Monday, October 24, 2016

El Salvador's fiscal crisis

El Salvador is in the midst of a financial crisis.   Its government is running out of funds to pay its bills; the political parties are deadlocked in negotiations to find a solution; and there are suggestions the government might even default on its debt.

From Bloomberg:

El Salvador President Salvador Sanchez said the government was in a state of emergency as he pushed lawmakers to agree to a global bond sale to ease a liquidity crunch. 
A "lack of liquidity" must be solved this year to "avoid negative consequences of greater dimension," Sanchez said in a televised address, as yields on the Central American nation’s debt soared. 
The government is willing to reach an agreement on a fiscal responsibility law in congress that would include tighter spending rules, Sanchez said, while calling on lawmakers to approve a $1.2 billion bond sale. Standard & Poor’s placed El Salvador on credit watch last week and said the country’s B+ rating may be downgraded if parties fail to agree on fiscal issues. The country’s "financial management is deteriorating" due to "heightened political polarization," S&P said in a report.
The credit rating agency Standard & Poor's subsequently did downgrade El Salvador's credit rating, writing:
The downgrade reflects deterioration in our assessment of El Salvador's
institutional and governance effectiveness, which has contributed to a weaker
external profile, and a further erosion of the government's liquidity
Continued political stalemate between the governing party Frente Farabundo
Martí para la Liberación Nacional and the main opposition party ARENA (Alianza
Republicana Nacionalista) has blocked progress on fiscal and pension reform,
undermining investor confidence. It has also imposed a heavy cost on financial
management by weakening the government's ability to raise added revenues and
to manage its debt.  
There has not been consensus from a qualified majority in Congress to approve
the issuance of external debt due to opposition from ARENA.
So what's going on?   The government of El Salvador is having a hard time paying its bills when they come due.   It wants to borrow $1.2 billion on world markets, to help pay these bills but ARENA will not agree to approve the changes without a package of fiscal reforms.

  • Political deadlock.   El Salvador's warring political parties have been unable to agree on a series of fiscal measures to reduce spending and increase revenues to get the country out of this crisis.
  • Tax evasion.    Many businesses and other tax payers are delinquent in paying their taxes.   The government says that more than $560 million is owed the government by more than eleven thousand individuals and businesses.
  • High price of social spending.   Seven years of FMLN governments have seen an increase in social spending, but income to the government has not kep up.
  • Inefficiency and corruption.   El Salvador's government does not spend its money well.
  • Slow growing economy.   The economy of El Salvador has been suffering with growth rates below 3% for many years.  More growth could increase government revenues and reduce unemployment.

It is a crisis that an editorial from the University of Central America blames on both political parties, who seek more to gain political advantage than to come together for the good of the country:
Actúan como verdaderos niños caprichosos, llorando sobre la leche derramada y planteando exigencias que la misma crisis hace imposible atender. 
[The parties] act as truly capricious children, crying over spilled milk and making demands that make it impossible to address the current crisis.

Tuesday, October 18, 2016

Intimidation of journalists in El Salvador

If there is anything which El Salvador truly needs it is independent and courageous journalists.   But as the Texas Tribune notes in a piece titled El Salvador journalist faces threats from gangs, government, such journalism can provoke official intimidation.   The article describes how one Salvadoran journalist, Jorge Beltran, faced threats of prosecution after publishing an article about gangs which the government did not like:

In late December 2015, he published a map detailing which of San Salvador’s neighborhoods are controlled by the country’s powerful streets gangs, including the Mara Salvatrucha (or MS-13) and the Barrio 18. It was intended as an interactive guide to help people navigate the confusing and treacherous gang boundaries; knowing where not to cross is literally a matter of life and death here. 
But national law enforcement authorities were deeply embarrassed by the notion that they had lost control of huge swaths of San Salvador to the maras, the gangs. A few days after the maps were published, the government fired back. 
Citing laws classifying street gangs as terrorist organizations — and giving authorities wide powers to punish their “collaborators, apologists and financiers” — a top national police commander filed a complaint against Beltran’s newspaper with the attorney general’s office. (The articles were unsigned, but Beltran says the government knew he was the author) 
The alleged charge: advocating terrorism and inciting crimes, violations punishable by up to four years in prison.
The article goes on to note harassment of other journalists from El Faro and RevistaFactum.  As a consequence of this posture of the goernment, the advocacy group Reporters Without Borders dropped El Salvador 13 places from 2015 to 2016 in its World Press Freedom Index:
The media are among the victims of the widespread violence in Salvador, one the world’s most dangerous countries. Several journalists have been murdered or physically attacked in recent years. Freedom of information has lost ground under Salvador Sánchez Cerén, who was elected president in 2014 and who has accused the media of waging a “campaign of psychological terror” against his government. Officials harass and threaten journalists who try to investigate corruption or government finances. The president himself violates the rules on access to information.

The refugee crisis continues

The plight of refugees in El Salvador and the other countries of the northern triangle of Central America continues unabated. More reporting this week highlights the magnitude of the crisis and some of the stories of individual families:

Home Sweet Home? Honduras, Guatemala and El Salvador’s role in a deepening refugee crisis is a report from Amnesty International which explores how the three countries are failing to protect people from violence, and also failing to set up a comprehensive protection plan for deportees forced by countries such as Mexico and the USA to return to life-threatening situations.

Central America's rampant violence fuels an invisible refugee crisis is an article by Nina Lakhani in the Guardian also looking at the dangers faced by these families and the scant efforts to protect them.

Gang Violence Drives Internal Displacement in El Salvador is an article by Edgardo Ayala from IPS about the internally displaced persons of El Salvador.

Saturday, October 15, 2016

El Salvador wins gold mining arbitration

There was celebration yesterday in El Salvador's government and among environmental activists after the country won its seven year legal dispute with Oceana Gold.    Oceana God's predecessor, Pacific Rim, had initiated the arbitration against El Salvador seeking more than $250 million after the country refused to grant it permits to mine gold on the company's El Dorado property in the department of Cabanas.   OceanaGold was ordered to reimburse El Salvador for the country's $8 million in legal costs in defending the suit.  

The Guardian quoted the parties' reactions to the decision:
“For the people of Cabanas who have been fighting to defend their environment, it is mission accomplished,” said El Salvador’s attorney general, Douglas Meléndez Ruiz. “It is an important step for the country to have been victorious in this lawsuit.” 
While an OceanaGold statement expressed disappointment at the verdict, the outcome was celebrated by civil society groups from El Salvador to Canada, although they questioned why the ruling in a case dating back to 2009 had taken so long.  
Bernardo Belloso, president of the Association for the Development of El Salvador, part of a national roundtable opposed to metallic mining, said the ruling “vindicates our right to determine our own development path”.
Despite the favorable result, activists continued their criticism of the arbitration process.   From the New York Times:
The World Bank panel, known as Icsid, is a little-known body that arbitrates disputes initiated by private companies that argue that their rights as investors have been violated by governments. 
Many free-trade agreements incorporate the rights of foreign investors to seek redress from the panel. Activist groups argue that private companies are using the dispute center to fight regulation. 
“The case has been hanging over El Salvador, and the company used this case to try to get permission to work there,” said John Cavanagh, the director of the Institute for Policy Studies, a left-leaning think tank in Washington.... 
The case that Pac Rim brought to the three-person panel proved to be so weak that the finding against it was unanimous. The company had never acquired the rights to all the land it wanted in its concession, which the government rejected in 2005.
You can read my summary of the issues which were involved in this case here.

The long-running dispute over whether gold mining would be permitted in El Salvador included the deaths of several activists against the mine.    The anti-mining movement has long alleged that these deaths were directed by mining interests, but prosecutors never treated the crimes as anything other than "common" violence in the country.

Although El Salvador was victorious in the arbitration, the country still lacks a comprehensive law banning or regulating extractive mineral mining, and continues to act under the moratorium against further mining permits originally adopted during the ARENA administration of president Tony Saca.

Wednesday, October 12, 2016

Spotlight on the Comandos

Some of the real heroes of El Salvador are the members of the Comandos de Salvamento -- the volunteer rescuers and ambulance drivers dressed in yellow and green uniforms who rescue victims of accidents, violence and natural disaster throughout the country.

One of their volunteers is profiled on the Refinery29 website in an article titled Meet The Girl Who Runs A Paramedic Crew In The World's Murder Capital:

The 18-year-old is a shift leader at Comandos de Salvamento, or Rescue Commandos, a volunteer-run ambulance service in San Salvador – the murder capital of the world. 
When the alarm rings on a Saturday night, it could be for a shooting, murder, car accident, or even a fire. Martinez knows how to deal with all of them. 
“I’m scared sometimes,” she said. “But I like the adventure and the adrenaline. I love it.”
She starts her weekly shift around 4pm, rushing the long commute from home to the Comandos de Salvamento headquarters to make sure she arrives well before the sun goes down. The base is in downtown San Salvador (the country's capital), in a rough neighbourhood which is known to be controlled by gangs and is unsafe to move around in after dark. But once a week, when Martinez puts on her green and yellow uniform, she knows it is her duty to go back out on the streets – whatever the risk may be.
Read the rest of the profile here.

This October has also seen the release in El Salvador of a documentary about the Comandos by filmmaker Marcela Zamora.  You can watch the trailer for the documentary on YouTube.

Tuesday, October 11, 2016

Profile of Nayib Bukele in VQR

If you read nothing else written in English about El Salvador this week, I recommend that you read the profile of San Salvador mayor Nayib Bukele in the Virginia Quarterly Review.   The feature length article written by Lauren Markham on the popular young mayor features not only the story of his rapid rise to being the most popular politician in the country, but also a look at the problems confronting the country and its capital as seen through Bukele's eyes.

Here Markham talks with Bukele about the national government's hard line approach to addressing violence:
Given the severity of these circumstances, it was almost baffling that Bukele hardly mentioned violence at all when we sat in his office in January, his people snapping photographs and filming us. He even tended to skirt the subject in favor of discussing his pet projects.  
“Look,” he explained when I pressed him. “If you have a headache, what would you take? A Tylenol. But what you have isn’t a Tylenol deficiency. You are stressed, or you are dehydrated, or something more severe. So you take two, and then that doesn’t work, and you take four, and then ten.” La violencia was a symptom of a more troubling disease, he argued, rooted in El Salvador’s long-standing poverty and structural injustice (more than 32 percent of Salvadorans live below the poverty line in gang-controlled areas). Though he was stating relatively basic principles of economic development, so mired is El Salvador in the current violence vortex that few policy makers are discussing the situation in these terms. 
Finally, lest there be any confusion, he drove the metaphor home. “Here, Tylenol is the police. People want more police, and I understand. It’s dangerous here—they have a headache, they want the Tylenol. But that won’t solve the problem.”
Make sure and read the rest of the article titled Prince of Peace here.  

Monday, October 10, 2016

30th anniversary of 1986 San Salvador earthquake

Thirty years ago today a massive earthquake struck San Salvador killing as many as 1,500 people.    The quake struck at ten minutes before noon on October 10, 1986  with a magnitude of 5.7.  The shallow quake caused considerable damage to El Salvador's capital city of San Salvador and surrounding areas, including neighboring Honduras and Guatemala.

The temblor caused between 1,000 and 1,500 deaths, 10,000 injuries, and left 200,000 homeless.   The shallow quake located just 7 km from the center of the capital city caused the destruction of many buildings. San Salvador's Benjamin Bloom children's hospital, a marketplace, many restaurants, office buildings, and poor neighborhoods were significantly damaged or destroyed.   It was a massive tragedy which came in the midst of El Salvador's 12 year civil war.

From the New York Times two days after the quake:
The death toll from a strong earthquake two days ago has risen to 890 and some stricken areas have still not been reached to search for victims, President Jose Napoleon Duarte said late tonight. 
Speaking in a televised news conference, Mr. Duarte said 10,000 people were injured in the quake Friday, and 150,000 left homeless. 
There ''are many people who are still buried and places where we have not reached,'' he said, suggesting the death toll could rise still higher.... 
A United States Embassy spokesman said the greatest needs were medicine, clean water and special torches and saws to cut steel and concrete. Four of the six major hospitals were severely damaged. 
Government officials said nine large neighborhoods had suffered major damage to at least 50 percent of their residences. It appears that thousands of homes were severely damaged, and survey teams today checked the badly destroyed downtown business district to decide which buildings to save.... 
Several buildings in the city center rested at crazy angles, like crushed sandwiches of concrete and glass. It seems likely that demolition and clearing efforts will take months. The downtown remained closed off today.
El Salvador's Ministry of the Environment and Natural Resources released this video to mark the 30th anniversary of the 1986 quake showing many images of the destruction which occurred:

Tuesday, October 04, 2016

Statistics point toward police abuses in El Salvador

The National Civilian Police (PNC) and armed forces of El Salvador have killed 693 alleged gang members in armed confrontations in the past twenty months since the government declared "war" on the gangs in January 2015.   The pace of the deaths of gang members has increased significantly in 2016 with 424 deaths of gang members at the hands of security forces this year.

A statistical analysis of these confrontations and deaths performed by El Faro supports the thesis that the security forces are making disproportionate use of assault rifles and committing extra-judicial executions.

One measure is the index of "lethality" or the ratio of subjects killed and wounded in confrontations between gangs and the police.   In the past 20 months, there were 1074 armed confrontations, leaving 693 dead gang members and 255 wounded, an index of lethality of 2.72.  In other words, for every one gang member who was captured wounded, there were 2.72 killed.   For the first 8 months of 2016, the lethality index has risen to 3.1.

According to El Faro, international experts say that military or security conflicts should never have an index higher than one.  For some comparisons, the war in Vietnam had a lethality index of 0.25, the conflict between Israel and Lebanon in 1982 had a ratio of 0.22, and in Chicago between 2010 and 2015 the index of lethality for police shootings was 0.54.

Another statistic reviewed is the ratio of police and military deaths to the number of gang member deaths.   In 2015, 13 police and 4 soldiers died in El Salvador and through August 2016, 4 police and 3 soldiers had been killed in confrontations with gangs.   In 2016, that produces a ration of one member of the security forces killed to 53 gang members killed.   In contrast, during Mexico's war against narco-traffickers from 2011-2013, the average ratio was 20:1.

In another comparison, one would expect more suspects captured than killed in confrontations with security forces, but in El Salvador, more gang members were killed than captured in the reported conflicts.

Another statistic is the level of deaths of civilians at the hands of state agents per 100,000 inhabitants.   In Brazil in 2014, the ratio was 1.5 per 100,000 inhabitants and in the urban areas of Rio, the ratio was 3.5.  In contrast in 2015 in El Salvador the ratio was 5.0 in 2015 and is on its way to reach 8.6 in 2016.    These statistics from professor Ignacio Cano of the State University of Rio de Janeiro who was consulted by El Faro.

El Faro published denials from the officials with the security forces who assert that police and military respond with appropriate force only when they are attacked.    Similarly, the attorney general's office denies that it has turned a blind eye on excessive force and extra-judicial executions.    Both sectors of government see little reason to change when there is popular opinion which supports
such methods in the battle to confront gang violence.

Finally, InsightCrime reports:

In contrast to the increasing number of confrontations between gangs and police, murders have continued to decline nationwide from the high-water mark of 2015 and early 2016, when El Salvador's homicide rate surpassed 100 per 100,000 citizens. Cotto said homicides are down 50 percent so far this month compared to September 2015. From January to March of this year, El Salvador registered on average between 20 and 24 homicides per day, but since April that number has fallen to between 11 and 13 per day. 
The government draws the conclusion that its lethal approaches to crime are working.

Big job for El Salvador's new Human Rights Advocate

El Salvador has a new Human Rights Advocate within its government. Raquel Caballero de Guevara is the new "Procuradora para la Defensa de los Derechos Humanos" or PDDH.   The position is one which advocates for human rights and denounces their abuses, but has no real power.

The election of Caballero de Guevara required a super-majority of votes in the National Assembly, so each of the major parties needed to support her.  She replaces outgoing PDDH David Morales who was unable to garner support from the country's political parties for a second term.   (In the last fifteen years, I don't believe any PDDH has obtained a second term -- if they are doing their job well a PDDH makes the politicians in power uncomfortable as they are held accountable on human rights issues).

The issues on the desk of Caballero de Guevara as she commences her job are large.   In the face of a hard line government response to gang violence, the PDDH must address serious and ongoing reports of police and military abuses including summary executions.   Following the repeal of the post war amnesty law, the PDDH should be a leading advocate for justice for the victims of crimes against humanity committed during the civil war.  In a country with record high levels of homicides and disappearances, the PDDH should be an advocate for the victims who often receive scarce attention from the Salvadoran government.

The start of Caballero de Guevara's time in office has not been without controversy.  She has been accused of firing supporters of David Morales in her office, hiring a step-daughter for an administrative position within the office of the PDDH, and immediately asking for the purchase of new pick-ups for her use in travelling the country.  For her part, Caballero de Guevara has denied the allegations of favoritism.

Sunday, October 02, 2016

This war now has a refugee camp

Nina Lakhani, writing in the Guardian, has a story of a makeshift refugee camp, which houses Salvadoran families forced to flee their homes because of gang violence:

A gloomy group of men and women watch in silence as a truckload of armed soldiers slowly drive past the basketball court where they are living in makeshift plastic shelters. 
This encampment in Caluco, a small town 40 miles west of the capital, San Salvador, is home to about 70 people from a nearby farming community, forced to flee their homes after a recent escalation of gang violence. 
It is El Salvador’s first camp for internally displaced people since the 12-year civil war, when an estimated one million people were forcibly displaced and 80,000 killed.... 
The Caluco camp serves as the latest stark warning that extreme violence is again displacing huge numbers of Salvadorans, forcing entire families to leave home in search of safety.
Read the rest of the story here.