Leftist Victor in El Salvador Offers 'Unity' to Opponents

By JOEL MILLMAN

SAN SALVADOR, El Salvador -- Leftist Mauricio Funes ran for president under the slogan "A safe change." Now he will have to overcome suspicion from this country's business elite, and pressure from his own hard-line constituents to keep that promise.

"My administration will be animated by a spirit of national unity," the 49-year-old television newsman Sunday night told supporters from his FMLN movement.. "Let's put aside, from this very instant, the confrontation, the revenge."

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A pedestrian walks past campaign propaganda of Rodrigo Ávila, presidential candidate for the ruling Nationalist Republican, in San Salvador.

In a speech at his party's headquarters, losing candidate Rodrigo Ávila left little doubt he would contest the FMLN agenda, promising to lead a "vigilant" opposition to socialism, just as his Arena party did in the 1980s, before it won the first of four presidential elections.

The streets of San Salvador's poshest neighborhoods were filled with FMLN partisans bused in to celebrate in their opponents' stronghold. Amid flying FMLN banners—and a few Venezuelan flags—some supporters called out to Venezuelan president Hugo Chavez, others chanted the leftist mantra "The People, United, Will Never Be Defeated."

Mr. Funes has parried charges that he is an acolyte of the radical Venezuelan regime, referring often to his closer ties to Brazil's president, Luiz Inácio Lula da Silva. Mr. da Silva was one of the first leaders to call the president-elect and offer congratulations Monday. While Mr. Funes also accepted congratulations from Venezuela's leader, he emphasized that he isn't interested in turning El Salvador away from closer ties to the U.S., where more than 2 million Salvadoran expatriates reside.

Mr. da Silva, on a visit to the U.S., welcomed Mr. Funes' election, calling him an old friend and saying he was "much more flexible" ideologically than his party. Mr. da Silva added that Mr. Funes' Brazilian-born wife suggests the new leader would be closer to moderate Brazil than Mr. Chávez's Venezuela.

In his first 24 hours as president-elect, Mr. Funes won praise for sticking to his "no more polarization" campaign theme. Amid the world economic crisis -- and El Salvador's weakening economy -- Mr. Funes faces challenges in fulfilling constituents' hopes for anti-poverty relief, while also encouraging one of the most dynamic private sectors in Latin America.

Mauricio Funes

In the past five years, billions of dollars have flooded into El Salvador from international giants such as Citigroup, HSBC and ScotiaBank, all of which have snapped up local financial groups to get a piece of El Salvador's growing wealth. Wal-Mart Stores and Millicom International Cellular also recently made big investments here, drawn by El Salvador's devaluation-proof currency, the U.S. dollar, which replaced the local colon in 2001.

"This is a country with more cellular phones than people," marvels Manuel Enrique Hinds, a Minister of Finance in two past administrations and now a business consultant. Mr. Hinds, who supports Arena, nonetheless is pleased by Mr. Funes' pro-business attitude. He worries, however, that Mr.. Funes' party may not be so accommodating.

While Mr. Funes' victory Sunday was by no means an upset -- he enjoyed comfortable leads in national polls before the race narrowed in its final weeks -- it represents a stunning shift for a nation that has elected only ultra-right presidents since the late 1980s, when El Salvador was engulfed in a bloody civil war. In the post-war era, Mr. Funes' FMLN party, which rose from the ranks of guerrillas fighting as the Farabundo Martí National Liberation Front, fed the polarized culture by fielding candidates bent on reversing the status quo -- who invariably lost badly in national elections. Those defeats provide Mr. Funes now with an opportunity to lead creatively. For instance, the FMLN's last presidential candidate, Schafik Handal, pledged in 2004 to reverse dollarization, and to repudiate the many privatizations of public-sector enterprises the FMLN opposed. In contrast, Mr. Funes said he would keep the dollar, explaining that the cost of reversal far exceeded any potential benefit to restoring the colon. He also promised not to threaten private property holders, including those now operating former state enterprises.

. Mauricio Funes Even more telling, he pledged to preserve El Salvador's membership in the Central American Free Trade Agreement, a pact with the U.S. and El Salvador's Caribbean neighbors, which his party bitterly opposed.

A coming test of whether Mr. Funes can bridge right and left will be in hammering out an economic recovery package to address falling remittances from emigrants abroad, and a general slowing of investment here. Many here fear that the FMLN bloc in the National Assembly, with whom Mr. Funes has never had to work on legislation, may not share the new president's willingness to compromise with private enterprise.

"This is a new experience for the country," warns Raúl Melara Morán, the executive director of ANEP, El Salvador's main private business group. For now, Mr. Melara said, his membership is hopeful that the president-elect will keep saying the right things about respecting private enterprise, otherwise El Salvador could experience disinvestment and capital flight.

"His party historically has run on the idea of creating a socialist government," Mr. Melara explained. "He has to keep his own campaign promise not to do that. He has to be the one governing the country, not his party."

—David Luhnow in New York contributed to this article.

Write to Joel Millman at joel.millman@wsj.com

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