the people who support those projects also count: it is not about how old they are —although it is possible that the younger ones subscribe to the renovation, and the older ones to the defense of what is traditionally established—, but about how well defined their professional backgrounds, and their intellectual and political profiles are.

    It is not enough to claim that you are a renovator to be one. It is necessary to count with certain credentials to validate that personal subscription: lucidity, boldness, creativity and commitment with the new ideals. When those credentials do not exist, to be a renovator is no more than an excuse to either accomplish personal ambitions or to re-conquer a somehow lost leading role.

    Up to what point is this happening inside the FMLN and ARENA is a topic that can be discussed. But the suspicion that the leaders of the political and institutional reform -in both parties- have professional backgrounds that only with a great reserve can be considered as renovators, is something relatively easy to accept. The profile, the ideological and political education or even the professional background of Facundo Guardado and Gloria Salguero Gross —just to mention some emblematic names related to the internal debate of both parties— do not have a renovator’s credentials.

    If to all this we add that the other members of their parties did not give them too much importance, then we can almost understand their need for popularity. It is not that they cannot be full time renovators; what happens is that if to their origins, profile and resentments we add how confusing or little original their ideas are, the presumed capacity for renovation they rave about is left without foundations.

    Certainly, to make political renovations inside a party, a project —an alternative to the present one— is required. It is not just about opposing to the others' opinions, nor about throwing accusations, but about designing a proposal that exceeds the predominant project.

    The founders' proposal for ARENA's reform is not clear at all. The newest action that they have performed is to defend the founders' participation during the selection of the candidates that run for the positions of the popular elections. However, that initiative has been diluted in a see of demands of a clear conservative sense that, before pointing at a renovation, they aim to return to the traditional party format. In this context, it is easier to understand the sudden postulation of Mario Acosta Oertel —a man who until this day has been nothing but the opposite to a renovator— as the founders' favorite persona.

    Inside the FMLN —where the dispute among the presumed renovators and the presumed orthodox has been the loudest one— it is not clear what it means to subscribe to either one or another tendency. For instance, in a press release issued by the renovators you can read "the renovators are sympathizers of the free competition, in the context of a social economy market; however, free competition can only be possible by the means of a strong efficient and adequate State, to fulfill our needs as a country with a highly organized and informed society".

    Those ideas are not as different from the ones assumed by the FMLN in their Legislative Program 2000-2003, at the chapter where they speak about the alternative model ingredients. Specifically, the Section 1 speaks about the "mechanisms that guarantee a Market performance to preserve the national interests". While the sections 9 through 12 refer to the importance of the State as a dynamo, education promoter, public services provider, social security mediator, and an ecologic system protector of the sustainable development.

    Then again, about the economic subject, what are the new features that the FMLN's renovators offer? Nothing different than what has been already offered by the party and that, as a legislative program, should be regulating the activities of both the elected mayors and the congressmen.  In other words, they are not offering anything new; and therefore, they are not renovators at all. They do have popularity aspirations and they cannot hide their desire to gain some space in the news media, jut like ARENA. However, neither one nor the others reunite enough requirements to provide each of their institutions with the energy and the creativity they need to gain the trust of the citizens.

    The meeting of the world's most industrialized countries plus Russia concluded last week at Geneve. The "anti-globalization" crowded street demonstrations also ended. The balance is a dead person, dozens injured, and considerable economic losses for the sea-side town. Before the claims of the diverse tendencies groups over the perverse effects of globalization, the Italian police responded with a sudden violence. Independent sources speak about the brutality that was used to repress the demonstrators, regardless of their condition of pacifists, greens or anarchists.

    The violent attitude of some anti-globalization groups and the repression —at times disproportioned or caused by the Italian police— are issues that are still being discussed. The opposition parties against the Berlusconi government ask for a parliamentary investigation about the use of the police force, specifically about the death of one of the demonstrators. On the other hand, it is still being discussed whether if in this kind of demonstrations the "pacifists" have to be differentiated from the violent ones, considered as new anarchists or modern times’ "guerrillas".

    While the debate about the convenience to distinguish between pacifists and anarchists continues, the occidental order forces do not establish any difference, and they punish all kinds of demonstrators with the same severity. Even worse, the arbitrary police intervention criteria seems to be destined mostly to impede demonstrations rather than to control violent actions. It was a brutal response —which is very negative for a consolidated democracy, such as the Italian one— to the right that every citizen has to express his opposition to certain social issues in a democratic country.

    However, despite the importance of the debate about the attitude of the demonstrators or the legitimacy of the police interventions, there is an undeniable fact: there is a growing worldwide discontent about the harmful effects of globalization. Different opinion polls about the demands of the demonstrators reveal the open conscience that prevails in the public opinion of the developed countries' inhabitants about those effects. From this point,  it is convenient to ask what makes the globalization issue so offensive, for a considerable part of the world.

The other globalization

    It is important to outline that, generally, the world's public opinion is not hostile to a certain kind of globalization. The possibility to immediately communicate with the rest of the world is generally welcome, and everyone can take advantage of that. Many of the anti-globalization demonstrators usually celebrate with much sincerity the adoption of the worldwide treaties. For instance, when the application of justice is discussed, or when it comes to fight against the serious ecological problems that affect the planet. From this perspective, you cannot ignore the Geneve demonstrators. The accusations about being unrealistic and conservative —to which certain neoliberal sectors usually relate them to— are ambiguous. Instead of trying to confuse the public opinion about the nature of the anti-globalization demonstrators' demands, it would be more convenient to stop and analyze their requests.

    The anti-globalization demonstrators usually denounce the materialistic, neoliberal and anti-ecological character of globalization. With the domination of the States, because of the multinational companies' selfish interests, the demonstrators fight for the people’s self-determination right. Some kind of a world citizenry is defending itself from the international racism, which covers up the most serious violations to the economic and cultural rights. In summary, what the anti-globalization demonstrators reject is the "globalization without representation". That is why they propose a global control of the citizens over the market interests, in order to rescue the ideal of politics as a public affairs’ activity.

    In this context, you can tell the difference between those who defend the market’s globalization, and those who fight for the citizens universal rights. The United States' President declaration —in which he accused the anti-globalization demonstrators to condemn the poor to a life of misery— is the expression of an unforgivable cynicism. Inside the globalization logic he defends, he should explain to the world's opinion why he refuses to support a worldwide proposal such as the Kyoto protocol, about the reduction of the gases that contribute to the green house effect, and the establishment of an international penal tribunal.

    It is all about discussing the project of the "other globalization", the one the anti- globalization militants propose. Issues such as global justice, global citizenry or global human rights should be the main concern of the political leaders. On the contrary, they will not only act behind the backs of the citizen's demands, but they will also continue contradicting the democratic political principles that they usually discuss at public forums. They must demonstrate that it is possible to combine the economic globalization with political democracy. That is the main demand of the demonstrators, which is the same one that the political leaders keep ignoring, protecting themselves behind thick walls, defended by the police and the army.

The questionable bet of the Salvadoran right-wing

    In that sense, the denounce of the "offensive" harassment that the democratically elected presidents were submitted to, made by the El Diario de Hoy’s editorialist (on July 24, 2001), must be a reason to worry. Not because he speaks hypocritically about the "weak service that is made to the poor of the world by disturbing the environment, darkening the problems and generating false expectations", but because he does not mention the need to repair the relations among the politicians and the people, or to relate politics to the needs and the demands of the citizenry. A political legitimacy protected —as an excuse to avoid any offense against the presidents— behind anti-popular walls says plenty about the democratic quality that wants to be sold to the poor countries of the planet.

    In addition, the opposition of the most important national news media against what happened at Geneve, gives us an idea of the kind of democracy that they prefer for El Salvador. That is the reason why they seem so aggravated when demonstrations take place. They cynically compare them with the ones of the earthquake victims, who claimed for governmental help. Nothing occurs to them, but the old trick to make the demonstrators responsible for the violence that the "order forces" use. It does not matter if, at the same time, they turn into apologists of the police violence. Everything is permitted, in their opinion, when it comes to repress the popular demands, whether it is in Italy or in El Salvador.

    This attitude is obviously different from the revelations that the United Nations' General Secretary made about the Millennium Summit celebration. In that occasion, the General Secretary revealed to the presidents the results of a worldwide survey, about the citizenry's perception about the legitimacy of their representatives. Kofi Annan certified that most of the world's citizens —two thirds of the interviewed ones— do not feel represented by their government. From any perspective, this is the main issue that the wealthiest countries' leaders should be worried about, if they take the time to analyze the reason of such numerous demonstrations, and the world's rejection to their neoliberal policies. They prefer to ignore these problems, that is why they can underestimate the voice of the Salvadoran citizens, with the excuse of the electoral legitimacy of the governments reunited at Geneve.

    Opinions such as the one expressed by El Diario de Hoy about the "G-8 bet for globalization" and the demonstrators attitude, perfectly match with the democracy style that these opinion builders usually defend in El Salvador. All kinds of tricks are used to avoid pointing out at the responsibility of the governments with the citizenry.  That is why they took the United States President's declarations against the anti-globalization demonstrators as if they were their own, without questioning them. The public opinion is only considered when it does not contradict the neoliberal thoughts. That is, without considering, obviously, that the world has more wealth distribution problems than it has market problems. The market's benefits dogma blinds some people and does not let them see the reality. However, what these unconditional defenders of the market do not see is that even their most loyal supporters from the World Bank and the FMI have had to acknowledge their fallibility in certain occasions.

The globalization challenge

    The Salvadoran President's strategies, to insert the country into the neoliberal current, should be questioned. In the first place, a national debate about the kind of world insertion that the Salvadorans want and require is urgent. It is not about, as some people think, avoiding the globalization fact. It is about defining an insertion strategy where El Salvador can take advantage of some opportunities from that relation. To forget that as a small and poor country we have a disadvantage in relation to the most developed countries, is to fall into the silliest ingenuity.

    The discussion about the country's strategy to face globalization must consider the participation of the national and the world's citizens. We can no longer understand politics as we traditionally have. We cannot talk about globalization insertion if we keep avoiding the participation and the inclusion of all Salvadorans into the decisions that concern their future.

    All of these situations should be the Salvadoran Government's bet, specially the one of Francisco Flores. The fact that he was invited to participate with the G-8 presidents, at the discussions about the poverty in the world, does not provide his proposals with any legitimacy. What he should be asking himself, instead, is if the Salvadoran people felt represented by him at the reunion of the wealthiest. In summary, it is not about his persistence on the neoliberal discourse, but about the fact that it did not occur to him to defend the need for another kind of globalization.

    In the present, globalization introduces itself as one more step into the economic integration line. The difference with other integration process of the past is that now it does not only mean the relations between similar countries (geographically, economically and socially speaking), but also the connections between  very different ones. A sample of this is the recent reunion of the eight most industrialized nations’ group (G-8), where the presidents from some of the “not so industrialized countries” in Africa and Latin America attended. El Salvador was part of the chosen ones to attend at this reunion, which was developed in the context of the already traditional protests from anti-globalization groups.

    Although there already are general evaluations about the impact of globalization, in terms of income and wealth concentration, there are those who say —and it can obviously be discussed— that it as an "irreversible" process, to which societies must adapt in the best way possible. In their most elemental meaning, globalization can be understood as an internationalization process of the production mechanisms, along with the logical and successive elimination of the merchandise, capital, and people’s circulation restrictions.

    The main problem is that the process reveals that the most developed countries have a double moral standard: they ask the poor countries to adopt measures that not even they wish to adopt. The clearest example is the case of agriculture. While the United States and the European Union demand that the poor countries adopt the neoliberal policies that eliminate subsidies for the farming sector and the imports’ customs tariffs, they subsidize their farming sector and impose great tariff and non-tariff barriers for the access to the agricultural products that come from the poor countries.

    In this context, the Salvadoran government must handle the globalization process with extreme cautiousness. Not just because of the ambiguous attitudes of the G-8 countries, but also because globalization has already started to have an impact through two very specific process: the maquila proliferation, and the elimination of tariff barriers for the free trade. Together with this fact, it has been reported a growing dependency to the family remittances from the workers who live in the United States, and a clear prostration of the Salvadoran production apparatus, which is not even able to respond to the internal demand of goods and services. The examination of each one of these elements, allows to say that the globalization already has an impact in El Salvador, but that it has not capitalized the potential benefits of such impact yet.

Maquila and globalization

    It was mentioned that one of the features of the globalization has been a strong tendency to divide the production process. An electronic toy can have pieces that were actually produced and put together in different countries, such as Malaysia, Singapore and Costa Rica, for instance. In El Salvador, (and in many neighbor countries) this kind of process is already used in the clothing industry, under the shade of the Caribbean river basin (ICC) benefits, issued by the United States. This mechanism allows the entrance of clothing items free of tax into the United States market, as long as it obeys to some regulations of the origins of the basic materials.

    This has caused a real avalanche of business men from the Asian South East, and United States citizens who invest in the ICC  beneficiated countries, in order to have access the to the United States market without paying taxes, and to pay much lower salaries than they would have to pay in the United States. This fact explains the proliferation of textile maquilas in the North of Mexico, Guatemala, El Salvador, Honduras, Nicaragua and the Dominican Republic.

    As if this was not enough, the governments that beneficiate from the ICC also offer to the investors "fiscal vacations", at fiscal enclosures and maquila areas where they are exempt of paying income tax, as well as added value, imports, exports and municipal taxes.

    It is worthwhile to point out that in this phase of globalization there are also implications for the workers and the United States textile enterprises and clothing factories. Well remunerated jobs are disappearing in the United States in order to create extreme poverty salaries in the countries where the maquilas are built. The logic of the important United States clothing enterprises is to close their doors in the United States (where they pay high taxes and salaries), to hire the maquileros that live at the ICC countries, where, as it was mentioned before, the operational costs are considerably less. In the meantime, the consumer prices are kept in the same level, as if the production was in the United States. This is the globalization reality and, therefore, nobody should be surprised that it has its opponents.

Some impacts

    This aspect of globalization has many consequences for El Salvador, besides not generating any taxes at all: the concentrated growth of a sector, which generates low remunerations, and very little intermediate demand. In the second place, it depends on activities that cannot be affected by the government's economic policies. In fact, there is no need to analyze it much to notice that the maquila represents a 59% of the total of exportations, 455% of last year's traditional exportations (when they were slow), 162% of the non-traditional ones and 120% of the traditional and the non-traditional exportations together. Although it can be said that the maquila's net exportations are much less —since it imports 72% of what it exports— the truth is that nobody can deny that a significant amount of our international commerce revolves around it.

    However, despite the importance that the maquila has in the international commerce and in the generation of employment (it generates about 15% of the industrial employment), the deep social and economic contradictions that it has are always at sight. First, because it only grows if the salaries are low enough, Any attempt to increase the salaries by the legal means, or through the labor recoveries is at the same time discouraging for the creation of any new maquilas. This is very disheartening if we consider that the minimum salary (and the one at the maquilas) is under the line of the extreme poverty. Even President Francisco Flores has said that it is not convenient to increase the minimum wages, because that would make the maquila investment go away.

    In the second place, the fact that the maquila imports most of its intermediate consumption (or basic materials) means, at the same time, that it does not generate that much of a demand for the domestic economic sectors. Obviously, this reduces the multiplying effect of the maquila investments and seriously restricts the possibilities to keep high economic growth rates.

    In the third place, and due to the fact that one of the other conditions for the maquila growth is the elimination of fiscal "barriers", the State must also face a constant reduction of taxes, which becomes even worse as the maquila activity grows, demands public services and does not pay taxes. Finally, it is important to say that the environmental impact of that kind of industry is reorienting the use of the territory in the areas at which it is established. It promotes the use of the most fertile agricultural soils (as the ones of the San Andres Valley) for industrial purposes.

    In summary, the globalization through the textile maquila implies for El Salvador (and for most of the beneficiaries of the ICC) a growth based on activities that do not promote the development of the domestic economic sectors, generate low remunerated jobs, and do not generate taxes (in a moment when the main economic problem is the fiscal deficit). The only benefits would be the generation of employment, and the delay of the search for sustainable solutions for the economic recession and poverty.

Considerations

    El Salvador has the doubtful honor of being a pioneer at the tariff’s elimination in Central America. It has even omitted the importation taxes at an unnecessarily fast speed, to the point of lowering its taxes before establishing such aspect in the agreements subscribed with other Central American countries. This process has not been exempt of inquiries, especially from the farming and the industrial sector, which from the beginning, and with no success, opposed to the arbitrary tariff’s elimination. Something that not even the G-8 countries do.

    After more than ten years since the process started, the results are already at sight: the tariff’s elimination has stimulated the growth of importations and the unbalance of the external sector, at the same time it has placed the national companies in a disadvantage situation before the companies of the countries where considerable tariff barriers do exist. The result has been a growing replacement of the national production by the imported production, evidently not only in the food market, but also in the foot wear and the chemical products markets as well. In the mean time, the Salvadoran production has difficulties to step inside the international markets, not just because of tariff barriers, but also because of the national productive sector’s lack of competitiveness.

    El Salvador has already gone into the globalization process, in which it sells its labor cheap, and it pays a high price for the internal consumption imports. The only explanation for the sustainability of this model is the family remittances flow that the immigrant workers send, which compensate the external unbalance, increase the added demand and allow to import the consumption items. In the mean time, the productive sectors become slower without the governmental support and with no signs of a substantial change in their present situation.