The U.S. and the Privatization of El Salvador » Counterpunch: Tells the Facts, Names the Names
As much of Latin America braces itself for the possibility of Venezuelan President Hugo Chavez’s death, observers around the world would do well to note the stark contrasts that exist within the region. On the one hand, there are the ALBA (Bolivarian Alliance for the Americas) countries, united by Chavez in their rejection of US imperialism and neoliberal capitalism. On the other hand, there are those countries which are still very much living under the hegemony of the United States. In El Salvador, this means subservience to Washington and international investors who seek nothing less than total control of that nation’s economic destiny. This attempt at economic monopolization can be summed up with one word: privatization. It is precisely this strategy with all the union-busting, wage gouging, and propaganda disinformation that it entails, that is rearing its ugly head in El Salvador.
Public-Private Partnership (P3) Law
The corporate-financier drive to privatize the Salvadoran economy has taken the form of the proposed Public-Private Partnership law which, if approved, would grant the government the right to sell off national resources, infrastructure and services to foreign multinationals. In effect, it would allow for the privatization of those sectors of the economy traditionally controlled by the state. As Gilberto Garcia of the Salvadoran Center for Labor Study and Support stated, “Essentially, they want to take a strategic service from the state in favor of a multinational.”i The ultimate goal of this legislation is not merely to cede control of state institutions to private interests, it is also to subvert and ultimately eliminate the power of organized labor and thereby reduce wages and the standard of living of working people in the country.
Public sector workers in El Salvador earn a minimum wage of $300 per month while their private sector counterparts earn anywhere between $187 and $219 per month.ii The drive to privatize is, at least in part, aimed and driving down the wages of industrial workers while maximizing profits for foreign investors. However, the law is aimed not only at lowering wages, but weakening the public sector unions on a fundamental level in order to prevent mass resistance to the implementation of the neoliberal policies that have been so destructive in other parts of Latin America and the developing world. Many of the public sector unions have mounted effective resistance to these sorts of policies in the past, therefore making them high-priority targets for corporate bosses seeking to transform the economy for their own benefit.
This transformation of the economy affects the working class and the poor most acutely. Not only is access to vital social services and resources reduced, but the prices are increased dramatically. One clear example of this is the privatization of much of the electrical distribution system in El Salvador back in 1996 which resulted in an average increase in price of 47.2% for the lowest-level consumers.iii Essentially then, the poor and working class of the country have to pay to subsidize the selling off of their own resources and services to powerful multinational corporations. It is for this reason that tens of thousands have begun mobilizing against this legislation and in support of organized labor. However, in order to fully appreciate the vast scope of this issue, one must understand the larger framework within which the P3 law was created.
The US and the “Partnership for Growth”
The Public-Private Partnership legislation is merely an outgrowth of the Obama Administration’s so-called “Partnership for Growth” bilateral agreement, signed with the Funes government in 2011. This agreement “embodies a key administration policy of seeking to elevate broad-based economic growth as a top priority of our development assistance, ensuring that our investments and policies are guided by rigorous assessments of how countries can achieve higher levels of growth,”iv according to Mark Feierstein, assistant administrator for the Bureau for Latin America and the Caribbean. Despite the innocuous diplomatic rhetoric, the bilateral agreement intends to create a climate conducive to foreign exploitation of the resources and services of a country that is, in many ways, entirely dependent upon the United States for its economic survival. It should be noted here that, on more than one occasion, the Obama administration ambassador to El Salvador, Mari Carmen Aponte, has threatened to withhold crucial aid if the Public-Private Partnership law is not enacted.v In effect, the Partnership for Growth lays the foundation for a dependent relationship in which the United States, acting as the benefactor, controls the direction and type of development that El Salvador is allowed to have.
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