One of the most wide-ranging po- litical battles unfolding in the wake of the Salvadoran peace accords concerns funding for post-war recovery. The Consultative Group, a coalition of 19 countries and 12 international organi- zations including the World Bank, the Inter-American Development bank, the United States, Canada, Japan, and a number of European countries, is the chief providerof aid. The Group pledged nearly $800 million when it met in March with representatives of the Sal- vadoran government, the FMLN, the peace commission (COPAZ), and la- bor and non-governmental organiza- tions (NGOs) at the World Bank's head- quarters in Washington. The Bush administration insists that all funding go directly to the govern- ment of El Salvador, conditional on the achievement of consensus on the Na- tional Reconstruction Plan (PRN). Drafted by the ARENA government, the plan was presented to various groups throughout El Salvador, but was modi- fied only at the government's discre- tion. In this respect, U.S. policy to- wards El Salvador has not changed. The United States continues to use aid to legitimize the current government, one of the principal parties in the con- flict, rather than institutionalize new relationships among the country's po- litical forces. The scheduling of inter- national aid commitments has also served to foreclose the process of de- bate within El Salvador which began when hostilities ended. The National Reconstruction Plan is mainly devoted to capital develop- ment. Thirty-six percent of the $745 million budget presented in Washing- ton is designated outright for infrastruc- ture, as is a further 27% of the budget within the $324 million category called "Social Sector and Human Capital Needs," which originated as a conces- sion to popular pressure. The PRN was presented at the March meeting in Washington in the context of a review of the ARENA government's year-old program for structural adjustment, since the World Bank considers the PRN "complemen- tary" to ARENA's overall economic program. Although the majority of Salvadorans are now concentrated in urban areas, the PRN targets the for- merly "conflictive zones" in an at- tempt to recuperate governmental con- trol and reintegrate these areas into national economic life. Many of the 108 communities in the conflictive zones have formulated their own development plans based on local community needs, priorities and ca- pacities. These local initiatives tend to favor small-scale, independent, com- munity enterprises which differ pro- foundly from the neo-liberal and ex- port-oriented agro-business model at the core of the ARENA program. Some grassroots projects were incorporated into the PRN, but they comprise a small percentage of the total budget. Further- more, the government made no com- mitment to involve the NGOs which work with these communities in carry- ing out these projects. The Salvadoran government prefers to channel aid via the municipal admi- nistrations, whose office-holders be- long overwhelmingly to the ARENA party. Many local mayors have had no relations until now with the communi- ties designated in the PRN and will find this opening useful. Local communi- ties and opposition sectors view mu- nicipal officials with suspicion because they represent outposts of national au- thority and, in the past, government repression. The government plan rejuvenates "Municipalities in Action" (MEA), the U.S. AID program of the mid-1980s. MEA was the civilian version of previ- ous military-run counterinsurgency "civic action" projects. Through MEA, local mayors bought support by financ- ing small-scale projects to build infra- structure and to provide for other basic needs. Similarly, the ARENA govern- ment hopes the PRN will enable it to cultivate political support in the con- flictive zones in time for the 1994 elec- tions. VOLUME XXV, NUMBER 5 (MAY 1992) 9 Mimi Hurd is afreelance writer based in New York. I VOLUME XXV, NUMBER 5 (MAY 1992) 9An Inauspicious Beginning Santa Marta was selected as a prom- ising pilot project for post-war recon- struction months in advance of the peace accords. This town of 3,000 is one of many communities of repatriates who survived years in Honduran refugee camps after being driven from their villages by the military. The commu- nity organized its return to the north- central region of Cabafias not long ago. U.S. Ambassador William Walker's trip to Santa Marta in June of 1991 was the first visit of a U.S. government official to a "liberated" community. Walker, accompanied by Cong. Joe Moakley, U.S.AID officials and the local ARENA mayor, opened discussions with town leaders about community needs. The possibility of giving U.S. AID funds directly to the NGO representing the community was discussed, but Ambas- sador Walker said that aid must be channeled through the local municipal- ity. With the help of NGOs and a tech- nical assistance team contracted by them, Santa Marta drew up plans for 20 inter-related projects for increased agricultural production, crop diversi- fication, storage facilities, transporta- tion enterprises, artisanal and mechani- cal workshops, revitalization of former bakeries and dairies, marketing, and small-scale industrial production. These projects are designed to enable 9,000 people in the area to become economically productive and self-suf- ficient. A leather-tooling cooperative in Ciudad Segundo Montes, a repopulated town in an FMLN-controlled zone. The National Reconstruction Plan U.S.AID agreed to provide admin- istrative funds to develop these projects, and also delivered $20,000 to the local mayor's office in January, with the un- derstanding that the initial projects agreed upon with the community-road construction and electrification along various stretches between Santa Marta and outlying communities-would be completed by February. As of early April, just three kilometers of highway had been laid and posts for electrical wire had been planted only within the town itself. Trees in the town that the community had specifically asked to be preserved were felled in the process. This inauspicious beginning may mean that Santa Marta is turning out to be a truer model of post-war reconstruction than anyone intended. International Monitoring At the March meeting in Washing- ton, the Consultative Group strongly recommended putting two conditions on the PRN. First, the Group called on the government to give priority to the PRN's "Democratic Strengthening Pro- grams" this year, rather than deferring them. Fifty million dollars over and above the original budget was allocated for that purpose. Secondly, the Group required the Salvadoran government to comply with stringent accounting pro- cedures and to submit to an indepen- dent audit by an international firm. The U.S. Congress also wrote into law an- other oversight mechanism. How the PRN is finally carried out will be an important indicator of whether the peace accords' promise of political and economic change can be realized. Given the experience of Panama and Nicaragua to date, El Salvadormightbe considered lucky to receive significant reconstruction funds of any kind. Yet it is possible that aid aimed at supporting the Salvadoran government may only aggravate the dire social conditions at the root of the country's turmoil. The PRN is also a test for Washing- ton. A RAND corporation report issued on the day of the signing of the accords in Mexico declared U.S. policy toward El Salvador a failure. The implementa- tion of the PRN will test Washington's ability to change course and its toler- ance for real social change in both the economic and political spheres.
