Labor Movement Leads Fight Against US Backed Privatization


This year on International Workers' Day, May 1, over 70,000 workers, campesinas, students, and union members poured into the streets of San Salvador to rally for the rights of the working people of El Salvador. Demonstrators united to express resounding opposition to a law introduced by the Funes Administration and heavily supported by the US government – the proposed Public-Private Partnership law (PPP). Francisco Garcia, Secretary General of the Public Pension Workers’ Union (SITINPEP) decried the law, saying it will have the same effects as privatization: higher costs, reduced services and worse working conditions for the people of El Salvador. Medardo Gonzalez, Secretary General of the FMLN, declared for the first time that the party will vote against the proposed law. Back in late 2011, President Funes' Technical Secretary Alex Segovia presented the Public-Private Partnership Law to the Legislature. The law proposes a legal framework to contract private investors and companies to run public industries and also allows companies use their own goods to sell public services. While it has been touted as a new way of financing public services and improving efficiency of the public sector, Salvadoran labor leaders say that the law is just privatization by another name. they also claim that the initiative comes at the behest of the US government, which continues to push a neoliberal economic agenda on El Salvador. The law was crafted with input from the World Bank, the US Treasury Dept. and the Salvadoran Economic and Social Council (CES) which is purportedly made up of representatives of the public, private and labor sectors. However, members of the largest union coalition, the Salvadoran Union Front, claim that the “labor leaders” on the CES do not represent workers, and are in fact the representatives of right-wing shell unions. In the case of the PPP law, costs of the public-private partnerships would be included in the annual budgets of municipalities and ministries, which are approved by the Legislative Assembly. Once every three years, these partnerships would be evaluated to ensure they do not exceed 5% of the GDP. Instead of reducing state expenditures, the already cash-poor government, and thus, the people of El Salvador, would be footing the bill for local or foreign businesses to manage their public services. In addition, concessions of public services in the form of self-sustaining contracts allow private companies to set the prices of the public services that they provide. The unfortunate history of privatization in El Salvador, from telecommunications to electricity, has shown skyrocketing prices across the board in these formerly public utilities. Two US-initiated economic agreements with El Salvador are either openly or tacitly endorse the PPP. The first is the Partnership for Growth (PfG), a signature effort of Obama's new economic development policy. PfG economic analysts claim that the nation's security situation is the greatest limitation to economic growth. Consequently, the PfG has done little for El Salvador’s development besides call for boosted, repressive security measures. However, the program’s Joint Country Action Plan has outlined a major goal of spurring foreign private investment, partly through US support for enacting the Public-Private Partnership law. This past February, El Salvador also sealed the deal on a second round of projects with the Millennium Challenge Corporation (MCC), which is an example of a US public-private partnership for development. The first projects of the MCC, nearly complete, were to construct the Northern Longitudinal Highway and connect other roads in the north. Unions have denounced the MCC and the foreign companies contracted by MCC for ignoring the bargaining agreements between the construction union and the national guild of construction companies, which foreign companies are supposed to honor. El Salvador’s ports and airport are the MCC’s new targets. The proposal is to create an industrial corridor between the Acajutla Port, Comalapa International Airport, and the La Union port, which would allow transnational companies more efficient transportation of goods through Central America. Currently, the completion of the La Union port is held up in the Legislative Assembly. The FMLN has argued to keep public control of the port, while the right wing parties would concede most of it to foreign interests. The PfG publicly supports the right wing position and its Joint Action Plan states that the US government will back the concession of the La Union port and work to attract “world class operators” for the ports and airport.Salvadoran unionists have rallied against privatization before, and with great success. In 2002, a strike of health care workers led by STISSS, a health care workers union, and SIMETRISSS, the doctors union, helped block privatization of health care. Today these unions are again gearing up to defend their public services. This year at the May 1 march, the STISSS carried a banner that read: “No More ARENA Privatizations in the Country, Not in Social Security, Not in the Geothermic Energy Company, and No Public Partnerships with Thieves!” Although the labor movement can count on the FMLN to vote against the PPP law in the National Assembly, the right wing parties have enough seats to pass the law by a simple majority. This means that the biggest battle against the Public-Private Partnership law will be waged in the streets by the grassroots organizing efforts of the unions, social movement organizations and the FMLN, pitted against Funes’ economic team, the Salvadoran and transnational business elite, backed by the US government.

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