Bring fact-checked results to the top of your browser search. Despite its traditional concentration on agriculture, the country is not self-sufficient and must import food.
Public sector[ edit ] Fiscal policy has been one of the biggest challenges for the Salvadoran government.
The 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 el salvador economy essay, 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 pensioners covered in the old system. The government lost the revenues from contributors and absorbed completely the costs of coverage of retired pensioners.
This has been the main source of fiscal imbalance. Debates surrounding the emission of bonds have stalled the approval of the national budget for many months on several occasions, reason for which in the government will finance the deficit by reducing expenditure in other posts.
This would facilitate an otherwise long process in Salvadoran politics. 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.
However, some basic goods are exempt from the indirect taxes. The VAT is the biggest source of revenue, accounting for about In recent years inflation has fallen to single digit levels, and total exports have grown substantially.
The ultimate goal was el salvador economy essay develop a rural middle class with a stake in a peaceful and prosperous future for El Salvador.
But when agrarian reform ended inaboutlandless families still had not benefited from the reform actions. The peace accords made provisions for land transfers to all qualified ex-combatants of both the FMLN and ESAFas well as to landless peasants living in former conflict areas.
USAID remains actively involved in providing technical training, access to credit, and other financial services for many of the land beneficiaries.
Manufacturing[ edit ] El Salvador historically has been the most industrialized nation in Central America, though a decade of war eroded this position. The industrial sector has shifted since 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. Services[ edit ] In the 21st century, numerous call centers serving North American markets have been developed in El Salvador.
The industry benefits from the availability of a large English speaking work force, composed of deportees from the United States. 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 indigobut 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.
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.
Currently there are fifteen free trade zones in El Salvador. The largest beneficiary has been the maquila industry, which provides 88, jobs directly, and consists primarily of cutting and assembling clothes for export to the United States. In order to take advantage of CAFTA-DR, 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 for a free trade agreement with Colombia.Economic growth in El Salvador reached percent in It was mainly driven by external factors, including a significant decline in oil imports and remittances.
An Expatriate Tour in El Salvador Essay. The instance provides that John Lafferty has accepted an chance to be a Program Officer of the United Nations based in El Salvador - An Expatriate Tour in El Salvador Essay introduction.
John has antecedently worked as development economic expert in different parts of Latin America and his experience and passion for assisting refugees make his. Encompassing that million is million located in the largest city, and also the capital of El Salvador, San Salvador.
El Salvador became an independent republic in and is now divided into 14 departments which have municipalities/5(1). - The Root of El Salvador's Problems Much of El Salvador's problems come from a long time ago, mostly beginning in the 's.
From the 's until about the 's and 's much of the problem in El Salvador was about the land and the economy. El Salvador is a country of many great geographical sites, a strange history, a blackened economic state, and an incredible agricultural base. The country has .
Trade is significant for El Salvador’s economy; the combined value of exports and imports equals 64 percent of GDP. The average applied tariff rate is percent.