El Salvador's monopoly capitalism

["F G" <cantthinkofahandle@xxxxxxxxxxx>]

Michael expressed some desire to hear from other people on the list who are
familiar with the economic situation in other countries.  That said, I'll
throw two cents in about the situation in El Salvador.
The concentration of wealth and investment flows has reached extraordinary
levels- I don't have any reliable stats handy but the wealth concentration
may in fact be higher than pre-insurgency period save for agriculture whose
share in national production has sharply dropped anyway.  The new power base
is the banking system in which 4 banks owned by the ruling class control 83%
of the market.  Moreover they compete for the delivery of the massive
remittances that flow in from abroad, these actually being the main income
source of the country.  All other significant sectors, to my knowledge, are
fully oligopolized or monopolized (cement and beer being notable- both are
regularly protected in our "Free Trade Agreements").  In fact, the directive
organ of the ruling neoliberalism-at-all-costs ARENA party has been DIRECTLY
TAKEN OVER BY THE RULING CLASS.  Even founding members and certain political
ideologues have been expelled. Actually the party president is also the
president of the largest private bank in central america and replaced
another prominent businessman who recently resigned.  These developments are
most interesting.  Aside from this, the country is approaching unsustainable
Argentine-style debt.  I attended a recent meeting of some leading
economists which brought to my attention the gravity of the situation.
Throw in the fact that the economy has been unconstitutionally dollarized
(without a shred of consultation with the rest of the population) and you've
got a recipe for default within a few years.  Actually the banks have
apparantly bought a good deal of govt bonds since their returns are tax free
(corporate taxes here are flat 25% annually- banks pay 11% average).  Also
the pension system is in deep s*** though I know less about this.
Seems the oligarchy is aiming for a last-ditch-attempt at salvation (dunno
how though) through the signing of a NAFTA-clone with the United States.
Given the colossal trade defecit we already have it hardly seems that this
would do any good.  But what the hell, they can always move their money to
banks in Miami.
I'll throw in more later.

As a whole, the future hardly looks bright for Central America, I'm afraid
to say.

-Frank G., San Salvador.

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