The Diplomatic Letter: Mr President, your victory in the 21 May 2004 presidential election gave the ARENA party its fourth consecutive term in the executive office. Why do you think Salvadoran voters have continued to place their trust in your party? With your journalism training and young age, do you hope to infuse fresh momentum into El Salvador’s development process?

Elias Antonio Saca: As you know, in addition to my duties as the President of the Republic, I am also the Chairman of the ARENA (Nationalist Republican Alliance) party, which brought me to power and has governed the country since 1989. I consider ARENA to be a democratic party. It welcomed the renewal of its political platform as well as its leadership, setting an example for other parties and for the region as a whole.

Our party is constantly renewing itself, as we blend the invaluable experience of our better-known figures with the force and energy of our younger members.

ARENA is a more humane party than ever, with a close bond to El Salvador’s citizenry. It champions an important social vision that has enabled us, with the support of the government I preside, to resolve the problems of the most destitute Salvadorans.

We are forging new opportunities for our people, proving that the Left does not have a monopoly on social concerns.

We are fostering good governance and friendly relations between the sectors responsible for helping advance a shared global vision for our country.

Salvadorans understand this full well, and have come to consider us the only force truly capable of governing the country. We are creating a new dynamic, founded on our openness to the rest of the world, which will generate new trade opportunities that we must put to good use. I am thinking of the free-trade agreement with the United States of America, as well as accords with other regions.

T.D.L.: Thirteen years after the end of the civil war that tore apart your country from 1980 until 1992, the Salvadoranpolitical scene has been stabilized. Could you describe the key changes in Salvadoran society over the past decade? Do we still see the wide social inequalities that sparked the ideological battle at the heart of the civil war?

E.A.S.: El Salvador has undergone a wide-reaching political, economic, and social transformation since the peace agreement was signed. A special institute has even been created to ensure that human rights and basic freedoms are respected.

The Institute for the Defense of Human Rights, which grew out of the peace agreement, sees to it that these rights are protected. Its operating budget was increased for the current fiscal year, to further the work it is doing to help society as a whole.

In accordance with the terms of the peace agreement and our Constitution, the mission of our armed forces has been redefined. El Salvador’s armed forces now have one single role: protecting our sovereignty and territorial integrity. There are exceptions for special cases, wherein the President of the Republic can use the armed forces to bolster public security functions, in a specific situation. The number of troops has been cut in half, as called for in the 1992 peace agreement. As our armed forces are being modernized, they are being deployed to support various social activities, to the good of the people.

The National Civil Police is another institution that has been established since the peace agreement was signed. It was created as a public security corps, under its own legal regime. It is not tied to the armed forces, but operates under the authority of civilian government officials. Given its delicate mission, a police monitoring service evaluates corps members on a regular basis, issuing recommendations on ways to improve operations at the institutional level. The ranks have thus been purged on a regular basis since 2000.

El Salvador has managed to build a stronger democracy and reinforce the rule of law, thanks to pluralist participation by civil society along with our political class, while respecting freedom of speech as well as economic liberties. This is underscored by the conformation of the Legislative Assembly, in which the full range of viewpoints are now represented (ARENA, FMLN, PCN, PDC, and CD).

In addition, Salvadoran civil society is now laying a key role in the governmental decision-making process, working through round tables organized in conjunction with the Presidential Representative for Governance.

T.D.L.: You have made enhancing social protections one of your key priorities, starting with your plan to reform education. What more needs to be done to help reduce the gap between the rich and the poor in your country?

E.A.S.: Our social agenda is the driving force behind the government’s “secure country” plan. The government of El Salvador is making tremendous efforts to reduce poverty. It has launched the “Opportunities Program” to fight extreme poverty. The many activities undertaken to spur local development include: heightening competitiveness and fostering the creation of more micro-, small- and medium-sized businesses; strengthening social and family networks; and revitalizing the agricultural sector.

The Common Health Fund (FOSALUD) was created to call greater attention to the most destitute Salvadorans. We have made improvements in the services provided by the Salvadoran Social Security Institute and the Ministry of Public Health and Social Welfare, which now provide services around the clock.

We have launched a historic education reform called the 2021 National Education Reform Plan. English will now be taught in our schools, in order to broaden employment opportunities and raise the overall quality and level of the education received by Salvadorans. In like manner, we are banking on information and communication technologies, to improve the quality of vocational training. We have instituted more stringent requirements for obtaining academic degrees, in order to build a skilled work force and fill the jobs generated in the future.

We have created a Secretariat for Youth, to meet the needs of our young people. It organizes career orientation programs, as well as athletic programs. These activities are vital to the rounded development of El Salvador’s children and youth, who are flocking to participate in these programs. By investing in our young people, we are helping to build better conditions for the future, reduce poverty, and create a skilled work force.

T.D.L.: The “Iron Fist” crime-fighting plan, one of the key elements in your global action plan, is a response to the growing security threat from “Maras,” El Salvador’s famous youth gangs. Could you summarize the key measures in this plan, and the headway that has been made in curbing gang crime and reinserting gang members into society? The Maras were born the United States. Is your country cooperating with Washington to limit the expulsion of Salvadoran immigrants with gang ties?

E.A.S.: The “Iron Fist Crime-Fighting Plan” is one of the nation’s main actions for combatting gangs, enhancing violence prevention, and reeducating and reintegrating at-risk youths and youths in trouble with the law. The plan was set up to fight gangs, whose ranks have swollen to an estimated 10,500 members. Let me stress that we have made considerable progress in this arena.

In June 2004, the Legislative Assembly approved reforms to our penal codes, penal process, and laws pertaining to minors, enabling judges to apply the “Iron Fist” to juvenile offenders.

According to a 12 November 2004 report evaluating the strides made under the “Iron Fist Crime-Fighting Plan,” over three thousand individuals have been arrested. The report also found that the deployment of anti-gang groups has helped to prevent these criminal bands from committing a great number of crimes.

We have adopted regional measures for combatting Gangs. Gang members are now being persecuted in several Central American countries, driving them to take refuge in other countries. We therefore felt it was important to lay out a regional strategy for thwarting gang-related crimes.

To that end, at the XXIII Central American Presidential Summit, held in Belize on 19 December 2003, our countries agreed to draw up a regional strategy for combatting gangs, which must by approved the Central American Security Commission. During the summit, El Salvador and Honduras signed a “Declaration on Jointly Combatting Criminal Gangs or Maras.”

The presidents of El Salvador, Guatemala, Honduras and Nicaragua signed a “Joint Declaration on Gangs” during the January 2004 inauguration ceremonies for the President of Guatemala, Oscar Berger. Back on 19 February 2003, the “Declaration by the Governments of Panama and El Salvador on Jointly Combatting Criminal Gangs or Maras” was signed during an official Salvadoran visit to Panama, initiating joint cooperation in the penal and law enforcement arenas and making it easier to eradicate illegal organizations and associations.

An initial assessment of this plan shows that we have made progress in several areas, including: better information exchange; stronger cooperation between our national police institutions using better coordination mechanisms; greater ability to identify different kinds of crimes and the sphere of gang activity; and improved systems for monitoring expelled criminals.

The first International Gang Conference was held in San Salvador from 21-24 February 2005. The United States’ key security, law enforcement and migration agencies attended this summit, along with the Chiefs of Police of El Salvador and Central America. We presented the “Iron Fist” plan at the summit, to share El Salvador’s experience with other Central American countries and help further the fight against gangs in the participating countries.

It was agreed during the conference that El Salvador would serve as the control base for attacking this problem, and would host our annual meetings. We also agreed to enhance communication between El Salvador and the United States, and to create a mechanism for exchanging statistical data on deported criminals entering El Salvador.

In addition to fighting gangs, we have also instituted the “Mano amiga” (Friendly Hand) plan for gang members wishing to voluntarily reintegrate society. The National Council for Public Security and the Ministry of Youth are working in partnership with other government institutions on this project.

To promoter social prevention of violence, the Anti-Violence Plan put forward in July 2004 will benefit 50 different communities across our country, and over 50,000 youths. The goal of this project is to encourage more young people to play soccer and basketball, as a way of preventing violence in our country’s poorer communities.

The Ministry of Youth, the Interior Ministry, the National Public Security Council, the National Sports Institute, the National Police Force, and various City Councils are all involved in implementing this strategy, which is called «Deportevias.» The aim is to take back public spaces and make them available to the community, in particular young people. Schools in the affected areas are also involved in carrying out this plan.

Our Government took also measures for rehabilitation and social Reinsertion. In June 2005, the National Public Security Council (CNSP) launched a project that created the first reeducation farm for offenders. For its initial run, this institution is working with 20 individuals who will be confined there during the first stage of the program, which will last from six months to one year.

The goal is to keep the youngsters occupied all day long working the fields, raising pigs, working in the bakery, and running industrial equipment, with the aim of preparing them for a useful career. Schools around the farm will open their doors to the inmates, to help them catch up academically. They will take reading and writing classes and other basic courses at the farm. They will also receive spiritual training, to help boost their self-esteem.

El Salvador has also launched the “Secure Central America” plan, as part of a regional initiative by the Central American Integration System (SICA). This strategy fosters social prevention of violence as well as the reeducation and reinsertion of at-risk youths or youths already in trouble with the law.

On 25 October 2005, the Deputy Foreign Affairs Minister for Oversees Nationals, Margarita Escobar, the Deputy Minister of Public Security, Rodrigo Avila, and the Director General for Migration and Aliens, Jorge Santibanez, traveled to the United States to meet with officials from the State Department, the Justice Department, and the Office of Homeland Security, with the following objectives:

– Identifying mechanisms that improve the monitoring of deported persons who pose a threat to society.

– Exploring the possibility of signing a bilateral extradition treaty, to ensure that persons who have committed crimes in the US serve out their sentences.

– Fostering wider exchange of experiences and information, to improve police monitoring mechanisms, bolster measures for monitoring expelled criminals, and decrease their impact on crime rates in both countries. – Sharing our findings on new sorts of crimes being committed by these gangs. This is important because of their close involvement in crimes linked to organized crime, drug sales, the trafficking of weapons and human beings, and turf control, among other things.

E.A.S: Money transfers from Salvadoran immigrants do, indeed, account for 15% of GDP. They have a very positive impact on our economy. Money transfers, coupled with the diversification and expansion of Salvadoran exports, have helped generate the resources needed to develop our country. And while these funds are not generated by our own economic machine, we have set up new mechanisms to channel them into productive activities and investments. They are thus helping to create new jobs in rural areas, and are fostering the development of all of the country’s different regions.

The 2001 Monetary Integration Law did much more than put the dollar into circulation. It allowed Salvadorans to take advantage of a stable currency that inspires trust, not just because of its origin, but because of El Salvador’s successful management of its economic policy, as acknowledged by numerous international institutions. Making the dollar legal tender did not put a brake on our economy, but just the opposite. Several countries have shared the benefits from this measure, which has eliminated exchange risk and devaluations, among other things.

As regards inflation, El Salvador is one of the countries with the lowest inflationary indexes, not only in Central America but in all of Latin America.

El Salvador is fully aware that something must be done to help make our exports competitive. Despite that fact, we have not resorted to measures that would prove untenable in the long term, such as “competitive devaluations.” We have instead opened up credit lines to increase production, improve quality, and reduce costs, with an aim to heightening productivity and competitiveness.

T.D.L.: As an advocate of an open, free-market economy, you have tried to attract more foreign investors to El Salvador. Several projects designed to revamp the country’s infrastructures are already underway. What advantages does El Salvador offer as an up-and-coming regional investment hub? Will the ratification of CAFTA, the regional free-trade agreement with the United States, open up new opportunities in this arena? How do you account for the fears the liberal development model has sparked in your country and in Latin America in general?

E.A.S.: El Salvador has always believed that a free system is an excellent model for our national economy. This is why the State must remain focused on its priority goals, and must bolster markets by setting up mechanisms that generate the resources we need. This will help to build a suitable and flexible framework for both Salvadoran and foreign entrepreneurs looking to invest in our country. El Salvador is not simply trying to draw in new investors. It is looking for strategic associates, realpartners, with whom we can create new opportunities. We have focused on public networks and primary port and aviation infrastructures, as well as assistance in setting up companies spread out across the region.

In addition to procuring a favorable macroeconomic climate, a modern legal framework and suitable partners, El Salvador is also interested in breaking into new markets in order to broaden the opportunities for entities investing in our country. Working out of El Salvador would give them access to all of Central America, Mexico, the Dominican Republic, Chile, and Panama, and, as of late, the United States of America. El Salvador could become a key logistics hub from which they could reach the more than 400 million people who live in the various countries with which we have signed trade agreements.

The number of countries looking to invest in El Salvador has risen markedly since we signed a free-trade agreement with the United States. Other countries have already forged strategic alliances with Salvadoran companies. We expect the implementation of this treaty, scheduled for January 2006, to bear out this trend in coming years.

The issue of a “free-market” economy, “free trade,” and all the other widely used expressions, has always sparked heated debate and strong opposition. It has also supplied many examples where it has worked very well. That said, El Salvador is not tied to any one model. We are trying, instead, to adapt our model to our own realities, either by reinforcing it or by rectifying its deficiencies as needed. As far as we are concerned, El Salvador has posted moderate growth rates, which have been curbed by the slow growth of the global economy in recent years. We continue to make adjustments, nonetheless, to improve our own performance.

T.D.L.: The Central American Integration System (SICA) is based in El Salvador, one of the driving forces behind the regional integration process. The last Central American Summit was held in September 2004. What can be done to get this process moving forward again, to help reform supranational institutions, stabilize the region, and ensure its economic stability? What is your take on the ongoing political crisis in Nicaragua?

E.A.S.: Let me start by confirming my country’s pro-integration spirit. El Salvador is home to SICA headquarters. It has proved its desire, through both its actions and its efforts, to see the Central American integration process move forward quickly, and in the right direction.

We have made SICA even stronger. In addition to the seven permanent members, we now have: an associate state, the Dominican Republic; a regional observer, Mexico; and two outside observers, the Republic of China (Taiwan) and Spain. Nowadays, when we look at many parts of the world, we no longer see individual countries, but a regional grouping.

Our own customs union is moving right along. Several regional agreements have already been negotiated, as well as free-trade agreements. Most of the key issues, such as security, are being handled at the regional level. It should be noted that all SICA countries are working together, and are making tremendous efforts to keep the integration process moving forward.

As far as reforming institutions is concerned, 2004 was a very important year. An Ad Hoc Commission worked very intently on reviewing and prescribing reforms by the Central American Institute. Finally, on 15 December 2004, during the 25th Summit of SICA Heads of State and Government, held in San Salvador, our heads of state took a string of decisions. Some of them concern the Central American Parliament, others pertain to the Central American Court of Justice and other aspects of the system. Our main goal is to make Central American institutions more modern, more effective, and more efficient, as we believe that having adequate institutions is essential in order to keep the integration process moving forward.

With regard to the situation in Nicaragua, in recent months we have watched our sister country maneuver its way through an institutional crisis brought on by constitutional reforms that changed the balance of power between State entities, weakening executive power. El Salvador has kept a close watch on the events unfolding in Nicaragua, with great concern. The government of El Salvador has supported initiatives necessary to reestablish democratic order and restore the balance of power within the State, working through the Central American Integration System (SICA) and the Organization of American States (OAS). We insisted that a broad and constructive dialogue be opened between the concerned parties, in order to reach agreements that strengthen good governance and the rule of law, and bring this country greater stability.

We are very optimistic about the recent approval of the Framework Law that suspends constitutional reforms until 20 January 2007. We view this law as an outgrowth of an agreement between the concerned parties, who set aside their own claims in order to serve the common good of the Nicaraguan people.

T.D.L.: Should the implementation of interregional infrastructure projects, for instance under the Plan Peubla Panama, help to make Central America’s economies more complementary and thus boost trade and foster the development of the region as a whole?

E.A.S.: We are setting up “transport corridors” that cross the meso-American isthmus, electricity interconnections, and wide-band fiber optic cables for telecommunications. We are also working on projects that will make it easier to transport merchandise to harmonized border posts. We are putting together programs for more competitive corporate management on a meso-American scale. We are also working to create a regional tourism certification system and to expand both ethnic and cultural tourism. Development projects for rural farming have been launched, as well as projects to prepare SMEs to face stiffer competition. We have also taken steps to train civil servants how to implement more modern procedures, to improve management as well as productivity.

The expanded El Cimarron hydroelectric power plant, located in Santa Ana, will cover 15.3 km2. The feasibility stage is drawing to a close, thanks to help from France. Your country donated funds to complete the initial study, which was conducted by the firm Coyne and Bellier. We expect the plant to have a production power of 261 MW, putting out some 700 GWh/year, a 50% increase over current capacity. The plant is set to come on line in 2013, after four years of work. The estimated construction costs are US $404.8 million. This project, along with the interconnection of the region’s electric networks, will make it easier to distribute energy. There is a good chance that France will be involved in the various calls for tenders.

The government of El Salvador’s project to build a new La Union Port offers French firms great opportunities in two different arenas: managing the port, and purchasing the equipment needed to operate it. The expansion of the port will create a demand for tourism infrastructures and related industries. There is thus great potential here for French firms to get involved.

There will be enormous investment opportunities in other areas as well, such as cargo ship maintenance and repair, training institutes, and other related sectors.

According to CEPA (The Port Authority of El Salvador), three calls to tenders will be open to foreign firms: the contract for 2 tugboats, with a total cost between $6 and $7 million; a contract for two Panamax cranes, at a cost between $8 and $9 million; and the contract for managing the port.

The expansion of the El Salvador International Airport includes the construction of a new loading terminal, with estimated investment costs between $30 and $40 million.

The goal behind the airport expansion is to make a 10- to 14-hectare stretch of land available. The operator who wins the contract will be in charge of developing the facilities, procedures, technology, et cetera, for a period of 20 years.

T.D.L.: San Salvador and Washington have long enjoyed strong ties, cemented by the presence of a large Salvadoran community in the United States. Bilateral relations were bolstered even further when your country sent several contingents to Iraq. El Salvador is the only Central American country still involved in this conflict. Can tell our readers why El Salvador took this step? You met with President Bush on three separate occasions in just one year. What has prompted this heightened cooperation between your two countries?

E.A.S.: El Salvador has always had very close ties with the government of the United States, all across the board. The US is, after all, our leading political and trade partner.

In the political arena, we share the same democratic values and the same respect for human rights and the rule of law. We are carrying out joint actions on the political stage, focusing on priority problems such as the battle against terrorism, drug trafficking, and organized crime.

As far as migration is concerned, given that one out of four Salvadorans now lives outside our country, with most of them residing in the United States, joint US-El Salvador measures focus on implementing initiatives that ensure greater security and legal stability for our citizens, and guarantee that their rights are respected. After the 2001 earthquakes in El Salvador, the government of the United States granted Salvadoran citizens Temporary Protected Status (TPS), giving them temporary legal residence permits as well as work permits. US-based Salvadorans are thus helping to spur the development of the communities where they live, and at the same time helping to rebuild El Salvador and ensure the well-being of their own families by sending money back home.

In the economic arena, we continue to work on the implementation of CAFTA-DR, set for 1 January 2006. This treaty will make our countries’ economic, trade and investment ties more stable and more certain. It will generate brand-new investment opportunities in our region and give our products better access to the American market. It will consequently create more sources of employment and will help to foster the development and integration of the Central American region.

With regard to cooperation, El Salvador has put forward the idea that cooperating countries should take into account more than just a nation’s macroeconomic indicators. They should also consider local variations in human and social development indicators, and thus support the efforts of low-income countries. This could be seen as a reward for these countries’ efforts to strengthen their institutions and democratic systems, and combat poverty. The goal of this initiative is to gain recognition for the tremendous efforts these nations have made over the past 15 years, as well as the reforms they have enacted. The support of the international community will, of course, be absolutely vital.

Countries such as El Salvador cannot be treated in the same manner as developing countries like China, India, Mexico, and Brazil. In this light, we are counting on support from the United States within the World Trade Organization (WTO), to open up more space and create more flexibility, so that small economies can integrate themselves into the global trade chain. This will allow them to ensure a stable supply of jobs and even create new ones, and give them access to foreign investment.

It is important for multilateral financial institutions to recognize that there is simply not enough reduced rate or non-callable financing to foster the integration of low-income countries into the world trade system. There are loans available for this purpose, but the resulting increase in public debt is not being taken into account.

T.D.L.: El Salvador and France have forged strong cultural ties and heightened their industrial cooperation. During your June 24th visit to Paris, did you and President Chirac target specific areas where you hope to enhance cooperation and build even closer bilateral ties? Could you identify a few sectors, apart from the aeronautics industry, in which bilateral economic ties could be expanded?

E.A.S.: I discussed bilateral cooperation as concerns security, tourism, social development, and the fight to eradicate poverty in an interview with Brigitte Girardin, Minister delegate for Cooperation, Development and Francophony. I noted that El Salvador is one of the three Latin American countries that have the best chance of meeting their Millennium Goals with regard to education and health care.

Certain El Salvador-France trade figures already top $57 million, and could be increased even further by identifying new products. Strategic investments could also be made in key sectors such as automobile spare parts and technology, among others.

T.D.L.: In light of declarations issued at the Guadalajara Summit favoring the creation of a “strategic biregional partnership,” what role would you like to see France and the European Union play in Latin America? Would the signing of an association agreement between the countries of Central America and the EU help to build new synergieson both shores of the Atlantic, in particular between El Salvador and the EU?

E.A.S.: As we have seen, strengthening the strategic biregional partnership between the European Union, Latin America and the Caribbean has been one of the European Union’s key foreign objectives since the 1990s. The 3rd LAC-EU Summit, held in Guadalajara in May 2004, confirmed Europe’s commitment to strengthening its ties with Latin America and the Caribbean by reinforcing this strategic association. The European Union is indeed aware of the importance of playing a more active role in the different regions of the world, in a full range of arenas.

As concerns Central America, the biregional CA-EU partnership will bring a major change in the judicial framework that has governed relations between the two regions in years past. This new partnership will bring stronger, wider and more specific commitments, based on our shared aspirations and values in the political, economic and cooperation arenas.

In the political realm, El Salvador believes we should craft an Association Agreement that includes a free-trade accord, to improve and strengthen our preexisting ties. This can be done by establishing communication channels that not only allow us to exchange information, but also enable us to take shared stances, on both the regional and international stage, on issues of global importance.

When it comes to trade and economics, the Association Agreement must create a climate conducive to the exchange of goods and services between the two parties. It must also foster economic cooperation and the creation of new investment opportunities, in accordance with WTO standards. To do so, the agreement must take into account the existing imbalance in these regions’ development levels, and create a mechanism that gives them a stronger foothold in an ever wider, globalized market. This association would thus spark greater economic growth and heighten social development levels in both Central America and Europe.

With regard to cooperation, signing the Association Agreement will give us an opportunity to create new cooperation sectors and new cooperation tools, taking the unique interests of each region into account. This would give us the means to achieve our objective of boosting economic and social development in both regions.

In light of all of the above, El Salvador and Central America believe that being able to count on the support of France and the European Union is of utmost importance, in order to successfully meet our strategic bi-regional objective. Signing an Association Agreement that includes a free-trade treaty would afford Central America an invaluable opportunity to strengthen its integration and spur its economic and social development, as well as deepening mutual understanding.

With that in mind, support from France and the European Union is of strategic importance, so that we can officially announce the opening of negotiations on the Association Agreement between Central America and the European Union at the IV LAC-EU Summit, to be held in Vienna in May 2006.