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By Fundación Flor de Izote, in El Salvador in Perspective, Vol. I no. 4, July-August 1995

We talked with Dr. Hector Dada Hirezi of the Latin American Faculty of Social Sciences (FLACSO), who gave us an overview of what Globalization is, its effects, and why El Salvador cannot help but perceive this phenomenon.

He begins by making us understand that Globalization is nothing more than a stage in the long-term process of internationalization of capital, in which the ability of transnational business to divide the productive process becomes clear, thanks to great advances in technical-scientific development such as "cybernetics", which have made this possible.

According to Dr. Dada Hirezi, this phenomenon does not have in itself a reason for being, but rather it responds to the needs of the transnationals who receive capital and wealth on a universal scale. In this sense, El Salvador is affected in different ways. The most clear example is the idea of President Armando Caldero'n Sol to turn the country into one large free trade zone. With this what is sought is to generate development politics, which will not, however, happen as the result of manufacturing, but rather through sale of products.

This is reflected in the fact that until now it is not clear whether local businessmen will be able to install necessary support mechanisms, given that while Globalization is presented as "free competition," what it puts first is "the identification of the patterns of world economic behavior against which it is impossible to compete, which means that it is not a freely competitive market" as such. This requirement limits the freedom of institutions competing in the market, thus favoring the concentration of profits in a few sectors.

An undeniable fact is that globalization does not favor domestic savings; thus, it does not seek to free dependent countries from foreign debt. That is to say that it does not mean that we as a dependent country will be less in debt. Nevertheless, the application of this is complex because there is no single form of globalization or sequence of effects on our economy. With the model being promoted by the current government, a deficit balance is produced, which indicates a risk, "given that little by little we will not have the dollars to compensate for this," because for now we depend on family remittances.

This aspect becomes an indicator, since economic growth is attributable to the remittances, and all of the growth is based on speculation, or worse, growth could be the result of "money laundering", which in the end will produce other kinds of external consequences.

If we assume that democracy means obtaining better sources of jobs and a more equitable distribution of income, the current government policies are contrary to these premises. The clearest example is that if the economy of the country grew 7% last year and poverty did not diminish, according to government statistics, this is a recognition that we are growing to the benefit of capital, which leads to the conclusion that there is not a process for progressive distribution, but rather regressive distribution, making it difficult to say that we are building democracy, if the economic policies are anti-democratic.

Derechos de Autor 1995. Fundación Flor de Izote. Esta publicación puede ser reproducida únicamente bajo condición que Fundación Flor de Izote sea citada como fuente.

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