Resurrection in El Salvador:
Globalization
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| With globalization, American chains find new markets. |
Latin America has been out of the news since the 1980s except for a few telegenic natural disasters. Perception among Americans is that the problems are fixed. Like so many perceptions of people whose world view is shaped by the TV, it is wrong.
For a review of the local economy from the experts, we visit ANEP — the National Association for Private Enterprise. Stepping into air-con luxury with big cushy swivel chairs, lots of flags and a brilliant power-point presentation, a well-dressed woman explains everything with simple and straight forward bar charts. Going from the rusty and bent chairs at Beatriz's with the balding chicken pecking at our feet to the heavily guarded ANEP building was a fascinating jolt.
The bar charts are big on numbers. Slow growth of under 2% has persisted for five years. Inflation is up to 6%. Overall, exports are up (traditional exports are down, clothing is up, non-traditional exports are up). Remittances are way up, bringing in $2.5 billion or 16% of the country's entire economy. There are pros but no real cons. We're told "Free trade presents benefits and challenges."
The recent collapse of the coffee market wrought massive environmental and social consequences. Without trees, only the coffee plants kept the steep hills from eroding in the rain. As the coffee plants disappear, erosion will give El Salvador an export that's not good for the economy…top soil. With legions of coffee workers now unemployed, their children are hopeless and directionless. Many are left with little to do but roam the cities in gangs and cause people to built even higher walls.
With a national economy of around $3 billion, El Salvador makes ends meet with the $2 billion sent home from refugee workers in the USA. More people are leaving today than even during the war. Families struggle to send one person abroad. There are two million Salvadorans living in the USA. Seven in ten families have an immediate member in the USA. "Refugee aid" like this is big throughout the developing world. In fact, remittances from refugees working in the rich world ($75 billion) are 50 percent higher than all foreign aid combined ($50 billion).
After El Salvador's Civil War ended, phone and electricity was privatized. The next big privatization move — here and throughout the world — is for water. Public monopolies are now private monopolies. Prices for utilities have jumped five fold. The Government used to subsidize health and education. World Bank and IMF want to privatize health, education, and water. What they want, they get. The right wing ARENA party — always in power here — oversees the neo-liberalization of the economy. Privatization is a precondition for getting loans from the World Bank.
The former president of the National Association for Private Enterprise (ANEP) became the new president of El Salvador in 2004 with USA interference making a mockery of local democracy. Today the government is the hand maiden of private enterprise.
The Central American Free Trade Association (CAFTA) is the big issue these days. CAFTA forces compliance. For instance, poor people were opting for folk remedies because they couldn't afford the drugs sold by pharmaceuticals. Pharmaceuticals won't stand for this. Honduras was recently forced to sell patent rights for its local plants to Monsanto. In the future, these may well be patented and unaffordable as well. There is no compassion in health care. Viagra may be on the push list, but a tube of bug cream costs a day's wages.
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| Since 2001, US dollars are the currency of the land. |
Since 2001, the US dollar has been the legal currency of El Salvador. Dollarization means the local government has no say in the country's monetary policy. The FMLN party was gearing up to challenge this, but 13 days after dollarization, the big earthquake hit and everyone had more important battles to fight. With the dollar, local elites have no risk of a radical change in government messing up their personal economies. It's a kind of voluntary colonization.
Honduras has an indigenous leader on its currency. Guatemala's paper money features a beautiful bird. El Salvador's was named for Columbus (Colone) and today it's the American dollar.
In this age of globalization, it seems even if national movements of liberation (like El Salvador's FMLN and Nicaragua's Sandinistas) were in power, they would not be allowed to address issues of structural poverty. Next struggles must be trans-national. Today forces for economic justice face an infinitely more powerful foe than their local elites…they face the IMF, WB, and a new religion whose creed is free trade. There's been a quantum leap in the reach of American-style capitalism and its power.
Continued |
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