What can President Obama do for El Salvador?

BY LINDA GARRETT*

President George Bush stopped for five hours in El Salvador to meet with his counterpart, President Francisco Flores during his 2002 Latin America tour. A year after that brief encounter El Salvador joined the “coalition of the willing,” sending its first contingent of soldiers to Iraq. Five Salvadorans died on the battlefield but the people of El Salvador received little in return for their contribution.

A decade later, President Obama plans an overnight stay in San Salvador where he and his counterpart, President Mauricio Funes will meet.

The seemingly intractable problems faced by Salvadorans – including economics, migration and security – cannot be solved by the United States but also cannot be solved without our help. So what can President Obama do – how can he act, what can he say – to help Salvadorans address these interrelated problems which afflict them but which also affect us here in the United States?

First, if the U.S. wants a more prosperous El Salvador, to preserve the country’s stability and as a hedge against migration, President Obama should consider wading into the political debate on tax and fiscal reform in El Salvador.

In 2009, El Salvador was rescued from near bankruptcy by the U.S. and international financial institutions, but the country cannot survive on credit and remittances from Salvadorans living abroad if it wants to create jobs and address the nation’s grinding poverty. El Salvador has one of the lowest tax rates in the hemisphere; there are no property taxes and, according to the UN, the wealthiest receive greater subsidies than the poorest.

Fiscal reform has been on the Funes agenda from his first day in office but after nearly two years, El Salvador’s private sector has refused to budge on tax reform, subsidies or corporate regulations. The biggest businesses seem to be playing for time; freezing economic activity and new investments, hoping Funes will fail, and counting on elections for the National Assembly in 2012 and the presidency in 2014 to return conservative government to power.

The Obama administration has been generous with political, financial and technical support including an innovative program designed to use anticipated remittances to leverage bonds for infrastructure and President Obama is expected to make important announcements of other initiatives during his visit.

President Funes has reached out to conservative political and business leaders, but the deadlock continues. The visit, and tactful intervention by President Obama could encourage investment and stimulate deeply needed economic activity.

Second, part of the solution to the immigration problem in the U.S. rests on creating economic opportunity in countries of origin, in this case, El Salvador.

Some 2.5 million hardworking Salvadorans in the U.S. send about $260 million per month to their families, almost 17% of the GDP. Meanwhile, hundreds of Salvadorans continue to risk the costly and increasingly dangerous journey north every month.

President Funes is perhaps the first leader of a people-exporting country to prioritize strategies to reduce emigration. “We want our people to stay,” he has often said, “but we must create opportunities.”

With comprehensive immigration reform still a distant reality, President Funes will reportedly ask President Obama to consider permanent residency status for the over 200,000 Salvadorans who currently hold temporary protected status (TPS). This will stabilize the living conditions of the beneficiaries and help ensure a steady flow of remittances to desperate families in El Salvador.

Creating opportunities for Salvadorans at home is clearly in the interest of both countries. Doing that, however, will require continued political, economic and technical commitment from the U.S. in addition to critical tax and fiscal reforms and local investment in El Salvador. Economic stimulation will not only create jobs but will allow the Funes administration to invest in social programs that will entice more Salvadorans to see their future at home.

Third, what drives migrants from El Salvador and further immiserates the population that stays is the country’s interwoven culture of crime, violence and impunity.

El Salvador’s homicide rate of 61 deaths per 100,000 in population is the highest in Latin America. Its citizens are so wearied by public safety concerns and debilitating poverty that 45.6% of the population, according to a recent survey, would be willing to sacrifice democracy to a military coup if that would solve their problems.

El Salvador and the U.S. both have a stake in fighting insecurity and redeeming the institutions of democracy that are currently overwhelmed by violence, organized crime, drug trafficking, gangs, corruption and impunity.

The Obama administration is proposing a regional security umbrella to oversee and coordinate other initiatives including Plan Mérida, Plan Colombia and CARSI, the Central American Regional Security Initiative, but must consider institutional credibility in each country. In El Salvador, while the government has made great strides in building professional, honest military and police forces, ongoing pressure and support from the U.S. will be necessary to purge corrupt personnel and end impunity.

This will mean a difficult but indispensable process of judicial reform, from top to bottom in El Salvador as well as support for the proposed UN-backed regional commission to investigate organized crime and strengthen judicial institutions throughout Central America.

Fourth, President Obama should look past his domestic critics in the U.S. – who incorrectly view President Funes and the party in power, the FMLN, as ideological soul mates of the radical Latin American left – and continue its close cooperation with the Salvadoran government which is and can be a real source of support for the U.S. and for stability in the region.

Much has changed in both countries since the 1980s when the U.S. backed the military and the rightist government against the left guerrilla movement. Building trust between former enemies presents challenges but doors are open and both governments agree: Looking to the future, not the past is in everyone’s interest.

El Salvador faces difficult economic, security and social challenges. The Funes administration is confronting them with an agenda designed to dramatically change people’s lives and reduce the flow of migration. Washington’s support has been intelligent and respectful. A bilateral partnership has developed that we hope will be a model, as President Obama said, “not as a senior partner or a junior partner but as a respectful partner for security, growth and prosperity.”

Linda Garrett Consultant, Center for Democracy in the Americas (310) 569-2711 -(202) 234-5506

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