New Salvadoran unrest feared

SAN SALVADOR, El Salvador

The bodies soaking the pavement with blood stirred memories of this country’s violent past, still vivid in the minds of many. Minister of Eco-nomy Yolanda May- ora de Gavidia considers the government’s decision to undertake economic reforms after years of military oppression to be the key to ensuring those dark days never return.

However, some in El Salvador are concerned that the seeds of the next wave of national unrest have already been sown by an economic agenda that leaves many Salvadorans behind.

Lawmakers such as Salvador Arias Sanchez, 66 — a former rebel with the leftist Farabundo Marti para la Liberacion Nacional (FMLN), which has become a political opposition party — think the free-market ideas of President Antonio Saca Gonzalez, 41, and his ruling National Republican Alliance (Arena), neglect the needs of the country’s poor majority while courting big business.

“None of this [privatization and free trade] is helping our people or our economy,” said Mr. Arias. “Free-market ideals have benefited only a select few in this country, while the rest are ignored.”

The government disagrees. According to its National Office of Statistics and Census, 57.8 percent of Salvadorans lived on less than a dollar a day in 1991. That number dropped to 38.9 percent in 2002, the statistics office said. El Salvador adopted the U.S. dollar in 2001.

Since Mr. Saca took office in 2004, Mrs. Mayora says, the percentage of those living on less than a dollar a day has gone down further, but some say the figures on poverty in El Salvador are skewed by an increase in remittances from relatives living abroad, which exceeded $3 billion last year.

Backers of the government see remittances as a vital source of income needed to keep the country afloat during its free-market growing pains.

President seeks loans

Mr. Arias’ concerns with Mr. Saca, a close Bush administration ally, include his decision to privatize the country’s pension funds and take on more foreign debt.

El Salvador’s privatized pensions have been coming up short lately, prompting the government to seek overseas loans to cover the balance, a step the FMLN rejects. Though the opposition doesn’t have a majority in Congress, it has enough lawmakers to prevent Mr. Saca from getting the two-thirds vote he needs to pass loan approval in El Salvador’s unicameral Legislative Assembly, which has 84 members.

“This government is willing to take on debt to pay its debt,” complained Mr. Arias. “We’ve told the government to stop, because we need to rethink and restructure this current model.”

El Salvador’s public and private debts total about $13 billion, up $500 million from last year. Hoping to stem national indebtedness, FMLN lawmakers this month voted down a proposal by the Saca government to take on another $376 million in foreign loans, a big defeat for Arena.

The FMLN also takes issue with El Salvador’s decision in 2001 to do away with its own currency in favor of the dollar, which caused rising inflation and left 40 percent of the population unable to afford “basic human needs,” according to Mr. Arias.

The currency change made leading Salvadoran exports like coffee and textiles less competitive globally and unable to compete with developing economic powerhouses, Mr. Arias said. “We don’t have the capacity to compete with China, India and Bangladesh, because we are a dollarized economy,” he said.

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