THOMSON: Fixing El Salvador

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By John R. Thomson

COMMENTARY:

Strategically and centrally located within Central America, tiny El Salvador has been a striking economic success in recent years. Rated by the Wall Street Journal as, after Chile, having the most open and free market in Latin America, and enjoying relative domestic calm for nearly 20 years, it nevertheless faces a relentlessly radical political opposition and is surrounded by unfriendly or failing nations.

Multiple factors impact legislative elections next January, followed by presidential elections in March. The radical leftist revolutionary group turned political party, Farabundo Marti Liberation Movement (FMLN), is fighting to gain political power it never could achieve during 30 years of civil chaos. Despite solid economic growth (5 percent in 2007) and unemployment of just 5.5 percent, credible polls give the FMLN a 7 percent to 8 percent advantage over the ruling Nationalist Republican Alliance (ARENA), winner of the last four presidential elections.

The FMLN presidential candidate, Mauricio Funes, a widely known and admired media personality, is considered relatively moderate. His vice presidential running mate, Salvador Sanchez Ceren, is a much more radical hard-liner. Jaime Darenblum, director of the Hudson Institute's Center for Latin American Studies, observes that Mr. Funes "does not have any real sway over the FMLN's structure and ideology, which are inspired by old-fashioned Marxism-Leninism.

Vice Minister for Foreign Affairs Eduardo Calix appears not overly worried. He recently noted that "the election is still a long way off" and finds it difficult to believe a majority of voters will back the FMLN. "The election will be a battle between our democratic system and their revolutionary system, at a time when the country is having unprecedented peace and prosperity. Backed by Venezuela and others, the FMLN want to completely change our economic and social system.

"It will be a passionate campaign," Mr. Cadiz acknowledges, "but the FMLN cannot ignore the improvement in the lives of most citizens over the past several years, and they cannot resort, as before, to violence - the government will not permit it. El Salvador enjoys political security and a solid financial situation, and Salvadorans know the government is working to continue the rising prosperity, sound employment, steady food supply and fairly priced gasoline. We have a steady flow of illegals from our neighbors - and we need them. Migrants move where they see opportunity, and with such a low unemployment rate, we need qualified workers at all levels in most sectors."

Vice Minister Calix has completed a six-month term as president of Plan Puebla Panama, a unique association of nine nations: Mexico, the Central American states - Belize, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama - plus Colombia. The group has undertaken major infrastructure improvements in telecommunications interconnectivity, transportation, power generation and distribution and facility of movement between states.

Mr. Calix proudly noted that Plan Puebla Panama is well-positioned to complete 35 projects costing $5 billion by the end of 2010, with most electricity and road work finished by the end of 2009. (Honduran Vice President Elvin Santos assumed Plan Puebla Panama's rotating presidency on June 30.)

At a June 27-28 meeting in Villa Hermosa, Mexico, the nine countries' presidents finalized $3 billion more in infrastructure work, including - after 80 years' discussion - construction of the final 60 kilometers (37 miles) of the Pan American Highway that stretches from Canada and Alaska to Chile and Argentina, in the difficult Darien section between Colombia and Panama. Nevertheless, there remains much to do in El Salvador and elsewhere.

Neighboring Nicaragua is in a prolonged economic slump. Unpopular, peripatetic President Daniel Ortega, seemingly governs by telephone. Utilizing an aircraft loaned by Libyan dictator Moammar Gadhafi, Mr. Ortega in just two years has made more than 30 foreign trips with a huge retinue, including his eight children, their spouses, uncounted grandchildren, plus many friends and retainers. Meanwhile in Managua, the government leans on handouts from Hugo Chavez - more than $520 million identified to date - and is rife with corruption.

In Honduras to the east, union, legal and academic leaders are openly concerned and restless, as violent gangs run free in Tegucigalpa, San Pedro Sula and other cities.

Guatemala's President Alvaro Colom, elected in 2007, is tackling difficult narco-trafficking and gang situations and security show signs of improving, and is credited with listening to differing views in the society. Random violence and kidnapping continue apace, however.

In all three states, more than 45 percent of the populations live below the poverty level, contrasting with El Salvador's steadily falling 30 percent. The still significant poverty in El Salvador nevertheless provides fertile ground for the FMLN.

Greater regional tranquility can come none too soon for El Salvador. The latest poll by the respected polling arm of Universidad Tecnologica gives Mr. Funes nearly a 20-point lead over probable ARENA candidate Rodrigo Avila: 48.3 percent for Mr. Funes and 29.8 percent for Mr. Avila. Underscoring FMLN's presidential lead, the revolutionary group turned political party is showing similarly strong leads among voters for the January legislative elections.

Internal and external challenges notwithstanding, Eduardo Calix believes voters will ultimately recognize El Salvador's relative economic and social success. For the sake of its 7 million citizens - and the region - it can be hoped voters early next year will save the nation from turning to the FMLN's radical alternative, proving his assessment correct.

John R. Thomson writes frequently on geopolitical matters, focusing on developing countries where he has devoted 40 years to marketing and business development and served as a senior commercial diplomat during the Reagan administration.