Caribbean & Central America - August 2013 (ISSN 1741-4458)

In June US Deputy Assistant Secretary of State for Western Hemisphere Affairs Liliana Ayalde paid a visit to San Salvador to evaluate the implementation of the US’s Partnership for Growth (PFG) programme in the country. El Salvador was the only Latin American country and one of four countries world-wide to be included in the PFG – one of various initiatives announced by President Barack Obama during his historic March 2011 visit to El Salvador. Ayalde’s visit, during which she highlighted that the US had earmarked US$91.2m for the five year plan and affirmed bilateral ties, is the latest sign of the strength in relations between the US and its traditional ally in Central America.

The PFG aims to rapidly expand broad-based economic growth in El Salvador through addressing crime and insecurity and low productivity in the tradables sector –considered the two restrictions to El Salvador’s anaemic growth (1.6% in 2012, the lowest in Central America). It is just one area of bilateral cooperation to have taken place under El Salvador’s first left-wing Frente Farabundo Martí para la Liberación Nacional (FMLN) government which took office in June 2009 led by President Mauricio Funes. It shows that concerns raised ahead of the 2009 election by US government and former government officials, who warned Salvadorans about the potential consequences should they elect an FMLN presidential candidate, failed to materialise. These concerns stemmed from traditional animosity between the FMLN and US prior to Funes’ election, evidenced in disagreements over issues like the Dominican Republic – Central American Free Trade Agreement (DR-CAFTA), dollarization, Cuba and Venezuela, Salvadoran troops deployed to Iraq and privatizations. Aside from the fact that Funes was an independent and a moderate, elected on the FMLN ticket, the US government’s willingness to work with the FMLN also changed with the 2008 election of President Barack Obama.  

From the start the US indicated a readiness to work with the new FMLN government – as was clear by then secretary of state, Hillary Clinton’s, attendance at Funes’ inauguration. President Obama then invited Funes to the White House in March 2010 to discuss a variety of bilateral and multilateral economic, political, and security concerns. Funes also met Secretary Clinton in Washington, D.C. in September 2010. Finally, the importance of relations between the US and El Salvador were further cemented with President Obama’s historic March 2011 visit to El Salvador.

Outside of Colombia, El Salvador has been one of the US's strongest regional allies. Salvadoran troops were deployed to Iraq in 2003 and its last soldiers did not return home until 2009. While President Funes re-established diplomatic relations with Cuba shortly after his inauguration [RC-09-07], he has done little more than that to improve relations with the communist island. Instead, he has strengthened political and economic ties with the US, including sending a small contingent of non-combatant troops to Afghanistan in 2011, and accepting the transfer of two Uighur detainees from Guantanamo Bay in 2012. When former president Manuel Zelaya (2006-2009) was illegally removed from the Honduran presidency in June 2009, the Funes and Obama administrations coordinated their responses to the coup. President Funes supported US diplomatic efforts to resolve the crisis, initially including Zelaya’s return to the presidency, and then with the US’s decision to move forward with the election of Porfirio Lobo even though doing so was not popular within the FMLN and within the region. The US and Salvadoran governments also do not consider legalization or decriminalization an appropriate alternative to regional drug policy.

• Continuing trade and investment cooperation

In 2004, the US and El Salvador entered into a preferential trade agreement through DR-CAFTA. Two years later, the US awarded El Salvador a five-year US$461m Millennium Challenge Corporation Compact. The five-year investment was designed to develop the northern border region where over 50% of the population lives in poverty. The investments included technical assistance and financial services to farmers and rural businesses, education and training to improve public services in poor communities, and the rehabilitation of the Northern Transnational Highway. The Compact was signed by the right-wing Alianza Republicana Nacionalista (Arena) government of President Elías Antonio Saca (2004-2009) and completed during Funes’ fourth year in office. The Compact’s success led to the ongoing negotiation of a second five-year US$270m compact to promote coastal and maritime development to improve ports and airports, increase access to water, electricity, and education, and develop a tourism and communications hub.

Points of contention

Like any partnership, the US and El Salvador have not always seen eye-to-eye. El Salvador’s national assembly approved the US-backed public private partnership law (the "P3 Law") in May last over the strong objections of public workers and much of civil society. In mid-2012, a constitutional crisis erupted over the appointments of five supreme court justices which its constitutional chamber (Sala IV) found unconstitutional. While President Obama and his administration encouraged President Funes and the parties involved to find a politically and constitutionally acceptable solution to the crisis, US congress members blamed the FMLN for the crisis and threatened to withhold the second MCC Compact if they did not abide by the court’s ruling This stand-off which eventually saw the legislature back down [RC-12-09], followed a 2011 crisis brought about by Arena and other right-wing parties’ passage of Decree 743 which would have weakened the constitutional chamber. The bill was signed into law by President Funes before pressure from civil society and the international community led the legislature to repeal it.  

Another point of contention was President Funes’ appointment of Manuel Melgar, a former left-wing guerrilla, as his justice & public security minister. The US holds Melgar responsible for a 1985 attack that killed four off duty US military personnel and eight civilians and allegedly pressured Funes into replacing Melgar as a condition for the country receiving PFG assistance – which he did in November 2011. Melgar’s appointment hindered security cooperation with the US while his removal worsened Funes’ relations with the FMLN. Funes then appointed retired general David Munguía Payés as his new security minister – an appointment criticised both by the FMLN and civil society as it threatened both the spirit and the letter of the 1992 peace accords which had removed the military from overseeing public security functions. In 2013, the constitutional chamber ruled that Munguía Payés’ appointment was indeed unconstitutional and he was replaced although he has since been drafted back into the cabinet, as defence minister (see sidebar) As justice & public security minister, Munguía Payés was responsible for spearheading a March 2012 truce between country’s two main gangs, MS-13 and the M-18, which cut homicides rates by roughly half. However, the US remains sceptical and appears to be pursuing its economic and security policies towards El Salvador as if the truce does not exist.

For the last thirty years, the US has developed working partnerships with Salvadoran administrations led by the Partido Demócrata Cristiano (PDC) (1984-1989), Arena (1989-2009), and the FMLN. Approximately two million Salvadorans live in the US, sending home nearly US$4bn in remittances each year; the US is El Salvador’s most important trading partner both in terms of exports and imports; and, according to the Global Attitude Project of the Pew Research Center, Salvadorans maintain more favourable views of the US than any other people in Latin America. Yet policy differences between the US and the FMLN old guard persist while US embassy cables released by Wikileaks indicate US concern about alleged corruption which took place under Saca – who remains a strong contender for the 2014 presidency (see sidebar). As a result, there is every likelihood that US-El Salvador relations could undergo significant changes with a victory by the FMLN hardliner, Salvador Sánchez Cerén or Saca in 2014 and/or with a Republican Party victory in 2016.

• Polls

A survey published on 21 July in conservative daily El Diario de Hoy showed the FMLN’s Salvador Sánchez Cerén topped the poll for the first time since announcing his candidacy last October, with 29.9% of voting intention. Arena’s Norman Quijano, who had a huge lead in early polls six months ago, was second on 28.9%, with former president Tony Saca (2004-2009), who is running for the centre-right coalition Movimiento Unidad, on 27.7%. The survey interviewed 1,204 people nationwide between 6-9 July and had a 3% error margin.

• Munguía Payés

On 12 July President Mauricio Funes swore-in General David Munguía Payés as his defence minister, replacing General José Atilio Benítez, who stepped down unexpectedly earlier that day. Munguía Payés returns to the post he previously held between June 2009 (when Funes first took office) and November 2011, before he was controversially moved to head up the justice & public security ministry. His reappearance in the cabinet came amid fears that the truce between the country’s mara gangs – in which Munguía Payés was considered to play a key role - was in danger of unravelling after a spate of homicides at the turn of the month.