With ARENA Fractured, Funes is FMLN's Only Rival

 

id: 245623

date: 1/26/2010 19:14

refid: 10SANSALVADOR37

origin: Embassy San Salvador

classification: SECRET

destination: 09SANSALVADOR1033|09SANSALVADOR1045|09SANSALVADOR1101|09SANSALVADOR1238|09SANSALVADOR789|09SANSALVADOR978

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INFO WHA CENTRAL AMERICAN COLLECTIVE

 

 

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S E C R E T SAN SALVADOR 000037

 

SIPDIS

 

E.O. 12958: DECL: 2020/01/19

TAGS: PREL, PGOV, ECON, ES

SUBJECT: With ARENA Fractured, Funes is FMLN's Only Rival

 

REF: 09 SAN SALVADOR 1101; 09 SAN SALVADOR 789; 09 SAN SALVADOR 978

09 SAN SALVADOR 1033; 09 SAN SALVADOR 1238; 09 SAN SALVADOR 1045

 

CLASSIFIED BY: RBlau, CDA, DOS; REASON: 1.4(D)

 

1. (C) Summary: Eight months into the Funes presidency, the GOES

can best be characterized as schizophrenic.  The part of the

government that Funes controls is moderate, pragmatic, responsibly

left-of-center and friendly to the USG.  The part he has ceded to

hard-line elements of the (left-wing) Farabundo Marti National

Liberation Front (FMLN) is seeking to carry out the Bolivarian,

Chavista game-plan, including implacable hostility towards the USG.

Divisions on the right have given the FMLN a dominant position in

the Legislative Assembly.  However, the FMLN does not have an

outright majority in the legislature, and it faces strong

opposition in the popular and independent-minded President Funes.

Funes's popularity could erode quickly if his administration does

not start showing visible results in reducing violent crime and

reviving the economy.  The government's long-run inability to

tackle crime or produce economic growth, coupled with petty

infighting and corruption within the country's political parties,

raises questions about the future of democratic governance in El

Salvador.  End summary.

 

 

 

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FUNES-FMLN RELATIONS STRAINED BUT CIVIL

 

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2. (S) The FMLN's relationship-of-convenience with Mauricio Funes

has soured since the March 2009 election.  Early in his tenure,

Funes surrounded himself with centrist advisors and laid out a

moderate, pro-U.S. foreign policy - moves FMLN hardliners saw as an

attempt to distance himself from their influence.  Recognizing

Funes's popularity and needing his support, the FMLN sought subtle

ways to challenge Funes's independence.  Starting in September

2009, FMLN hardliners within Funes's cabinet (most notably Vice

President and Education Minister Salvador Sanchez Ceren) gave

anti-American speeches, announced El Salvador's intention to join

ALBA, and made high-profile visits to Cuba and Venezuela - each

action carefully choreographed to defy Funes's agenda but with the

pretense that the officials were acting as FMLN representatives,

not as members of the Funes government (see reftel A).  Meanwhile,

Public Security Minister Manuel Melgar has sought to politicize the

National Civilian Police (PNC) and the FMLN has used its

"territorial" ministries (Labor, Health, Education and Gobernacion)

to extend their geographic and bureaucratic hold over the GOES.

Funes advisors told us the FMLN may have also used their control of

the Salvadoran intelligence agency to bug phones in the Casa

Presidencial (see reftel B).  Thus far, however, the two sides

continue to cooperate on issues of mutual interest, including the

budget and tax reform passed in December.

 

 

 

3. (C) While the Funes-FMLN conflict would appear to benefit the

right, internal divisions there have prevented the (center-right)

National Republican Alliance (ARENA) from mounting a serious

opposition.  Since October, thirteen legislative deputies and

scores of mayors and local party functionaries have left ARENA,

most of them joining the newly-formed Grand Alliance for National

Unity (GANA) (see reftel C).  ARENA leaders blame these defections

on former president Antonio Saca, whom the party expelled from its

ranks in December 2009.  While not officially a member of any

party, Saca is widely rumored to be the inspirational and financial

force behind GANA.

 

 

 

4. (C) This crisis has not only dashed ARENA's hope of forming a

majority alliance in the Legislative Assembly, it has also called

into question the identity of the party, for years considered one

of the most well-organized and ideologically-unified in Latin

America.  Still, ARENA  private sector representative Tom Hawk told

PolOff that the crisis has galvanized the party's base, which Hawk

says is "angry as hell" at Saca and the GANA "traitors."  According

to Hawk, in February ARENA plans to roll out a Contract with

America-style publicity campaign that will emphasize "center-right

pragmatism" and distance the party from President Saca's corrupt

legacy.  Hawk said that ARENA president Alfredo Cristiani has

instructed party leaders to focus their criticism on the FMLN and

avoid attacking GANA or President Funes, both of which ARENA views

as potential allies.  Until the 2012 legislative elections,

 

however, ARENA will remain a marginalized force in national

politics.

 

 

 

5. (C) Aside from the FMLN and ARENA, the country's other political

parties are small, weak, and ideologically malleable.  Their only

real selling points are as coalition partners providing the final

votes on closely fought legislation.  Neither the FMLN nor ARENA

can achieve a legislative majority without the support of GANA or

the (opportunist) National Conciliation Party (PCN).  In recent

months, the FMLN has teamed with both GANA and the PCN to reshuffle

the legislature's leadership positions and pass a contentious tax

increase (see reftels D and E).  Given their strategic positions,

GANA and the PCN will likely remain major players in legislative

battles ahead, demanding, as they were rumored to have done in

their previous votes with the FMLN, political favors and covert

payments in exchange for their support.

 

 

 

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Funes's Challenges: Crime and the Economy

 

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6. (C) Public security ranks atop most polling on the nation's

priorities, particularly after a 37 percent increase in homicides

in 2009.  Despite great efforts, successive administrations have

failed to make much of a dent in the intractable street-gang

problem, so Funes's team will need to be both creative and

ambitious in its approach to make any headway.  So far, they have

been neither.  Funes's most significant public security reform to

date has been a temporary deployment of troops to patrol high-crime

areas (see reftel F) which news reports suggest may have moderately

reduced crime in those areas since the November 2009 deployment.

However, the constitution limits such deployments to six months,

and Funes has yet to propose reforms to the GOES security apparatus

that would make those gains sustainable.  He has not moved to

provide the National Civilian Police (PNC) with significant

increases of badly-needed personnel, equipment and training, nor

sought institutional changes in PNC culture, that will result in

more effective law enforcement and crime control.

 

 

 

7. (C) The other major concern for the GOES is the sluggish

economy, which continues to feel the effects of the global

financial crisis and the recession in the U.S.  According to the

GOES, GDP declined 3.5 percent in 2009 and is projected to grow

less than 1 percent in 2010 - its worst two-year performance since

1992.  Unfortunately, Funes has few options available to stimulate

a recovery: the GOES has limited funds for countercyclical fiscal

activity, even with President Funes's modest tax increase, and

dollarization rules out monetary stimulus.  Funes and his economic

team understand the importance of free-market incentives, but have

been anemic in their efforts to attract private investment.

Ultimately, powerful trade and remittance relationships mean that

the Salvadoran economy will only recover following a sustained

economic recovery in the U.S.

 

 

 

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Comment

 

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8. (C) GANA's threat to ARENA now appears more serious than it did

at first.  GANA has poached dozens of ARENA-loyalists in recent

weeks and has demonstrated through an extravagant convention and a

subsequent publicity campaign that it has the deep pockets to put

up a real fight.  Whispers within ARENA also suggest GANA's

critique of ARENA's elitism has struck a chord among mid-level

party functionaries, many of whom secretly sympathize with GANA

despite remaining within ARENA.  ARENA's rebound depends on

recuperating financing, which it lost when it became an opposition

party without GOES patronage to hand out.  It still represents the

only organized force capable of confronting the growing influence

of the FMLN.

 

 

 

9. (C) Funes's ego has little chance of rapprochement with the

hard-line FMLN.  If things continue to deteriorate, we could see an

open break between the two sides, possibly resulting in a new

 

alliance between Funes and an existing party (perhaps the

center-left Democratic Change (CD)) for the 2012 legislative

elections.  Funes would then need to shake up his cabinet and seek

right-of-center allies in the Legislative Assembly to pass his

agenda.  The FMLN response would be ugly - massive street protests,

labor strikes, road blockages, threats of violence, legislative

logjams - and paralyze some government operations and place a

further drag on the struggling economy.

 

 

 

10. (C) The GOES's inability to make gains in public security,

continued anemic growth and the disintegration of the right taken

together present a challenging road ahead for democracy in El

Salvador, especially if coupled with a Funes-FMLN split.  Funes's

persistent high popularity ratings, now well over 80 percent, make

it too soon to sound the alarm, but democratic institutions are

vulnerable.  Sanchez Ceren's recent call for sweeping

constitutional reforms to institute "participatory democracy" is a

timely reminder that the hard-line FMLN's threat to Salvadoran

democracy is real.  The Embassy, allied with civil society, will

continue to engage and support moderates in the GOES while working

with democratic forces across the political spectrum to strengthen

Salvadoran constitutional institutions.

BLAU

 

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