U.S. Helps Push Privatization Scheme in El Salvador

Published on Saturday, April 20, 2013 by Dollars & Sense
U.S. Helps Push Privatization Scheme in El Salvador
A cross-border fight erupts against a public-private partnership law.
by Hilary Goodfriend

Unions in El Salvador are on high alert, fighting a privatization scheme that has the full weight of the U.S. government behind it. Led by the Salvadoran Union Front, a militant coalition of public- and private-sector unions, workers are mobilizing against a proposed Public-Private Partnership (P3) Law, drafted by Salvadoran President Mauricio Funes’ office with U.S. Treasury Department assistance. The law is an initiative of the bilateral development agreement called the Partnership for Growth, which the U.S. Embassy in El Salvador calls a “signature effort of President Obama’s development policy.” With everything from ports, airports, and roads to municipal services and higher education on the auction block, the P3 law threatens public-sector workers with layoffs, wage cuts, and union busting. In the face of aggressive U.S. pressure for the law’s passage, Salvadoran workers are counting on international solidarity to protect their jobs and defend state services.

“For us,” says José Alberto Cartagena Tobias of the SITEAIES airport workers union, “a public-private partnership is nothing more than privatization.” Workers like him know firsthand the cost of privatization. After state banks, telecommunications, electricity, and pensions were sold off under the right-wing Nationalist Republican Alliance (ARENA) administrations of the 1990s, labor conditions plummeted. Five thousand workers were laid off at the telecommunications company, and those remaining saw salary reductions, the loss of seniority, and their union dissolved. Nearly 1,000 workers were laid off at the Acajutla port following privatizations in 2001; dock workers’ daily wages dropped by 90% and their union was dismantled. At the airport, security, cargo, and cleaning services were privatized that year; these workers now earn $240/month, while the unionized airport workers earn a minimum of $552/month.

Soaring utility rates and rising unemployment soon turned public opinion against privatization. In 2003, 150,000 Salvadorans took to the streets to shut down ARENA President Francisco Flores’ attempt to privatize the health-care system; little has been privatized since.

Today, the U.S. government and Salvadoran economic elite are trying a different tack. The new strategy, explains Gilberto García of the Center for Labor Study and Support (CEAL), “appears more ‘lite’.” The P3 Law is designed to shield new contracts from the controversies that damned past concessions. Currently, all privatizations and concessions require legislative approval. The proposed law, however, would create a body in the executive office to approve concessions, with many contracts bypassing the legislature entirely. And the bill is more generous to corporate bidders than it is to state budgets; for larger concessions requiring legislative approval, a bidding corporation would be guaranteed a 1% return on bid value if debate extends past 45 days, or if the bid is rejected. Furthermore, equal-treatment stipulations ensure a major bidding advantage for transnational corporations, which generally have more capital than local companies. Workers like Cartagena fear that with concessions funneling former sources of state funding into foreign bank accounts, vital social programs will inevitably suffer: “The few resources that remain with the State will be in private hands—people who come from other countries to exploit (us) and then take our money who-know-where.”

More:
http://www.commondreams.org/view/2013/04/20-1