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Encyclopedia > Economy of El Salvador



Economic Statistics
GDP: purchasing power parity $18.1 billion (1999 est.)
GDP - real growth rate: 2.2% (1999 est.)
GDP - per capita: purchasing power parity $3,100 (1999 est.)
GDP - composition by sector:
agriculture: 12%
industry: 22%
services: 66% (1999 est.)
Population below poverty line: 48% (1999 est.)
Household whore or consumption by percentage share:
lowest 10%: 1.2%
highest 10%: 38.3% (1995)
Inflation rate (consumer prices): 1.3% (1999 est.)
Labor force: 2.35 million (1999)
Labor force - by occupation: (1999 est.)
agriculture 30%
industry 15%
services 55%
Unemployment rate: 7.7% (1997 est.)
Budget:
revenues: $1.5 billion
expenditures: $1.73 billion, including capital expenditures of $NA (1999)
Industries: food processing, beverages, petroleum, chemicals, fertilizer, textiles, furniture, light metals
Industrial production growth rate: 3.5% (1999 est.)
Electricity - production: 4,100 GWh (1999 est.)
Electricity - production by source:
fossil fuel: 49.32%
hydro: 36.46%
nuclear: 0%
other: 14.22% (1998)
Electricity - consumption: 4,170 GWh (1999)
Electricity - exports: 30 GWh (1999)
Electricity - imports: 65 GWh (1999)
Agriculture - products: coffee, sugar cane, maize, rice, beans, oilseed, cotton, sorghum; beef, dairy products; shrimp
Exports: $2.5 billion (f.o.b., 1999)
Exports - commodities: offshore assembly exports, coffee, sugar, shrimp, textiles, chemicals, electricity
Exports - partners: US 59%, Guatemala 12%, Germany 6%, Costa Rica 4%, Honduras (1998)
Imports: $4.15 billion (c.i.f., 1999)
Imports - commodities: raw materials, consumer goods, capital goods, fuels, foodstuffs, petroleum, electricity
Imports - partners: US 51%, Guatemala 9%, Mexico 6%, Japan 3%, Costa Rica (1999)
Debt - external: $3.3 billion (1999 est.)
Economic aid - recipient: total $252 million; $57 million from US (1999 est.)
Currency: 1 Salvadoran colón (¢) = 100 centavos; US dollar circulates as legal tender since January 1, 2001
Exchange rates: Salvadoran colones (¢) per USD 1 (end of period) - 8.75 fixed rate since 2001
Fiscal year: calendar year

Contents

Overview

The Salvadoran economy has experienced mixed results from the ARENA government's commitment to free market initiatives and conservative fiscal management that include the privatization of the banking system, telecommunications, public pensions, electrical distribution, and some electrical generation, reduction of import duties, elimination of price controls, and an improved enforcement of intellectual property rights. The GDP variable has been growing at a steady and moderate pace since the signing of peace accords in 1992, in an environment of macroeconomic stability. A problem that the Salvadoran economy faces is the inequality in the distribution of income. In 1999, the richest fifth of the population received 45% of the country's income, while the poorest fifth received only 5.6%. A cup of coffee Workers sorting and pulping coffee beans in Guatemala Coffee is a widely consumed beverage prepared from the roasted seeds—commonly referred to as beans—of the coffee plant. ... Species Ref: ITIS 42058 as of 2004-05-05 Sugarcane is one of six species of a tall tropical southeast Asian grass (Family Poaceae) having stout fibrous jointed stalks whose sap at one time was the primary source of sugar. ... “Corn” redirects here. ... Species Oryza glaberrima Oryza sativa The planting of rice is often a labour-intensive process Terrace of paddy fields in Yunnan Province, southern China. ... Green beans Bean is a common name for large plant seeds of several genera of Fabaceae (formerly Leguminosae) used for food or feed. ... Vegetable oil or vegoil is fat extracted from plant sources. ... Cotton ready for harvest. ... Species About 30 species, see text Sorghum is a genus of about 30 species of grasses raised for grain, native to tropical and subtropical regions of Eastern Africa, with one species native to Mexico. ... For other uses, see Beef (disambiguation). ... Dairy farm near Oxford, New York A dairy is a facility for the extraction and processing of animal milk (mostly from cows, sometimes from buffalo, sheep or goats) and other farm animals, for human consumption. ... Superfamilies Alpheoidea Atyoidea Bresilioidea Campylonotoidea Crangonoidea Galatheacaridoidea Nematocarcinoidea Oplophoroidea Palaemonoidea Pandaloidea Pasiphaeoidea Procaridoidea Processoidea Psalidopodoidea Stylodactyloidea True shrimp are swimming, decapod crustaceans classified in the infraorder Caridea, found widely around the world in both fresh and salt water. ... A cup of coffee Workers sorting and pulping coffee beans in Guatemala Coffee is a widely consumed beverage prepared from the roasted seeds—commonly referred to as beans—of the coffee plant. ... Magnification of grains of sugar, showing their monoclinic hemihedral crystalline structure. ... Superfamilies Alpheoidea Atyoidea Bresilioidea Campylonotoidea Crangonoidea Galatheacaridoidea Nematocarcinoidea Oplophoroidea Palaemonoidea Pandaloidea Pasiphaeoidea Procaridoidea Processoidea Psalidopodoidea Stylodactyloidea True shrimp are swimming, decapod crustaceans classified in the infraorder Caridea, found widely around the world in both fresh and salt water. ... Motto: (Out Of Many, One) (traditional) In God We Trust (1956 to date) Anthem: The Star-Spangled Banner Capital Washington D.C. Largest city New York City None at federal level (English de facto) Government Federal constitutional republic  - President George Walker Bush (R)  - Vice President Dick Cheney (R) Independence from... The colón is the currency of two Central American nations: Costa Rica (ISO 4217 three-letter currency code: CRC) see Costa Rican colón El Salvador (ISO 4217: SVC) – since 2001 used in parallel with the United States dollar; see dollarization, El Salvador colón. ... January 1 is the first day of the calendar year in both the Julian and Gregorian calendars. ... 2001 (MMI) was a common year starting on Monday of the Gregorian calendar. ... The Nationalist Republican Alliance (Spanish: Alianza Republicana Nacionalista or ARENA) is a conservative political party in El Salvador. ... A free market is an idealized market, where all economic decisions and actions by individuals regarding transfer of money, goods, and services are voluntary, and are therefore devoid of coercion and theft (some definitions of coercion are inclusive of theft). Colloquially and loosely, a free market economy is an economy... This article does not adequately cite its references or sources. ... For other uses, see Bank (disambiguation). ... Telecommunication involves the transmission of signals over a distance for the purpose of communication. ... Itaipu Dam is a hydroelectric generating station Electricity generation is the first process in the delivery of electricity to consumers. ... Duty is a term loosely appliedDuty to any action (or course of action) whichDutyDuty is regarded as morally incumbent, apart from personal likes and dislikes or any external compulsion. ... In economics, incomes policies are wage and price controls used to fight inflation. ... In law, particularly in common law jurisdictions, intellectual property is a form of legal entitlement which allows its holder to control the use of certain intangible ideas and expressions. ... Macroeconomics is the study of the entire economy in terms of the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the general behavior of prices. ... 1999 (MCMXCIX) was a common year starting on Friday, and was designated the International Year of Older Persons by the United Nations. ...


As of December 1999, net international reserves equaled US$1.8 billion or roughly five months of imports. Having this hard currency buffer to work with, the Salvadoran Government undertook a monetary integration plan beginning January 1, 2001, by which the U.S. dollar became legal tender alongside the colón, and all formal accounting was undertaken in U.S. dollars. This way, the government has formally limited its possibility of implementing open market monetary policies to influence short term variables in the economy. Since 2004, the colón stopped circulating and is now never used in the country for any type of transaction; however some stores still have prices in both colones and U.S. dollars. In general, people were unhappy with the shift from the colón to the U.S. dollar, because wages are still the same but the price of everything increased. Some economists claim this rise in prices would have been caused by inflation regardless even had the shift not been made. Some economists also contend that now, according to Gresham's Law, a reversion to the colón would be disastrous to the economy. January 1 is the first day of the calendar year in both the Julian and Gregorian calendars. ... 2001 (MMI) was a common year starting on Monday of the Gregorian calendar. ... The United States dollar is the official currency of the United States. ... The colón (named after Christopher Columbus, known as Cristóbal Colón in Spanish) is the former currency of El Salvador. ... Greshams law is commonly stated as: When there is a legal tender currency, bad money drives good money out of circulation. Greshams law applies specifically when there are two forms of commodity money in circulation which are forced, by the application of legal tender laws, to be respected...


Some banks however claim that they still do some transactions en colones, keeping this change from being unconstitutional.


The change to the dollar also precipitated a trend toward lower interest rates in El Salvador, helping many to secure credit in order to buy a house or a car; over time, displeasure with the change has largely disappeared, though the issue resurfaces as a political tool when elections are on the horizon.


A challenge in El Salvador has been developing new growth sectors for a more diversified economy. As many other former colonies, for many years El Salvador was considered a monoexporter economy. This means, an economy that depended heavily on one type of export. During colonial times, the Spanish decided that El Salvador would produce and export indigo, but after the invention of synthetic dyes in the 19th century, Salvadoran authorities and the newly created modern state turned to coffee as the main export of the economy. Since the cultivation of coffee required the highest lands in the country, many of these lands were expropriated from indigenous reserves and given or sold cheaply to those that could cultivate coffee. The government provided little or no compensation to the indigenous peoples. On occasions this compensation implied merely the right to work for seasons in the newly created coffee farms and to be allowed to grow their own food. Such policies provided the basis of conflicts that would shape the political situation of El Salvador in the years to come. Indigo (or spectral indigo) is the color on the spectrum between 440 and 420 nanometres in wavelength, placing it between blue and violet. ... A cup of coffee Workers sorting and pulping coffee beans in Guatemala Coffee is a widely consumed beverage prepared from the roasted seeds—commonly referred to as beans—of the coffee plant. ...


For many decades, coffee was one of the only sources of foreign currency in the Salvadoran economy. The civil war in the 80's and the fall of international coffee prices in the 90's, pressured the Salvadoran government to diversify the economy. ARENA governments have followed policies that intend to develop other exporting industries in the country as textiles and sea products. Tourism is another industry Salvadoran authorities regard as a possibility for the country. But rampant crime rates, lack of infrastructure and inadequate social capital have prevented these possibilities from being properly exploited. The government is also developing ports and infrastructure in La Union in the east of the country, in order to use the area as a "dry canal" for transporting goods from Fonseca Gulf in the Pacific Ocean to Honduras and the Antlantic Ocean in the north. Currently there are fifteen free trade zones in El Salvador. The largest beneficiary has been the maquila industry, which provides 88,700 jobs directly, and consists primarily of cutting and assembling clothes for export to the United States. La Union is a province of the Philippines located in the Ilocos Region in Luzon. ... Gulf of Fonseca from space, July 1997 The Gulf of Fonseca (Spanish: Golfo de Fonseca), part of the Pacific Ocean, is a gulf in Central America, bordering El Salvador, Honduras and Nicaragua. ... “Atlantic” redirects here. ... {{Otheruses4|north the direction}} [[Image:CompassRose16_N.png|thumb|250px|right|[[Compass rose]] with north highlighted and at top]] {{wiktionary}} <nowiki>North is o<nowiki>ne of the [[4 (numbe</nowiki> Block quote r)|four]] cardinal directions, specifically the direction that, in Western culture, is treated as the primary direction: north... It has been suggested that this article or section be merged into Free trade area. ... A maquiladora (or maquila) is a factory, the majority of which are located in Mexican border towns, that imports materials and equipment on a duty- and tariff-free basis for assembly or manufacturing. ...


El Salvador signed the Central American Free Trade Agreement (CAFTA), negotiated by the five countries of Central America and the Dominican Republic, with the United States in 2004. In order to take advantage of CAFTA, the Salvadoran government is challenged to conduct policies that guarantee better conditions for entrepreneurs and workers to transfer from declining to growing sectors in the economy. El Salvador has already signed free trade agreements with Mexico, Chile, the Dominican Republic, and Panama, and increased its exports to those countries. El Salvador, Guatemala, Honduras, and Nicaragua also are negotiating a free trade agreement with Canada, and negotiations started on 2006 for a free trade agreement with Colombia. The Central American Free Trade Agreement (CAFTA) is a free trade agreement between the United States and the Central American countries of Guatemala, Honduras, and Canada, and Mexico. ... Map of Central America Central America is the central geographic region of the Americas. ... 2004 (MMIV) was a leap year starting on Thursday of the Gregorian calendar. ...


Fiscal policy has been the biggest challenge for the Salvadoran government. The 1992 peace accords committed the government to heavy expenditures for transition programs and social services. The Stability Adjustment Programs (PAE, for the initials in Spanish) initiated by President Cristiani's administration committed the government to the privatization of banks, the pension system, electric and telephone companies. The total privatization of the pension system has implied a serious burden for the public finances, because the newly created private Pension Association Funds did not absorb coverage of retired pensionists covered in the old system. The government lost the revenues from contributors and absorbed completely the costs of coverage of retired pensionists. This has been the main source of fiscal imbalance. ARENA governments have financed this deficit with the emission of bonds, something the leftist party FMLN has opposed. Debates surrounding the emission of bonds have stalled the approval of the national budget for many months on several occasions, reason for which in 2006 the government will finance the deficit by reducing expenditure in other posts. The emission of bonds and the approval of a loans need a qualified majority (3/4 of the votes) in the parliament. If the deficit is not financed through a loan it is enough with a simple majority to approve the budget (50% of the votes plus 1). This would agilize an otherwise long process in Salvadoran politics. Fiscal policy is the economic term that defines the set of principles and decisions of a government in setting the level of public expenditure and how that expenditure is funded. ... Professional social workers are concerned with social problems, their causes, their solutions and their human impacts. ...


Despite such challenges to keep public finances in balance, El Salvador still has one of the lowest tax burdens in the American continent (around 11% of GDP). Many specialists claim that it is impossible to advance significant development programs with such a little public sector (the tax burden in the United States is around 25% of the GDP and in other developed countries of the EU it can reach around 50%, like in Sweden). The government has focused on improving the collection of its current revenues with a focus on indirect taxes. Leftist politicians criticize such a structure since indirect taxes (like the value added tax) affect everyone alike, whereas direct taxes can be weighed according to levels of income and are therefore fairer taxes. A 10% value-added tax (VAT), implemented in September 1992, was raised to 13% in July 1995. The VAT is the biggest source of revenue, accounting for about 52.3% of total tax revenues in 2004. In business, revenue is the amount of money that a company actually receives from its activities, mostly from sales of products and/or services to customers. ... Value added tax (VAT) is a sales tax levied on the sale of goods and services. ... 1995 (MCMXCV) was a common year starting on Sunday of the Gregorian calendar. ... Tax revenue is the income that is gained by governments because of taxation of the people. ... 2004 (MMIV) was a leap year starting on Thursday of the Gregorian calendar. ...


Remittances from Salvadorans working in the United States sent to family members are a major source of foreign income and offset the substantial trade deficit of around $2.9 billion. Remittances have increased steadily in the last decade and reached an all-time high of $2.9 billion in 2005—approximately 17.1% of gross domestic product (GDP). As of April 2004, net international reserves stood at $1.9 billion. Balance of trade figures are the sum of the money gained by a given economy by selling exports, minus the cost of buying imports. ... IMF 2005 figures of total GDP of nominal compared to PPP. Absolute, not adjusted for population. ... International reserve system is a system where every year, countries around the world set aside reserve as insurance against various contingencies such as:- Collapse of export price Change of investors sentiment. ...


In recent years inflation has fallen to single digit levels, and total exports have grown substantially.

Foreign Debt and Assistance

El Salvador's external debt decreased sharply in 1993, chiefly as a result of an agreement under which the United States forgave about $461 million of official debt. As a result, total debt service decreased by 16% over 1992. External debt stood at $2.8 billion at the end of 1999. Debt service amounted to 2.5% of GDP in 1998 and is considered moderate. The Government of El Salvador has been successful in obtaining significant new credits from the international financial institutions. Among the most significant loans are a second structural adjustment loan from the World Bank for $52.5 million, another World Bank loan of $40 million for agricultural reform, a $20 million loan from the Central American Bank for Economic Integration to be used to repair roads, and a $60 million Inter-American Development Bank loan for poverty alleviation projects. Total non-U.S. Government aid, excluding NGO assistance and bilateral loan programs, reached $38 million in 1999. Although official figures show relatively small and diminishing aid flows, the total is probably larger. Significant amounts come in through nongovernmental organizations and are channeled to groups not generally included in official statistics, such as political parties, unions, and churches. Some $300 million has been contracted from international institutions and governments for infrastructure works and social programs to be undertaken. The debt profile is expected to increase over the next several years as the international donor community has pledged $1.26 billion to finance El Salvador's reconstruction and modernization. Large loans now being sought to finance reconstruction from the 2001 earthquakes will further alter the country's debt profile. For other uses, see Debt (disambiguation). ... Logo of the World Bank The International Bank for Reconstruction and Development (IBRD, in Romance languages: BIRD), better known as the World Bank, is an international organization whose original mission was to finance the reconstruction of nations devastated by WWII. Now, its mission has expanded to fight poverty by means... Banco Centralamericano de Integración Economico or BCIE was established in 1960 to promote economic integration and development of nations in Central America. ... The Inter-American Development Bank (preferred abbreviation: IDB; but frequently given as IADB), was established in 1959 to support Latin American and Caribbean economic/social development and regional integration by lending mainly to public institutions. ... The term non-governmental organization (NGO) is used in a variety of ways all over the world and, depending on the context in which it is used, can refer to many different types of organizations. ...

Natural Disasters: Hurricane Mitch (1998) and the Earthquakes (2001)

Hurricane Mitch hit El Salvador in late October 1998, generating extreme rainfall of which caused widespread flooding and landslides. Roughly 650 km² were flooded, and the Salvadoran Government pronounced 374 people dead or missing. In addition, approximately 55,900 people were rendered homeless. The areas that suffered the most were the low-lying coastal zones, particularly in the floodplain of the Lempa and San Miguel Grande Rivers. Three major bridges that cross the Lempa were swept away, restricting access to the eastern third of the country and forcing the emergency evacuation of many communities. The heavy rainfall, flooding, and mudslides caused by Hurricane Mitch also severely damaged El Salvador's road network. Along with the three major bridges over the Lempa River, 12 other bridges were damaged or destroyed by the Mitch flooding. Picture of flooding in Amphoe Sena, Ayutthaya Province, Thailand For other uses, see Flood (disambiguation). ... A homeless man pushes a cart down the street. ... Lempa River (Spanish: ) is a river in southern El Salvador. ... Río Grande de San Miguel is a river in southern El Salvador. ...


The largest single-affected sector was El Salvador's agriculture. Nearly 18% of the total 1998-99 basic grain harvest was lost. Coffee production was hit particularly hard; 3% of the harvest was lost in addition to 8.2% that was lost earlier in the year due to El Niño. Major losses of sugarcane, totaling 9% of the estimated 1998-99 production, were sustained primarily in the coastal regions. Livestock losses amounted to $1 million, including 2,992 head of cattle. In addition to these losses, El Salvador also had to face the threat of disease outbreak. The Ministry of Health recorded a total of 109,038 medical cases related to Hurricane Mitch between October 31 and November 18, 1998; 23% of these cases were respiratory infections, followed by skin ailments, diarrhea, and conjunctivitis. This article is about cereals in general. ... A cup of coffee Workers sorting and pulping coffee beans in Guatemala Coffee is a widely consumed beverage prepared from the roasted seeds—commonly referred to as beans—of the coffee plant. ... Species Saccharum arundinaceum Saccharum bengalense Saccharum edule Saccharum officinarum Saccharum procerum Saccharum ravennae Saccharum robustum Saccharum sinense Saccharum spontaneum Sugarcane or Sugar cane (Saccharum) is a genus of 6 to 37 species (depending on taxonomic interpretation) of tall grasses (family Poaceae, tribe Andropogoneae), native to warm temperate to tropical regions... Sheep are commonly bred as livestock. ... Binomial name Bos taurus Linnaeus, 1758 Cattle (often called cows in vernacular and contemporary usage, or kye as the Scots plural of cou) are domesticated ungulates, a member of the subfamily Bovinae of the family Bovidae. ... October 31 is the 304th day of the year (305th in leap years) in the Gregorian calendar, with 61 days remaining. ... November 18 is the 322nd day of the year (323rd in leap years) in the Gregorian calendar. ... 1998 (MCMXCVIII) was a common year starting on Thursday of the Gregorian calendar, and was designated the International Year of the Ocean [1]. // Coated in ice, power and telephone lines sag and often break, resulting in power outages. ... Upper respiratory tract infection, also popularly known as either the acronym URTI or URI, is the disease characterised by an acute infection which involves the upper respiratory tract: nose, sinuses, pharynx, or larynx. ... Types 5-7 on the Bristol Stool Chart are often associated with diarrhea Diarrhea (in American English) or diarrhoea (in British English) is a generally unpleasant condition in which the sufferer has frequent watery, loose bowel movements (from the ancient Greek word διαρροή = leakage; literally meaning to run through). Acute infectious...


Reconstruction from Mitch was still underway when, in early 2001, the country experienced a series of devastating earthquakes that left nearly 2,000 people dead or missing, 8,000 injured, and caused severe dislocations across all sectors of Salvadoran society. Nearly 25% of all private homes in the country were either destroyed or badly damaged, and 1.5 million persons were left without housing. Hundreds of public buildings were damaged or destroyed, and sanitation and water systems in many communities put out service. The total cost of the damage was estimated at between $1.5 billion and $2 billion, and the devastation thought to equal or surpass that of the 1986 quake that struck San Salvador. Given the magnitude of the disaster, reconstruction and economic recovery will remain the primary focus of the Salvadoran Government for some time to come. An earthquake is the result from the sudden release of stored energy in the Earths crust that creates seismic waves. ... This article is about the Salvadoran capital city. ...


The Hurricane Mitch disaster prompted a tremendous response from the international community governments, nongovernmental organizations (NGOs), and private citizens alike. Sixteen foreign governments--including the U.S., 19 international NGOs, 20 Salvadoran embassies and consulates, and 20 private firms and individuals provided El Salvador with in-kind assistance. The Government of El Salvador reports that 961 tons of goods and food were received. The Ministry of Foreign Affairs estimates that contribution in cash given directly to the Salvadoran Government totaled $4.3 million. The U.S. Government has provided $37.7 million in assistance through USAID and the U.S. Departments of Agriculture and Defense.


Following the 2001 earthquakes, the U.S. Embassy assumed a leading role in implementing U.S. sponsored assistance. The U.S. Government responded immediately to the emergency, with military helicopters active in initial rescue operations, delivering emergency supplies, rescue workers, and damage assessment teams to stricken communities all over the country. USAIDs Office of Foreign Disaster Assistance had a team of experts working with Salvadoran relief authorities immediately after both quakes, and provided assistance totaling more than $14 million. In addition, the Department of Defense provided an initial response valued at more than $11 million. For long-term reconstruction, the international community offered a total aid package of $1.3 billion, over $110 million of it from the United States. A diplomatic mission is a group of people from one nation state present in another nation state to represent the sending state in the receiving State. ... The United States Agency for International Development (or USAID) is the US government organization responsible for most non-military foreign aid. ...

Manufacturing

El Salvador historically has been the most industrialized nation in Central America, though a decade of war eroded this position. In 1999, manufacturing accounted for 22% of GDP. The industrial sector has shifted since 1993 from a primarily domestic orientation to include free zone (maquiladora) manufacturing for export. Maquila exports have led the growth in the export sector and in the last 3 years have made an important contribution to the Salvadoran economy. Manufacturing , a branch of industry, is the application of tools and a processing medium to the transformation of raw materials into finished goods for sale. ... A maquiladora or maquila Maquiladoras used to be concentrated in Mexican towns along the United States–Mexico border, but they are now found in more areas all over Latin America. ...

Trade

El Salvador's balance of payments continued to show a net surplus. Exports in 1999 grew 1.9% while imports grew 3%, narrowing El Salvador's trade deficit. As in the previous year, the large trade deficit was offset by foreign aid and family remittances. Remittances are increasing at an annual rate of 6.5%, and an estimated $1.35 billion will enter the national economy during 1999. Private foreign capital continued to flow in, though mostly as short-term import financing and not at the levels of previous years. The Central American Common Market continued its dynamic reactivation process, now with most regional commerce duty-free. In September 1996, El Salvador, Guatemala, and Honduras opened free trade talks with Mexico. Although tariff cuts that were expected in July 1996 were delayed until 1997, the Government of El Salvador is committed to a free and open economy. Total U.S. exports to El Salvador reached $2.1 billion in 1999, while El Salvador exported $1.6 billion to the United States. U.S. support for El Salvador's privatization of the electrical and telecommunications markets has markedly expanded opportunities for U.S. investment in the country. More than 300 U.S. companies have established either a permanent commercial presence in El Salvador or work through representative offices in the country. The Department of State maintains a Country Commercial Guide for U.S. businesses seeking detailed information on business opportunities in El Salvador. The balance of payments is a measure of the payments that flow from one exports and imports of goods, services, and financial capital, as well financial transfers. ... The article on electrical energy is located elsewhere. ... Telecommunication involves the transmission of signals over a distance for the purpose of communication. ...

Agriculture and Land Reform

Cotton field, Usulután Department
Cotton field, Usulután Department

Before 1980, a small economic elite owned most of the land in El Salvador and controlled a highly successful agricultural industry. About 70% of farmers were sharecroppers or laborers on large plantations. Many farm workers were under- or unemployed and impoverished. The civilian-military junta, which came to power in 1979, instituted an ambitious land reform program to redress the inequities of the past, respond to the legitimate grievances of the rural poor, and promote more broadly based growth in the agricultural sector. The ultimate goal was to develop a rural middle class with a stake in a peaceful and prosperous future for El Salvador. At least 525,000 people--more than 12% of El Salvador's population at the time and perhaps 25% of the rural poor--benefited from agrarian reform, and more than 22% of El Salvador's total farmland was transferred to those who previously worked the land but did not own it. But when agrarian reform ended in 1990, about 150,000 landless families still had not benefited from the reform actions. The 1992 peace accords made provisions for land transfers to all qualified ex-combatants of both the FMLN and ESAF, as well as to landless peasants living in former conflict areas. The United States undertook to provide $300 million for a national reconstruction plan. This included $60 million for land purchases and $17 million for agricultural credits. USAID remains actively involved in providing technical training, access to credit, and other financial services for many of the land beneficiaries. Image File history File links Size of this preview: 800 × 540 pixels Full resolution (1800 × 1215 pixel, file size: 339 KB, MIME type: image/jpeg) File links The following pages on the English Wikipedia link to this file (pages on other projects are not listed): Economy of El Salvador ... Image File history File links Size of this preview: 800 × 540 pixels Full resolution (1800 × 1215 pixel, file size: 339 KB, MIME type: image/jpeg) File links The following pages on the English Wikipedia link to this file (pages on other projects are not listed): Economy of El Salvador ... Sharecropping is a system of farming in which employee farmers work a parcel of land in return for a fraction of the parcels crops. ... // This article is about crop plantations. ... Poverty describes a wide range of circumstances associated with need, hardship and lack of resources. ... General Augusto Pinochet (sitting) as head of the newly established military junta in Chile, September 1973. ... Shafik Handal Revolution or Death, We will win! El Salvador in struggle. ...

See also


  Results from FactBites:
 
El Salvador: Economy (271 words)
El Salvador's economy is primarily agricultural, with farming employing about 40% of the workforce and accounting for a quarter of the gross national product.
El Salvador's economy was adversely affected by its 12-year civil war.
El Salvador's Economy to Grow 3.5-4.0 Percent in 1999.
  More results at FactBites »

 
 

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