Caribbean & Central America - December 2011 (ISSN 1741-4458)

ECONOMIC OVERVIEW: EL SALVADOR

Central America by LatinNews 30 November 2011 1694 views

El Salvador commemorated 200 years since the first grito de independencia with a contemporary cry from the Roman Catholic Church to break “new chains” that are preventing “true independence” in the country. The auxiliary bishop of San Salvador, Gregorio Rosa Chávez, said that the modern chains were “structural injustice, poverty and homicidal violence which keeps sowing anguish and pain among families in El Salvador”.

On 5 November 1811, Father José Matías Delgado tolled the bells in the church of Nuestra Señora de La Merced in San Salvador to begin the uprising against the Spanish Crown, which was the first cry for independence in the whole of Central America, leading to the sub-region’s eventual independence almost 10 years later on 15 September 1821.

President Mauricio Funes was due to attend an official ceremony, but pulled out, sending his culture secretary, Héctor Samour, in his place. Samour, employing a healthy dose of historical revisionism, said the first cry of independence had a clear objective: economic development and social welfare for each and every Salvadorean.

These are the twin challenges of the Funes administration, which must lift economic growth to stand any chance of addressing poverty and inequality in El Salvador. Funes announced this month that the growth forecast for 2011 had been cut to 1.4% from an already parlous 2.1% due to the recent heavy rains which claimed 34 lives. The rains resulted in nearly 60,000 people being evacuated, decimated some 10% of national territory and caused damage and losses worth an estimated US$840m. This represents 4% of GDP, which in 2010 reached US$21.79bn, according to World Bank figures. 

The saving grace for the Funes administration is that remittances are increasing. In the first 10 months of the year, remittances totalled US$3.008bn, up 5.8% on the same period last year, according to the central bank. This is a mixed blessing, however, as the deputy minister for Salvadoreans abroad, Juan José García, pointed out in October when he fretted that El Salvador was becoming “addicted to remittances” [RC-11-11].