President Flores and the Magic Mountain
When presenting his report on his third year in office, President Flores talked of an optimistic and secure country that is climbing to the glorious summit of a mountain. But is the real picture in El Salvador quite as rosy as the President would like to paint it?
CIDAI-UCA Team, San Salvador
President Francisco Flores’ two previous reports to the Legislative Assembly to mark the anniversary of taking office have been characterized by a great display of rhetoric; the third one was no exception. Unlike most previous Salvadoran Presidents, Flores delights in playing verbal games. He is a man of many words and few actions, judging by how much he has to offer when talking to the nation—verbal puns included—and the limited concrete results that can be seen. The central image of this year’s presidential report—mountain climbers optimistically striding toward the summit—is even more illustrative than he might have imagined. What Flores has to offer are future illusions and dreams rather than concrete solutions to current problems. The President has so far failed to understand that the point is not reaching the summit of the mountain, but rather concentrating on the mere mortals living at its foot. In short, what is the good of climbing to the top if you end up there alone? Or, worse still, what if that summit turns out to be just an illusion?
Optimism or deceit?At the end of his third year, Francisco Flores received his highest ratings since taking up the reins of this third consecutive ARENA government. Thus, when he spoke to the Legislative Assembly on June 1, Flores was in a celebratory mood, brimming with optimism. According to his particular point of view, he is heading a government of visionaries undeterred by difficulties who are always prepared to climb right on to the top of the mountain.
In his eagerness to emphasize his optimism and faith in the improvements that his government has supposedly brought to El Salvador, Flores brands anyone critical of or opposed to his administration as a smug preacher of doom. "There will be no lack of people who hope to infect others with their pessimism," he said, "as desperation is also a form of convenience. Of all the dangers we face, this is the most pernicious as it saps the energy people need to face the challenges, problems and adversaries that the future always brings along."
Francisco Flores has shown himself a cynical master of deceit, able to give the country’s most urgent problems a wide birth. This pinch of cynicism is the only way to explain, for example, how the President could start his speech by praising the dollarization process, the very issue most Salvadorans condemn. Thus Flores was quite happy to talk about the benefits this measure has brought to families earning over 9,000 colons a month, knowing perfectly well that it is an insult to most Salvadorans to mention figures anywhere near as high. Either the President was out to insult Salvadoran families earning the minimum wage or he is an inept politician ignorant of the basic rules governing dialogue with his fellow citizens.
This is an eloquent illustration that the President is not interested in what the majority of the Salvadoran population thinks because his mind is too set on the mountain of benefits that he and his followers are reaping from their economic policies. That’s why he can allow himself the luxury of ridiculing those who doubt that the summit is near. Or is his deceit based on the security of finding an echo among a population confused by official policies and a leftist alternative too inept to capitalize on the growing popular discontent over the failure to satisfy the most basic needs?
Economics: The spoken One of the first issues President Flores referred to in his report was the impact on the family economy of the recent law on "monetary integration"—the official name for dollarization—which he called a "decisive" issue. He also touched on three other economic subjects: the elimination of diesel subsidies, expansion of free trade assembly plants, or maquiladoras, and free trade agreements (FTAs).
and the unmentionable
He failed to mention the impact of other measures that his government either has implemented or promised but never acted on, such as the reduction or elimination of electricity and water rate subsidies, the elimination of sales tax exemptions on food and medicine purchases, the introduction of a road maintenance tax, the tax hike for micro- and small-scale businesses and the massive public-sector layoffs.
Nor did he say anything about the behavior of the main macroeconomic indicators, including the trends in production, exports and the maquiladoras; the fiscal deficit; the need to finance public spending and the tendency of the public debt. These aspects were previously covered by Finance Minister and Presidential Secretary Juan José Daboub, who spouted triumphalist interpretations of the microeconomic performance that contrast with the evident tendency toward economic imbalances reflected in the government’s own statistics.
Three years in: Broken promisesFlores should evaluate his three years in government based on what he offered in his government manifesto rather than the improvised measures he has taken along the way or windfalls such as the Caribbean Basin Initiative and the proliferation of textile maquiladoras offering wages below the extreme poverty line.
During another arrogant speech at his swearing-in ceremony, President Flores had announced his government’s main programmatic areas. It would eliminate the exchange rate risk to provide investors stability and predictability and would seek to bring about sound public finances. The announced economic program included measures to favor weakened productive sectors and implement policies for the agricultural sector that would increase competitiveness and profitability through irrigation systems, agricultural association, financing and strategic information.
Three years into his term, only the first of those promises has been honored, which judging by the presidential speech itself has not brought about the expected improved climate for investors. There are few achievements to crow about in other areas either. The public finance deficit is continuing to grow and the productive sectors are languishing in the face of government indifference.
The "advantages" of dollarizationIn referring to his achievements, Flores gave first place to the dollarization process, which he said had helped improve the family economy. This is, in fact, another half-truth. According to the President, one of the most important impacts of the "monetary integration" has been the reduction of the interest that families pay to bank creditors. While this may be true, it says nothing about the situation of the country’s more typical families, those without private transport, a credit card or access to credit to buy their own home.
Most Salvadorans could care less if interest rates rise or fall, because they are not linked to the financial system. Many micro businesses have to resort to moneylenders and usurers to obtain financing. It is also not clear if the downward trend in interest rates can be exclusively attributed to dollarization, as they have been falling since 2000. What is clear is that dollarization has brought many disadvantages and complications with it as far as fiscal, monetary and commercial policies are concerned.
In any case, it is scandalous, insensitive and even offensive for the President to cite the benefits of dollarization for people living in the urban areas who earn the equivalent of just under US$1,150 a month, when over 65% of the population is struggling to bring in anything over US$2,000 a year.
The "success" of the A second area Flores reported on was the elimination of the public transport rate subsidy, which in his opinion has favored the family economy by "returning" 350 million colons a year to the Salvadoran population. What he did not mention was that vehicle owners had to turn right around and use this "returned" money to pay their contribution to the new fund for maintaining and repairing the country’s highways. In fact, elimination of the subsidy is unfavorable to the family economy as it is opening the way for increased public transport rates in cities in the country’s eastern and western regions.
The increase in free trade zones is another supposed great success of the Flores government. The President stated that during his three years in office, the total number of free trade zones increased from 7 to 15, providing jobs to some 90,000 people, predominantly women. While this cannot be denied, this economic growth model also implies major uncertainty and volatility and exerts pressure to maintain and expand low-paid jobs in terrible conditions. The textile maquiladoras hire predominantly unskilled workers, who receive wages that keep them living on, if not under, the extreme poverty line. These companies also tend to leave the country in response to the smallest changes in the economic environment, such as wage increases, unionization, application of taxes and elimination of the preferential programs for the goods made of inputs from the United States that are assembled in low-wage countries such as El Salvador and then re-exported into the United States.
The "wonders" of free tradeFlores highlighted the different free trade agreements as another of his government’s success stories, because they have stimulated exports to countries such as Mexico and the Dominican Republic. He announced that in the future such agreements would increase exports to Panama, with which a recent agreement was signed, Canada, the European Union and the United States. What he failed to mention was that while exports to Mexico have indeed increased, imports from there have risen even more, thus widening the trade deficit with that country. Furthermore, the volume of trade with countries such as the Dominican Republic and Panama is so limited that the respective agreements signed with them can be expected to have little real impact.
A realistic government would not boast of successes that were none of its doing, such as the proliferation of textile maquiladoras or the macroeconomic balances achieved on the back of incoming family remittances. Nor would it present half-truths or cover up the continuing or worsening trends that are upsetting the macroeconomic balances and thus slowing down the economy, particularly agricultural production.
All the present government has achieved after three years in power is elimination of the exchange rate risk, a "success" for which we have paid a very high price and that has failed to produce any great increase in investment, as revealed by the downward trend in economic growth rates. The country is still waiting for the Flores government to fulfill such promises as sound public finances and support for the productive sectors. Worse still, the government continues to put off adopting corrective measures for problems that have been showing up again and again for over five years now.
Acceptable levels of stabilityFrom President Flores’ perspective, El Salvador has taken huge strides forward in socioeconomic matters over the last three years. In addition to strategies aimed at opening up trade and increasing public investment, and not forgetting the government’s efficient management of publicity, in the social field the President stressed the reduction of illiteracy and infant mortality, the rebuilding of schools, houses and hospitals following the earthquake, the migratory stability of Salvadorans living abroad and the head-on fight against crime.
It is evident that the country has achieved important advances in all of these areas since the signing of the Peace Accords and that Salvadoran society has achieved acceptable stability levels compared with other Central American societies. Such achievements, however, have essentially been based on channeling collective energies, particularly during moments of national tragedy such as Hurricane Mitch and the earthquakes of January and February 2001.
Realities masked by such optimismDuring his speech, the President made a great show of the achievements of the National Civil Police and the education, health, economy, public works and foreign affairs ministries and praised the "courage and efficiency" of the armed forces. He also offered figures to illustrate several of his government’s success stories: 8 new free trade zones providing 100,000 secure jobs; $738 million in public investment in 2002; 473 km of rural roads and 150 km of trunk roads; the rebuilding of 2,473 schools following the earthquakes; the growth of the population by 105,700 children since 1998; a 15% drop in illiteracy; the provision of temporary or permanent shelter for 243,000 families affected by the earthquakes and some 225,000 Salvadorans protected by Temporary Protection Status in the United States.
Such optimism is an attempt to conceal an increasingly imposing reality. The gains in education are minimal bearing in mind the great challenges still pending in educational matters, while the health system reform has been postponed due to obscure interests within official sectors. The housing sector is facing a crisis due to the precarious nature of housing structures, particularly those units still inhabited by earthquake victims, as well as quantitative and qualitative deficits and financial difficulties.
Although the number of kidnappings has fallen, El Salvador still has high homicide rates. Meanwhile, the labor sector has lost much of its representativeness in national life and stemming the flow of emigrants or providing adequate protection for them on their migratory route has proved impossible.
One of the world’s President Flores forgot to mention that over half of the Salvadoran population (51.2% following the earthquakes) is affected by poverty and that his people are afflicted by unemployment and underemployment. Furthermore, despite all the advances made in the security model, public insecurity still represents a great challenge for the police. It is also obvious that the country’s environmental administration and risk management is inadequate given limited resources and the recurrent natural disasters (droughts, earthquakes and storms). The President also failed to mention that the Salvadoran population is divided by nearly insurmountable social and economic differences. El Salvador is still one of the most inequitable countries in the world. The concentration of wealth and income has opened insuperable gaps among Salvadoran citizens. The two major quakes last year only served to extend poverty, leaving still more sectors destitute.
most inequitable countries
The reality of social exclusion and backwardness is a thing of the present, not just the past. It is, to take up Flores’ metaphor, to be found at each point along the mountain to be conquered, right up to the top. The discourse employed for the administration’s third year mentions highways and free trade, while thousands of Salvadorans are forced to live in inhuman conditions under poor-quality temporary roofs. The discourse mentions a country with a state-of-the-art financial and business sector, while the social sectors (education, health, housing, infrastructure and labor) are scandalously behind the times. It is perhaps not too surprising, then, that big business considered Flores’ report to the Assembly representatives realistic, while for the left and the Office of Human Rights Ombudsman he is living in cloud cuckoo land.
The President’s In his presentation, President Flores prided himself on unprecedented levels of "international prestige" and cited a few examples: "our participation in the G-8, President Bush’s visit, our leadership in Central American integration, the opening up of the European Economic Community…" Unfortunately nobody appears to have told the President that the EEC disappeared many years ago, giving way to the European Union.
Flores’ "prestige" emerged during a shameful episode at the 10th Ibero-American Summit held in Panama in November 2000, a few months after he had celebrated his first year in office: he publicly accused Cuban President Fidel Castro of supporting terrorism. At the same time, however, he could not explain to Castro why Cuban-American terrorist Luis Posada Carriles was able to move freely around El Salvador with Salvadoran documentation to plan criminal acts against the Caribbean island. While the rightist press highlighted the President’s anti-communist broadside, presenting it as an act of courage, Salvadoran authorities have yet to explain how Posada Carriles managed to operate in our country. From that moment on, the President has witnessed an upturn in his international projection, characterized by his explicit, unconditional defense of US interests.
The highest honor: Bush’s "Friend"Up to now the Salvadoran President has stood out from his Central American colleagues as the defender of a "free market" project with Washington that includes few measures to protect national economies. The Salvadoran media, for their part, project Flores as the regional "leader" in this area. Bush officially consecrated this "leadership" on his visit to El Salvador on March 24, when, in payment for Flores’ good services, the US President called him "my friend," thus raising his "international prestige" to unprecedented levels.
The media referred to the "chemistry" between Flores and Bush and suggested that Flores’ supposed statesmanship would prove capable of persuading Bush to approve the longed-for extension of the Temporary Protection Status that would stop any renewed deportation of Central Americans and free trade agreement (FTA). Flores achieved neither objective, but he continues to bask in the aura of being Bush’s friend.
Right from the start, Flores took up Bush’s war against terrorism, ordering immediate militarization of the Comalapa airport in violation of the rights of the workers there. Resurrecting the xenophobic practices of General Martínez, the Flores government also established strict migratory restrictions for citizens from countries Washington had stigmatized as terrorist states, such as Afghanistan, the Palestinian Authority, Cuba and Libya.
The leader of regional integration?The President likes to sell the idea that his government has strengthened Central American integration. Not quite. The integration model being promoted by the region’s governments is a precarious one because it is almost exclusively based on trade competition. It couldn’t be otherwise, given that many of Central America’s current governors come from the business sector and direct public affairs along business lines. In the field of trade, alliances tend to be temporary because the main criterion is to maximize profits and reduce losses. The same is true of the current attempts at Central American integration, with cold trade competition proving more powerful than the indelible political will to unite our countries.
The Flores government is no exception to this rule. When Bush honored the President with his visit and "friendship," Flores proposed that, given the unequal development levels among the isthmus’ different economies, they should not wait until all of them were ready for the FTA. Instead, those with economies that were ready, such as El Salvador’s, could sign bilateral agreements. This blunder, which Bush rejected, reveals the true limitations of Flores’ noble intentions when it comes to integration.
No powerful country will negotiate a bilateral trade agreement with El Salvador because its economy is insignificant in the world arena. That is precisely why it is necessary for Central America to act as a bloc. Although it is naive even to think of bilateral negotiations, President Flores appears convinced of the possibility. He brags about having placed the country in an advantageous position vis-à-vis the rich nations, but constantly returns from his travels empty-handed, offering nothing concrete to those he is governing, but going out of the way to praise himself and his government.
What do the people think?In spite of everything, an opinion poll by the University Public Opinion Institute (IUDOP) of El Salvador’s Central American University showed the Salvadoran population giving Francisco Flores’ government a 6.2 rating on a scale of 1 to 10 for its performance upon reaching its third year in office. The survey, which was conducted between May 18 and 24 with a national sample of 1,223 adults from all 14 of the country’s departments, revealed that the government’s performance was viewed more positively than in previous years. In fact, this is the second time Flores has achieved a rating of over 6 since taking office and is his government’s best rating yet.
The government achievements most cited by those polled were the improvement of streets and highways (23.1%), the post-earthquake reconstruction programs (10.3%) and the trade and free trade agreements signed with other countries (7%). A little over a third of those interviewed (35%) did not identify any successes during the third year of the ARENA government.
Meanwhile, the majority of the failures selected were linked to the government’s economic policy. Those most mentioned were the dollarization process (15.5%), the rise in unemployment (10.8%), crime (6.9%), economic policy (6.7%) and poverty (6.5%). Around 30% did not mention any failures. After three years in power, the government’s most critical area would thus appear to be the economy. Of those polled, 81.6% believe that the government has done little or nothing to combat poverty so far, while the dollarization is viewed negatively by 60.7% and positively by just 17.7%. More positively for the government, 58.5% consider that a free trade agreement with the United States will benefit the country, while 30.7% feel it will cause greater harm than good. Opinions on other problems such as crime and government corruption tend to lean toward the negative, with many Salvadorans (58.7%) feeling that crime has increased during the current administration.
"The tale of the magic mountain"President Flores’ demagogic speech, which ignored the serious problems afflicting most of the population, has since been dubbed "the tale of the magic mountain." Its notorious defects and holes are perhaps explained by the fact that the spectacles through which he views El Salvador have an excessively rosy tint. He has ended up believing the airbrushed image that he himself presents abroad, of a country leading the way in democratic economic freedom. We are faced with a style of government more suited to a business administrator and publicist than a true statesman. Flores is either lying or does not know the country he is governing. In fact, anybody listening to the President who doesn’t know what is really going on in El Salvador could be excused for believing that we’re doing all right, are on the right track. Nothing could be further from the truth. We’re doing badly and things are getting worse.
"Patience: a non-renewable Speaking of mountains, Francisco Flores would do well to remember that over 20 years ago a great many Salvadoran men and women took to the mountains in an attempt to put an end to all forms of exclusion, confront the official violence and eradicate impunity. Much remains to be done if such heights are really to be scaled. Where Flores has it right is in recognizing that the population is beginning to have its doubts. The fact is that many people are starting to lose patience with governments like this one and those that have gone before. He should bear this in mind, since as Mexican poet and musician Guillermo Briseño put it, "patience is a non-renewable natural resource."