Of all the groups reacting initially to the unexpected signing of the peace proposals by the five Central American presidents at Esquipulas, Guatemala, on August 7, the most negative response in the region came from leaders of the Salvadoran Farabundo Marti National Liberation Army (FMLN), who stated that they would not adhere to any agreements made in settings in which they did not participate directly.
Since the military fortunes of the guerrillas in El Salvador have been in sharp decline during the past three years, this position might seem surprising at first glance. But the reasons for this recalcitrance over the peace proposals are complex and lie in the peculiar relationships that have developed between the guerrillas and the Salvadoran economy, sectors of the Salvadoran labor movement, and the Nicaraguan government. These relationships, in turn, reveal much about the overall nature of the political system in El Salvador today, and they are unlikely to be affected by the forthcoming presidential elections in the United States.
Guerrilla strength is down from more than 11,000 combatants in 1984 to less than 6,500 today. The area under FMLN control has been reduced during the past two years from around one-third of the national territory to around 12 percent. Beginning in 1985, a small trickle of defectors began to surrender to government forces, complaining of hunger and poor morale. Guerrilla units began to avoid armed contact with government troops where possible.
But if the guerrilla armies no longer pose a serious threat to the continued existence of the government, they can still inflict significant damage to the nation's economy, especially during the harvest season from November to February. Sabotage during the past several years has caused economic losses estimated to be nearly as much as the total amount of U.S. economic assistance to the country (over $2 billion) since 1980. The earthquake of October 1986 added another billion dollars in damage. A weakened economy poses a serious political problem for the government since it heightens domestic competition for government relief - housing, roads, schools, and other government services. As the economy deteriorates, so do government revenues to satisfy these demands. U.S. and Salvadoran military experts believe that sabotage against the economy, in the form of blown bridges and electric facilities, damage to farm crops, traffic stoppages, and so on, can continue into the indefinite future even if overall guerrilla strength continues to decline.
Economic sabotage, poor agrarian productivity (caused in large part by low investment by private land holders and in part by a drought last year), inflation, and low commodity prices on world markets for El Salvador's crops in 1986 and 1987 forced President Jose Napoleon Duarte to cut spending, devalue the currency, and raise taxes. These measures increased unemployment both in the government and private sectors. Moreover, real wage rates for most workers have failed to keep up with inflation.
Labor defections
Responding to these developments, some labor leaders in early 1986 defected from pro-government federations to create a new Marxist group, the National Unity of Salvadoran Workers (UNTS), which opposes the government. In 1986 and 1987, FMLN leaders began to support the claims of UNTS. They
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