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EL SALVADOR

Charting new course for El Salvador

 

www.state.gov

Safety and security are words that matter to the Salvadoran people. They matter to Salvadoran families and communities suffering from the effects of gang activity and one of the highest homicide rates in the world. And they matter to Salvadoran workers, seeking to make an honest living to support their families and build a better future.

Yet payday can be a frightful experience for everyday Salvadorans. Public transportation can be particularly hazardous, as passengers fear being robbed — or worse — by gangs on their way home. At best, the attackers will steal the week’s wages. At worst, as happened last year, gang members burn the bus with passengers inside. During my travels to the country, I often hear stories about the impact of crime on daily life.

In addition to the tragic human cost, this type of violence takes a significant toll on the Salvadoran economy. Because workers fear travelling home after sundown, many factories have closed at night, resulting in lost jobs and productivity. It’s been estimated that the additional cost of insecurity in El Salvador totals 10.8 percent of GDP. With the lowest rate of investment and GDP growth in Central America, this is a “tax” El Salvador can ill afford.

In our current fiscal environment, the United States cannot simply deploy additional resources to help important friends like El Salvador. Through the U.S. Agency for International Development and Millennium Challenge Corporation, we already contribute about $140 million a year for development projects in El Salvador. But development is not just about dollars. It’s about helping others build the capacity to solve their own problems. In fact, years of development experience have taught us that skill transfer must happen in a truly collaborative manner in order to have most impact.

In this spirit, President Obama and Salvadoran President Mauricio Funes announced the Partnership for Growth (PFG) initiative this past spring. Earlier this month I had the honor of signing our PFG agreement with El Salvador. The PFG offers a new vision for our development policy, by looking at the full spectrum of development and economic issues and working with all elements of government and civil society in each partner country to target the underlying causes of economic stagnation. We ask countries to be active partners in designing and implementing plans of action for attacking those problems.

The announcement by Presidents Obama and Funes was followed by a rigorous review of the reasons behind El Salvador’s anemic growth conducted jointly by a team of economists from our two governments. After eight months of analysis, two areas surfaced as clear impediments to El Salvador’s economic growth: insecurity resulting from crime, and low productivity in internationally traded goods. Both governments, along with business and civil society, then developed an action plan with key steps and milestones to tackle these fundamental challenges.

Many of the United States’ contributions to PFG focus on building the government’s ability to address crime through knowledge sharing and training. For example, in response to crime on public transit, El Salvador will create special courts and police units to focus on the transportation system, and — using our experience in countries such as Colombia — we will help to train them on investigative and forensic techniques. Experts estimate that each 10 percent drop in El Salvador’s crime rate will boost GDP growth by 1 percentage point.

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