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El Salvador (01/08)


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For the most current version of this Note, see Background Notes A-Z.

Flag of El Salvador is three equal horizontal bands of blue (top), white, and blue with the national coat of arms centered in the white band; the coat of arms features a round emblem encircled by the words REPUBLICA DE EL SALVADOR EN LA AMERICA CENTRAL.

PROFILE

OFFICIAL NAME:
Republic of El Salvador

Geography
Area: 20,742 sq. km. (8,008 sq. mi.); about the size of Massachusetts.
Cities: Capital--San Salvador (pop. 2.2 million). Other cities--Santa Ana, San Miguel, Soyapango, and Apopa.
Terrain: Mountains separate country into three distinct regions--southern coastal belt, central valleys and plateaus, and northern mountains.
Climate: Semitropical, distinct wet and dry seasons.

People
Nationality: Noun and adjective--Salvadoran(s).
Population (2007 est.): 5.8 million.
Annual growth rate (2005 est.): 1.7%.
Ethnic groups: Mestizo 90%, indigenous 1%, Caucasian 9%.
Religion: About 52% Roman Catholic, with significant and growing numbers of Protestant groups.
Language: Spanish.
Education: Free through ninth grade. Attendance (grades 1-9)--90.4%. Literacy--85.4% nationally; 77% in rural areas.
Health: Infant mortality rate (2005)--23/1,000 (source: UNICEF). Life expectancy at birth (2006)--71.8 years.
Work force (about 2.7 million, 2006): Agriculture--18.9%; services--51.1%; industry--15.8%; construction--6.7%; government--7.4% (2006).

Government
Type: Republic.
Constitution: December 20, 1983.
Independence: September 15, 1821.
Branches: Executive--president and vice president. Legislative--84-member Legislative Assembly. Judicial--independent (Supreme Court).
Administrative subdivisions: 14 departments.
Political parties (represented in the legislature): Farabundo Marti National Liberation Front (FMLN), Nationalist Republican Alliance (ARENA), National Conciliation Party (PCN), Christian Democratic Party (PDC), Democratic Revolutionary Front (FDR), and the United Democratic Center (CDU).
Suffrage: Universal at 18.

Economy
GDP (2006): $18.57 billion; PPP GDP (2006): $38.62 billion (IMF estimate).
GDP annual real growth rate (2006): 4.2%.
Per capita income (2006): $2,656.90, PPP per capita income $5,514.97 (IMF estimate).
Agriculture (9.8% of GDP, 2006): Products--coffee, sugar, livestock, corn, poultry, and sorghum. Arable, cultivated, or pasture land--68% (2005).
Industry (21.2% of GDP, 2006): Types--textiles and apparel, medicines, food and beverage processing, clothing, chemical products, petroleum products, electronics.
Trade (2006): Exports--$3.5 billion: textiles and apparel, coffee, sugar, medicines, iron and steel products, tuna, light manufacturing, and paper products. Major markets--U.S. 57.1%, Central American Common Market (CACM) 29.2%. Imports--$7.6 billion: petroleum, iron products, machines and mechanical devices, cars, medicines, consumer goods, foodstuffs, capital goods, and raw industrial materials. Major suppliers--U.S. 40.46%, CACM 15.1%, Mexico 7.7%.

PEOPLE
El Salvador's population numbers about 5.8 million. Almost 90% is of mixed Indian and Spanish extraction. About 1% is indigenous; very few Indians have retained their customs and traditions. The country's people are largely Roman Catholic and Protestant. Spanish is the language spoken by virtually all inhabitants. The capital city of San Salvador has about 2.2 million people; an estimated 40.3% of El Salvador's population lives in rural areas.

HISTORY
The Pipil Indians, descendants of the Aztecs, and the Pocomames and Lencas were the original inhabitants of El Salvador,

The first Salvadoran territory visited by Spaniards was on Meanguera Island, located in the Gulf of Fonseca, where Spanish Admiral Andr�s Ni�o led an expedition to Central America and disembarked on May 31, 1522. In June 1524, the Spanish Captain Pedro de Alvarado started a war to conquer Cuscatl�n. His cousin Diego de Alvarado established the village of San Salvador in April 1525. In 1546, Charles I of Spain granted San Salvador the title of city.

During the subsequent years, the country evolved under Spanish rule; however, toward the end of 1810 many people began to express discontent. On November 5, 1811, when the Priest Jos� Matias Delgado rang the bells of La Merced Church in San Salvador calling for insurrection, the people began to band together for freedom.

In 1821, El Salvador and the other Central American provinces declared their independence from Spain. When these provinces were joined with Mexico in early 1822, El Salvador resisted, insisting on autonomy for the Central American countries. In 1823, the United Provinces of Central America was formed of the five Central American states under Gen. Manuel Jose Arce. When this federation was dissolved in 1838, El Salvador became an independent republic. El Salvador's early history as an independent state--as with others in Central America--was marked by frequent revolutions; not until the period 1900-30 was relative stability achieved. Following a deterioration in the country's democratic institutions in the 1970s a period of civil war followed from 1980-1992. More than 75,000 people are estimated to have died in the conflict. In January 1992, after prolonged negotiations, the opposing sides signed peace accords which ended the war, brought the military under civilian control, and allowed the former guerillas to form a legitimate political party and participate in elections.

GOVERNMENT AND POLITICAL CONDITIONS
El Salvador is a democratic republic governed by a president and an 84-member unicameral Legislative Assembly. The president is elected by universal suffrage by absolute majority vote and serves for a 5-year term. A second round runoff is required in the event that no candidate receives more than 50% of the first round vote. Members of the assembly are elected based on the number of votes that their parties obtain in each department (circumscriptive suffrage) and serve for 3-year terms. The country has an independent judiciary and Supreme Court. Legislative and municipal elections will be held in January 2009. Presidential elections will be held in March 2009.

Political Landscape
Hard-line conservatives, including some members of the military, created the Nationalist Republican Alliance party (ARENA) in 1981. ARENA almost won the election in 1984 with solid private sector and rural farmer support. By 1989, ARENA had attracted the support of business groups. Multiple factors contributed to ARENA victories in the 1988 legislative and 1989 presidential elections, including allegations of corruption in the ruling Christian Democratic party, poor relations with the private sector, and historically low prices for the nation's main agricultural exports.

The successes of Alfredo Cristiani's 1989-94 administration in achieving a peace agreement to end the civil war and in improving the nation's economy helped ARENA--led by former San Salvador mayor Armando Calderon Sol--keep both the presidency and a working majority in the Legislative Assembly in the 1994 elections. ARENA's legislative position was weakened in the 1997 elections, but it recovered its strength, helped by divisions in the opposition, in time for another victory in the 1999 presidential race, bringing President Francisco Guillermo Flores Perez to office. Flores concentrated on modernizing the economy and strengthening bilateral relations with the United States by becoming a committed partner in anti-terror efforts, sending troops to aid in the reconstruction of Iraq, and by playing a key role in negotiations for the Central American Free Trade Agreement (CAFTA-DR).

Taking advantage of both public apprehension of Flores' policies and ARENA infighting, the chief opposition party, the Farabundo Marti National Liberation Front (FMLN), was able to score a significant victory against ARENA in the March 2003 legislative and municipal elections. ARENA, left with only 29 seats in the 84-seat Legislative Assembly, was forced to court the right-wing National Conciliation Party (PCN) in order to form a majority voting bloc. However, in 2003 the PCN entered into a loose partnership with the FMLN, further limiting ARENA's ability to maneuver in the legislature.

Despite these constraints, ARENA made a strong showing in the March 2004 presidential election, which was marked by an unprecedented 67% voter turnout. ARENA candidate Elias Antonio "Tony" Saca handily defeated the FMLN candidate and party head Shafik Handal, garnering 57.71% of the votes cast. The defeat of the FMLN's presidential candidate rekindled an internal FMLN struggle between party hardliners and more moderate party members who saw the party's 2004 defeat as a call for reform. In addition, the PCN and the two parties that comprise the center/center-left coalition, the United Democratic Center (CDU) and the Christian Democratic Party (PDC), faced dissolution for failing to each capture at least 3% of the votes. Members of all three parties, whose deputies continued to hold seats in the legislature, publicly discussed creating new parties or aligning with existing ones.

In March 2006 Legislative Assembly and municipal elections, the ruling ARENA party garnered 34 Assembly deputies and 147 mayoralties, while the opposition FMLN won 32 legislative seats and 51 city halls (plus 8 additional mayoralties in which they participated as part of a coalition). The PCN, PDC, and CD carried 10, 6, and 2 Legislative Assembly seats, respectively. As with the 2003-2006 Assembly, the combined 44 seats of ARENA and their center-right PCN allies are sufficient for all legislation requiring a 43-vote simple majority, while the FMLN can still block legislation requiring a two-thirds (56 vote) supermajority. El Salvador's political parties are preparing and planning for 2009, when presidential, legislative, and municipal elections will be held in the same year for the first time since 1994.

Human Rights and Post-War Reforms
During the 12-year civil war, human rights violations by both the government security forces and left-wing guerillas were rampant. The accords established a Truth Commission under UN auspices to investigate the most serious cases. The commission recommended that those identified as human rights violators be removed from all government and military posts. Thereafter, the Legislative Assembly granted amnesty for political crimes committed during the war. Among those freed as a result were the Salvadoran Armed Forces (ESAF) officers convicted in the November 1989 Jesuit murders and the FMLN ex-combatants held for the 1991 murders of two U.S. servicemen. The peace accords also established the Ad Hoc Commission to evaluate the human rights record of the ESAF officer corps.

In accordance with the peace agreements, the constitution was amended to prohibit the military from playing an internal security role except under extraordinary circumstances. Demobilization of Salvadoran military forces generally proceeded on schedule throughout the process. The Treasury Police, National Guard, and National Police were abolished, and military intelligence functions were transferred to civilian control. By 1993--9 months ahead of schedule--the military had cut personnel from a war-time high of 63,000 to the level of 32,000 required by the peace accords. By 1999, ESAF strength stood at less than 15,000, including uniformed and non-uniformed personnel, consisting of personnel in the army, navy, and air force. A purge of military officers accused of human rights abuses and corruption was completed in 1993 in compliance with the Ad Hoc Commission's recommendations. The military's new doctrine, professionalism, and complete withdrawal from political and economic affairs leave it the most respected institution in El Salvador.

More than 35,000 eligible beneficiaries from among the former guerrillas and soldiers who fought the war received land under the peace accord-mandated land transfer program, which ended in January 1997. The majority of them have received agricultural credits also. The international community, the Salvadoran Government, the former rebels, and the various financial institutions involved in the process continue to work closely together to deal with follow-on issues resulting from the program.

National Civilian Police
The civilian police force, created to replace the discredited public security forces, deployed its first officers in March 1993 and was present throughout the country by the end of 1994. The National Civilian Police (PNC) has about 16,000 officers. The United States, through the International Criminal Investigative Training Assistance Program (ICITAP), led international support for the PNC and the National Public Security Academy (ANSP), providing about $32 million in non-lethal equipment and training since 1992.

Judiciary
Following the peace accords, both the Truth Commission and the Joint Group identified weaknesses in the judiciary and recommended solutions, the most dramatic being the replacement of all the magistrates on the Supreme Court. This recommendation was fulfilled in 1994 when an entirely new court was elected, but weaknesses remain. The process of replacing incompetent judges in the lower courts, and of strengthening the attorney generals' and public defender's offices, has moved more slowly. The government continues to work in all of these areas with the help of international donors, including the United States. Action on peace accord-driven constitutional reforms designed to improve the administration of justice was largely completed in 1996 with legislative approval of several amendments and the revision of the Criminal Procedure Code--with broad political consensus.

Principal Government Officials
President--Elias Antonio "Tony" SACA
Vice President--Ana Vilma Albanez DE ESCOBAR
Minister of Foreign Relations--Francisco LAINEZ
Ambassador to the United States--Rene Antonio Rodriguez LEON
Representative to the OAS--Abigail CASTRO DE PEREZ
Representative to the UN--Carmen Maria GALLARDO de Hernandez

El Salvador maintains an Embassy in the United States at 1400 16th Street NW, Washington, DC, 20036 (tel: 202-265-9671). There are consulates in Atlanta, Boston, Chicago, Dallas, Houston, Las Vegas, Los Angeles, Miami, New York, and San Francisco.

ECONOMY
The Salvadoran economy continues to benefit from a commitment to free markets and careful fiscal management. The economy has been growing at a steady and moderate pace since the signing of peace accords in 1992, and poverty has been cut from 66% in 1991 to 30.7% in 2006. Much of the improvement in El Salvador's economy is a result of the privatization of the banking system, telecommunications, public pensions, electrical distribution and some electrical generation; reduction of import duties; elimination of price controls; and improved enforcement of intellectual property rights. Capping those reforms, on January 1, 2001, the U.S. dollar became legal tender in El Salvador. The economy is now fully dollarized.

The Salvadoran Government has maintained fiscal discipline during post-war reconstruction and reconstruction following earthquakes in 2001 and hurricanes in 1998 and 2005. Taxes levied by the government include a value added tax (VAT) of 13%, income tax of 20%, excise taxes on alcohol and cigarettes, and import duties. The VAT is the largest source of revenue, accounting for about 52.2% of total tax revenues in 2007. El Salvador's public external debt in November 2007 was about $5.5 billion, 28.4% of GDP.

Years of civil war, fought largely in the rural areas, had a devastating impact on agricultural production in El Salvador. The agricultural sector has experienced significant recovery, buoyed in part by higher world prices for coffee and sugarcane and increased diversification into horticultural crops. Seeking to develop new growth sectors and employment opportunities, El Salvador created new export industries through fiscal incentives for free trade zones. The largest beneficiary has been the textile and apparel (maquila) sector, which directly provides approximately 70,000 jobs. Services, including retail and financial, have also shown strong employment growth, with about 51.1% of the total labor force now employed in the sector. During the last three years foreign companies have set up 96 new subsidiaries providing 18,000 new jobs, mainly in maquilas, tourism, and telephone call centers.

Remittances from Salvadorans working in the United States are an important source of income for many families in El Salvador. In 2006, the Central Bank estimated that remittances totaled $3.3 billion. UNDP surveys show that an estimated 22.3% of families receive remittances.

Under its export-led growth strategy, El Salvador has pursued economic integration with its Central American neighbors and negotiated trade agreements with the Dominican Republic, Chile, Mexico, Panama, Taiwan, Colombia, and the United States. The trade agreement with Taiwan will enter into force in 2008. Central American countries began negotiating an Association Agreement with the European Union in 2007. Trade agreements with CARICOM and Canada are under negotiation, while an agreement with Israel is being considered. Exports in 2006 grew 3.7%, while imports grew 11.6%. As in previous years, the large trade deficit was offset by family remittances.

The U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), implemented between El Salvador and the United States on March 1, 2006, provides El Salvador preferential access to U.S. markets. Textiles and apparel, shoes, and processed foods are among the sectors that benefit. In addition to trade benefits, CAFTA-DR also provides a framework for additional reforms on issues such as intellectual property rights, dispute resolution, and customs that will improve El Salvador's investment climate. For sensitive sectors such as agriculture, the agreement includes generous phase-in periods to allow Salvadoran producers an opportunity to become more competitive.

U.S. support for privatization of the electrical and telecommunications markets 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 U.S. Department of Commerce maintains a Country Commercial Guide for U.S. businesses seeking detailed information on business opportunities in El Salvador.

On November 29, 2006, the Government of El Salvador and the Millennium Challenge Corporation (MCC) signed a 5-year, $461 million anti-poverty Compact to stimulate economic growth and reduce poverty in the country's northern region. The grant seeks to improve the lives of approximately 850,000 Salvadorans through investments in education, public services, enterprise development, and transportation infrastructure. It is expected that incomes in the region will increase by 20% over the 5-year term of the Compact, and by 30% within 10 years of the start of the Compact.

Natural Disasters
Located on the Pacific's earthquake-prone Ring of Fire and at latitudes plagued by hurricanes, El Salvador's history is a litany of catastrophe, including the Great Hurricane of 1780 that killed 22,000 in Central America and earthquakes in 1854 and 1917 that devastated El Salvador and destroyed most of the capital city. More recently, an October 1986 earthquake killed 1,400 and seriously damaged the nation's infrastructure; in 1998, Hurricane Mitch killed 10,000 in the region, although El Salvador--lacking a Caribbean coast--suffered less than Honduras and Nicaragua. Major earthquakes in January and February of 2001 took another 1,000 lives and left thousands more homeless and jobless. El Salvador's largest volcano, Santa Ana (also known by its indigenous name Ilamatepec), erupted in October 2005, spewing tons of sulfuric gas, ash, and rock on surrounding communities and coffee plantations, killing two people and permanently displacing 5,000. Also in October 2005, Hurricane Stan unleashed heavy rains that caused flooding throughout El Salvador. In all, the flooding caused 67 deaths, and more than 50,000 people were evacuated at some point during the crisis. Damages from the storm were estimated at $355.6 million.

FOREIGN RELATIONS
El Salvador is a member of the United Nations and several of its specialized agencies, the Organization of American States (OAS), the Central American Common Market (CACM), the Central American Parliament, and the Central American Integration System (SICA). It actively participates in the Central American Security Commission (CASC), which seeks to promote regional arms control. From 2002-03, El Salvador was chair of the OAS anti-terrorism coordinating body, CICTE. El Salvador also is a member of the World Trade Organization and is pursuing regional free trade agreements. An active participant in the Summit of the Americas process, El Salvador chairs a working group on market access under the Free Trade Area of the Americas initiative. El Salvador has joined its six Central American neighbors in signing the Alliance for Sustainable Development, known as the Conjunta Centroamerica-USA or CONCAUSA to promote sustainable economic development in the region.

El Salvador enjoys normal diplomatic and trade relations with all of its neighboring countries including Honduras, with which it has previously had territorial disputes. While the two nations continue to disagree over the status of their maritime borders in the Gulf of Fonseca, they have agreed to settle their land-border disputes with the International Court of Justice (ICJ). In September 1992, the Court awarded most of the territory in question to Honduras. In January 1998, Honduras and El Salvador signed a border demarcation treaty to implement the terms of the ICJ decree although delays continue due to technical difficulties.

U.S.-SALVADORAN RELATIONS
U.S.-Salvadoran relations remain close and strong. U.S. policy toward El Salvador promotes the strengthening of El Salvador's democratic institutions, rule of law, judicial reform, and civilian police; national reconciliation and reconstruction; and economic opportunity and growth. El Salvador has been a committed member of the coalition of nations fighting against terrorism and has sent 10 rotations of troops to Iraq to support Operation Iraqi Freedom.

U.S. ties to El Salvador are dynamic and growing. More than 19,000 American citizens live and work full-time in El Salvador. Most are private businesspersons and their families, but a small number of American citizen retirees have been drawn to El Salvador by favorable tax conditions. The Embassy's consular section provides a full range of citizenship services to this community. The American Chamber of Commerce in El Salvador is located at World Trade Center, Torre 2, local No. 308, 89 Av. Nte. Col. Escal�n, phone: 2263-9494.

Principal U.S. Embassy Officials
Ambassador--Charles L. Glazer
Deputy Chief of Mission--Michael Butler
USAID Mission Chief--Deborah Kennedy-Iraheta
Political Counselor--Philip Laidlaw
Economic Counselor--Donn-Allan Titus
Commercial Officer--Michael McGee
Public Affairs Officer--Robert J. Riley

The U.S. Embassy in El Salvador is located at Final Blvd. Santa Elena, Antiguo Cuscatl�n, La Libertad (phone (503) 2501-2999; fax number (503) 2501-2150).

Other Contact Information
U.S. Department of Commerce
International Trade Administration
Office of Latin America and the Caribbean
14th and Constitution Avenue, NW
Washington, DC 20230
Tel: 202-482-1658; 1-(800) USA-TRADE
Fax: 202-482-0464

Caribbean/Latin American Action
1818 N Street, NW, Suite 310
Washington, DC 20036
Tel: 202-466-7464
Fax: 202-822-0075



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