military, and death squads in the anticommunist cause. The ORDEN organizational network served as the “foundation” for the party.95 Among the party’s founders was former intelligence chief Maj. Roberto D’Aubuisson, who combined ultranationalist and anticommunist rhetoric to galvanize support for the new party. His charismatic persona and fiery speeches fueled U.S. fears that the election could deliver a “slow-motion right-wing coup” rather than victory for the center-right PDC.96 The Reagan administration reacted to the growing strength of ARENA by channeling financial support to Duarte in hopes of ensuring a PDC victory, which was seen as vital to approval for continued military aid.
While the PDC won a plurality of the votes (40.27 percent, twenty-four seats) in the 1982 elections, ARENA (29.32 percent, nineteen seats) joined in coalition with the PCN (19.03 percent, fourteen seats) to ensure control of the assembly. As a result, D’Aubuisson, who had been described by former U.S. ambassador Robert White (1977–80) as a “pathological killer” was poised to be elected as provisional president. The Reagan administration sent the message via a congressional delegation that U.S. aid was contingent on the election of a moderate government. In a conciliatory move, Salvadoran banker Dr. Álvaro Magaña was named president. Unhappy with Washington’s influence and manipulation, D’Aubuisson was named assembly president.97 There were deep divisions between the PDC, ARENA, and the PCN, which had a general mistrust of one another. Under pressure from the United States, the parties signed the Pact of Apaneca in an attempt to end the infighting between parties. Though its strength was somewhat diminished following the pact, ARENA was able to use its position in the transitional government to limit the size of land expropriated in the land reforms, protecting some of the larger estates and also overseeing the ministries charged with land reform, which enabled ARENA to essentially halt the reforms.98 Thus, the oligarchy was establishing a foothold in politics once again thanks, in part, to the electoral process.
“Demonstration” Democracy and the Making of a New Right
The March 1984 elections were supposed to signify the transition away from the political uncertainty that had plagued El Salvador since the 1979 coup. Still concerned that a victory by ARENA would threaten the flow of military aid to defeat the FMLN, the United States spent $6 million on the elections, including $2 million in covert aid to Duarte and the PCN.99 No parties from the Left participated in the elections, based on both principle and security concerns. Despite a number of significant irregularities and much confusion at polling stations, voter turnout was higher than predicted. Approximately 1.4 million Salvadorans voted in the 1984 elections. Duarte won 43 percent of the vote, followed by 30 percent for D’Aubuisson. Duarte’s failure to win a majority of the vote necessitated a runoff in May. Duarte defeated ARENA’s D’Aubuisson for president in the runoff with almost 54 percent of the vote. Duarte’s presidential victory was also buoyed by PDC victories in the 1985 legislative and municipal elections, which gave the party a majority in the Legislative Assembly.
The Duarte government embarked on a program of reforms to undercut the popular support for the FMLN in an effort to stem the effect of the war on the economy.100 Such reforms included wage increases for public-sector employees, a minimum wage for urban workers, and increased access to credit and price controls.101 Many of Duarte’s policies were made possible by the influx of economic and military assistance from the United States after his election. But these policies were increasingly at odds with the new economic prescription being encouraged by the United States: liberal economic reforms, including devaluation, privatization, and trade liberalization. Duarte resisted, believing that such policies would be unpopular and would generate support for the FMLN. But his policies had become unsustainable. In 1985, 50 percent of the national budget was dedicated to the war.102 Rising inflation, capital flight, and an expanding budget deficit required action. Inflation increased from 11.7 percent in 1984 to 31.9 percent in 1986.103 In 1986 the Salvadoran government was forced to launch a new stabilization policy, which included a 100 percent nominal devaluation of the Salvadoran colón.104
While the austerity measures weren’t popular with the traditional elites, they were well received by the Salvadoran Foundation for Economic and Social Development (FUSADES). FUSADES was created with funding from the United States Agency for International Development (USAID) in 1983 in response to Duarte’s hesitance at Washington’s new economic direction.105 The Salvadoran think tank, which was designed to promote the Reagan administration’s commitment to neoliberal reform in the country, served as a key instrument for the elites in advancing their economic policies. The positions and policies of FUSADES closely mirrored the sentiments of the elites espoused during the late nineteenth century: unfettered economic liberalism. That said, there was also the recognition of the need to break from export agriculture in the increasingly globalized economy. This aspect was clearly at odds with some of the agricultural elites and came to symbolize a growing rupture within elites—the traditional agrarian elites versus the emerging agro-industrialists.106 Not surprisingly, the key founders of FUSADES were also members of the Association of Coffee Processors and Exporters (ABECAFE), founded in 1961 to represent the interests of coffee processors and exporters (as distinct from the growers). From 1984 to 1992, USAID contributed $100 million to FUSADES alone.107 Recognizing that the United States would never support ARENA with D’Aubuisson as the head of the party, he was replaced by Alfredo “Fredy” Cristiani in 1985. Cristiani, a wealthy coffee grower, businessman, former president of ABECAFE, and member of the board of directors of FUSADES, represented a new, more moderate (and electable) right. By 1988, ARENA was the dominant electoral force in Salvadoran politics. Aided by allegations of egregious corruption by the Duarte administration, ARENA won thirty-one seats in the Assembly and 178 mayoralties (including all departmental capitals) in the 1988 elections. Together with the PCN, which won seven seats and four mayoralties, ARENA controlled the assembly. By the late 1980s, ARENA no longer represented the interests of the landed oligarchy to the extent that it had earlier in the decade.108 It was becoming a powerful extension of the new right, and it was willing to sacrifice former allies to achieve its vision for El Salvador’s future.
The Rocky Road to Peace
By 1989 there was a significant shift in both the domestic and international context. The beginning of the collapse of the Soviet Union and the discrediting of communist ideology together with the election of George H. W. Bush as president, in 1988, resulted in a change in U.S. foreign policy in the region. Latin American insurgencies were not solely in the context of an international communist threat, but rather as domestic issues. The decline of the Soviet Union also had an impact on the FMLN’s willingness to seek a negotiated settlement to the war.109 In 1989, FMLN commander Joaquín Villalobos wrote an article in Foreign Policy detailing the FMLN’s ideological position and preference for democracy.110 The regional commitment made to peace and democracy by the Central American presidents in the Esquipulas I and II peace accords, in 1986–87, as well as changing dynamics in Cuba and Nicaragua, also created an environment conducive to a negotiated settlement.111 These changes, combined with ARENA’s seeming transformation from extremist to pragmatic also helped pave the way for a political settlement to the war.
In early 1989 the FMLN offered to lay down their weapons and participate in the presidential elections provided that the government postpone the elections for six months, and other criteria, to ensure safeguards for its participation. While the FMLN ultimately did not participate in the elections, the Democratic Convergence (CD), a coalition of center-left parties affiliated with the FDR, did. Guillermo Ungo, who returned from exile along with Rubén Zamora in 1987, was the CD’s presidential candidate. The elections confirmed ARENA’s new political dominance and the PDC’s precipitous decline. ARENA candidate Alfredo Cristiani won by a comfortable margin in the first round of voting with 54 percent of the vote; PDC candidate Fidel Chávez Mena won 36 percent.112 Cristiani assumed the presidency in June, pledging economic recovery and peace talks. Cristiani’s plans for economic recovery were largely based on the recommendations of FUSADES. The plan sought a strict adherence to the neoliberal model through
