Water safe from privatization for now, US continues pushing reforms to fast-track other concessions

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With the ink barely dry on the State Department's commitments to work with the incoming administration of Salvador Sánchez Cerén of the leftist Farabundo Martí Liberation Front (FMLN), US Ambassador Mari Carmen Aponte continues her crusade for privatization policy, intervening in El Salvador’s legislative affairs to promote corporate interests. Aponte has taken up lobbying efforts to urge the Legislative Assembly to approve reforms to the US-backed Public-Private Partnership (P3) Law, conditioning US development aid on the passage of the reforms package. The Ambassador insists the reforms are necessary to invest the pending $277 million Millennium Challenge Corporation (MCC) funds, claiming El Salvador’s investment conditions “are not totally mature yet.”

The P3 Law, which was originally drafted with US government advisors, opens up public projects to private concessions. The proposed reforms would reverse several elements that FMLN legislators had managed to include in the final bill to ensure it did not trigger a privatization free-for-all of essential public services. Presented by legislators from the right-wing Nationalist Republican Alliance (ARENA) party last December, the reforms are based on a proposal by the National Council for Growth, a body created by the US-El Salvador bilateral economic agreement, the Partnership for Growth, that joins government representatives with the country’s wealthiest businessmen.

At a March 24 forum hosted by the Legislative Assembly, representatives of the broad-based social movement coalition the Water Forum and FMLN legislators expressed fierce opposition to a reform that would make water vulnerable to private concessions after the FMLN had successfully excluded it from the P3 Law. “The FMLN is not in favor of privatizing our fundamental services,” said legislator Orestes Ortez of the leftist party.

Intent on passing the reforms as soon as possible, the Council for Growth unveiled a reduced list of recommended reforms the next day, abandoning plans to bring water back into the realm of possible concessions. The surviving reforms aim to minimize public debate around concessions and speed up their approval. One would change the current P3 legislation, which requires the Assembly first approve the terms of bidding and then approve the final contract, so that concessions would only require a one-stop legislative approval. Another would put supervision of the concessions into the hands of the president’s Investment and Exports Promotion Agency (PROESA), rather than an autonomous oversight body in the Ministry of the Economy. A third reform would increase the limit on how much debt the State can incur from any one concession from 1% of the nation’s GDP to 3%. FMLN legislator Lorena Peña pointed out that 1% of the GDP is already $245 million, nearly the same amount as the entire MCC project ($277 million).

The US Embassy’s shameless intervention in the Legislative Assembly’s affairs make the US’s true foreign policy aims all the more transparent. Ambassador Aponte is forcing legislation on the country to ensure that MCC funds are easily diverted into the pocket of private, transnational corporations, granting them greater access to El Salvador’s public services in the future, regardless of the party in power. As Aponte recently affirmed the Obama administration’s willingness to work with the incoming FMLN administration, she emphasized the need to advance bilateral programs “not only for the benefit of El Salvador, but also for the benefit of the United States,” but her latest actions seem to indicate that the primary beneficiary will be, as ever, a transnational corporate elite.

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