EL SALVADOR: SCENESETTER FOR VISITS OF U/S KAREN

UNCLAS SAN SALVADOR 000487

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ES PGOV PREL
SUBJECT: EL SALVADOR: SCENESETTER FOR VISITS OF U/S KAREN
HUGHES AND WHA A/S TOM SHANNON


1. (SBU) Embassy San Salvador welcomes and looks forward to
your visit to El Salvador March 17 to 18. You are arriving
in country following President Saca's very successful visit
with the President on February 24. The announcements during
the visit that CAFTA-DR would enter into force for El
Salvador on March 1, and that the President is extending TPS
benefits for Salvadorans for an additional year, are seen
here, both by President Saca and most Salvadorans, as proof
of the close relationship between the two countries and
between the two administrations. Your visit offers further
opportunity to reinforce this valid perception.

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El Salvador-U.S. Relations
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2. (SBU) El Salvador is one of our strongest allies in the
Western Hemisphere, and remains the only other Western
Hemisphere nation with soldiers serving alongside U.S. troops
with coalition forces in Iraq. The U.S. operates a
Cooperative Security Location (CSL) that is collocated with a
Salvadoran Air Force base at El Salvador's principal
international airport at Comalapa. Last November, the
Salvadoran National Assembly approved the establishment of
the International Law Enforcement Academy (ILEA) for the
Western Hemisphere, a joint USG-GOES endeavor. The FBI will
soon open an office at the Embassy for the purpose of
exchanging intelligence with the GOES on street gang
organizations. Embassy officers have unfettered access to
the highest echelons of GOES officials.

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Domestic Political Overview
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3. (SBU) President Elias Antonio "Tony" Saca of the
governing Nationalist Republican Alliance (ARENA) party
assumed office June 1, 2004 after winning a hotly-contested
presidential race. President Saca's ARENA party holds only
29 of 84 seats in the Legislative Assembly, but, through
alliances with smaller parties, regularly passes legislation
requiring a simple majority. ARENA's major political
opposition is the leftist Farabundo Marti National Liberation
Front (FMLN),which has been weakened recently by internal
struggles and defections. Human rights problems are minimal.
The Embassy continues to encourage the GOES to fully enforce
and enhance labor protections. Attention is now focused on
March 12 nationwide municipal and Legislative Assembly
elections. Saca is hoping that his ARENA party and other
democratic parties will win enough seats in the National
Assembly to overcome the FMLN's ability to block key reform
legislation.

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Domestic Economic Overview
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4. (SBU) El Salvador's stable economy, the result of a broad
reform agenda implemented by four successive ARENA
governments, has earned El Salvador an investment-grade debt
rating from Moody's, and provided a measure of economic
predictability. Nonetheless, the economy has been growing at
a disappointing rate of about two percent per
year since 1999, despite its excellent macroeconomic
fundamentals. President Saca's highest priorities are
reinvigorating El Salvador's economy, creating jobs, and
improving the nation's infrastructure. Increasing violence
is exacting an economic cost and creates difficulty for
investment; Saca will have to bring this under control as
part of his economic strategy. Roughly 40 percent of the
population still lives in poverty. El Salvador ratified
CAFTA in December 2004, the first country to do so; El
Salvador will also be the first to implement CAFTA with the
United States on March 1, 2006. Saca is relying on increased
trade to help jump-start the nation's sluggish economic
growth. El Salvador is one of two countries to have
qualified as a lower-middle-income nation for a Millennium
Challenge Account compact; it has proposed a new highway to
create sustainable economic grow in the heretofore isolated
northern departments by improving access to national and
regional markets.

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El Salvador's Foreign Policy
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5. (SBU) El Salvador's postwar ARENA governments have been
reliable in their support for U.S. positions in international
fora such as the UN, including on issues such as UN reform,
human rights abuses in Cuba, and the Middle East peace
process. The GOES has been very helpful in regional fora in

moderating neighboring countries' positions on the
deportations issue and immigration reform. El Salvador has
on occasion pursued a somewhat more independent course, but
has still proven dependable on key matters of bilateral
importance. El Salvador has recently broadened its foreign
relations to include moderate Arab states such as Morocco and
Qatar, and is actively seeking a seat on the UN Economic and
Social Council (ECOSOC).

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Terrorism and International Crime
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6. (SBU) El Salvador has been a consistently strong
supporter of the United States in the fight against terrorism
and international organized crime. El Salvador's geographic
position makes it vulnerable to trafficking in drugs, people,
and guns to or from the United States. Drug trafficking has
received significant GOES attention and cooperation; El
Salvador hosts the Cooperative Security Location (CSL) at
Comalapa Airport. This is one of three CSL's in the region,
and since 2001 has contributed to the seizure or disruption
of about 210 metric tons of cocaine. Trafficking in persons,
smuggling of aliens, and gunrunning remain problems due to
the porous borders in Central America. The government passed
new anti-trafficking legislation last year and is conducting
raids against those suspected of exploiting children. The
Border Police unit and Immigration Service are working
closely with the Department of Homeland Security and the
Embassy to improve coordination with the U.S. and their
ability to limit the illegal movement of people through El
Salvador. Violent street gangs are a serious problem. Law
enforcement efforts against the gangs have been hampered by
the government's current inability to protect witnesses and
an ineffective judicial system.

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Civilian-Military Relations
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7. (U) The Armed Forces of El Salvador (ESAF) are capable,
professional, and subordinate to civilian authority.
The military consistently receives high approval ratings in
public opinion polls, reflecting its dramatic transformation
since the 1980-1992 war. The sixth contingent of a
380-person "Cuscatlan Battalion" task force that rotates
every six months departed for Iraq in February; nearly 2,300
Salvadoran soldiers have now served with coalition forces in
Iraq. The Battalion has suffered two fatal casualties in
Iraq, one combat death in April 4, 2004 and one
non-combat-related death in June 27, 2005. The ESAF has
performed admirably in humanitarian and reconstruction
efforts in support of the Iraqi people.

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Migration Issues
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8. (U) As many as 2.5 million Salvadorans live in the United
States, most illegally. Since the 2001 earthquakes, between
250,000-280,000 Salvadorans have benefited from Temporary
Protected Status (TPS),and have been able to live and work
legally in the United States. The announcement during Saca's
February 24 visit to Washington of a further extension of TPS
is of paramount importance to the Saca Administration;
remittances from Salvadorans living abroad make up
approximately 16 percent of the GDP, and are an important
source of income for many Salvadoran families. Public
opinion polls also show that 7 out of 10 Salvadorans would
immigrate to the United States if given the chance. The GOES
is focused on obtaining permanent status for TPS recipients,
claiming it cannot absorb that number of returnees. The GOES
has complained about an alleged lack of intelligence sharing
between U.S. law enforcement agencies and the GOES relative
to criminal deportees. Earlier this year, the GOES made a
proposal to DHS to receive considerably larger numbers of
Salvadoran deportees, while requesting some USG assistance to
help absorb the impact of the deportations. The GOES is
awaiting DHS response and hopes to continue with bilateral
talks on accelerated deportations.
Barclay