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<p class=MsoNormal align=center style='text-align:center'><b><font size=5
face="Times New Roman"><span style='font-size:20.0pt;font-family:"Times New Roman";
font-weight:bold'>Consumer prices rise in <st1:country-region w:st="on"><st1:place
w:st="on">El Salvador</st1:place></st1:country-region> as government fails to
pay subsidies to key industries<o:p></o:p></span></font></b></p>
<p class=MsoNormal align=center style='text-align:center'><font size=3
face="Times New Roman"><span style='font-size:12.0pt;font-family:"Times New Roman"'>CISPES
update<o:p></o:p></span></font></p>
<p class=MsoNormal align=center style='text-align:center'><font size=3
face="Times New Roman"><span style='font-size:12.0pt;font-family:"Times New Roman"'>April
17, 2009<o:p></o:p></span></font></p>
<p class=MsoNormal align=center style='text-align:center'><b><font size=5
face="Times New Roman"><span style='font-size:18.0pt;font-family:"Times New Roman";
font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><i><font size=3 face="Times New Roman"><span
style='font-size:12.0pt;font-family:"Times New Roman";font-weight:bold;
font-style:italic'>Included in this update:<o:p></o:p></span></font></i></b></p>
<h1 style='margin-left:.5in;text-indent:-.25in;mso-list:l1 level1 lfo4'><![if !supportLists]><b><font
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style='font:7.0pt "Times New Roman"'>
</span></font></span></span></font></b><![endif]><i><font color=navy
face="Times New Roman"><span style='font-family:"Times New Roman";color:navy;
font-style:italic'><a href="#_Nicaragua_halts_trade">Nicaragua halts trade
negotiations between Europe and Central America</a></span></font></i><i><font
face="Times New Roman"><span style='font-family:"Times New Roman";font-style:
italic'><o:p></o:p></span></font></i></h1>
<h1 style='margin-left:.5in;text-indent:-.25in;mso-list:l1 level1 lfo4'><![if !supportLists]><b><font
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style='font:7.0pt "Times New Roman"'>
</span></font></span></span></font></b><![endif]><i><font color=navy
face="Times New Roman"><span style='font-family:"Times New Roman";color:navy;
font-style:italic'><a href="#_President-elect_Mauricio_Funes">President-elect
Mauricio Funes meets US Vice-president Joe Biden</a></span></font></i><i><font
face="Times New Roman"><span style='font-family:"Times New Roman";font-style:
italic'><o:p></o:p></span></font></i></h1>
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face="Times New Roman"><span style='font-family:"Times New Roman"'>Salvadoran
President Tony Saca's Technical Secretary, Eduardo Ayala Grimaldi, announced
last week that the government would no longer be paying the subsidy to
electrical utilities that it has long maintained in order to ease costs for
Salvadoran families and small and medium businesses. Ayala Grimaldi said the
subsidy costs the government $15.7 million per month funds that simply do not
exist given the current financial crisis. In December 2008, Grimaldi sought to
instill confidence in the Saca Administration's ability to handle the crisis,
saying “I made a call for tranquility, because the government is in
control.”<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>Since last August, the electric
distribution companies have complained that subsidy payments from the
government have been late. Electricity bills began to rise across the country
in February in response. “The electric bill has always been about four or
five dollars for us. At its highest, eight dollars and that’s the highest
it has ever been. But for the past two bills it has been fifteen and seventeen
dollars. That’s a more than three times increase,” said Karla
Estrada, a single mother and employee at a non-governmental organization.<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>The transportation sector, which has not
received its government subsidy for the past three months, has called for a
strike that would stop 70% of the country’s buses and microbuses from
running next week. The Salvadoran Chamber of the Transport Industry (CASIT)
decided to take this measure during its General Assembly in the first week of
April to demand the government pay the $17 million dollars it owes. On
Thursday, April 16, representatives of the transportation sector met with
representatives of the Ministry of Transport and Ministry of Finances with the
mediation of Human Rights Ombudsman Oscar Luna. The meeting yielded no
compromises or agreements and CASIT has said if the conflict is not resolved
favorably by next week, they will begin the strike.<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>“Both of these situations are
really going to affect the general population, and particularly poor
people,” said student organizer Israel Alexander Leiva. “For
example, with the electric subsidy, that will affect all sectors and raise
prices all around. Right now an egg costs 15 cents and is a staple of a poor
family’s diet. If it goes up to 20 or 25 cents because the cost of
production increases, that will create a real crisis.”<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>Late last year, the Salvadoran government
received over $1 billion in loans from the International Monetary Fund and
Inter-American Development Bank designed to mitigate the effects of the global
economic crisis.<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 color=blue face="Times New Roman"><span
style='font-size:12.0pt;font-family:"Times New Roman";color:blue'><o:p> </o:p></span></font></p>
<h1 style='mso-list:none'><a name="_Nicaragua_halts_trade"></a><b><font size=3
face="Times New Roman"><span style='font-size:12.0pt;font-family:"Times New Roman"'>Nicaragua
halts trade negotiations between Europe and Central America<o:p></o:p></span></font></b></h1>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>On April 1, <st1:country-region w:st="on">Nicaragua</st1:country-region>
withdrew from negotiations for a free trade agreement between the European
Union and five Central American Countries (<st1:country-region w:st="on">Nicaragua</st1:country-region>,
<st1:country-region w:st="on">El Salvador</st1:country-region>, <st1:country-region
w:st="on">Costa Rica</st1:country-region>, <st1:country-region w:st="on">Honduras</st1:country-region>,
and <st1:country-region w:st="on"><st1:place w:st="on">Guatemala</st1:place></st1:country-region>).
The talks, being held in <st1:place w:st="on"><st1:City w:st="on">Tegucigalpa</st1:City>,
<st1:country-region w:st="on">Honduras</st1:country-region></st1:place>, were
in their seventh round. <st1:country-region w:st="on"><st1:place w:st="on">Nicaragua</st1:place></st1:country-region>
asked for a moratorium of six months while it carries out internal government
discussions and consultations with its population.<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>Nicaraguan President Daniel Ortega said,
“The conditions are unacceptable on the part of the European community
because they will come to create a much more difficult position for the fragile
Central American economies.” He also cited the European Union's
refusal to consider the creation of a $70 billion dollar fund in order to
confront the asymmetries and lack of competitiveness in <st1:place w:st="on">Central
America</st1:place> compared to the European Union. <o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>Salvadoran Vice-chancellor and
representative at the negotiations Eduardo Cálix explained that <st1:country-region
w:st="on"><st1:place w:st="on">Nicaragua</st1:place></st1:country-region>’s
withdrawal breaks up the negotiations for all the countries. “[The
EU delegates] have a mandate to negotiate with the five countries and not with
four,” he said.<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>The negotiations of this free trade
agreement have received criticism from the social movement and economists
alike. They cite similar accords with <st1:country-region w:st="on">Mexico</st1:country-region>
and the <st1:country-region w:st="on">United States</st1:country-region> that
have pushed <st1:country-region w:st="on"><st1:place w:st="on">El Salvador</st1:place></st1:country-region>
deeper into poverty and greatly damaged the agricultural sector in the
country. <o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>Regarding the free trade agreement with
the EU, “The purpose of this instrument of domination is to exercise
control over our natural resources, over our water, over our biodiversity, over
our mineral resources, over our energy resources,” said Raul Moreno,
economist at the Foundation for the Study of the Application of Law (FESPAD).<o:p></o:p></span></font></p>
<h1 style='margin-left:0in;text-indent:0in'><![if !supportLists]><b><font
size=3 face="Times New Roman"><span style='font-size:12.0pt;font-family:"Times New Roman"'><span
style='mso-list:Ignore'><font size=1 face="Times New Roman"><span
style='font:7.0pt "Times New Roman"'>
</span></font></span></span></font></b><![endif]><font face="Times New Roman"><span
style='font-family:"Times New Roman"'><o:p> </o:p></span></font></h1>
<h1 style='mso-list:none'><a name="_President-elect_Mauricio_Funes"></a><b><font
size=3 face="Times New Roman"><span style='font-size:12.0pt;font-family:"Times New Roman"'>President-elect
Mauricio Funes meets US Vice-president Joe Biden<o:p></o:p></span></font></b></h1>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>On Monday, March 30, <st1:country-region
w:st="on">US</st1:country-region> Vice-president Joe Biden met with Central
American heads of state in <st1:country-region w:st="on"><st1:place w:st="on">Costa
Rica</st1:place></st1:country-region>. President-elect Mauricio Funes
was present by special invitation in addition to current Salvadoran President
Tony Saca. Biden said the purpose of his visit was to show a region that
felt ignored under the Bush administration that it will no longer be neglected.
The meeting will be followed up this month by the <st1:City w:st="on">Summit</st1:City>
of the <st1:country-region w:st="on">Americas</st1:country-region> in <st1:country-region
w:st="on">Trinidad and Tobago</st1:country-region>, which will be attended by <st1:country-region
w:st="on"><st1:place w:st="on">US</st1:place></st1:country-region> President
Barack Obama and Funes.<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>In <st1:country-region w:st="on">Costa
Rica</st1:country-region>, Central American leaders pleaded for the <st1:country-region
w:st="on"><st1:place w:st="on">US</st1:place></st1:country-region> to slow its
record pace of deportations. In 2008 alone, over 80,000 Central Americans
were deported. These deportations and the economic crisis have been a
hard blow to Central American countries, which heavily rely on remittances sent
home in their economy. According to the Inter-American Development Bank (IDB),
in the last quarter of 2008, remittance income dropped by 4% compared to the
same period in 2007. In <st1:country-region w:st="on"><st1:place w:st="on">El
Salvador</st1:place></st1:country-region>, remittances are the largest source
of income to the Gross National Product (GNP), making up close to 20% of the
country’s income. Mass deportations have also been linked to the
country’s gang problems and high homicide rate.<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>Biden asked for patience from the Central
American Leaders. “There will not be an immediate response to
deportations,” he said. Without giving any details on when or how, Biden
explained that the deportation problem could only be solved in the context of
comprehensive immigration reform that includes a pathway to citizenship for
undocumented immigrants. In addition to immigration reform, Biden cited the
“War on Drugs,” strengthening of financial institutions, and
environmental issues as areas the <st1:country-region w:st="on">US</st1:country-region>
and <st1:place w:st="on">Central America</st1:place> could collaborate on.
“We are not putting together a policy for the hemisphere; we are putting
together a policy <i><span style='font-style:italic'>with</span></i> the
hemisphere,” he added. <o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'>Meanwhile, Funes continuous to state his
wiliness to reach agreements with the <st1:country-region w:st="on"><st1:place
w:st="on">US</st1:place></st1:country-region> based on respect between the two
governments and the needs of the Salvadoran people.<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt;font-family:"Times New Roman"'><o:p> </o:p></span></font></p>
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