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El Salvador - Overview

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El Salvador is the third largest economy in Central America, and the most densely populated, with 6.2 million mainly urban inhabitants.

In the years following the end of the civil war in 1992, El Salvador made significant democratic advances, including successive free and fair elections.  The democratic transition has been accompanied by significant social and economic progress, including reduced infant mortality and improved literacy.  Despite these gains, the country continues to face daunting impediments to development, including poverty and vulnerability to natural disasters.  With the global financial crisis of 2008-9, El Salvador’s economy suffered reversals that are still being felt today.  El Salvador has one of the world’s highest homicide rates, largely attributable to gangs.

During a March 2011 visit to El Salvador, President Barack Obama and President Mauricio Funes pledged to strengthen cooperation through the new Partnership for Growth (PFG) initiative.  The PFG commits both governments to work closely together to boost competitiveness and reduce insecurity in order to rapidly expand broad-based economic growth in El Salvador.  On Nov. 3, 2011, the Salvadoran and U.S. governments signed the PFG Joint Country Action Plan.

USAID programs in El Salvador are aligned with and contribute to achieving the PFG goal to expand broad-based economic growth in a more secure El Salvador.  Security activities help strengthen the justice system and government accountability, reduce community crime and violence, and improve education for secondary students and out-of-school youth.  Economic assistance helps create a better business environment and to increase the production of tradables (exports whose prices are set on the international market), particularly for Small and Medium Enterprises (SMEs).  USAID actively builds public-private alliances with civil society, community organizations and the private business sector to sustain program efforts.

Programs 

Improved Citizen Security and Rule of Law

USAID provides technical assistance to strengthen the justice system and to improve the management and investigative capacity of the Attorney General’s Office (AGO), the Public Defender (PGR), the National Civilian Police (PNC), forensic services, judges and court personnel.  Interventions help professionalize El Salvador’s civil service and enhance public confidence in the government.  The program also helps increase the use of alternative dispute resolution to reduce congestion in the formal judicial system.  Government ethics and anti-corruption programs promote greater transparency, accountability and more responsive governance.  USAID will also provide support for merit-based hiring in the civil service and implementation of the Access to Information Law and a code of ethics, all of which are specific actions in the PFG Joint Country Action Plan. 

USAID supports a comprehensive approach to crime and violence prevention, focusing on municipalities identified by the Salvadoran government as having high crime rates.  Activities include the establishment of municipal crime prevention councils and the expansion of community policing, proven to lower crime rates.  A major USAID initiative provides educational opportunities for vulnerable, disadvantaged boys and girls in lower secondary school (grades 7-9), and out-of-school youth, ages 12-24.  Interventions support the Ministry of Education expansion of the Full Time Inclusive School that extends the school day and offers an enhanced curriculum.  USAID also provides vocational training and after-school programs. 

Expand Broad-Based Economic Growth

USAID provides assistance and training to improve municipal administration and services for local economic development.  Activities support the creation of Municipal Competitiveness Councils, municipal economic development plans, one-stop business services windows, and the Municipal Competitiveness Index that ranks municipalities for transparency and quality of services for the business community.  At the national level, USAID provides support to the Ministry of Economy and the Salvadoran Export Promotion Agency (PROESA) in trade and investment facilitation.  USAID also helps the Salvadoran government to modernize budget management systems and provides assistance for tax policy analysis and reform at the national and municipal levels.  

Helping SMEs improve productivity and to produce quality products for export, is a goal of PFG.  USAID provides technical assistance, training, and information technology to the Salvadoran government and private entities to improve business services for SMEs seeking to export.  Activities establish linkages and alliances with private sector organizations to identify business opportunities for SMEs to secure sales with national and international buyers.  Higher education and job training programs align workforce skills with productive sector needs and promote innovative business expansion. 

USAID promotes the adoption of sustainable production of agro-tradables to expand exports.  The adoption of these practices will also help the country to mitigate the impact of global climate change.

Last updated: March 06, 2014

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