Salvadoran Peace Raises Economic Hopes

My personal revenge will be the right for my sons to attend school and excel.

- From an FMLN song

ON a dusty, sun-baked soccer field, Fernan Cienfuegos, a commander of the Farabundo Marti National Liberation Front (FMLN), promises some 500 rebel troops that the "fruit of their sacrifices" is at hand: rebuilt schools, electricity, roads, and latrines so that the people "may live in dignity as the peace accords promise."

Moments later, he tells a rapt group of mothers and children in this remote village with no phones, "soon we will have a direct international phone to the United States" to talk family members there.

Peace in El Salvador has rekindled hopes for economic and social equality. Indeed, a central tenet of the peace pact is an ambitious economic reconstruction program. Restoring the nation's ravaged infrastructure will cost $1.8 billion, government officials say. Foreign donors are offering to chip in.

But "one of the characteristics of peace is the gap between expectations and realities," warns Ruben Zamora Rivas, vice president of El Salvador's parliament. Fulfilling reconstruction expectations, analysts say, will depend largely on two factors: international financing and cooperation between adversaries who have spent more than a decade at war.

For example, President Alfredo Cristiani announced a $14.3 million first stage of the National Reconstruction Program Feb. 2, one day after the cease-fire. He handed out checks for various projects to about 20 mayors in a former combat zone.

m sure this was a well-meaning effort to get moving on reconstruction, but it could be misinterpreted," notes a European diplomat here. "The accords clearly state the government must present its plan to the FMLN first for review and recommendations."

On Feb. 14, the FMLN got its first official look at the reconstruction plan. This week the two sides discussed the plan in depth.

The president's plan breaks down into short- and long-term projects. The immediate plan targets the 800,000 people in 106 municipalities hit hardest by the war. The aim is to expand on Municipalities in Action (MEA), a US-aid-financed community development program with a five-year track record.

MEA identifies community priorities via town meetings where residents decide on their greatest needs, such as electricity, water, or schools. The government provides the funds and technical assistance, and pays a local workforce to do the job.

And the small-scale public works program puts people to work quickly - a crucial need as thousands of soldiers return to civilian life looking for jobs.

"MEA is the way to rebuild El Salvador," says Carlos Leon Garcia, mayor of Villa Victora, a rural municipality in the Cabanas province.

Under the mayor's jurisdiction is the village of Santa Marta, a longtime FMLN stronghold. Yet, despite his ruling party affiliation, Mr. Leon directed MEA funds to this village even before the war's end.

Electrification, road, and latrine-building projects are getting under way in Santa Marta.

"The road to peace and reconstruction is one we must walk together, regardless of political ideology." He adds with a grin, "Besides, I think this program will win votes."

But MEA, as part of the National Commission for the Restoration of Areas (CONARA) aid program, does have a reputation problem. A small part of CONARA became associated with the Salvadoran Army through a program which airlifted toys, doctors, clowns, and food into conflict zones for field days.

"It gave the program a terrible image problem," admits an official with the US Agency for International Development (AID).

"We don't like CONARA's ideology. But CONARA exists and we'll have to work with it," says Rolando Gonzalez, an FMLN official at La Mora.

Last year, the US spent $20 million on MEA in some 240 communities. This year, the MEA budget is likely to swell to $30 million with about $20 million going to the 106 target towns - effectively doubling spending in the conflict areas.

The longer-term reconstruction projects include more expensive infrastructure needs, including repairing some 375 miles of roads, installing bridges, and replacing most of the electric grid. The funding for this is expected to come from international aid donors. The InterAmerican Development Bank has promised "at least" $150 million, Salvadoran officials say. A crucial World Bank meeting is slated for next month. "We'll get the [reconstruction] show on the road," says an AID official. "The other donors' funds will come along a year or so later."

But the dependency on external financing - how much will arrive and when - is a major weakness of El Salvador's recovery plan, says Alexander Segovia, director of economic and social research at the Center of Science and Technology Research. "Our experience with the [1986] earthquake showed us a lot is offered, but what actually comes is late or never arrives," he says.

Another deficiency, Mr. Segovia says, is that the accords do not obligate the government to change the reconstruction plan based on FMLN recommendations. "It's up to the FMLN to convince us of any rational improvement in the plan," says Cristiani spokesman Ernesto Altschul.

But Segovia notes that government takes a big political risk if it appears to ignore the FMLN - not just because it contravenes the spirit of the accords. "If the plan fails, at election time only the government can be blamed."

The other major question mark hanging over El Salvador's economy is the fate of about 1 million Salvadorans living abroad, mostly in the US and Canada. Salvadorans overseas send money home and are the nation's biggest source of foreign earnings. They pump an estimated $500 million to $700 million into this small economy annually.

But the special temporary visas of about 200,000 Salvadorans legally residing in the US are due to expire in June.

"The US would do more to support peace and stability in El Salvador if it favorably resolved this immigration question than if it sends the $200 million in aid," Segovia says.