RE: EOpriv: El Salvador and surge in privatization push

["Vic Thorpe" <just.solutions@pandora.be>]

So, it's Dirty Business as usual World Bank and IMF style in El Salvador
also.

It is interesting to see in this classic report on the impacts of 'market
freedom' policies on a developing economy, the mention of education and
health services.  Now that the first 'privatisation wave' has effectively
smashed public ownership of industrial resources and energy infrastructures,
property transfers to private hands have now got round to the core elements
of human survival (water and health) and civilization (education).  With the
recent accords coming through the WTO on 'trade in services' such transfers
will increase - even in bastions of public intervention in such areas as
Europe.  The result will be further polarization and marginalization in
these essential aspects of human development, as it has been in every other
area so far touched by this process.  A world of elites and drones is being
created amid the rhetoric of 'freedom'.

There is no way back to centralised state control over production and
services for more just human ends.  But the distributed ownership response
does need promotion as a model that can provide distributed democratic
control.  The COG needs to develop this argument and sell it to the movement
for 'globalization from below' - I strongly reject the term
'anti-globalization movement'.  It is something that I hope we can do in the
coming year's conference.

Vic Thorpe

-----Original Message-----
From: owner-eopriv@cog.kent.edu [mailto:owner-eopriv@cog.kent.edu]On
Behalf Of Dan Bell
Sent: 19 December 2001 22:32
To: eopriv@cog.kent.edu
Subject: EOpriv: El Salvador and surge in privatization push


ARENA SACKING THE STATE

Since 11 September the ARENA government, in conjuncture   with
international financial institutions, particularly the World   Bank and the
Inter-American Development Bank, has been on   an accelerated path to strip
the State of its most valuable sectors   and turn them over for private
profit.  The events of 11   September have facilitated this process.
Apparently, the goal   seems to be twofold: 1) transfer key and profitable
sectors,   including their infrastructure, to private hands for their
profit; and   2) leave the State without any way to generate income and
powerless to make profound changes without a fierce and long   battle.  A
key element in achieving their goal is the elimination of   the unions that
oppose such neo-liberal plans.  The government's   plan appears to be to
attack and dismantle the Union  Federation  of Public Service Workers of El
Salvador  (FESTRASPES),  thus establishing a clear run at privatization.
Below is a brief  update and analysis on the process in each  sector.

EDUCATION11 This section of the article is based on an  interview with
Rafael Coto, ANDES, Dec. 2001.

The privatization attack strategy in the educational sector can be   seen
on three fronts: 1) voluntary leave; 2) the World Bank   program "Educo";
and 3) the aggressive privatization process of   the two of the leading and
most respected public high schools.

Voluntary leave was started by then-President Christiani in 1991   as one
of the first steps in "reducing the state".  The program   was designed to
eliminate teachers by giving incentives to those   teachers who had 20-30
years teaching experience so they   would leave their jobs.  The initial
goal was then to "freeze" the   position and not hire another teacher.
However, because of   popular pressure from unions and the absurdity of
eliminating   teachers when almost a third of the country (over 15 years of
  age) was illiterate (according to official statistics and about a
million children did not attend school because of lack of   opportunity)
the government backed down and exempted health   and education from the
"freeze" plan.  The government then   settled for not having to pay
teachers on the upper-end pay   scale and instead replacing them with new
teachers.

The World Bank funded program known as "Educo" is another   key program in
the privatization plan.  While the World Bank   and the Salvadoran
government boast that World Bank money   goes to improve education, their
hidden agenda is to dismantle   the public education system.  The money is
destined for teachers   in the rural areas; however, the money is not
channeled through   the Ministry of Education and the teachers are neither
salaried   teachers nor part of the permanent public system.  At the end of
  this year ANDES (national teachers union) estimates that 3,000   to 4,000
teachers in this program will be released.  There is,   then, a program
whose aim is to reduce the public system and a   complementary program,
based on debt, where the aim is to   utilize and build a system based on
"flexible" teachers (without   job security or many benefits) outside the
public realm.

The government is also taking steps to privatize the nation's two   leading
public high schools, INFRAMEN and Centro Escolar   de Commercio.  According
to Rafael Coto of ANDES, it is in   the plans of the Ministry of Education
to privatize through   "partnerships" with banks.  In such plan, the
schools depend on   funding from private banks.  However, the banks in
turn, impose   their will over the institutions.

Furthermore, the historic and well-respected University of El   Salvador
(UES) is under attack.  The goal is to create discontent   and
unfunctionabilty so that the university can be privatized.22  Statistics in
this paragraph taken from speech given by Dr. María  de Rodríguez, Rector
of the UES, at a conference organized by the  FMLN.    In  1980, 3.5% of
the national budget went the UES.   During the  war the military bombed the
University's buildings,  burned  laboratories, libraries and other
equipment and not one- cent has  ever been allocated to the UES for
reconstruction after  these  crimes.  In 2001, 1.7% of the budget went to
the UES  and the  executive's proposal for 2002 is a shocking 0.8%.  In
comparison, Costa Rica gives 6% to their public university.    With this
allocation the executive government is consciously   condemning the UES to
deficit and instability.

HEALTH CARE33 Section based on interviews with Lilian Castro  (STISSS) and
Dr. Magda (Colegio Médico) in addition to articles in  La Prensa Gráfica
and Diario de Hoy.

Since the new director of the ISSS (Salvadoran Social Security   Institute,
public health care) took over in June 2001, 71 workers   have been fired,
mostly members the union, STISSS.  Based on   meetings with administration,
the union is anticipating around   2,000 firings in January.  The target
areas are maintenance,   security and custodial positions.

Currently the government is allocating a suffocating 1.8% of the   GDP to
the Ministry of Public Health in an effort to reduce the   State's
responsibility in providing health care for its citizens.  The   Ministry
of Public Health would need an increase of 94% in   order provide
sufficient service to the population.  In addition,   the "Concessions Law"
was recently passed by the Right block   in the Legislative Assembly, which
helps pave the way for the   privatization of health.  The law was based on
the ANEP's   (National Association of Private Business) suggestions
provided   in the "Reforma del Sector de Salud" (Health Sector Reform).
The STISSS and Colegio Medico have published an alternative   proposal that
contains the following observations:
Due to restricting budget workers are not able to perform  their  duties
adequately because of lack of medicine and   equipment



The ISSS should expand to the rural area: only 16% of the   population has
access to ISSS



Funding for the Ministry of Public health needs to be  increased  by almost
100%



There are problems of corruption and lack of regulation of   medicine




However, judging on past and present experience, health care   workers will
not give up.  In a speech given at the budget forum   organized by the
FMLN, Dr. Magda stated that they are tired of   signing agreements with the
government (in 1998 they signed an   agreement with the government which
stated that no aspect of   the public health system would be privatized)
because the   executive government never respects the accords.  He
affirmed,   now, they will start a new struggle.

WATER

The Inter-American Development Bank (IDB) and ARENA are   setting the
groundwork for the privatization of water through a   loan from the IDB.
The loan was signed in October 2001 and   currently the Legislative
Assembly must approve the conditions,   which will allow the first
disbursement of the loan.

In order to receive these disbursements, the Assembly must   approve the
legal framework to comply with the conditions.  In   order to receive the
first disbursement, the condition was to have   presented a
"decentralization" strategy based on the IDB   guidelines.

In an article written by José Antonio Morales Carbonell in the   13
December Co Latino, he states, "The three fundamental   elements of the
said strategy are: the possible concession of the   large systems or group
of systems to private operating   companies, the deconcentration of ANDA
(public water   company) and the decentralization of the small municipal
systems   actually operated by ANDA..."  He continues: "decentralization
meaning 'transferring the administration and operation of a   system of
potable water or a group of small municipal systems to   a independent
company with private standing formed by the   municipality or association
of municipal users and preferably with   the participation of the private
sector, with or without lucrative   ends.'"

According to Oscar Bolaños from SETA (state water company   union) and head
of FESTRASPES (Union Federation of Public   Service Workers of El Salvador)
the union is anticipating around   1,000 firings in January.  In addition,
the union leader also made   evident that there are French and Spanish
companies interested   in the water system and they are only waiting for
the   establishment of a legal framework to protect their interests.44
Meeting with Oscar Bolaños, Dec. 14, 2001.

PORTS

In September, under the guise of the "war on terrorism", 154   airport
workers were "laid off for 9 months" at gun point.55 For a  history of the
case see CIS Action Alert, October, 2001.   Owing  to the conditions of
poverty, 75 workers have accepted  the  government severance pay; thereby
accepting that his is no   layoff but rather enforced redundancy.
Furthermore, workers   had taken out loans to rebuild their homes after the
earthquakes   and now they are being threatened by the banks.  In order not
to   immediately lose their homes they were manipulated into   accepting
the severance pay. According to Joaquín Campos,   General Secretary of
SITEAIES (the airport worker's union),   the government (in conjecture with
private enterprise) strategy is   to use the war on terrorism as an excuse
to lay off workers,   primarily from the union, for 9 months because of
"security   reasons" then force them into accepting their offer to be
"voluntarily let go".  This way, they can say they have not "fired"
anyone, dismantle the union and have a smooth shot at   privatization.
Immediately, the two strategic areas to privatize   are cargo and security.


With the preparation of Plan Puebla Panama and the Free Trade   Area of the
Americas (FTAA), private interests have their eyes   on Port of Acajutla so
as to reap the profit from the foreseen   "free trade".  According to the
Salvadoran Port Industry Union   (SIPES), those behind the privatization
process and with   interests in the Port are none other than: 1) Alfredo
Cristiani, ex-  president of El Salvador and owner of Banco Cuscatlan; 2)
Ricardo Montenegro of UNIFERSA (involved in the loss of   fertilizer
donated by the Japanese government); and 3) Leonel   Mejía, President of
ALCASA and the Simán Consortium.  In   order to achieve the privatization
of the Port of Acajutla the   government has initiated a defamatory
campaign against SIPES.    It has placed expensive advertisements on
television and radio   stating that the port is on verge of collapsing
because of the   worker's excessive demands and salaries.  Ruy César
Miranda,   President of the Autonomous Port Executive Commission   (CEPA),
claims there are million colon losses owing to the   "operative system".66
La Prensa Gráfica, Dec. 10, 2001, Pg. 48.    However, César Zelidón, SIPES
representative, has pointed  out that the yearly port records,  dating from
1998-2000,  presented to the Legislative Assembly  contain no evidence of
the millions in losses.  He also pointed  out that CEPA's annual  spending
is ¢33.8 million colones  (CEPA includes the  International Airport of El
Salvador, the  Port of Cutuco and the  Port of Acajuta, among others) and
of  that amount, ¢11.5  million goes to 52 executives.77 Co Latino Dec. 3,
2001, Pg. 2.   Ruy Miranda  himself earns ¢40,000 colones a month.  The
union  representative also pointed out that the port, in its nature,  is
profitable. He adds, "How is it possible that in 1998  President  Armando
Calderón Sol declared that Acajutla was  profitable  and one of the most
modern ports in Central America  and the  following year they say not any
more...?"88 Co Latino,  Dec. 3, 2001, Pg. 2.  The union states that  the
current problems  with the port are owing to its  administration.
Particularly, it  points to the administrative  salaries and to corruption.
 For  example, the union claims there  are some barges that have  special
privileges and pay discounted  rates.99 La Prensa Gráfica,  Dec. 10, 2001,
Pg. 48.

As predicted, the privatization of profitable public sectors (and   other
neo-liberal measures) has left the State with insufficient   money to cover
its budget and further "cut backs" are necessary.    Further cut backs and
"concessions" means less income, which   means more dependency on loans and
fewer social services   (basic human rights). And the deadly cycle
continues.   The   global and national elite along with the international
financial   institutions make out like bandits on the misery of the masses,
  but the chickens might come home to roost as the deficit created   by
ARENA continues to grown and the economy continues to   sink.


--
Dan Bell
International Program Coordinator
Ohio Employee Ownership Center
Kent State University
Kent, OH 44242
(330) 672-0333 << Direct number!
(330) 672-3028 general office number
(330) 672-4063 fax
dbell@kent.edu
http://www.kent.edu/oeoc/
http://cog.kent.edu