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El Salvador celebrates third anniversary of signing the Peace Accords

Fundacion Flor de Izote: Report from El Salvador, Vol.6 no.3. 16-23 January, 1995

"Now we are a nation that is respected by the world, because we live in peace, democracy and liberty."
Armando Calderon Sol, Salvadoran President. (1)

"How can Salvadorans have peace when they are contemplating the depressing situation of corruption and impunity?"
Monsignor Gregorio Rosa Chavez, diocesan administrator for San Salvador. (2)

In his Sunday homily, Monsignor Gregorio Rosa Chavez, Diocesan Administrator for San Salvador, offered his reflections of the third anniversary of signing the peace accords. "According to legislative decree January 16 is a national holiday and people are given the day off, because it is the 'day of peace.' However, many ask themselves 'what peace?,' because the Peace Accords mean very little for people who live in permanent insecurity in the streets and sidewalks of El Salvador. Recently, even priests and religious workers have been the victims of assaults, robberies, and other forms of violence. The Peace Accords mean nothing to the Salvadoran men and women who continue to be victims of war weapons," he said. (3)

In his reflection Monsignor said that "tomorrow is not a 'day of peace' for Salvadorans who do not reap the benefits of an expanding economy and who cannot even get to sleep, because they are worried about how they will feed their children and buy them what they need so that they can go to school. How can Salvadorans have peace when they are contemplating the depressing situation of corruption and impunity which seems to be out of control and rooted within the government? Nevertheless, we should believe in peace and defend the Peace Accords." (4)

A day later President Calderon Sol along with cabinet members, FMLN representatives, diplomats, and members of ONUSAL celebrated a commemorative act of the signing of the Peace Accords. In his brief speech Calderon Sol said, "now we are a nation that is respected by the world, because we live in peace, democracy and liberty." (5)

The Foundation for Peace (FUNDAPAZ) also held an anniversary celebration attended by various diplomats and members of ONUSAL. At the event the director of ONUSAL, Enrique Ter Horst said that the petition sent by a Salvadoran delegation to the Secretary General of the United Nations asking for more funds to fulfill the Peace Accords had "fallen on fertile ground." In addition, he said, "the Secretary General, Boutros Ghali assured Vice President Borgo Bustamante and Mr. Sanchez Ceren that he would take great pains in getting the international community to make this last effort to consolidate the [peace] process." (6) Ter Horst pointed out the amount of change the country has undergone. "Salvadorans have a very strong desire, especially Calderon Sol, to finish sowing democracy and to make the institutions function as they should." (7)

"Privatization is going to bring about massive lay-offs in all of the affected governmental organizations."
Franklin Sanchez, ANTEL technician. (8)

Faced with the threat by the U.S. government to cut back economic aid various labor groups announced their opposition to the new economic measures and privatization that will be carried out by the Calderon Sol Administration. The first group to protest were the workers of ANTEL who concentrated around the Central Roma building. Franklin Sanchez, a technician with ANTEL, said, "privatization is going to bring about massive lay-offs in all of the affected governmental organizations. On the other hand, we think that the transnational [corporations] who will take over communications are not interested in servicing all of El Salvador." (9) Workers from the Ministry of Public Works, affiliated with the ATMOP union were represented by their secretary general who warned the government of their need to negotiate "the policies [and] measures that they are trying to implement within the ministry. [Therefore], we are giving them until Monday of next week." (10) General Secretary of the Association of Workers of the Ministry of Agriculture reminded people of the promise made by the ministry's commission "that no worker will be fired, transferred, or demoted arbitrarily." (11)

According to Treasury Minister, Manuel Enrique Hinds the speed of modernizing the nation should accelerate and include the privatization of various institutions as well as the creation of competition between sectors who provide the nation's infrastructure. He announced that next March he will have a law ready to regulate competition for communications and electricity. Hinds seemed to be satisfied by the response given by distinct Salvadoran sectors to the economic plan, because they have been willing to discuss it thoroughly while contributing their ideas. (12)

"The government's economic proposal in search of the Salvadoran dream."
Report from Salvadoran newspaper, La Prensa Grafica. (13)

The economic program that the Calderon Sol Administration will implement this year has been rejected by practically every sector in the country from private enterprises to union groups and from parties on the left to parties on the right. Only members of ARENA, officials who support them, and a few deputies are in favor of the new policies, but even they have shown opposition to those changes they claim as necessary.

La Prensa Grafica said that the government's program is "the economic proposal in search of the Salvadoran dream, [which] can only be summed up in one word, liberty. . .. In spite of the fact that the bonanza of dollars will not last long and neither will the current price of coffee." According to them, another factor to take into consideration is the amount of "remittances sent to Salvadoran families which put millions of dollars every year into our economy. These funds will decrease and in turn the umbilical cord that unites Salvadorans [in the United States] to their homeland will become more fragile." (14) Apparently, the National University of El Salvador (UES) shares this analysis. "The money exchange system seems attractive. Nevertheless, it has been conceived as an aislated measure and is not necessary for the nation's process of development." (15)

Treasury Minister, Manual Hinds in an attempt to support the new economic measures stated that raising the sales tax (IVA) is necessary, because it is "linked not only to the new measures, but to the past as well....because you have to pay the price of peace and it costs 1.53 billion dollars. It would be irresponsible of the government to say that it will not raise taxes, knowing we will have a problem in the long run if we do not." (16)

"We are looking for a consensus to put the economic plan in action."
Salvadoran President, Armando Calderon Sol. (17)

"What good is it to [express our opinion] about the plan if they are planning all along to carry it out?"
Mario Cabrera, leader of the National Union of Salvadoran Workers (UNTS). (18)

President Armando calderon Sol affirmed that he is not trying to impose his economic plan upon the nation and on the contrary "we are looking for a consensus to put the economic plan into action." During his trip to Costa Rica to attend the Central American Economic Institute (INCAE) Forum, he said that he would "ask other presidents from the region what they think about the plan." Nevertheless, a member of the Executive Council of the National Union of Salvadoran Workers (UNTS), Mario Cabrera does not agree with the president. "What good is it to [express our opinion] about the plan if they are planning all along to carry it out even though we have made counter proposals?" he stated. (19) Furthermore, the group expressed their complete rejection of the economic measures in a press release, because they consider them an "economic punch" that will hit agricultural, commercial and industrial workers directly. They said that more attention must be placed on the fact that "if taxes are raised then the prices of basic consumer goods, water and electricity will go up." (20)

Different union groups including those that represent the agro- export market and industry are worried over the possible implementation of the economic plan. The Corporation of Salvadoran Exporters (COEXPORT) stated that although the plan follows their general objectives it requires brusque changes that might generate "social, commercial, economic, and labor destabilization." (21) They said that just the "fact that the [government] is trying to obtain results from a financial policy based on a fixed exchange rate for a currency that does not coincide with its purchasing power" gives enough reason for the plan to be newly revised. (22) Similarly, spokespeople from the Salvadoran Association of Bus Companies (AEAS) pointed out that "once the economic reforms are approved" their operating costs will increase and this would "cause serious problems for transportation services." (23)

"Paqueton from Calderon [the big punch from Calderon]."
Roberto Viera, Renovated Socio-Christian Movement (MRSC) deputy. (24)

Renovated Socio-Christian Movement deputy, Roberto Edmundo Viera called the economic plan the "paqueton from Calderon [the big punch from Calderon]." It may very well have technical and financial coherency, but it is weak, because it does not take Salvadoran reality into account. Once enacted, these economic measures will jeopardize trade with neighboring countries and put up a barrier to Central American integration." (25) According to Felix Ulloa of the Salvadoran Institute of Judicial Studies (IEJES), the primary fault of the economic measures is its unconstitutionality. Article 1 of the Salvadoran Constitution establishes that the human being is the means and end of the State....consequently, the obligation of the State is to ensure that inhabitants of the Republic enjoy liberty, health, economic well-being, and social justice. Ulloa said that according to this article "it must be decided whether the measures will benefit all the sectors of the population or just a few. If it benefits only a few sectors then they would be violating constitutional law." (26)

Roberto Viera said that his party has made a proposal to modify the economic plan. First, they must enforce a new tax policy which reduces import taxes by 1% for raw materials and capital goods while maintaining the 20% tax on remaining imports. "This is going to help our national industry to reinvest and transform itself to be more competitive." (27) If remaining imports are reduced to 15% then that reduction should be accompanied by three other reductions: interest rates in the financial system, national inflation, and the deficit of the national budget. "If these three factors accompany the reduction then the policy of lowering import taxes can have positive affects on the nation." (28)

Anti-drug activist, Carlos Aviles expressed a very different opinion than the rest. "Our government should investigate more and find out why the economy of Hong Kong has been so successful. Being open to any investment allows for too many investors and a wide range of activities which could be funded by money made illegally." (29)

"You cannot even rent a room for that much."
Eduardo Molina Olivares. (30)

"They can scrutinize me, but they will never find any kind of tax evasion on my part."
Gloria Salguero Gross, Legislative Assembly President. (31)

The freedom of expression attained by the Peace Accords has put the official party (ARENA) on the defensive, as accusations of corruption continue. Now, Gloria Salguero Gross, Legislative Assembly President has joined the former ministers of agriculture and treasury in her defense against claims of corruption. She is accused by a group of citizens led by Dr. Eduardo Molina Olivares of evading eight million colones in taxes.

Salguero Gross supposedly declared her rent taxes falsely. Molina Olivares along with various deputies of distinct parties have presented proof including "a declaration of a tax-deductible donation for the ARENA party for 75 thousand colones." However, examining her records shows that she does not have that kind of money, "because her expense account only has 4 thousand colones in it." (32) Olivares added that Salguero Gross has not declared the true value of her properties either. She has claimed 10 out of her 24 properties in her taxes, including a house in the department of Santa Ana which rents for 50, 42, and 15 colones. These are ridiculous amounts, because, "you cannot even rent a room for that much," he said. (33) Salguero Gross said that the accusations against her are slanderous. "They can scrutinize me, but they will never find any kind of tax evasion on my part," she said while adding, "they can pursue an investigation, but I am not scared. They are absurd accusations." (35)

The last plenary session of the Legislative Assembly decided that the Legislative Board of Directors of which Salguero Gross is president or the Legislative Political Commission should be the organ to investigate the case. FMLN deputy, Miguel Saenz argued that the legislative board should not be in charge of the investigation, because "the internal rules of the Assembly are very clear on this point. In article 12 it states that all of the affairs that deal with the competency of the Assembly should be reviewed by its commissions, and the board is not a commission. Therefore, we think the matter should be taken up by the Political Commission." Faced with such a delicate situation, Salguero Gross said that she would prove her innocence. "The board will clear up the matter [and everyone] will realize who is telling the truth and who is lying," she stated. (36)

The former Treasury Minister, Ricardo Montenegro and his brother, Eduardo met with FMLN representatives in the Assembly telling them that they do not want "the case to be politicized." "We want it to remain business-like and judicial. Also, we want you all to see the deficiencies of the audit," said Montenegro. Gerson Martinez stated that the case should be investigated and cleared up. He affirmed that it is not the only case, "because there are other tax evaders here." (37) The former minister reiterated that his business had never evaded taxes, but the audit conducted by the Central Accounting Office (Corte de Cuentas) showed discrepancies and its president, Dr. Hernan Contreras reaffirmed his accusations of tax evasion against Montenegro. "It is different when a business distributes its profits and claims them on their tax forms, but in this case it is evident that they gave loans and in doing so they evaded taxes," he said. (38)


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  3. EM, 16/1/95
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  36. TV2, 20/01/95
  37. TV12, 16/01/n5
  38. TV2, 16/p1/95.

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