Background Note: El Salvador

Background Note: El Salvador

March 2009

Bureau of Western Hemisphere Affairs

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. 1.6 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): 5.7 million.
Annual growth rate (2006 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 high school. Attendance (grades 1-9)--92.4%. Literacy--86.1% nationally; 77.6% in rural areas.
Health: Infant mortality rate (2006)--22/1,000 (source: UNICEF). Life expectancy at birth (2008)--72.1 years.
Work force (about 1.9 million, 2007): Agriculture--17%; retail, hotels, and restaurants--29.8%; industry--16.9%; construction--6.3%; other services--20.9%;(2007).

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), and Democratic Change (CD).
Suffrage: Universal at 18.

Economy
GDP (2007): $20.4 billion; PPP GDP (2007): $41.56 billion (IMF estimate).
GDP annual real growth rate (2007): 4.7%.
Per capita income (2007): $3,547.21; PPP per capita income $5,842 (2007 IMF estimate).
Agriculture (11.2% of GDP, 2007): Products--coffee, sugar, livestock, corn, poultry, and sorghum. Arable, cultivated, or pasture land--68% (2005).
Industry (20.6% of GDP, 2007): Types--textiles and apparel, medicines, food and beverage processing, clothing, chemical products, petroleum products, electronics, call centers.
Trade (2007): Exports--$4 billion: textiles and apparel, ethyl alcohol, coffee, sugar, medicines, iron and steel products, tuna, light manufacturing, and paper products. Major markets--U.S. 50.8%, Central American Common Market (CACM) 33.7%. Imports--$8.7 billion: petroleum, iron products, machines and mechanical devices, cars, medicines, consumer goods, foodstuffs, capital goods, and raw industrial materials. Major suppliers--U.S. 35.6%, CACM 16.8%, Mexico 9.8%.

PEOPLE
El Salvador's population numbers about 5.7 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 1.6 million people; an estimated 37.3% 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 Meanguera Island, located in the Gulf of Fonseca, where Spanish Admiral Andrés Niño 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 Cuscatlán. 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 Priest José 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 were held in January 2009, and presidential elections were 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 which had 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. Under his presidency El Salvador committed itself to combating international terrorism, including sending troops to aid in the reconstruction of Iraq. El Salvador also played 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 57.7% of the votes cast. The defeat of the FMLN’s presidential candidate rekindled an internal FMLN struggle between hardliners and more moderate members who saw the party’s 2004 defeat as a call for reform.

In January 2009 legislative and municipal elections, the incumbent ARENA party garnered 32 assembly deputies and 122 mayoralties, while the opposition FMLN won 35 legislative seats and 75 city halls (plus 21 additional mayoralties in which they participated as part of a coalition). The PCN, PDC, and CD carried 11, 5, and 1 assembly seats, respectively. The new assembly will take office in May 2009. Either of the major parties would be able to block legislation requiring a two-thirds (56 vote) supermajority.

On March 15, 2009, FMLN candidate Mauricio Funes won El Salvador’s presidential elections, defeating ARENA candidate Rodrigo Avila. Final vote totals were 51.3% for the FMLN and 48.7% for ARENA. These elections mark the first time since the 1992 peace agreement that ended the civil war that an FMLN candidate has been elected president and will be the first left-of-center government in El Salvador’s history. The presidential inauguration will take place June 1.

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 one of the most respected institutions in El Salvador.

More than 35,000 eligible beneficiaries from among the former guerrillas and soldiers who fought in the war received land under the peace accord-mandated land transfer program, which ended in January 1997. The majority of them also received agricultural credits.

National Civilian Police
The National Civilian Police (PNC), 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 PNC has about 16,000 officers. The United States, originally through the International Criminal Investigative Training Assistance Program (ICITAP) and subsequently through the Department of State’s Bureau for International Narcotics and Law Enforcement Affairs, 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, including 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 judges in the lower courts, and of strengthening the attorney generals' and public defender's offices, has moved 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 Gonzalez
Vice President--Ana Vilma Albanez DE ESCOBAR
Minister of Foreign Relations--Marisol ARGUETA DE BARILLAS
Ambassador to the United States--Rene Antonio Rodriguez LEON
Representative to the OAS--Francisco LAINEZ
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 was cut from 66% in 1991 to 34.6% in 2007. 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 accounted for about 52.2% of total tax revenues in 2007. El Salvador’s public external debt in November 2008 was about $5.6 billion, 27.4% 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 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 48.7% of the total labor force now employed in the sector.

Remittances from Salvadorans working in the United States are an important source of income for many families in El Salvador. In 2008, the Central Bank estimated that remittances totaled $3.8 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. Central American countries began negotiating an Association Agreement with the European Union in 2007. Trade agreements with CARICOM and Canada are also under negotiation, while agreements with Israel and Peru are being considered. Exports in 2008 grew 14.2%, while imports grew 12%. 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 trade capacity building, particularly in the environment and labor areas, and 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 five-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. The Compact entered into force in September 2007, and it is expected that incomes in the region will increase by 20% over the five-year term of the Compact, and by 30% within ten 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 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, national reconciliation and reconstruction, and economic opportunity and growth. El Salvador was a committed member of the coalition of nations fighting against terrorism and sent eleven rotations of troops to Iraq to support Operation Iraqi Freedom from 2003 through 2008.

The U.S. and Salvadoran Governments cooperate closely to combat narcotics trafficking and organized crime. El Salvador hosts the International Law Enforcement Academy, which provides training to police, prosecutors and other officials from across the Latin American region. El Salvador’s Air Force installation near Comalapa Airport houses a monitoring facility that surveils narco-trafficking routes in the Eastern Pacific. The Federal Bureau of Investigation (FBI) and El Salvador’s National Civilian Police jointly operate the Transnational Anti-Gang unit, which addresses the growing problem of street gangs in both countries. In January 2009, the U.S. and El Salvador signed letters of agreement committing both countries to work jointly under the Merida Initiative to fight crime and drug trafficking.

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. Escalón, phone: 2263-9494.

Principal U.S. Embassy Officials
Ambassador--vacant
Deputy Chief of Mission/Chargé d'Affaires--Robert Blau
USAID Mission Chief--Larry Brady
Political Counselor--Philip Laidlaw
Economic Counselor--Donn-Allan G. Titus
Commercial Counselor--Michael McGee
Acting Public Affairs Counselor--Alberto Rodriguez
Consul General--Carl Cockburn

The U.S. Embassy in El Salvador is located at Final Blvd. Santa Elena, Antiguo Cuscatlán, La Libertad (phone (503) 2501-2999; fax number (503) 2501-2150). Internet website: http://sansalvador.usembassy.gov/

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

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.

STAT-USA/Internet, a service of the U.S. Department of Commerce, provides authoritative economic, business, and international trade information from the Federal government. The site includes current and historical trade-related releases, international market research, trade opportunities, and country analysis and provides access to the National Trade Data Bank.

ENDS

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