Interest Groups

El Salvador Table of Contents

Private Enterprise

Members of the private business sector relied on a number of organizations to articulate their positions on economic and political issues. These organizations served as pressure groups, injecting themselves regularly into the political arena through criticism of government policies, the actual or threatened shutdown of business and industry, and behind-the-scenes lobbying with politicians. The leading private enterprise organizations were the National Association of Private Enterprise (Asociacion Nacional de la Empresa Privada--ANEP), the Association of Salvadoran Industrialists (Asociacion Salvadorena de Industriales--ASI), the Salvadoran Chamber of Commerce and Industry (Camara de Comercio e Industria de El Salvador), the Salvadoran Coffee Growers Association (Asociacion Cafetalera de El Salvador--ACES), and the Association of Coffee Processors and Exporters (Asociacion de Beneficiadores y Exportadores de Cafe-- Abecafe). Their membership was drawn from the economic elite, and their leadership consistently advocated a reduction in government involvement in industry, the reprivatization of coffee exports and foreign trade in general, no increase in taxes on business (usually referred to as "the productive sector"), no extension of the agrarian reform, and reductions in government spending.

Most economic issues usually found the private enterprise organizations aligned on one side and labor and peasant organizations on the other, with the Duarte government somewhere in between, attempting to mediate between the two blocs. This was especially true with regard to agrarian reform. The private enterprise organizations, particularly the coffee growers' associations, opposed agrarian reform from its inception in 1980. They were unable to prevent implementation, however, because of a shift in the political climate that brought too many other actors, including the PDC, the reformist military, and the United States, down on the side of some measure of reform. Denied their first preference in the matter, the private sector groups went on to advocate limitations on the terms of the reforms. These were enacted by the Constituent Assembly and incorporated into the 1983 Constitution. By the late 1980s, the line taken by the private sector reflected that espoused by Arena, namely, that the reforms should not be rescinded but should be made more efficient.

Private-enterprise organizations provided the most significant opposition to the Duarte government's 1986 economic austerity package. From the businessmen's point of view, the most offensive aspect of the package was the so-called "war tax" on all income above US$20,000 with revenues derived from the tax to be applied directly to the war effort against the leftist guerrillas. In this as in other matters, the private sector groups worked in concert with Arena. While arenero legislators boycotted sessions of the Legislative Assembly in an effort to deny the PDC a quorum, the private-enterprise organizations called for a shutdown of business and industry on January 22, 1987. The business strike was quite effective, closing a reported 80 percent of Salvadoran stores, factories, and professional and nonprofessional services. Although impressive, this demonstration of economic power by the private sector had no immediate effect on government policy. The issue eventually was rendered moot, however, in February 1987 when the war tax was declared unconstitutional by the Supreme Court.

The January 1987 strike was but another chapter in a long history of confrontation between the private sector and the PDC. Bitterly opposed to Duarte's election in 1984, the ASI publicly denounced Duarte and his party as adherents to the same ideology as that of the FMLN. The PDC, according to the industrialists, differed only in its "method and strategies" for achieving socialism. Although he responded to the attacks in kind during the campaign, Duarte attempted after his election to reassure business leaders that he was not antagonistic to private enterprise. The agendas of the PDC and the private sector were too divergent, however, and attitudes generally were hardened between the two as economic conditions failed to improve and the insurgency ground on interminably.

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Source: U.S. Library of Congress