Duarte, Jolted by Kidnaping Case in ‘85, Faces Economic Perils in ’86

President Jose Napoleon Duarte, a charismatic, sometimes messianic figure whose personal style has been a key to his success, suffered a political setback with his handling of his daughter’s kidnaping.

During 1985, the U.S.-backed president also saw an erosion in his base of support among workers and peasants because of his neglect of the economy and treatment of labor problems, according to foreign diplomats and political observers.

They say that 1986 may be even more difficult for Duarte, a Christian Democrat, who is scheduled soon to propose to the legislature an economic austerity package that could bring harder times for most Salvadorans.

“He has been a magnificent, charismatic figure, and the kidnaping took the wind out of his sails,” a U.S. observer said, asking not to be identified by name. “He has come down in the estimation of a lot of people. His strength has eroded because of inaction on the part of the government to fulfill expectations that were awakened.”

No Coup Likely

However, none of the politicians or observers interviewed said they believe that Duarte’s weakened position will lead to a coup against his 18-month-old government or to a lessening of U.S. support for the president in his government’s war with Marxist-led guerrillas.

Duarte’s daughter, Ines Guadalupe Duarte Duran, and a companion were abducted by guerrillas outside a local university Sept. 10. The Farabundo Marti National Liberation Front freed the two women Oct. 24 in an exchange that also involved the release of 22 political prisoners held by the government, evacuation from the country for 101 wounded guerrillas and freedom for 33 municipal officials who had earlier been abducted by the guerrillas.

The normally robust president looked haggard during the 44 days it took to arrange the complicated exchange, and the government came to a near standstill. Afterwards, the far right harshly criticized Duarte for agreeing to the guerrillas’ demands and charged that he had put his family’s interests before those of the nation.

Members of Duarte’s Christian Democratic Party criticized him for having refused to enter into negotiations with the guerrillas for the release of the municipal officials until after his own daughter was abducted.

A Future Price?

The armed forces overcame internal dissent to give their blessing to the release of the political prisoners, although apparently not without some resentment in the ranks that left some observers wondering what price Duarte will eventually have to pay for the deal.

The president’s anti-guerrilla position seems to have hardened in the wake of his daughter’s kidnaping, making the possibility of dialogue with the rebels increasingly remote.

“I don’t think he will ever forgive them for kidnaping his daughter,” said one close friend and adviser to the president.

Duarte campaigned on a platform of peace and dialogue with the rebels when he ran for president in 1984 and again when he took to the stump early last year on behalf of Christian Democratic congressional candidates. In October, 1984, amid international fanfare, he held peace talks in the town of La Palma with guerrilla military and political leaders.

A second round of talks was held in November, 1984. A third round was talked about but never took place.

This year, the economy is likely to present Duarte with his most difficult challenge.

The government is confronting 30% inflation, unemployment and underemployment totaling 50% of the work force, a drop in the value of the Salvadoran currency and an active black market in money. The public foreign debt is about $1.8 billion and the government’s budget deficit is about 5% of gross domestic product.

Woes Blamed on War

The government blames the war for the bad economy.

“The problem is simple,” a presidential adviser said. “We spend about 1.8 billion colons a year and only produce about 900 million colons. We have to come up with 900 million colons to pay for the war.”

Later this month, the president will introduce a U.S-backed economic package to the National Assembly calling for a devaluation of the currency that would stabilize it at the rate of five colons to $1, new and higher “war taxes” and import taxes, and limits on luxury imports. The program is expected to draw angry protests from workers and peasants who believe it will boost the cost of living, although it will include a few price freezes on basic commodities.

“This may do what the FMLN (guerrillas) has not been able to do in years--reactivate the masses,” said one economic analyst. “There will be a lot of discontent.”

The package, Duarte’s first comprehensive economic plan since taking office, was drawn up with the help of U.S. Agency for International Development officials who, according to one of Duarte’s advisers, have suggested that U.S. aid might be limited in the future if the package is not adopted. It would bring El Salvador into compliance with the International Monetary Fund’s loan requirements.

Labor Unrest Looms

In the last few months Duarte has already been confronted with a number of strikes by angry public-sector unions. The walkouts were settled with small pay increases, but then Duarte declared such strikes illegal.

That, plus an incident last summer in which the government sent security forces into the Social Security Hospital to evict occupying strikers, has earned the president resentment among many workers who once supported him.

“There’s no question that, since the election, he has bottomed out,” one labor analyst said. “Duarte has taken sides but not with the people who elected him. They want pay and jobs and he has not produced any.”

Critics of Duarte’s economic program say that he should freeze prices on a larger list of commodities and let salaries rise with inflation to protect the country’s workers.

Groups of cooperative farmers, once strong backers of the Christian Democrats, have demanded that the government push through legislation that would guarantee them financing and tax-exempt status.

The extremely conservative private sector also is attacking the economic plan, saying that it means higher taxes for the same few who pay most of the taxes now and includes no investment incentives.

But most observers expect the loudest protests to come from workers. U.S. officials admit that the new economic measures could provoke a wave of strikes and demonstrations but they are banking on Duarte’s ability to handle the reaction.

“It all has to do with how the government reacts,” said a U.S. observer. “If Duarte is prudent and there are no acts of repression, I think they are going to weather the storm.”