The road is the baby of Mexican President Vicente Fox’s Plan Puebla Panama, an initiative meant to facilitate the transport of goods between Mexico and other Central American countries. At first glance, its promise to carry El Salvador to economic prosperity is convincing. Yet, a second glance, through the smeared window of an old US school bus chugging painfully up the asphalt’s easy grade, raises doubts.
For those riding in creaky vehicles puttering along in the right lane, or waiting among the crowds that mill on the shoulder, the road merely accentuates the contradiction of Salvadoran economic progress that has left them behind. In the emergency lane, the informal economy thrives. Elderly women plod slowly with bundles of firewood, jugs of water, cans of cooking gas, and baskets of vegetables balanced elegantly on their heads. Small children trail behind them, using their hands to steady the smaller items that sway above them. Piles of coconuts wait for thirsty travelers under improvised thatch roofs at every curve. Two long-eared cows are tethered to a tree in the median.
“Dollarization” was another promise, meant to drive the economy forward and carry Salvadorans toward a new era of economic prosperity. A string of conservative presidents, leading back to the end of the decade-long civil war in 1992, pushed it through, along with the privatization of banking, electricity, and telecommunications; the removal of price controls on most goods; and reductions in tariffs on imports.
Citing steady economic growth and the more than doubling of exports during the past decade, the country’s leaders boast that their fiscal reforms raised El Salvador’s economy far above the rest of Central America, making it a poster-child for free trade. But most Salvadorans have seen little benefit from such “structural reforms,” which have turned El Salvador into one of the most open economies in Latin America.
Despite a rising real gross domestic product, per capita it is now below the levels of the 1970s. The importance of agriculture has declined, while textile manufacturing – with little oversight of labor conditions and wages – produces 59 percent of El Salvador’s exports. Unemployment remains at a respectable 7 percent, but wages are stagnant and almost half of Salvadorans live below the poverty line. A study by the Global Policy Network shows a wide gap between the rich and the poor that has remained frozen for a decade. The wealthiest fifth of the population enjoys 45.6 percent of the nation’s income, with the poorest fifth left with only 5.6 percent.
In July, San Salvador police tried to clean out an army of street vendors that blocked off downtown streets with their rickety stalls, but the vendors lit bonfires and the makeshift market remains. Meanwhile, one-fourth of all Salvadorans have moved to the US to look for work, and the economy stays afloat thanks mainly to the $2 billion sent home annually by Salvadorans abroad.
The anti-privatization graffiti that covers the walls of government buildings in San Salvador signals a widespread frustration with the results of El Salvador’s neo-liberal economy. Yet, discontent was stifled in the March presidential election, and voters delivered another victory to the right-wing National Republic Alliance (ARENA). Despite its vows to expand structural adjustment policies meant to ease the entrance of investors and foreign companies, ARENA easily beat the left-wing Farabundo Marti National Liberation Front (FMLN) with 60 percent of the vote.
The FMLN, which opposes dollarization and the impending Central American Free Trade Agreement (CAFTA), was unable to withstand a brutal campaign. Its presidential candidate, former civil war guerilla Schafik Handal, was portrayed as a communist who would destroy El Salvador’s close relationship to the US. ARENA also played on the insecurity felt by Salvadorans as a result of spiraling crime and violence.
Although drug cartels, kidnapping rings, and paramilitary groups operate throughout the country, the country’s mainstream media portray gangs as the perpetrators of most violence. According to a study by the Overseas Development Institute, a British think tank, over 60 percent of residents in San Salvador approve of social cleansing, meaning the extra-judicial killing of gang members by police, military, or paramilitary groups. ARENA candidate Tony Saca promised to crack down on crime, and, since his election, has reinforced the anti-gang program “Mano Dura” (Iron Fist), which promises increased police vigilance and strengthened laws against gang members.
But deeper than fears of gangs and losing much needed income from remittances, a desire to participate in the economic growth that has built the highways, malls, fast food chains, and factories that dot El Salvador’s urban landscapes spurred voters to support the right. Although many Salvadorans recognize the growing disparities spawned by the right’s structural adjustment policies, they don’t want to be left behind as the rest of the region embraces free trade.
CAFTA negotiations have pitted Central American countries against one another as they jostle to stay competitive and get the best deal with the US. Balking at the FMLN’s combativeness, many citizens see this “free trade” agreement as unavoidable, a way to keep their place at the top of Central America’s economic hierarchy and compete with the draw of cheap labor in China.
The FMLN, which promised to put the brakes on free trade and privatization, faces division. A faction of younger members is pushing to redefine the party’s platform. They want to downplay the FMLN’s guerilla roots and find compromises with the reigning free trade doctrine by proposing strategies that balance the pressures to stay competitive in the international economy with protections for local businesses and workers.
Even if that view prevails, the Left’s hope for a viable compromise is fraught with problems. Assuming the Democrats win the US presidential election and deliver on a promise to insert labor rights into CAFTA, China still looms as a vast source of cheaper and less regulated labor for transnational companies. For most Salvadorans, the beckoning highway’s only destination lies north, where they will continue adding more dollars to the flow that has sustained their families and their country so far.
Sarah Garland recently received a master’s degree in Latin American studies and journalism from New York University and traveled to El Salvador with a grant from the Overseas Press Club Foundation.