Keynote address to the Nassau Institute/Atlas Economic Research Foundation conference, Taking Small Nations to Greatness, Friday, June 9, 2006.
In 1972, the more radical sectors of the communist movement decided that conditions were ripe for an armed insurgency in El Salvador. These isolated groups were greatly stimulated by the Sandinista victory in 1979 in neighboring Nicaragua. A year later, under the direct command of the Castro regime, the approval of the Soviet Union, and the logistical compromise of the Sandinistas, the various guerrilla movements were integrated under a unified movement. The FMLN (Farabundo Marti para la Liberacion Nacional) was officially born in Havana in 1980.
The Reagan administration decided to help the Central American governments to stop the communist takeover of the region. El Salvador became from 1979 the last armed scenario of the Cold War. When the Berlin Wall fell in November 1989, support for the guerrilla movement dwindled until their central command decided to accept the government’s offer to end the war through a negotiated peace. The peace treaty was signed in February 1992.
El Salvador was destroyed by 13 years of armed conflict. Every Salvadoran family had to mourn the loss of at least one of its members. In one of the greatest diasporas in modern history, one third of the population fled to neighboring countries. Our streets were filled with beggars due to the brutal impoverishment of our campesino families.
The Pan-American Highway, the main artery that articulates the country from our borders with Guatemala and Nicaragua became in many stretches a dirt road.
Power shortages were the norm, families waited for the few hours at night when they could use electricity in their homes. The state of siege suspended all personal rights from 6 pm to 6 am. Anybody in the streets could be shot without even an explanation.
Francisco Flores, Former President of El Salvador
Faced with threat of a growing guerrilla movement, the military junta that governed since 1979, decided "to steal the promises of the left" and implement a socialist state.
The disasters of the war were now compounded with a disastrous public policy. All properties greater than 240 hectares were forcefully expropriated. The banking system passed in its entirety to the government. Foreign commerce became a state monopoly through a law that prohibited any export not channeled through a government agency.
This generated unprecedented corruption levels, a paralysis of the productive sector, and a bureaucratic mismanagement catastrophe in key institutions.
In the middle of the war, a devastating earthquake destroyed the capital city.
Our overpopulated country, totally dependent on its weak agricultural exports, overburdened by a disastrous public policy, in the midst of a severe armed conflict, seemed hopeless.
And yet today, only fourteen years from the events I describe to you, El Salvador is a different country. It has slashed its poverty level by half, from 60% in 1992 to 30% today. Extreme poverty has been brought down from an alarming 30% to a 12%. Though any percentage in this category is inadmissible, El Salvador has achieved the highest poverty reduction rate in the Continent.
Twelve years ago, 25% of the population could neither read nor write. Today, it is 13%. Infant mortality was 45 per a thousand births. Today, it is 25.
During our term in office, everyday we advanced one kilometer in connecting our most isolated rural communities, everyday we built three schools, to educate our poorest children, everyday we built 106 new low income houses and every week we built a new health clinic.
After having interest rates around 30%, we have today the lowest interest rates in the region, 6.8%. Our new monetary policy and our strict fiscal discipline have earned us the coveted investment grade: shared in Latin America only by Mexico and Chile.
Of all the Central American countries, El Salvador is the first to reap the benefits of the Central American Free Trade Agreement with the United States.
Conditions in El Salvador have changed dramatically. Telephone lines have multiplied twelve fold. Vehicles have increased fourfold. Water supply and electricity are up 50% in the rural areas. It is now possible to acquire a low income house for $35 a month.
From a socialist dictatorship, we now have a vibrant democracy: a free and independent press, a true separation of powers.
What is El Salvador’s secret? What can explain this dramatic change in less than fifteen years?
I am convinced that it has to do with these four essential elements.
The first is responsibility. For decades, we Salvadorians transferred our responsibility to some outside source. El Salvador was poor because it was raped by the Spanish conquerors; it was poor because imperialism robbed its strategic resources. It was poor because developed nations imposed their commercial terms. It was poor because of multinationals, the International Monetary Fund, or the United States.
It was not until we faced the fact that it was we, and only we Salvadorians the ones to blame for the condition of our country, that we started constructing our solutions.
The first step is simple. We stopped blaming others.
The second step is a long term vision. A nation can not be constructed; a country can not find its path, without developing a vision that has the depth to resolve the country’s most severe problems that is practical enough to be applied in one and hopefully several presidential terms and has the emotional appeal to make every citizen feel that his aspirations are included.
El Salvador’s success is greatly due to the fact that its leadership took the time to construct a new political and economic model based on the concept of individual freedom. This implied a real democracy, an economic model based on everybody’s inclusion and a strategy to fight poverty constructed on the concept of creating new opportunities.
This serious and in depth work is the antithesis of populism. The restructuring that underdeveloped nations need, are never pleasing or popular. They demand courage and a willingness to accept political costs.
The third step is a new political ethic. To me the two most important dimensions of this are the purpose of governing and the purpose of political parties.
In 2001 we were faced with an astonishing rise in crime. As all of you know there are a thousand ways to justify this: from the violence inherited by a 13 year war to the gangs organized in Los Angeles. But all of you leaders that have had this experience know that in all probability an unexplained rise in crime are the result of growing corruption within the police force.
The solution is a tough one. Admit it publicly, pursue the policemen involved, and create an effective system to inspect their behavior.
In our case we fired one fifth of the police force. Did we create a crisis? You bet. But a few months later crime was at an all time low and we survived the political storm.
Governing is not an applause contest. It has ethical imperatives that demand honesty when facing problems. This is the first dimension of a new political ethic.
The second dimension has to do with political parties. In our country, political parties had become perverse filters. Instead of selecting the best members of society for leadership positions they valued party loyalty and political clientele over anything else.
The possibility of renewing our political leadership was precluded- over and over again, in every election; the same faces were up for the ballot.
It was necessary to create a new political instrument. The new party was conceptualized as a broad alliance to include every sector.
Its essential characteristic became evident when the founder of the party, facing great possibilities of success in the 1989 presidential election stepped aside, and instead did the job of selecting the best candidate possible.
President Cristiani was the first to further an economic model based on freedom, he negotiated the peace accord, effectively ending the war in1992, and developed the first cohesive strategy to fight poverty.
Two years ago our party won by a landslide the presidential election. In Latin America a fourth consecutive term won by the same party in free elections with the same vision is to my knowledge a political phenomenon that has only happened in El Salvador.
When I finished my term, I asked all the members that had accompanied me in the party’s directory to resign. Every single political instrument that allowed me to influence our mayors, or congressmen I willingly turned over to the new team. I did this out of a conviction that permanent renewal is El Salvador’s strategy for success.
Societies are open projects that must evolve continuously. One way to insure this positive dynamic is to open spaces for new, young leaders. Youth are more in tune to the future; they have less complicity with the past. They have a greater share of energy and idealism, which are precisely what political parties mostly need.
To conclude this third step, I will say that a new political ethic is necessary to successfully implement the deep transformations underdeveloped nations need.
The fourth element is the most important. I mean patriotism. Those of you that are entrepreneurs understand that there is nothing more practical than being a patriot. Just make sufficiently long termed business projections and you will find yourself face to face with your country.
For us in El Salvador this realization came in its most dramatic form. When everything seemed lost, we decided to defend our country, that tiny corner of the world that destiny had willed was our home.
We defended it and built a new nation.
After what we lived in El Salvador, I will take the liberty to exhort you: take care of your country. Do not take it for granted. Like ours it might be at risk.
Our country is like the air we breathe. We aren’t even conscious that it exists. But if we were to lose it we would asphyxiate in a world without meaning, for we would lose our roots and our memories.
So even if the danger is such that you must find other ways to fight for it …do so.
This from someone that has fought for his country has had the joy of seeing it reborn and carries proudly the scars of having done his responsibility.
Responsibility, a long term vision based on freedom, a new political ethic and a strong patriotic sense are the four elements that made our small nation great.
Thank you very much.
Former Presdient of El Salvador Franciso Flores is president of the America Libre Institute
The views expressed are those of the author, and not necessarily those of the Nassau Institute (which has no corporate view), or its Advisers or Directors.
Want to blog about this post? Check out WeblogBahamas.com
