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.

 

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.  

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.

Ambassador Mari Carmen Aponte Finally Secures Senate Confirmation and Will Return to El Salvador

A follow-up on yesterday’s post – the U.S. Senate just confirmed President Obama’s nomination of Mari Carmen Aponte as the new Ambassador to El Salvador. The Senate voted 62-37 to end debate on the nomination and was confirmed just an hour later.

As we mentioned yesterday, the Senate considered her nomination back in December but the Democrats did not have the 60 votes necessary to end the Republican-led filibuster. Today, nine Republicans joined Democrats to secure her confirmation.

The vote is a victory for the Obama campaign, which is courting the Latino vote in order to win swing states such Florida, Nevada, and others. The Administration has been fighting Republicans over the nomination since December 2009, and in 2010 even used a recess appointment to get Carmen Aponte into her position.

Senate May Reconsider Mari Carmen Aponte’s Nomination to be U.S. Ambassador to El Salvador

Roll Call reported yesterday that Senate Democrats might bring up the nomination of Mari Carmen Aponte to be ambassador to El Salvador again, as early as this week.

In 2009, President Obama appointed Carmen Aponte to the post in El Salvador, but Senate Republicans have blocked her confirmation. When the Senate failed to confirm her in 2010, President Obama used a recess appointment that allowed her to serve until December 2011. Senate Democrats brought her nomination up for a vote in December, but failed to get the votes necessary to override the Republican filibuster.

According to the Washington Post, the difference this time may be Florida Republican Marco Rubio. They report that Senator Rubio voted against the nomination during the last vote, but later changed his mind and promised to get other republicans on board. He never did, however, and her nomination has been stalled ever since. This time around, Senator Rubio says he will support her nomination but is not going to whip other Republicans to support her.

The Washington Post article hints at the politics behind the nomination and the timing of the vote. Florida is a key state in President Obama’s plan for reelection, and mobilizing the Latino vote is a must. He is planning to be in Orlando next week and would like to be able to “tout the success of a Puerto-Rican-born ambassador, or blast the Republicans for blocking one.”

On a side note, a Huffington Post article posted last night argues that the Latino vote is a “sleeping giant” that may cause trouble for Republican presidential nominee Mitt Romney. They report that in 8 states there are an estimated 21.5 million Latinos who are eligible to vote in November. If those voters or any portion of them registered and voted in the Presidential elections, they could have a tremendous impact on the outcome. The article reports that the 21.5 million potential voters are more than Obama’s margin of Victory in 2008. Since mid-April, the Obama campaign has spent $1.7 million on ads in Spanish in Florida, Nevada, and Colorado, while the Romney campaign has spent only $13,000. The article points out that while the Latino population is Democratic leaning, they should not be taken for granted. It’s not that President Obama and the Democrats have a great record on immigration and other issues important to Latino voters, but its not tough to have a better record than the tough-talking, Arizona-supporting Republicans.

We’ve written several articles about Ambassador Carmen Aponte. For more information about this long, drawn out drama, click here, (Senate Holding up Nomination) here, (Recess Appointment) here, (Re-nomination) and here (Senate filibustered nomination).

Ambassador Aponte Coming Home?

Mari Carmen Aponte, the interim Ambassador from the US to El Salvador, may be coming home in the next few weeks as her recess appointment expires at the end of the month.

President Obama nominated Mari Carmen Aponte when he took office in 2009, but Senate Republicans blocked her confirmation over her past relationship with a Cuban-American they believe was a Cuban spy. She finally arrived in El Salvador in September 2010 when President Obama circumvented the Senate with a recess appointment, which expires at the end of the month. President Obama re-nominated Ambassador Aponte this year, and the Senate Foreign Relations Committee confirmed her nomination this week, but Republicans are again preventing the Senate from bringing her nomination to the floor for a vote.

Ambassador Carmen Aponte fueled Republican opposition in June when she published an op/ed piece in the La Prensa Grafica supporting the gay rights movement in El Salvador. Opposition to her final confirmation is led by Senator Jim DeMint (R-SC), who claims that she is “strongly promoting the homosexual lifestyle” and attempting “to impose a pro-gay agenda” on El Salvador. The article praised Salvadoran President Mauricio Funes for signing a law prohibiting anti-gay discrimination by the government, as well as the UN pledge to eliminate violence against LGBT people. She also said that all people have the responsibility to break the cycle of violence and discrimination.

According to The Hill,

The White House is blasting Senate Republicans for playing politics with President Obama’s nominated ambassador to El Salvador, saying a hold on the diplomat would severely hurt US ties in the region.

During a Senate Foreign Relations Committee Hearing this week, Sen. John Kerry (D-MA) spoke out on behalf of Ambassador Aponte, saying that she has done a“solid job in her capacity as ambassador,” and “I have not heard of or seen any substantive rationale for her not continuing in this post.”

Sen. Richard Durbin (D-IL) pointed out that since 1998, when Aponte was nominated to be ambassador to the Dominican Republic from which she withdrew herself from consideration, she has twice received top security clearances.

Ambassador Aponte also has the support of Sen. Richard Durbin (D-IL), who also serves on the Foreign Relations Committee. During a hearing last week he pointed out that since 1998, when Aponte was nominated to be ambassador to the Dominican Republic from which she withdrew herself from consideration, she has twice received top security clearances. He argues that any questions regarding her past relationships were answered during those processes, and are no longer an issue.

Barring any last minute support from Senate Republicans, Ambassador Aponte will be leaving El Salvador at the end of December and the US will be without an ambassador.

President Obama Re-nominates Ambassador Aponte to El Salvador

The White House announced yesterday that President Obama has again nominated Mari Carmen Aponte to be the U.S. Ambassador to El Salvador. President Obama first nominated her to the post in December of 2009, but Senate Republicans led by Jim DeMint held her nomination in Committee. Sen. DeMint (R-SC) voiced concerns that Ms. Aponte had a romantic relationship in the 1990s with Roberto Tamayo, a Cuban who has alleged ties to the FBI and Fidel Castro.

President Obama used a recess appointment in August 2010 to by-pass the Senate and Ambassador Aponte was sworn in on September 22, 2010. As a recess appointment, her term will end in January 2012, giving the administration just under ten months to get her nomination approved by the Senate.

Senator DeMint and other Republicans have asked to see to her FBI files to better understand her relationship with Mr. Tamayo. In 1998, President Clinton nominated Ms. Aponte to serve as U.S. Ambassador to the Dominican Republic, but she withdrew her nomination when Senator Jessie Helms threatened to ask probing questions about the relationship.

The Salvadoran Embassy website posted the following biography for the Ambassador:

Before assuming the position of U.S. Ambassador to El Salvador, Mari Carmen Aponte worked as an attorney and consultant with Aponte Consulting, and served on the Board of Directors of Oriental Financial Group.  From 2001-2004, Ms. Aponte was the Executive Director of the Puerto Rican Federal Affairs Administration.

Prior to that, she practiced law in Washington D.C. for nearly twenty years.  Ms. Aponte has served as a member of the Board of Directors of the National Council of La Raza, the Puerto Rican Legal Defense and Education Fund, and the University of the District of Columbia.  She was a member of the Board of Rosemont College, and served as president of the Hispanic National Bar Association; the Hispanic Bar Association of the District of Columbia; and as a member of the District of Columbia Judicial Nominations Commission.  In 1979, as a White House Fellow, Ms. Aponte was Special Assistant to United States Housing and Urban Development Secretary Moon Landrieu.  Ms. Aponte has a B.A. in Political Science from Rosemont College, an M.A. in Theatre from Villanova University, and a J.D. from Temple University.

President Obama will be visiting El Salvador March 22-23 during a three-stop tour of Latin America. Last week, Salvadoran President Mauricio Funes said that they will be discussing the fight against poverty, which he says provides fertile ground for common crime and organized crime to flourish.