Shafick Handal, 72, a hardline former guerrilla, will run for the leftist opposition party Frente Farabundo Martí para la Liberación Nacional (FMLN). His opponent, representing the ruling rightwing Alianza Republicana Nacionalista (Arena) is Tony Saca, 38, an entrepreneur and former president of the influential National Association of Private Enterprise (ANEP).
The campaign will be highly politicised as the two have diametrically opposed views: Saca favours pro-market policies and privatisation; Handal, attenuating the effects of what he sees as pernicious neoliberalism for the average Salvadorean citizen and restoring a greater degree of national sovereignty.
Both men coasted through their respective party primaries. Handal beat the revisionist-minded mayor of Santa Tecla, Oscar Ortiz, on 27 July; Saca trounced Vice-President Carlos Quintanilla.
Handal
Handal has been involved in politics since he was 14, when he joined a successful general strike led by students to oust military dictator General Maximiliano Hernández Martínez. He was later forced into exile twice and became head of the Salvadorean Communist Party, a faction of the FMLN in the civil war.
Widely perceived as intolerant and dogmatic, Handal brooks no dissent. In 2001, he dispelled the moderate factions of the FMLN led by Facundo Guardado. Far from weakening the party, as many analysts predicted, the FMLN went from strength to strength, riding high in the legislative elections in March this year.
Now, the FMLN fronts the polls for the presidential elections next March. Ironically, the election of Handal in the party primaries, though widely endorsed by FMLN members, could prove to be the party's biggest liability. While recent polls put the FMLN on about 40%, compared to 24% for Arena, no poll has been conducted since the party candidates became known. Handal himself had a disapproval rating of a daunting 42% in a nationwide poll back in February.
In his very first week as candidate, Handal stirred up controversy by vowing to create civil defence committees (similar to the Bolivarian Circles set up by Venezuela's President Hugo Chávez ) should he win the elections. These would protect him in the event of a coup.
Saca
Tony Saca, who started out his career as a sports commentator, went on to launch several private radio stations before rising to become the president of ANEP, where he oversaw the privatisation of the port of Acajutla and the national railway system. In August 2002, ANEP provided the catalyst for El Salvador's longest-ever strike (nine months): the putative privatisation of the public health system.
Saca's success will depend upon how well he copes with the stigma of a ruling party that has lost touch with the people. The reasons for Arena's loss of popularity are manifold: El Salvador's economic growth has languished on two percent or less for each of the past four years; crime remains a widespread problem and domestic violence and street gangs are a very real threat (see box).
Privatisation has been deeply unpopular. The dispute over healthcare was a divisive social and political issue. Social groups joined medical unions to oppose the government's entire neoliberal agenda. One demonstration, in December 2002, attracted 100,000 protesters in San Salvador, the largest turnout since the civil war.
The health system might be inefficient and inadequate but, for the public, privatisation has negative precedents in El Salvador. When the electricity sector was privatised in 1996, there was little improvement in the service and rates increased.
Then there is the dollarisation process. Benefits, in the form of low interest rates and greater ability to tap the capital markets, have not translated into less poverty. For much of the public this is the most reliable gauge of the success of dollarisation. Many argue that the cost of living increased after the US dollar was introduced in 2001 because the conversion rate prices (8.75 colones to the dollar) resulted in prices being 'rounded up.'
Tying Handal to a policy
On economics, Handal plays the anti-neoliberal tune being heard across Latin America. He said that the FMLN will focus on implementing a more egalitarian fiscal policy to benefit the poorest sectors of the country. He aims to do this, he says bluntly, by increasing taxes on the rich.
He also says that, if elected, he will encourage foreign investment. Some of his remarks are not, however, likely to endear him to foreign investors. He intends reviewing past sales of public companies, including those in the electricity sector.
Like many other Latin American leaders who got elected on such a platform, Handal will be constrained by fiscal realities if he assumes power. The Salvadorean economy is heavily dependent on remittances and bond placements in foreign capital markets to compensate for the decline in exports and increasing oil prices.
Remittances from the 25% of El Salvador's population that live in the US were by far the country's biggest foreign-exchange earner in 2002, covering 90% of the widening trade deficit in 2002. This climbed to US$1.94bn, from US$1.91bn in 2001 and US$1.75bn in 2000. This is because major traditional exports (coffee, sugar and shrimps) are struggling in the face of falling world prices and lower demand.
US-Cafta
Saca is committed to maintaining the country's dollarised economy and pursuing the US-Central American free-trade agreement (US-Cafta), which the ruling party expects to generate 180,000 jobs over 10 years to help reduce unemployment from about 15%. 'Are we going to have a future based on opening and stability, or on confrontation, and models that have been conquered and broken?' Saca asks.
Handal has sounded an equivocal note. Although he claims not to be opposed to the US-Cafta trade deal per se, he wants a much better deal for Salvadorean farmers. A key plank of his election campaign is to 'rescue and reactivate' the agriculture sector.
Whilst Handal says that the FMLN will not do away with the US dollar, he says that it will reintroduce the national currency, the colón. This could be a painful process. Only US$72m worth of colones were left in circulation at the start of the year, with 99% of the broad money supply (deposits, loans and pension assets) and 87% of the narrow money supply (notes and coins) denominated in dollars.
Realpolitik
Handal is, however, behaving with a certain amount of realpolitik. He has been keen to allay any lingering fears that El Salvador will lurch violently leftwards if he comes to power. Whilst he maintains that communism would be 'an ideal', he says 'it is not pursuable'.
He is also keen to build bridges with Washington. He speaks of pursuing a relationship of 'friendship and cooperation' with the US. An FMLN delegation was dispatched to the US to meet congressional leaders and representatives from the US State Department and the Pentagon recently in an effort to brush up the party's image (see RC-03-06). Washington distrusts the FMLN, and especially Handal, for his past as a guerrilla leader in the Salvadorean jungle during the 1980s civil war against the US-sponsored rightwing government.
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