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El Salvador
>> Regional Overview >> El Salvador Overview
Development Challenge Summary Tables
Program Summary
Previous Years' Activities
2001, 2000, 1999, 1998, 199715
Introduction
El Salvador's small size (land area equivalent to Massachusetts) belies its political and economic importance to the United States. More than 1.5 million Salvadorans now reside in the United States, many of them illegally, and their remittances to family in El Salvador are an important source of assistance to many households. Better social and economic prospects at home would reduce dependence on this income and help stem the illegal immigration. More prosperous Salvadoran citizens would concurrently make the country a better market for U.S. goods and services, as well as a better site for U.S. investments. The United States already is El Salvador's most important trading partner, absorbing 60 percent of its exports and providing more than 50 percent of its imports. The recently approved Caribbean Basin Trade Partnership Act will bring further trade benefits to the Salvadoran populace. The country's proximity and the mobility of its population exacerbate cross-border issues such as HIV/AIDS, tuberculosis, and greenhouse gas emissions, requiring constant cooperation and consultation. After the civil war in El Salvador, the U.S. Government invested heavily in securing peace within the country. While the 1992 Peace Accords have been very successful overall, with the development of a democratic state and a market economy, these gains are still fragile. In addition, the United States has humanitarian interests within the country, given that, despite improvements, El Salvador still has significant poverty and suffers from frequent natural disasters. Finally, the country is a key regional partner in the fight against the international trafficking of drugs.
The Development Challenge
Still recovering from the effects of Hurricane Mitch that struck in October 1998, El Salvador was jolted by two major earthquakes in January and February 2001, making the development environment much more difficult. The earthquakes killed 1,159 and caused at least $2 billion in damage. This conservative estimate may eventually rise as the full impact of both earthquakes is assessed more completely. More than 1.5 million Salvadorans have been affected by the earthquakes or roughly one quarter of the country's population. Social infrastructure has been especially hard hit, with significant losses of homes, schools, health units, and municipal infrastructure. Almost 335,000 homes were damaged or destroyed. As one of the first organizations on the ground after the earthquake, USAID's Office of Foreign Disaster Assistance provided nearly $13.5 million of support in critical areas, such as temporary housing. The U.S. Government pledge of $110 million, which is requested in the current budget justification, was in response to the damage of the first earthquake. USAID will continue to seek additional funding for reconstruction needs resulting from the second earthquake and to help alleviate the anticipated gap of $600 million between donor pledged funds and reconstruction requirements.
USAID's strategy contributes to achievement of Agency goals 4 and 5 - "Stabilize World Population and Protect Human Health" and "The World's Environment Protected for Long-Term Sustainability," respectively. Given the scope of global problems that could potentially be addressed, the Mission has chosen to concentrate on protection of globally important biodiversity and reduction of Green House Gases (GHGs) associated with Global Climate Change (GCC); and on support for HIV/AIDS prevention and services to at-risk children. USAID phased out its reproductive health assistance in 2000, bringing it to a successful conclusion and producing and disseminating a final report on contribution. USAID's program is key to the Embassy's Mission Performance Plan's (MPP) strategic goals of Broad Based Growth, Open Markets, Democracy, Environment, and Population and Health.
The USAID response, working within the framework of the U.S. Embassy's Mission Performance Plan (MPP), is a multi-faceted program that contains components in economic growth, democracy and governance, child survival and reproductive health, potable water provision, and earthquake reconstruction. The principal thrust of the overall USAID program for El Salvador, embodied in the strategy covering the 1997-2002 period, is poverty reduction, and the primary customers are poor women, youth, and children residing in rural areas.
In part owing to this assistance program, El Salvador is making progress across a broad number of areas. USAID is proud of the progress that has been made in increasing access of the rural poor to necessary services. The program is achieving its primary focus: to reduce rural poverty. According to the national household survey, rural poverty has declined from 66 percent in 1992 to 55 percent today, a fall of 11 percentage points. USAID is also tackling the issue of violence under its rule of law program, working with the U.S. Department of Justice (DOJ) on a new community policing initiative which has reduced crime by 46% in target communities, with murders down by 57% and arrests up by 85%. In health, USAID helped stem the summer 2000 outbreak of dengue fever that caused more than 30 infant deaths. On the policy side, it played an important role in the preparation and presentation to President Flores of a health reform proposal submitted by the National Health Council. Due to USAID interventions, municipalities and citizens are playing an increasingly proactive role in assuring supplies of potable water. Ten municipalities have now been added to those that manage their own systems, and more than a hundred citizens' groups are active in water-related activities. The Hurricane Mitch reconstruction program, an outgrowth of extensive consultations with affected communities and their elected leaders and local organizations, is expected to be completed by the end of fiscal year 2001.
Reflecting prudent economic policies, El Salvador has a healthy foreign debt position. The country's total debt stock is a little over $3.6 billion. This amounts to 31% as a share of GNP, and debt service as a share of export earnings is 11%. Both shares are quite modest by developing country standards. Of the country's medium and long-term debt, almost 70 percent is with multilateral institutions, including the Central American Bank for Economic Integration (CABEI), the World Bank, and the Inter-American Development Bank (IDB).
Other Donors
The United States continues to be the largest bilateral donor in El Salvador, followed by Japan, Germany, and Spain. However, the lion's share of the economic development assistance comes from multilateral creditors, including the IDB, the World Bank, and CABEI. These institutions disbursed $255 million in 1998, the latest year for which data are available. Assistance from these banks in recent years had stalled owing to the failure of the Legislative Assembly to ratify programs, a problem that has eased somewhat in the wake of the earthquake disasters. Other multilateral donors consist of the United Nations Development Program (UNDP), the World Food Program (WFP), the Pan American Health Organization (PAHO), and the European Union (EU).
FY 2002 Program
The centerpiece for the FY 2002 program is the Earthquake Reconstruction intervention for which USAID intends to utilize $58 million from a combination of new funds, prior year funds, and funding from other sources yet to be identified. This amount, when combined with the $52 million from FY 2001, will fulfill the $110 million pledge for the first earthquake. As noted above, USAID will also continue to seek additional sources of funding for FYs 2002 and 2003 for additional reconstruction needs caused by the second earthquake. This program will restore community infrastructure for the rural poor, focusing on the repair and reconstruction of homes, schools, health facilities, and potable water systems. It will stimulate economic activity, working in tandem with micro and small entrepreneurs (MSE) and small farmers. It will also mitigate the adverse effects of future disasters, primarily through helping communities put in place land-use ordinances and disaster mitigation plans. Finally, it will help preserve USAID's successful investments in municipal development through assisting in the repair of rural judicial centers and municipal offices.
The ongoing development program with its focus on providing economic opportunities for the rural poor will significantly complement earthquake reconstruction efforts. USAID will work with 11 rural-based financial intermediaries to serve the needs of the earthquake-affected. It will pursue economic dialogue with the Government of El Salvador (GOES), helping it to develop a strategy and action plan for the re-activation of the productive sectors and to pull together its overall earthquake reconstruction program. USAID will participate actively in the reconstruction of rural schools and early childhood centers. Since research demonstrates that investments in early childhood education generate greater returns than any other investment in education, USAID will pursue implementation of its new early childhood education program -- the first of its kind in both El Salvador and the region. It will continue work with rural-based non-governmental organizations (NGOs) to provide environmentally sound agricultural technology. Finally, USAID will maintain its successful small productive infrastructure program providing for roads, bridges, and electrical transmission lines.
An important goal of the program is transformation and consolidation of El Salvador's nascent democracy. Through aggressive implementation of the new criminal and criminal procedures codes, USAID will continue to assist the shift of the country's judicial system to one that is oral and adversarial. Specific initiatives include assistance to the nation's law schools in changing their curricula to reflect the new codes, further development of legal centers in rural areas, and the establishment of a government-wide Office of Ethics, a key anti-corruption initiative. In local governance, USAID will assist the country's mayors' association - Corporation of Municipalities of El Salvador (COMURES) - to move forward a proposal for a new property tax that would be administered by municipalities. These local governments need access to additional resources if they are to meet the growing needs of their poor, rural constituents. USAID will continue work to modernize 28 target municipalities by helping them with their accounting systems, improving their administration, and assisting them to introduce new computer systems. And USAID will enhance citizen participation in government through participatory planning processes, open city council meetings, public budget meetings, and the preparation of financial accounts information.
In the area of health, USAID will continue to reduce child mortality through expanded coverage of primary health facilities, prevention and treatment of respiratory illnesses and diarrhea, improved nutrition, expanded use of integrated management of childhood illnesses (IMCI), and increased access to potable water and sanitation services. It will also strengthen and expand reproductive health and family planning information and services, reduce reproductive health problems through improved safe motherhood and birth outcomes, and prevent sexually transmitted infections (STIs) and HIV/AIDS. In particular, USAID will enhance the sustainability of the Salvadoran Demographic Association, the most important non-governmental institution providing family planning services in country.
To provide for potable water supplies, USAID will restore micro-watersheds in 18 municipalities. It will assist with the repair of wells and water systems damaged by the earthquakes, as well as fund other small water projects and sewage treatment and solid waste facilities. USAID will work with farmers, especially those affected by the earthquakes, to help them diversify their production and shift from subsistence crops into high-value commodities that can be grown on fewer hectares. This shift would release land for increased tree crop production and reforestation in watersheds. The program will also engage the GOES via the "Red de Agua" (a network of NGOs interested in water issues) to revise the country's draft water law, define institutional responsibilities, and enhance the delivery of potable water supplies within the country.
Activity Data Sheets
- 519-001 Expanded Access and Economic Opportunities for El Salvador's Rural Poor Families
- 519-002 More Inclusive and Effective Democratic Processes
- 519-003 Sustainable Improvements in the Health of Women and Children Achieved
- 519-004 Increased Access By Rural Households to Clean Water
- 519-007 Reduced Vulnerability of Rural Poor to Natural Disasters in Target Areas
- 519-009 The Lives of Targeted Earthquake Victims Improved
Country Background Information Resources CIA Factbook
Library of CongressNational Geographic Country Maps
State Dept. Country Information
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Last Updated on: February 12, 2003 |
