Environment, Partnership for Growth, U.S. Relations

¿Desarrollo para el país o el país por el desarrollo?

The University of Central America (UCA) in San Salvador just ran a program on the recent signing of the second Millennium Challenge Corporation compact between the United States and El Salvador. The program looks at the benefits proposed by the Salvadoran Government and the fears expressed by communities in the Bajo Lempa and San Juan del Gozo.

The program features Voices’ Field Director Jose Acosta, and many of our friends and partners in the Jiquilisco Bay region of El Salvador.

The 25-minute video is in Spanish only right now, but we will be working with AudiovisualesUCA to add subtitles and we will post it as soon as its ready.

We are writing up an analysis of the second MCC-FOMELINIO Compact that we’ll post soon.

Economy, Partnership for Growth, U.S. Relations

The Price for a $277 Million MCC Grant

Since Sanchez Cerén became the President of El Salvador on June 1, his administration has said securing the $277 million Millennium Challenge Corporation (MCC) grant is a top priority. Vice President Oscar Ortiz said they want to get it done within their first 100 days in office, which means within the next three months.

The MCC approved the grant in September 2013, but the US Embassy blocked the release of the funds until the government met conditions such as reforming the Public Private Partnership Law (P3 Law) and restructuring a popular seed program.

The P3 Law facilitates government contracts with private entities to provide public goods and services. The US Embassy made the P3 Law a prerequisite for the MCC funds but they don’t like the law passed by the Legislative Assembly. They don’t approve of the oversight role the Legislature created for itself – a committee that must approve all P3 contracts. The Embassy and business community also don’t like that the law exempts important public goods and services like water, health, education, and public security from public private partnerships.

One of the most vocal opponents of the P3 Law has been El Salvador’s labor movement. Unions fear that public private partnerships will result in a loss of jobs, decrease in wages, and even worse working conditions as private investors maximize profits. Other civil society organizations fear the P3 Law, even with the exemptions, will lead to the privatization of important goods and services – like water, health care, and education.

The US Embassy also doesn’t approve of the Seed Distribution Program operated by the Ministry of Agriculture (MAG). Officials argue the procurement process violates the Central American Free Trade Agreement (CAFTA) because the government only buys seeds from Salvadoran Farming Cooperatives, excluding international seed producers like Monsanto. The program provides thousands of jobs for people working for the cooperatives and ensures that more than 400,000 farmers have quality, non-GMO seeds.

Last week US Ambassador said that the Embassy’s problem was not with the seeds, but with the process. On May 2 Voices wrote an article arguing that the problem was not the seeds or the procurement process, but CAFTA.

The MCC program is popular with a lot of Salvadorans and politicians who see it as free money for development projects. But a growing number of environmentalists, unions, and communities argue that the Embassy’s conditions are too high a price to pay for development projects they don’t want anyway. And many see the conditions as an encroachment on El Salvador’s sovereignty.

Among those who oppose the MCC program outright are environmental groups and communities in the Jiquilisco Bay. MCC funds will support tourism development in the Bay and residents fear it will cause irreparable harm to mangrove forests, nesting grounds for the critically endangered Hawksbill sea turtle, and El Salvador’s most fertile agricultural land. (Voices has written about Tourism on this blog in the past – here are two reports we wrote on tourism in the Jiquilisco Bay).

Roberto Lorenzana, President Sanchez Cerén’s Chief of Staff said two weeks ago that the administration already has a draft Fomelinio Law (in El Salvador the MCC is called Fomelinio) that they will send to the Legislative Assembly soon. It’s unclear what is in the Fomelinio Law, but it likely contains all of the reforms the US Embassy is requiring for release of the MCC funds. Even before he became Chief of Staff, Lorenzana said the new administration is going to open the procurement process to national and international seed producers, in an apparent effort to satisfy the Embassy’s concerns.

While some Salvadorans have spoken out against the second MCC compact, the P3 Law and other neoliberal policies, many have not. The politics of opposing neoliberal economic policies grew more complex when the leftist FMLN party took office in 2009 and again on June 1, 2014. People and groups that organized against privatization, dollarization, CAFTA, and the first MCC compact (all policies adopted by the rightwing ARENA party between 1994 and 2008) have not been as critical since the leftist FMLN party took power. The result is that opposition to these destructive policies is less now that the FMLN is power.

El Salvador will soon get a $277 million grant from the U.S. Millennium Challenge Corporation, but it should be clear – this is not free money.

The 17 farming cooperatives that have been growing seed corn and beans for the MAG’s Seed Distribution Program will pay for the MCC grant when they have to compete with Monsanto and other international seed giants.

Communities that depend on the mangroves for their survival will pay for the MCC grant when developers cut down forest to build resorts and golf courses.

The Salvadoran labor force will pay for the MCC grant when private contractors take over government services and cut jobs and wages to increase profitability.

And all Salvadorans will pay if public goods and services like water, education, and health are contracted out to for-profit entities, especially if there is no oversight in the process.

 

El Salvador Government, Partnership for Growth

Bajo Lempa Rejects Latest Pressures from the U.S. Embassy over the Public-Private Partnership Law

In May, El Salvador passed a Law on Public-Private Partnerships (P3 Law) to facilitate foreign investment and increase the private sector’s role in managing and providing public services. The U.S. Embassy made the law a prerequisite for their approval of a second round of Millennium Challenge Corporation (MCC) funding.

The Legislative Assembly, led by the leftist FMLN party, passed the Law with reforms that exempt certain public goods and services from public-private partnerships. The public assets exempt include water, education, health care, and the prison system – all of which the government deems to important to contract out.

For a few months it seemed as though the passage of the P3 Law, even with the reforms, as enough to satisfy U.S. officials, and in September the MCC board approved a second round of funding.

Last week, however, Mari Carmen Aponte, the U.S. Ambassador, said that the Legislative Assembly would have to reform the P3 Law to take out the exceptions in order to get the MCC funds. The Embassy is also requiring that El Salvador have an anti-money laundering law in place.

Sigfredo Reyes, the FMLN president of the Legislative Assembly, responded to Ambassador Aponte’s new requirements saying that the pretentions that a person would impose such conditions on El Salvador that they would not adopt in their own country was unacceptable. He also stated, we are grateful that the government, or more the MCC has granted this second round of funding, as they call it, but the Salvadoran legislative branch moves to its own rhythm that Salvadorans determine.

Communities in the Bajo Lempa of Jiquilisco, Usulután responded to the Ambassador’s latest threats with the following statement (the original is in Spanish, with an English Translation below):

APROBAR LA LEY DE APP, FUE UN ERROR, REFORMARLA  ES AGRABAR EL ERROR

Desde que surgió el proyecto de Ley de Asocios Público-Privado, las organizaciones sociales, sindicales, ambientalistas, de derechos humanos y campesinas, la rechazan debido a que los resultados serán: control transnacional de servicios e industrias estatales necesarias, incremento de los costos de servicios básicos, peores condiciones laborales para los trabajadores y la pérdida de ingresos para el Estado.

Durante el debate en la Asamblea Legislativa, los partidos llegaron a un acuerdo para proteger por lo menos varios bienes públicos, incluso el agua, la educación, la salud y los sistemas de justicia. También hicieron reformas importantes para garantizar más supervisión por la Asamblea. Estas modificaciones son positivas, pero no suficientes para evitar que bienes como el aeropuerto, los puertos, presas hidroeléctricas, carreteras y otros que actualmente son propiedad de todos los salvadoreños y salvadoreñas sean susceptibles de ser concesionados a empresas privadas; pero más grave aún es lo que puede pasar con las playas, los bosques de manglar  y las reservas naturales.

Con la aprobación de la Ley de APP, El Salvador continúa asumiendo la receta neoliberal dictada por el Banco Mundial, El Fondo Monetario Internacional y el gobierno de Los Estados Unidos, principales “asesores” y promotores de esta Ley. A pesar que las medidas neoliberales fracasaron en todo sentido, las promesas de empleo y de crecimiento económico que acompañaron las privatizaciones, la dolarización y la firma del CAFTA-DR, jamás se cumplieron y en su lugar la pobreza, la violencia, el deterioro del medio ambiente y la corrupción se incrementaron.

A pocos meses de su aprobación la gran empresa privada y el gobierno de los Estados Unidos están presionando por introducir reformas en beneficio de los inversionistas, al respecto la Embajadora de los Estados Unidos en El Salvador, públicamente ha amenazado con detener el segundo compacto del FOMILENIO, si no se aprueban tales reformas.

Este chantaje viola la soberanía del pueblo salvadoreño. Son los y las salvadoreñas,  no el gobierno de los Estados Unidos, quienes deben  determinar la política económica de El Salvador. Por lo que ante las presiones externas de reformas a la Ley, es imprescindible que la Asamblea Legislativa reaccione y comprenda  que aprobar la ley fue un error, introducirle reformas es agravar el error.

Las comunidades del Bajo Lempa, una de las regiones del país, principalmente afectadas con este tipo de leyes, claramente han manifestado:

La ley de asocios público privados y El Fomilenio II, han sido diseñados a partir de los intereses políticos de Los Estados Unidos y como tal se convierten en instrumentos de manipulación y dominación de nuestro pueblo, al mismo tiempo que destruyen los recursos naturales y generan división y conflictos entre comunidades.  Además, expresan: Teniendo en cuenta que con la aprobación de la Ley de Asocios Público Privados todos los partidos políticos han perdido credibilidad, las organizaciones  y comunidades del Bajo Lempa reiteramos una vez más nuestra determinación a defender la vida y el territorio hasta las últimas consecuencias.

English Translation:

Approving the Public Private Partnership Law was a Mistake, Reforming the Law Will Only Make it Worse

Since the beginning of the Public-Private Partnership Law project, social organizations, unions, environmentalists, human rights organizations, and peasant (campesino) communities have rejected it. They believe the law will result in the control of important state services and assets by transnational corporations; increase in the costs of basic services; worse labor conditions; and lost income for the State.

During the Legislative Assembly’s debate of the issue, the political parties came to an agreement to at least protect various public goods from the law, including water, education, health, and the prisons. They also inserted mechanisms to give the Legislative Assembly a greater supervisory role in overseeing public-private partnerships. While these modifications were positive, they were insufficient to ensure that assets like the airport, ports, hydroelectric dams, highways, and others that belong to the Salvadoran people but are now subject to concessions with private, for-profit corporations. The most serious results could be occur with the selling off of the beaches, mangrove forests, and natural reserves, which are currently targeted for tourism projects.

With the approval of the P3 Law, El Salvador continues to implement the neoliberal agenda dictated by the World Bank, International Monetary Fund, and the government of the United States, which is the principal advisors and promoters of the law. The neoliberal policies have failed the people of Salvador in every sense – the promises of employment and economic growth that were to accompany privatization, dollarization, and the signing of the Free Trade Agreement have never materialized. In their place, poverty, violence, deteriorating environment, and corruption have all increased.

A few months after the approval of the P3 Law, large private corporations and the United States govenrment are pressuring the Legislative Assembly to adopt reforms to the law that will benefit investors. The U.S. Ambassador to El Salvador, Mari Carmen Aponte, has threatened publicly to withhold the second round of funding from the Millennium Challenge Corporation if the Legislature does not pass the reforms.

This blackmail violates the sovereignty of the Salvadoran State and its people. Salvadorans, not the U.S. government, ought to be the ones who determine the economic policies of El Salvador. It is imparitive that the Legislative Assembly recognize these external pressures, and state that passing the law was a mistake in the first place, and introducing reforms would only compound previous errors.

The Communities of the Bajo Lempa, one of the regions of El Salvador most affected by these types of laws and the implementation of neoliberal policies, clearly states:

 The Public-Private Partnership Law and the second round of the Millennium Challenge Corporation have been designed to benefit the political and economic interests of the United States, an as such have been converted into a tool of manipulation and domination of our communities and people, while destroying our natural resources and generating conflict between communities. We also state that with regards to the adoption of the Public Private Partnership Law, all political parties have lost credibility, and the social organizations and communities of the Lower Lempa once again reiterate our determination to defend our life and territory to the end.  

Advocacy, Partnership for Growth

Bajo Lempa Rejects the Public-Private Partnership Law

The Inter-Institutional Group of the Bajo Lempa region of Jiquilisco released a statement this afternoon in response to the passage of the Public-Private Partnership Law that passed through the Legislative Assembly last week. Their statement comes as the Salvadoran government announced that it is forming a commission to start organizing the first round of partnership agreements.

The Inter-Institutional group is comprised of several local and national development organizations working in the Bajo Lempa and Bay of Jiquilisco – they include organizations like ACUDESBAL (The United Communities of the Bajo Lempa), ADIBAL (Asociación para el Desarrollo Integral del Bajo Lempa), CESTA (Center for the Application of Sustainable Technology), ASPS (Salvadoran Association of Public Health), the Pastoral Team of the Lower Lempa, the Emergency Fund, and Voices on the Border. It also includes communities such as Amando Lopez, Comunidad Octavio Ortiz, La Tirana, Nueva Esperanza, and others.

Here is the Inter-Institutional Group’s statement, first an English translation and then the original Spanish.

PUBLIC PRIVATE PARTNERSHIP LAW

MORE POVERTY AND ENVIRONMENTAL DESTRUCTION

The Inter-Institutional group of civil society organziations of the Lower Lempa and communities in the municipality of Jaquilisco express our strong opposition to the Public-Private Partnerships Law, passed by the Legislative Assembly on Thursday May 23.

Neoliberal measures implemented in El Salvador have failed in every way. Privatization, dollarization and CAFTA-DR were supposed to create jobs and economic growth, but it never happened. Instead poverty, violence, environmental degradatoin and corruption increased significantly during the 4 ARENA governments that oversaw the implementation of these neoliberal policies. We deeply regret that our country continues to embrace the neoliberal agenda dictated by the World Bank, International Monetary Fund and the United States government, the principal “advisors” and promoters of the Public-Private Partnerships Law.

We recognize that the FMLN introduced important changes to the original bill, but at the same time it infuriates us that the party that once led a fierce opposition to the neoliberal agenda is now endorcing this type of law that provides state resources to transnational corporations whose only purpose is economic profit not the wellfare of the Salvadoran population, which has been marginalized throughout its history.

State resources such as the Comalapa International Airport, seaports, hydroelectric dams, highways and others are the property of all Salvadorans are likely to be endlessly exploited by private companies. Even worse is what can happen to the beaches, mangrove forests and nature reserves.

The Public Private Partnership law also paves the way for the second FOMILENIO, a megaproject that constitutes a series of threats to coastal ecosystems and their populations. Like the proposed gold mining projects and the construction of dams, the second FOMILENIO fund will provide large national and transnational corporations with economic benefit while providing the communities with economic and environmental problems.

Taking into account that all political parties lost credibility with the approval of the Law on Public Partnership Law and no longer represent the interests of the people, and we the below signed organizations and communities of the Lower Lempa once again reiterate our determination to defend our lives and territory until the ultimate consequences.

FOR THE DEFENSE OF LIFE AND THE TERRITORY
THE INTER-INSTITUTIONAL OF THE BAJO LEMPA

Spanish:

LEY DE ASOCIOS PÚBLICO PRIVADOS,

SAQUEO,  POBREZA Y DESTRUCCIÓN AMBIENTAL

La Interinstitucional del Bajo Lempa (INTERBAL), integrada por organizaciones sociales y comunidades del municipio de Jiquilisco, expresamos nuestro más enérgico rechazo a la Ley de Asocios Público Privados aprobada por la Asamblea Legislativa, el jueves 23 de mayo.

Las medidas neoliberales aplicadas en El Salvador fracasaron en todo sentido, las promesas de empleo y de crecimiento económico que acompañaron las privatizaciones, la dolarización y la firma del CAFTA-DR, jamás se cumplieron y en su lugar la pobreza, la violencia, el deterioro del medio ambiente y la corrupción se incrementaron grandemente durante los 4 gobiernos de ARENA. Lamentamos profundamente que el país continúe asumiendo la “receta” neoliberal dictada por el Banco Mundial, El Fondo Monetario Internacional y el gobierno de Los Estados Unidos, principales “asesores” y promotores de esta Ley.

Tenemos conocimiento que el FMLN introdujo importantes modificaciones al proyecto de ley original, pero a la vez  nos provoca indignación que el partido que fue  férreo opositor a la doctrina neoliberal   ahora avale este tipo de leyes que ofrecen recursos del Estado a empresas trasnacionales cuyo único fin es el  lucro económico y no el bienestar de la población históricamente excluida.

Bienes como el aeropuerto, los puertos, presas hidroeléctricas, carreteras y otros que actualmente son propiedad de todos los salvadoreños y salvadoreñas serán susceptibles de ser explotados hasta la saciedad por empresas privadas; pero más grave aún es lo que puede pasar con las playas, los bosques de manglar  y las reservas naturales.

Esta ley también abre el camino para el  segundo FOMILENIO, megaproyecto que constituye una seria amenaza a los ecosistemas costeros del país y a la población. Al igual que los proyectos mineros y de construcción de represas, de concretarse el segundo FOMILENIO,  grandes empresas, nacionales y trasnacionales saquearan los recursos de la zona, se quedaran con los beneficios económicos y las comunidades que habitan los territorios costeromarinos, serán desplazadas y abandonadas con muchos problemas.

Teniendo en cuenta que con la aprobación de la Ley de Asocios Público Privados todos los partidos políticos han perdido credibilidad y han dejado de representar los intereses de la población salvadoreña, las organizaciones  y comunidades del Bajo Lempa reiteramos una vez más nuestra determinación a defender la vida y el territorio hasta las últimas consecuencias.

POR LA DEFENSA DE LA VIDA Y EL TERRITORIO.

INTERINSTITUCIONAL DEL BAJO LEMPA

Partnership for Growth, U.S. Relations

Law on Public Private Partnerships Seems to be Moving Forward in El Salvador (Please sign the Petition Below!)

Countrapunto reported Wednesday that the Legislative Assembly’s Treasury Commission gave a green light to the proposed Law on Public Private Partnerships (P3 Law). The full Assembly should have a chance to vote on the bill as soon as today, Thursday May 23.

Since the Funes Administration introduced the bill last year, opposition has grown, in part, around the fear that if passed that State would be able to privatize important state services and assets. Members of the Treasury Committee tried to address some of those concerns with amendments. FMLN Diputado (Representative) Orestes Ortez, said “at least how it has been modified through today, in agreement with all the other diputados, the bill does not open space for privatizing those goods that have a public or social interest.”

According to the Contrapunto article, the Committee took out a section that required the Legislative Assembly to vote on a contract within 45 days of receiving it. Ortez pointed out that no country in the world imposed such tight time limits on legislative functions. The Committee also created a roll for itself in negotiating the terms of P3 contracts. The original bill only gave them the right to approve or oppose a contract, but not contribute substantively to its content.

Among the other changes, the reforms require that all contractors abide by El Salvador’s labor laws, which they would presumably have to do anyway. This seems to be an attempt to pacify the labor movement, which has been the law’s most vocal opponent. The reforms also exclude services like water, health, education, the public university, the public insurance system, and El Salvador’s jails from P3 contracts.

According to La Prensa Grafica, the bill that left the Treasury Commission should have enough support to pass the Legislative Assembly.

But the reforms seem insufficient to pacify the bill’s opponents. Estela Ramírez, a representative of the Private Sector Worker’s Union Federation (FUERSA), told a group of supporters, “we are here from the private sector to accompany public sector workers in their opposition to the P3 law, not only out of solidarity for those workers’ rights, but because of the impact that this law would have on private sector workers by raising the costs of social services and further bankrupting the state.”

Residents of the Bajo Lempa reigon of Jiquilisco, Usulután share the labor movement’s concerns about the P3 law’s affects on the labor market and access to public services. Their main concern, however, is that the P3 Law is a prerequisite for the second round of Millennium Challenge Corporation funds, which will fund public-private partnerships for developing tourism throughout the region. Residents of the Bajo Lempa have stated on several occasions that they do not want large tourism projects or other mega-development projects that will continue to disrupt their agricultural economy and peaceful way of life.

Yesterday, more than 70 residents and civil society leaders in the Bajo Lempa gathered to discuss the P3 Law and the reforms, as well as the MCC projects. Even after reviewing the changes approved this week by the Treasury Committee, the representatives at the meeting remain 100% against the P3 law and MCC. The reforms did not change their view that the P3 law was written to benefit corporations and wealthy people, and has not taken into consideration the needs of the communities.

One person at yesterday’s meeting made the point that since 2005 civil society has tried to get the Legislative Assembly to consider a Water Law they drafted. Their bill enjoys widespread support because it tries to protect the interests of communities and people. But the Legislative Assembly has never tried to move the bill forward. The P3 Law, however, appears to be zipping through the legislative process even though people, communities and civil society organizations have spoken out against it.

The labor movement is organizing a protest today outside the Legislative Assembly, presumably around the time the diputados will be debating and possibly voting on the P3 Law. They, along with residents of the Bajo Lempa, will continue to protest the law and its application if it is approved.

So far the P3 Law has enjoyed the most support from the U.S. Embassy in San Salvador. U.S. Ambassador Mari Carmen Aponte has appeared in the Salvadoran news several times over the past few months calling on the Legislative Assembly to pass the law, stating that it is a prerequisite for the second Millennium Challenge Corporation grant worth $400 million.

Support for the P3 Law amongst Salvadorans doesn’t necessarily come from common sense that public-private partnerships are the key to economic growth, though there are some who are believers. It comes from the th.reat that if the law is not passed, the U.S. will withhold the $400 million MCC fund – an investment that people in the Bajo Lempa don’t want anyway

This morning our friends over at CISPES sent around a petition by CEAL (a Salvadoran Labor group) asking that members of the Legislative Assembly reject the P3 Law, which “was proposed by the Executive branch under the pressure of the United States Embassy.” Instead they call on the Legislative Assembly to approve fiscal reforms quickly that require those that have more to pay more taxes in order to finance more social projects that benefit Salvadoran communities without needing to privatize government assets and services.

Please take a moment to sign the petition – it’s an important way to let the U.S. Embassy and the Legislative Assembly know that you believe that the interests of the Salvadoran people should come before those of wealthy corporations that are already thriving in the neoliberal economic model the U.S. has been implementing since the early 1990s.

2014 Elections, Partnership for Growth, U.S. Relations

Momentum Against the MCC and other U.S. Policies May be Building

On May 2nd, organizations and communities representing thousands of people from the Bajo Lempa region of Jiquilisco, Usulután held a press conference in San Salvador to denounce the Millennium Challenge Corporation (MCC), the Law on Public Private Partnerships (P3 Law), and the tourism projects they promise to support. The Salvadoran labor movement also held a press conference on May 2nd denouncing the MCC and P3 Law, which they believe will adversely affect much of the labor force.

Jose Acosta (Voices' Field Director) speaking at a press conference with Ricardo Navarro (CESTA), Jose Santos Guevara (ACUDESBAL), and Manuel Calderón (ADIBAL)
Jose Acosta (Voices’ Field Director) speaking at a press conference with Ricardo Navarro (CESTA), Jose Santos Guevara (ACUDESBAL), and Manuel Calderón (ADIBAL)

Other than opposition from the labor movement and Bajo Lempa, the MCC proposal and the P3 Law have not created the huge public outcry that other issues have in recent years – attempt to privatize health care (2002), Central American Free Trade Agreement (2006), or Pacific Rim’s efforts to mine gold (2005-present).

But momentum against the MCC and the P3 Law seemed to get a boost on May 1 when Vice President and FMLN presidential candidate Sanchez Cerén announced he and his leftist party do not support U.S. agreements like Partnership for Growth and “the project that has been presented to the Legislative Assembly.” The project Cerén was referring to is a package of laws President Funes presented to the Legislative Assembly in October 2012 and includes the P3 Law.

Cerén’s statements were qualified however, and it remains a little unclear where he and the FMLN stand on the MCC and P3 Law.

Overview of Partnership for Growth, MCC, and the P3 Law

Partnership for Growth is President Obama’s development program that is being implemented in four countries – El Salvador, Ghana, Philippines, and Tanzania. In El Salvador, Partnership for Growth identified security and low production of tradables (exports) as the two main barriers to economic development. As a result, all U.S. programs and funding in El Salvador have to address one or both of these barriers.

In 2004, the Bush Administration created the MCC as its signature development program, investing funds on infrastructure and business development in countries around the world. The first round of MCC funding for El Salvador (2007-20012) invested $463 million in a new highway that spans the northern region of the country, high school and university scholarships, and capital for small businesses. If approved, the second round of MCC funding will be worth $413 million and likely contribute to the expansion of the Litoral Highway along El Salvador’s southern coast and invest in public-private partnerships, which include as many as 30 different tourism projects.

To receive more MCC funds, the U.S. Embassy said El Salvador must pass the Public-Private Partnership Law, which has been lingering in the Legislative Assembly since last year. The bill creates favorable conditions for private investors, and would pave the way for leasing and contracting out State resources and services, including water, education, health care, prisons, air and sea ports, and much more. Critics of the bill fear it will result in the loss of thousands of public sector jobs and adversely affect wages across the labor market. They also fear it will diminish the quality of public services.

Growing Opposition?

In his remarks yesterday, Sanchez Cerén said, “with respect to Partnership for Growth, we want to say that the project that has been presented to the Legislative Assembly, we as the FMLN do not back it.” As pointed out by Diario El Mundo, Cerén was referring to a package of laws that the Funes Administration presented to the Legislative Assembly on October 18, 2012. The purpose of the laws is to implement the Partnership for Growth action plan and include the Public-Private Partnership Law that residents of the Bajo Lempa and the Salvadoran Labor Movement denounced at their press conferences.

Cerén explained that the FMLN does not support Partnership for Growth because it includes mechanisms for privatizing health, education, and prisons. The Diario El Mundo article also reports that FMLN official José Luis Merino confirmed the party’s position on Partnership for Growth adding that they want the United States to respect El Salvador’s sovereignty.

The FMLN, and Cerén, also announced they have drafted their own proposal for increasing investment and promoting public-private investments, but in a manner that will safeguard the interests of the State and ensure that important services (health social services, public security and justice, water and education, and the National University) will not be privatized. It is unclear whether their proposal will satisfy the U.S. Embassy’s prerequisites for the MCC funding. It also remains unclear whether Cerén and the FMLN would also support tourism projects in the Bajo Lempa and respect the region’s desire to protect their communities and natural resources.

During his May 1st speech, Cerén urged members of the FMLN not to abandon the party and permit the right-wing ARENA return to power. The plea was a recognition that the FMLN is somewhat divided right now, in large part over Partnership for Growth, the MCC, and the P3 Law. The FMLN can’t afford to loose the labor movement and entire regions like the Bajo Lempa and expect to defeat the ARENA candidate (Norman Quijano) in February 2014.

For now anyway, momentum against the P3 Law and the MCC seems to be growing.

Corruption, El Salvador Government, International Relations, Mauricio Funes, Organized Crime, Partnership for Growth

Decriminalization and the Impact of Drug Trafficking in Central America

Decriminalization, or legalization, of drugs in Central America is a hot topic in El Salvador and Guatemala right now. Last Friday, Inside Story Americas, an Al-Jazeera news program, ran a program on the effects of drug trafficking on Central America, touching on the pros/cons of decriminalization.

The program was in response to comments made last week by Guatemalan President Otto Perez Molina, who said he would be open to decriminalizing drugs in an effort to address Guatemala’s security issues. The comments came after a meeting with Salvadoran President Mauricio Funes who also said he is also open to the idea. President Funes stated,

“Our government is open to discussion on any proposal or measure which achieves a reduction in the high levels of consumption in our countries, but particularly (to reduce) the production and trafficking of drugs. As long as the United States does not make any effort to reduce the high levels of (narcotics) consumption, there’s very little we can do in our countries to fight against the cartels, and try to block the production and trade in drugs.”

After returning to El Salvador from his meeting with President Perez Molina, President Funes backtracked a bit, saying that he does not favor decriminalizing drugs.

Saving the discussion about the pros and cons of decriminalization or legalization for another blog post, an interesting point of these recent conversations is the growing emphasis on the failure of the U.S. to curb its demand for drugs. Al Jazeera cited a recent government report that found that 22.6 million Americans used illicit drugs in 2010, nearly 9% of the population. While the number of users dropped from 2.4 million in 2006 to 1.5 million in 2010, the U.S. remains the largest consumer of cocaine in the world.

The Inside Story panelists said the heads of state in Central America, and even Mexico and Colombia who have talked about decriminalization, may be discussing decriminalization in order to pressure the U.S. into taking more actions to decrease demand. Experts from around the world agree that the “war on drugs,” as it has been fought over the past 40 years, has failed. Even President Obama has acknowledged that the U.S. needs to address the demand issue, and treat the issue as a public health problem.

U.S. policies have yet to change, though. In 2011, the National Drug Control Strategy had a budget of $15.5 billion, and the expenditures were roughly the same as in previous years. Approximately 1/3 ($5.6 billion) of the federal budget for the war on drugs was allocated for treatment and prevention – an increase of $0.2 billion from the 2010 budget. The remaining $9.9 billion was allocated for law enforcement, interdiction, and international support, the same as previous years.

In addition to the well-documented affects on Mexico and South America, the U.S. demand for illicit drugs produced in South America and trafficked through Central America and Mexico have very real consequences in Salvadoran communities.

El Salvador, Honduras, and Guatemala now comprise the most violent region in the world. While police officials blame 90% of the murders on local youth gangs, other government agencies, recently demoted police officials, and civil society organizations believe the violence is the result of international organized criminals who are trafficking drugs, guns, people, and laundering money. They estimate that only 10-20% of El Salvador’s murders are attributable to local gangs. The high murder rates have resulted in such insecurity in El Salvador that the U.S. aid program, Partnership for Growth, indentified it as one of the country’s two primary barriers to economic growth.

Traffickers use border communities, coastal villages, and other regions to move shipments from South American producers to North American markets. But they don’t just use these communities quietly – they often take them over, corrupting local government and police officials, making sure that local citizens and law enforcement do not interfere with their activities.

Along the coast, traffickers use small villages, ports and tourist destinations to refuel the small boats they use to transport drug shipments by sea. They also use these villages to transfer shipments that arrive by boat to cars and trucks, which then continue the journey north via land routes. Traffickers use communities along El Salvador’s borders with Honduras and Guatemala to move shipments without interference from border agents.

The cartels control these towns by putting local government and police officials on their payrolls. In turn these officials arrange for locals to move and provide security for shipments, and make sure that law enforcement agencies do not interfere. The local government and police officials maintain a culture of lawlessness that prevents political opposition and limits civil society.

One of the best examples of how traffickers work in El Salvador is the Texis Cartel, which was exposed in a report put together by El Faro in May 2011 and a companion video produced by the Washington Office on Latin America. The Texis Cartel ran a land route that trafficked drugs and other contraband from Honduras through northern El Salvador and on to Guatemala.

While it remains unclear how decriminalization or legalization would affect Central American communities, experts and even President Obama agree that the long-term solution must include a decrease demand in the U.S. Unfortunately, U.S. officials have yet to shift their priorities, forcing Central and South American governments to discuss other options. And until the U.S. can kick its cocaine problem, the violence will continue and the cartels will continue to control communities throughout the Americas.