Friday, March 03, 2006

Comments on the platform of the FMLN

Candidates for the National Assembly running under the banner of the FMLN promote a platform with several points including (1) jettisoning the dollar and returning to the colón (2) repeal of CAFTA, (3) greater investment in education, health and access to safe water, and (4) avoiding foreign borrowing.

While sympathetic to these aims, the February 15, 2006 edition of Proceso calls on the FMLN to have some political realism. For example, with respect to dollarization and CAFTA Proceso points out:

It is true that dollarization did not give the expected results. However, this does not mean that reversing it would be the answer. Reversing dollarization could bring more costs than benefits, because both consumers and producers make their economic decisions according to minimizing transactions and the stability of currency. It is also unsuitable to blame dollarization the price increase. Under oligopolic and monopolic conditions as those given in El Salvador, with dollars or colones, it is difficult to reduce prices. In this sense, it would be more suitable that the FMLN advocates for a proper application of the Free Competition Law.

The other proposal of the FMLN in opposition to the interests of the ruling party is the repeal of CAFTA. According to the left wing party, CAFTA will have perverse effects for agriculture and for the economic activity of the micro and small enterprises. The Executive branch thinks the opposite: CAFTA is the best economic development strategy in the country. What is true is that CAFTA contains unfavorable laws and rules for many sectors in the country. Many of the legal norms in the agreement do work against many enterprises. This point is recognized by many industrial and entrepreneurial organizations that have some links with the ruling party. In spite of this, the FMLN should not try to repeal the agreement. It would be more feasible to push for revising the agreement in order to stop those unfavorable points. In this sense, it would be suitable that the FMLN establish consensus with some entrepreneurial sectors in order to push the Executive branch to make changes inside the CAFTA.

With respect to social investment and foreign debt, Proceso urges the FMLN to be realistic and recognize that even if it controls the legislature, it will not control the executive branch for at least the next three years. Working for political consensus may be more appropriate in these areas.

In addition to the points made by Proceso, I would note that increasing social investment may not be possible without foreign borrowing. The problem with El Salvador's foreign debt is not so much that it borrows, but that the loan proceeds do not do the greatest good for addressing the needs of the majority of the people of El Salvador.


Andrés N. Castro A. said...

I totally agree with Proceso´s call for realism. I am a true leftist, but its sad to see that there is no political realism. Promises are easy to make, but its interesting to notice the lack of explanations on the process and true results of such, as well as side effects. Is that a trick of general politics? I suspect so.

I stil wait for the right left winged party to support. But I specially expect for a change in the Salvadorean idea that "Why vote for the third option" under such rule, there will never be a true third option, nor a change in the polarization of the political ambient.

"Our Word is our Wepon" - EZLN

Pulgarcito said...

My question is: If we they don't get money from foraing debt (I'm not saying it's the right answer) and they want to invest more in education and healt (I hope they don't put in the trash the Fosalud and the Plan 2021 and start their own programs, coz that will be more expensive) who exacly are they planning to finance their projects?????

El-Visitador said...

Pulgarcito has excelent comments.

I will just add, however, that FMLN could draw enormous amounts of cash to spend on education by:

1. Selling the 2 airports
2. Selling Acajutla and Cutuco
3. Privatizing ANDA
4. Shutting down CONCULTURA
5. Shutting down Itto. Desarrollo de la Mujer ISDEMU
6. Selling the hydro power plants
7. Selling the 68% stake in the geothermal plants
8. Cleaning and selling FENADESAL, and most important, the rights of way!
9. Privatizing the medical component of ISSS (the pensions component has already been privatized)
10. Selling the SS-Airport highway
11. Selling the SS-Guatemala highway
12. Shutting down MARN
13. Outsourcing the jail system (like U.S.)
14. Privatizing the Civil Aviation Authority (like U.K.)
15. Shutting down the Banco Central de Reserva (we use the greenback, why do we have a Central Bank anymore?)
16. Sell the two state-owned commercial banks
17. Sell the state TV station
18. Sell the state-owned theaters
19. Sell the mail service (like Germany)
20. Sell the state-owned hotels like Cerro Verde

There's probably a bunch of other budget-sucking useless institutions like ISDEMU you could shut down and save big bucks and probably a lot of other assets you could capitalize and I have not listed.

My friend, if the FMLN wants $ for education... the $ are staring in their faces.

Tell you what, I promise to vote FMLN if they promise to sell half the stuff I mentioned above.

Miguel Lerdo said...

A couple of years ago, ARENA argued that Socialist President Zapatero of Spain was ideologically closer to ARENA than the FMLN. The message was clear – there is a range of consensus in the international sphere regarding acceptable ideological positions. The FMLN falls outside this range. Since that time, the FMLN has cast off its moderate wing to the responsible center, the CD.

Despite hopes during the Hector Silva era, the CD has proved itself incapable of building a viable centrist movement. Its alliances with the infamously corrupt PDC can’t help. It looks like the FMLN is our only hope.

The Salvadorian people have been ready for change during several past election cycles. People don’t really want indefinite one party rule. The Left in El Salvador can’t win until it convinces the public that it will not provoke financial chaos and international condemnation. The institutionalization of the Dollar and CAFTA restrict the FMLN’s potential for mayhem, increasing their electability. The FMLN gets away with opposing these policies in the legislative elections because, as the Processo article points out, the FMLN has no potential to take any action. Expect the FMLN’s rhetoric against the Dollar and CAFTA to quiet down considerably if they look competitive in the next presidential elections.