El Salvador: Albaphobia?

We republish this interesting article by Jay Hartling Chavez about the campaign the Salvadorean oligarchy has launched against ALBA agreements with Venezuela. 

El Salvador’s right-wing party, ARENA, and its commercial wing, ANEP (National Association of Private Enterprise) have recently come out swinging against ALBA Petroleos and its derivative companies, insisting the mixed company be investigated for money-laundering, corruption, illicit activities, and breaking various competition and foreign-ownership laws. The US embassy has stated publicly that they are “observing” the situation[2]. All of these accusations have been made without providing a shred of evidence to back them up. “Pot-kettle-black” comes to mind. Two lawsuits have been launched by ANEP/ARENA – one with the Competition Bureau, and the other with the Attorney General’s Office – demanding that ALBA Petroleos be investigated. In response to its publicly-unsubstantiated accusations, an anti-defamation suit has been brought against the President of ANEP (Arnoldo Jiménez) by ALBA Petroleos, led by well-respected lawyer Fabio Castillo.

Let’s be clear – these audacious accusations are occurring in the year leading up to a presidential election. The sheer hypocrisy of the statements would be laughable if it wasn’t for the fact that most of the media, and therefore the message, is controlled by the Salvadorian right. The media outlets are constantly bombarding the public with dramatic allegations and half truths. And finally, whatever happened to ARENA/ANEP’s uncompromising belief in free enterprise, the free market and open competition?

ALBA Petroleos is essentially a public-private partnership (P3) between ENEPASA, an inter-municipal non-profit owned by seventeen Salvadorian municipalities (most of them administered by the FMLN), and Petroleos de Venezuela – Venezuela’s state-owned oil company. ENEPASA’s slogan is “Energy for Your Well-Being”, and although its focus is currently petroleum, they are preparing an investment of $165 in renewables. Gas at ALBA’s more than 32 service stations is usually anywhere from 3-5 cents or more below prices at other gas stations (plus, they have nice washrooms). The petroleum is purchased, not donated, at preferential terms, and stored at the new ALBA facility in the port of Acajutla. What makes this public-private partnership different is its philosophy and purpose. ALBA Petroleos is a child of ALBA (The Bolivarian Alliance for the Americas), the fair trade organization that unites progressive countries of the south under the banner of humanism, solidarity, integration, Latin American cooperation, complementarity and social benefit for the people. ALBA currently has eight member countries, but others have observer status. ALBA’s interesting trade strategies, such as doctors for oil, are by now legendary. What isn’t well understood, however, are the other agreements and structures that have developed with the support of Venezuela’s enormous oil reserves.

The objective of ALBA Petroleos is to demonstrate that you can build a successful business founded on an alternative model, and also have a social and labour conscience. Yes, the company and its investors want to make a profit, but a percentage of that profit goes to a social development fund (Funda-ALBA) that is used for community development purposes across the country. The beneficiaries of the community development are the poorest sectors of society (and let’s face it – they’re still the majority in this tiny country) that have suffered from a history of exclusion by previous governments. More than $10 million has been invested in social programs like basic services of water and roads, schools and community recreation facilities. ALBA Petroleos is a major tax contributor to the state coffers – having paid $187 million in taxes from the sale, distribution and commercialization of petroleum products. It has also leveraged another $180 million for other companies.

ENEPASA/ALBA Petroleos has a number of subsidiaries. For example, in 2012, the company formed ALBA Foods with the goal of reactivating the agricultural sector, and creating the conditions for food sovereignty. ALBA Foods is now the country’s number one investor in reactivating small and medium-sized agricultural business (from the tiny family farm, to more medium-scale production) – creating 35,000 new jobs in El Salvador. ALBA Foods is also supporting penitentiary farms in the country with technical assistance. This year, the company announced ALBA Scholarships, where 3400 students of limited economic means and high academic achievement will receive scholarships to finish middle and high school, and attend university. Other subsidiaries are being created to work in the area of revitalizing transportation, the coffee sector and fisheries.

So what is the big deal with ARENA and ANEP? Why the attacks, and why now? Well, for one thing – a Special Legislative Commission is about to launch an exhaustive investigation into previous illicit activities associated with ARENA governments and the country’s only geo-thermal energy provider CEL-LaGeo. There are calls for other investigations as well. Secondly, the worn-out bogie man of foreign interference by (gasp) Venezuela is being trotted out again, as it always is during election time. If ARENA/ANEP and the US Embassy are so concerned about Venezuelan foreign ownership, why aren’t they concerned about the 14,000 CITGO stations in the US? Those are owned by a subsidiary of Petroleos de Venezuela and operate across the country. Venezuela also provides heating oil to families and organizations in need in the US through a public-private partnership (sound familiar?) with CITGO and Citizens Energy Corporation – a non-profit founded by former Senator Joseph Kennedy II. This year alone, the P3 will provide low cost or free heating oil to 100,000 low-income households in the US, including about 252 Native American communities and 245 homeless shelters.[3] And, if ARENA/ANEP is truly concerned about corruption, perhaps they would like to publicly explain what happened to the $40 million that went missing during their administration for the construction of the Diego de Holguin Boulevard; or the $30 million that was supposed to be used rebuild the Women’s Hospital? The list goes on ……

Certainly, if there are illegal activities occurring in ALBA Petroleos, or any other business for that matter, they should be properly investigated and evidence brought to light. However, it is widely suspected that what this is really about, aside from deflecting attention from their own fraudulent activities in the past, is that the oligarchy has controlled the economic sphere in El Salvador for a century, and now there’s a new kid in town, and they seriously don’t like the free market competition! And, it’s not only the competition for dollars -- ALBA Petroleos has shown that you can conduct business and compete in the so-called marketplace, but also make major contributions to the betterment of society – something the private sector has never done in El Salvador. So, they should watch where they swing, because the new kid’s got a successful “nocaut”!

Jay Hartling Chavez is an independent journalist and consultant based in San Salvador.  For more information, contact This email address is being protected from spambots. You need JavaScript enabled to view it.

[1] Albaphobia is a term coined by the FMLN Mayor of Nuevo Cuscatlán, Nayib Bukele

[2] http://elmundo.com.sv/ee-uu-observa-el-pleito-de-anep-y-alba-petroleos

[3] http://www.digitaljournal.com/article/342972