Acton Commentary

El Salvador's Secret: Freedom and Opportunity Cure Poverty


On October 24, 2005, Francisco Flores delivered the following remarks in Grand Rapids, Mich., at the Acton Institute's annual dinner. Mr. Flores, president of El Salvador from 1999-20004, is the founder of the America Libre Institute, a Washington-based think tank. In his speech, Mr. Flores recounts the amazing story of El Salvador's reconstruction from the ruins of war and natural disaster, and the process of raising up an entire nation from the depths of hopelessness.

Allow me to express my congratulations to the members of the Acton Institute for this celebration of their fifteenth year of successfully furthering the ideals of democracy and freedom and to you, Father Sirico, and the organizers of this event, my gratitude for the opportunity to share the Salvadoran experience.

Though it is not usual, ladies and gentlemen, in a forum dedicated to the values that should inspire public policy to address one's subject from a personal perspective, my life work is so intertwined with Salvadoran history — and my own personal beliefs — that I will ask you to allow me a few remarks concerning the historical context of my experience. These remarks will shed some light on the personal convictions that have animated my life work before presenting to you our new project: The America Libre Institute.

In the 1970s, the more radical sectors of the communist movement decided that conditions were ripe for an armed insurgency in El Salvador. These isolated groups were greatly stimulated by the Sandinista victory in 1979 in neighboring Nicaragua. A year later, under the direct command of the Castro regime, the approval of the Soviet Union, and the logistical support of the Sandinistas, the various guerrilla movements were integrated under a unified movement. The FMLN was officially born in Havana in 1980.

The Reagan administration decided to help the Central American governments to stop the communist takeover of the region. El Salvador became from 1979 onwards the last armed scenario of the cold war. When the Berlin wall fell in November 1989, support for the guerrilla movement dwindled until the FMLN decided to accept the government's offer to end the war through a negotiated peace. The peace treaty was signed in February 1992.

El Salvador was destroyed by 13 years of unremitting violence. Every Salvadoran family had to mourn the loss of at least one of its members. One third of the population fled to neighboring countries. Its infrastructure was devastated, with no resources to reconstruct itself, and more than half of its population lived under the poverty line. At the end of the war in 1992, El Salvador seemed hopeless.

Preaching Violence

I say hopeless in a literal sense. At the beginning of the war, El Salvador was a deeply Catholic country. However, led by revolutionary priests beginning in the 1970s, important sectors of the Church embraced liberation theology. The Bible was read as a political program that justified armed insurgency. Christ's teachings were used to justify terrorism.

As they sought the protection of the Church in their need for spiritual comfort, our campesino families found that the pulpit had become one more source of violence. They were asked to hate, and told to act violently.

They did neither. These campesinos searched for Christ's teachings elsewhere. I remember them walking through the narrow pathways of our mountains in those terrible days. The men wore long sleeved white shirts and black trousers, the women long skirts and their hair under white veils. If the guerrillas or the army stopped them, these humble people held a Bible up to the gun barrels that were pointed at them. They were courageous in their silence and though greatly vulnerable, they were immensely dignified. Never in my life have I been prouder to be a Salvadoran.

In my own small and private world, this meant that, at the beginning of the conflict in 1977, my parents feared for our safety and, like most Salvadoran families, felt that our country had no future, and that we should construct our lives elsewhere.

For seven years, I tried to develop a sense of purpose through intellectual understanding. I lived here in the United States, England and in India for a brief period of time. I studied philosophy and political science principally, but also literature and history.

But knowledge can never quench our deeper thirst. Though the waters of the Charles River flowed so peacefully that October morning in Boston, and the fire of artillery raged endlessly in Central El Salvador as the army and the guerrillas sought control of the strategic Lempa River, I decided to go back.

I decided to go back because I couldn't accept being tossed by history at her whim. If I accepted the loss of my country, my life would become a consequence of the decisions others would take, whether in Cuba or Moscow, the United Nations or Washington.

I could certainly build my life abroad but it would not be a choice. It would be an acceptance of fate, and therefore a negation of freedom. For the essential manifestation of freedom is to choose our path. Thereby making one's destiny a concrete evolution of the thoughtful, deliberate decisions we take.

I was conscious I was trading safety for freedom, particularly when I had decided to be involved in the turmoil El Salvador was living.

But I must say that for the safety one gains by avoiding risk, a huge price is paid in the ever present insecurity of leading a life that is always on the defensive. Though it might be unsafe, there is a great sense of security in leading a life according to one's conscience.

A Time to Act

So I came back and became involved. I couldn't have chosen a worse moment; the conflict had entered its greatest intensity. When I was first considered for a cabinet position, at that time, I was conscious of the immense challenges before us and my obvious lack of experience: I was 29 years old.

That team began its work in 1989. In a few years, it had achieved the negotiated peace in 1992, liberated the economy from the profound government intervention that the previous populist administrations had installed, and developed the first cohesive strategy to fight poverty.

The peace accord had incorporated the war protagonists from all ideologies into political actors. Concretely, those that had tried to eliminate each other in the battlefield faced each other as members of our national assembly. The tension in the hall of our congress was as intense as the historical possibility of seeing our country reborn.

I was there to see it for I had resigned my position in the cabinet to run for a seat in Congress. You can imagine my astonishment when I was later elected president of that Congress.

Just to complete the story, two years after that I ran for the presidency in 1999 and finished my term in June 2004.

Some of the members in this audience have asked me how do you become considered for a cabinet post at 29, congressman at 34, president of Congress at 37 and campaign for the presidency at 38? I can tell you this: There is no personal merit in this.

Salvadorans had become convinced that all political parties were responsible for El Salvador's conflict and economic disaster. When the whole political spectrum was seen as shouldering a historical guilt, the only way out was a generational change, and this is why El Salvador has had, since 1989, exceptionally young leaders in all fields of government.

But I hope you will be lenient with me for digressing into so many personal references. They tell me ex-presidents tend to do this. As they no longer have a podium at their constant disposal, once they get a chance - audiences better be patient!

I, however, have not forgotten that wisest of all biblical maxims: “Blessed are the politicians that speak briefly, for they can expect to be heard.”

The Comeback

The important message is this: Fifteen years ago, El Salvador was destroyed by war, seven years ago by hurricanes, four years ago by earthquakes. Extremely poor, 15 years ago, some 60 percent of the population lived under the poverty line. The country was totally dependent on its traditional agricultural exports and unable to honor its financial obligations. Fifteen years ago, its infrastructure had collapsed: Roads, energy systems, water distribution, telecommunications.

Today, El Salvador is a different country. It has the most accelerated poverty reduction rate in Latin America. From 60 percent to 30 percent under the poverty line, El Salvador has reduced its poverty level by half in twelve years. Twenty-five percent of our population could not read nor write; now it is down to 12 percent. Infant mortality has dropped from 45 out of a thousand births to 24.

The unemployment rate has dropped from 13 percent to 6.5 percent. Interest rates have lowered from 30 percent in 1992 to 6.8 percent last year. El Salvador has the lowest inflation rate in Latin America, and its fiscal discipline has earned it the coveted investment grade, only held by El Salvador, Chile and Mexico.

This economic stability and government reform have created an immediate impact in the lives of the less privileged. It has allowed, for example, low income housing to be accessible for as low a payment as $35 a month; telephone lines have multiplied tenfold, and the number of vehicles has increased fourfold.

More paved roads have been constructed in the last five years than in the previous 25 years. The number of public schools has doubled and the increase in health centers is 50 percent.

What is El Salvador's secret? I believe that it is the systematic application of the concept of freedom to public policy. The war was resolved by giving Salvadorans the freedom to choose their leaders and to make them accountable.

The constitutional reforms that ushered the new, inclusive and functional democracy that is responsible for El Salvador's vibrant political life today, withdrew power from political and economic elites to empower the common citizen in choosing his leadership.

The economic achievements of the past 15 years are due to the unleashing of productive energies created by the dismantling of the interventionist state of the 1980s.

The liberalizing of economic agents has brought technology, job creation, foresight, and adaptation that was impossible to achieve through the desk of a bureaucrat. That is, they are due to economic freedom.

Poverty's Antidote

Economic stability is the direct consequence of pursuing transparent prices, thereby allowing the citizen a framework of choices based on reality to take decisions as a consumer and as a political participant. By placing responsibility where it should be, the result is a constant demand for efficiency and transparency.

If the price of energy, gasoline, public transportation, healthcare, capital (as in interest rates) are for populist reasons hidden or distorted, then the fundamental cause of the problem is never addressed because it is never publicly identified and no one is held accountable.

In the end, price distortions are inevitably paid by the consumer through the much heavier load of excessive taxes, inflation or devaluation.

By far, El Salvador's greatest success has been its fight against poverty. The one constant concept that has inspired the social strategy of the past three and the present administration has been that the antidote against poverty is opportunity.

This concept presumes that what the poor need is an opportunity to succeed. The concept of integration, breaking the isolation of poor communities through education, roads, telecommunications, social services, job opportunities, and micro-credit is based on the objective of creating opportunities.

Because opportunity is choice and choice is freedom, and it is this enhanced freedom that allows a person to unleash his creative energies and resolve his problems.

I would like to underline this last consequence of having freedom as a guiding principle in public policy because I believe it has the most far reaching consequences in how successful a country will be. I mean freedom as responsibility.

Responsibility and freedom are two sides of the same coin. When a given choice is taken, then we become directly responsible for the consequences of that choice. A free man is a responsible man because by choosing deliberately, he chooses the consequences and is responsible for them.

This is also true of the choices nations make. In El Salvador, the depth of our suffering during the war made us realize that we Salvadorans and only we Salvadorans were responsible for the country we had created.

Taking Responsibility

By assuming responsibility for the crisis, we realized it was also in our hands to resolve the historical problems of our country. Ours was the blame for our great mistakes, but ours also the capacity to achieve our ideals. This is the most important distinguishing factor of present day El Salvador.

I say distinguishing factor because the common discourse of many political leaders in underdeveloped countries is to place responsibility outside their national reality, and blame some external factor for their circumstance.

I am sure you have heard the constantly repeated phrase, “Poor countries are poor because rich countries impoverished them,” or the historical version which goes, “We were enslaved and our national wealth was stolen.” And let's not forget the most prevalent today which is, “Rich nations keep poor countries poor by draining their resources.”

This is the essence of populism because by transferring responsibility outside national boundaries to some external factor, the actual job of problem solving in poor nations is never undertaken.

I have no patience with this because it is my experience that this perspective is the reason why many nations are unable to develop a successful strategy against poverty.

El Salvador's success is simple: It stopped blaming others.

Of course, we all know why this discourse is so prevalent. The concrete actions that must be taken to resolve the problems of underdevelopment are all highly unpopular.

For example, most underdeveloped nations have no funds for investment because 90 percent of their budget is spent on the salaries of a hugely overgrown government bureaucracy. Since it is popular to provide jobs for political clientele, every successive government increases the size of the public sector.

The solution is simple: Reduce the bureaucracy and obtain the funds you need to educate, provide health care, etc., but this has a huge political cost.

I was faced with this decision many times. I always took the cost, bit the bullet, and waited for the benefits of the reform to pull me though. My experience was that when it is effectively done, people understand. They refuse to be manipulated and support the decision.

Our infrastructure agency spent 90 percent of its budget on salaries and a meager 10 percent was invested. To our poor, rural communities, a good road was their number one priority. They saw clearly that with a good road, they could access better schools, health centers, sell their products more readily and consume products at a lower price.

Condemning a million Salvadorans to isolation because we chose to support the salaries of 7,000 public employees was inadmissible.

So we reduced the agency from 7,000 employees to 500. This allowed us to build more roads in five years than the past five administrations. Did we abandon the 6,500 workers? No, we gave them the organizational skills to provide the new agency with services as private workers. They became miraculously efficient and today the new agency provides more jobs than its original 7,000 employees.

More Hard Choices

In 2001, we were faced with an astonishing rise in crime. All leaders that have had this experience know that in all probability, an unexplained rise in crime is the result of growing corruption within the police force.

The solution is again a tough one. Admit it publicly, pursue the policemen involved, and create an effective system to inspect their behavior. In our case, we fired one-fifth of the police force.

Did we create a crisis? You bet. But a few months later, crime was at an all time low and we survived the political storm.

I have recounted these events because they go against the prevalent political wisdom that unpopular measures should be always avoided to preserve the political capital a leader needs to govern.

My team and our political record is proof that you can do what your country needs and still win elections. Last year, our party won by a landslide the presidential election. A fourth consecutive term won by the same party in free elections with the same vision is to my knowledge a political phenomenon that has only happened in El Salvador.

Deeply concerned by the new prevalence of populist ideas in underdeveloped nations, less than a year ago, a group of highly capable individuals who share my conviction in the guiding principle of freedom, joined me in the foundation of an institution dedicated to the education and implementation of successful public policy.

Our name is America Libre, so that there be no doubt as to the values we share and the ideals we pursue.

We believe in freedom. Freedom to express our thoughts. Freedom to pursue our chosen path. Freedom to dream our ideals. Freedom for the citizens of poor nations that want to mold their destiny with their own hands. Freedom for those that will assume responsibility and learm from their mistakes. Freedom from poverty, so that the new generations may choose from a broad range of opportunities. Freedom from injustice so that the common man can claim and succeed in defending his rights.

This is our new endeavor. We hope our paths may cross in this, the most stimulating of all achievements: To increase man's freedom.

Thank you.