El Salvador’s civil war ended in 1992, but as soon as one war ended, another started. Armando Flores, the director of the Committee in Defense of the Consumer, is a general in the war over neoliberal economics. He’s a thin, intense man who knows just about all there is to know about the details of electrical distribution and utility pricing in his country, as well as the bigger picture of privatization, trade agreements with the United States and grandiose plans to link all of Latin America into one big, centralized power grid.
CAFTA and the Consumer
Flores shows us in PowerPoint graphs what any Salvadoran could tell you from experience: it’s not possible for the vast majority of Salvadorans to live a decent life in their country today. About half of all workers in El Salvador earn minimum wage, a little less than $150 per month. But food for a family of four costs an average of $265 per month. That family can expect that their electrical bill will run about $20 per month, the phone about $30…the economics of everyday life in El Salvador would be untenable if it wasn’t for one saving grace: remittances. Virtually every family in El Salvador is dependant on relatives who work illegally in the United States and send dollars back home. It’s estimated that about 2.5 million Salvadorans live in the U.S. Seven hundred more leave the country each day for the United States, at the same time as two hundred are deported in the opposite direction. Private remittances in 2003 almost equaled the national budget. They’re a powerful political force. In every national election since the signing of the peace accords in 1992, the ARENA party, which governed during the civil war, has threatened that if their rivals, the FMLN, come to power, the United States will end the flow of remittances, not wanting to aid such communists. ARENA has managed to stay in national power ever since.
Many houses, like this one in the village of Cinquera, have similar jerryrigged wiring running to and from the building
The box outside Cinquera's organizing office wouldn't pass inspection in the United States, but is a common arrangement in El Salvador
The bitter rivalry between the former military enemies, ARENA and the FMLN, has played out in smaller, more personal ways for Salvadorans, Flores tells us. The FMLN holds power in most areas outside of the capitol; Salvadorans figure the United States doesn’t care who runs their little towns in the boondocks. Many of the mayors, former mountain guerrillas, want to improve life in remote villages by bringing electricity to rural areas. But national government officials don’t have much interest in helping their former enemies, or the poor rural voters who support them. Instead, they’ve privatized the country’s electrical and telephone grids, handing them over to companies from the United States and other wealthy countries. These companies dream that someday, they will own power grids that run the length of Central and South America, so that all of these countries can sell electricity to the United States at a cheap rate. These multinational corporations aren’t interested in rural electrification, or in providing a needed service to the community at low cost. Companies claimed they could provide energy more efficiently and cheaply than the government, but so far, electrical rates have skyrocketed, so that Salvadorans now pay the highest rates in Central America. Water has not yet been privatized, but after twelve years of peace, only 25% of rural residents have running water in their homes.
The people of Cinquera rely on bus service to reach other communities and San Salvador. While the capital city has lots of traffic, there are few cars around a small village like Cinquera.
A mule is very efficient transportation around Cinquera. The post is painted with the acronym of the prevailing political party, FMLN. This post from another area (right) lets everyone know that they're in ARENA territory
The economic ties between El Salvador and the United States continue to grow, usually at a heavy cost to the poor. For instance, in 2001, El Salvador abandoned its own currency, the colon, in favor of the dollar. At first, Salvadorans were enthusiastic about the change, Flores says. Poor and unsophisticated, they thought that meant that they would make the same amount of dollars as North Americans. As soon as the changeover occurred, many prices immediately went up. Unscrupulous merchants simply kept the old colones prices on items, and charged that amount in dollars, so that something that used to cost 8.75 colones, the equivalent of one dollar, was now priced at 8.75 U.S. dollars. Poor people couldn’t do the complicated math involved in converting currency and didn’t know how much they should pay.
The most recent threat, Flores says, is the Central American Free Trade Agreement, known as CAFTA. Negotiated not only by government trade representatives, but by big business executives as well, this agreement would give multinational corporations unprecedented power in doing business in every country in Central America. For instance, if a U.S. company wants to explore for oil in a forest preserve in El Salvador, and the government objects, the company can sue the government in front of a tribunal run by the World Bank. If the law is judged to stand in the way of free trade, it no longer applies to the company, and they can do whatever they think necessary to pursue their business in the country. The whole point of the agreement is to end government regulation that business sees as a burden and a barrier to markets south of the border.
Unfortunately, the tribunal won’t be of any help to El Salvador in protecting its largest export, illegal immigrants. “This is the spine of the free trade agreements,” Flores says, “to treat unequals as equals.” El Salvador, he says, doesn’t have anything to export that they could offer at a lower cost than North American companies. He tells us that when pressed about this, a government trade representative couldn’t come up with any examples of possible exports. Thinking fast, the representative suggested that because the United States was at war in so many places in the world, maybe Salvadorans could get contracts for military uniforms.
Many Salvadorans make money in informal street businesses, like this row of stands in San Salvador. The street markets are not only economically valuable to El Salvador; like marketplaces throughout time, they bring all kinds of people out and about together on the street,
CAFTA will only hurt El Salvador, Flores says. Under the rules, no U.S. business or development can be restricted or regulated in anyway, and at the same time, no Salvadoran business can be favored. The only criteria for making decisions is profitability, and on that playing field, El Salvador will lose every time. “Life is not a consideration,” Flores tells us. “It’s more important now not to violate property rights than human rights.”
