Economy of El Salvador

Compared to other developing countries, El Salvador has experienced relatively low rates of GDP growth. Rates have not risen above the low single digits in nearly two decades – part of broader environment of macroeconomic instability which the integration of the US dollar has done little to improve.[6] One problem that the Salvadoran economy faces is the inequality in the distribution of income. In 2011, El Salvador had a Gini Coefficient of .485,[7] which although similar to that of the United States,[8] leaves 37.8% of the population below the poverty line,[9] due to lower aggregate income. The richest 10% of the population receives approximately 15 times the income of the poorest 40%.[7]

As of 3 November 2014, the IMF reports official reserve assets to be $3.192B. Foreign currency reserves (in convertible foreign currencies) are $2.675B. Securities are $2.577B with total currency and deposits at $94.9M. Securities with other national central banks (BIS and IMF) are $81.10M. Securities with banks headquartered outside the reporting country $13.80M. SDRs are at $245.5M. Gold reserves (including gold deposits and, if appropriate, gold swapped) reported at $271.4M with volume in millions of fine Troy ounces at $200k. Other reserve assets are financial derivatives valued at $2.7M.[10]

Having this hard currency buffer to work with, the Salvadoran Government undertook a monetary integration plan beginning 1 January 2001, by which the U.S. dollar became legal tender alongside the colón, and all formal accounting was undertaken in U.S. dollars. This way, the government has formally limited its possibility of implementing open market monetary policies to influence short term variables in the economy. Since 2004, the colón stopped circulating and is now never used in the country for any type of transaction; however some stores still have prices in both colons and U.S. dollars. In general, people were unhappy with the shift from the colón to the U.S. dollar, because wages are still the same but the price of everything increased. Some economists claim this rise in prices would have been caused by inflation regardless even had the shift not been made. Some economists also contend that now, according to Gresham's Law, a reversion to the colón would be disastrous to the economy.

Some banks however claim that they still do some transactions en colones, keeping this change from being unconstitutional.

The change to the dollar also precipitated a trend toward lower interest rates in El Salvador, helping many to secure credit in order to buy a house or a car; over time, displeasure with the change has largely disappeared, though the issue resurfaces as a political tool when elections are on the horizon.

Economy of El Salvador
300xp
Currency1 Salvadoran colón (₡) = 100 centavos; US dollar circulates as legal tender since 1 January 2001
calendar year
Statistics
GDP(PPP)Increase$57.28 billion (2017 est.) (PPP per capita) $7,600 (nominal) 23.99 billion (2012 est.)
GDP rank106th (2017 est. PPP)
GDP growth
2.4% (2015), 2.6% (2016),
2.3% (2017e), 2.3% (2018f) [1]
GDP by sector
agriculture: 10.5%; industry: 30.0%; services: 59.4% (2012 est.)
Decrease0.7% (2018 est.)
Population below poverty line
30.7% (2009 est.)
.485
Labor force
2.593 million (2012 est.)
Labor force by occupation
agriculture: 21%; industry: 20%; services: 58% (2011 est.)
Unemployment6.9% (2012 est.)
Main industries
food processing, beverages, petroleum, chemicals, fertilizer, textiles, furniture, light metals
Increase73rd (2018)[2]
External
Exports$5.804 billion (2012 est.)
Export goods
offshore assembly exports, coffee, sugar, textiles and apparel, gold, ethanol, chemicals, electricity, iron and steel manufactures
Main export partners
 United States 45.8%
 Guatemala 14.9%
 Honduras 9.6%
 Nicaragua 5.8% (2012 est.)[3]
Imports$10.44 billion (2012 est.)
Import goods
raw materials (such as thread from US [1]), consumer goods, capital goods, fuels, foodstuffs, petroleum, electricity
Main import partners
 United States 34.4%
 Guatemala 10.8%
 Mexico 6.8%
 Colombia 5.7%
 China 5.5%
 EU 4.0% (2012 est.)[4]
Increase$12.84 billion (31 December 2012 est.)
Public finances
Revenues$4.835 billion (2012 est.)
Expenses$5.534 billion, (2012 est.)
Economic aid$300 million (2010 est.)
BB (Domestic)
BB- (Foreign)
AAA (T&C Assessment)
(Standard & Poor's)[5]
Foreign reserves
US$2.623 billion (31 December 2012 2011)

All values, unless otherwise stated, are in US dollars.

Public sector

Fiscal policy has been one of the biggest challenges for the Salvadoran government. The 1992 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 system, 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. As a result, in July 2017, the Government of El Salvador wanted to take $500 millions from the privatized pension system to cover retired pensioners from the old not privatized system, but the Supreme Court of El Salvador declared this move unconstitutional[11].

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. ARENA governments have financed this deficit with the emission of bonds, something the leftist party FMLN has opposed. Debates surrounding the emission of bonds have stalled the approval of the national budget for many months on several occasions, reason for which in 2006 the government will finance the deficit by reducing expenditure in other posts. The emission of bonds and the approval of a loans need a qualified majority (3/4 of the votes) in the parliament. If the deficit is not financed through a loan it is enough with a simple majority to approve the budget (50% of the votes plus 1). This would facilitate an otherwise long process in Salvadoran politics.

Despite such challenges to keep public finances in balance, El Salvador still has one of the lowest tax burdens in the American continent (around 11% of GDP). Many specialists claim that it is impossible to advance significant development programs with such a little public sector (the tax burden in the United States is around 25% of the GDP and in other developed countries of the EU it can reach around 50%, like in Sweden). 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. A 10% value-added tax (VAT), implemented in September 1992, was raised to 13% in July 1995. The VAT is the biggest source of revenue, accounting for about 52.3% of total tax revenues in 2004.

Economic sectors

Remittances

Remittances from Salvadorans working in the United States sent to family members are a major source of foreign income and offset the substantial trade deficit of around $2.9 billion. Remittances have increased steadily in the last decade and reached an all-time high of $2.9 billion in 2005—approximately 17.1% of gross national product (GNP). As of April 2004, net international reserves stood at $1.9 billion.

In recent years inflation has fallen to single digit levels, and total exports have grown substantially.

Agriculture

Cotton-UsulutanSV
A cotton field, Usulután Department.

The ultimate goal was to develop a rural middle class with a stake in a peaceful and prosperous future for El Salvador. At least 525,000 people—more than 12% of El Salvador's population at the time and perhaps 25% of the rural poor—benefited from agrarian reform, and more than 22% of El Salvador's total farmland was transferred to those who previously worked the land but did not own it. But when agrarian reform ended in 1990, about 150,000 landless families still had not benefited from the reform actions.

The 1992 peace accords made provisions for land transfers to all qualified ex-combatants of both the FMLN and ESAF, as well as to landless peasants living in former conflict areas. The United States undertook to provide $300 million for a national reconstruction plan. This included $60 million for land purchases and $17 million for agricultural credits. USAID remains actively involved in providing technical training, access to credit, and other financial services for many of the land beneficiaries.

Manufacturing

El Salvador historically has been the most industrialized nation in Central America, though a decade of war eroded this position. In 1999, manufacturing accounted for 22% of GDP. The industrial sector has shifted since 1993 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

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.[12]

Trade

El Salvador Export Treemap
A proportional representation of El Salvador's exports.

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 indigo, but 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. The government is also developing ports and infrastructure in La Unión in the east of the country, in order to use the area as a "dry canal" for transporting goods from Gulf of Fonseca in the Pacific Ocean to Honduras and the Atlantic Ocean in the north. Currently there are fifteen free trade zones in El Salvador. The largest beneficiary has been the maquila industry, which provides 88,700 jobs directly, and consists primarily of cutting and assembling clothes for export to the United States.

El Salvador signed the Central American Free Trade Agreement (CAFTA), negotiated by the five countries of Central America and the Dominican Republic, with the United States in 2004. 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 2006 for a free trade agreement with Colombia.

El Salvador's balance of payments continued to show a net surplus. Exports in 1999 grew 1.9% while imports grew 3%, narrowing El Salvador's trade deficit. As in the previous year, the large trade deficit was offset by foreign aid and family remittances. Remittances are increasing at an annual rate of 6.5%, and an estimated $1.35 billion will enter the national economy during 1999.

Private foreign capital continued to flow in, though mostly as short-term import financing and not at the levels of previous years. The Central American Common Market continued its dynamic reactivation process, now with most regional commerce duty-free. In September 1996, El Salvador, Guatemala, and Honduras opened free trade talks with Mexico. This trade alliance is also known as the Northern Triangle in relation to the Central American economies that are grouped together by proximity and location.[2] Although tariff cuts that were expected in July 1996 were delayed until 1997, the government of El Salvador is committed to a free and open economy.

Total U.S. exports to El Salvador reached $2.1 billion in 1999, while El Salvador exported $1.6 billion to the United States. U.S. support for El Salvador's privatization of the electrical and telecommunications markets has 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 Department of State maintains a country commercial guide for U.S. businesses seeking detailed information on business opportunities in El Salvador.

Natural disasters: Hurricane Mitch (1998) and the earthquakes (2001)

Hurricane Mitch hit El Salvador in late October 1998, generating extreme rainfall of which caused widespread flooding and landslides. Roughly 650 km² were flooded, and the Salvadoran Government pronounced 374 people dead or missing. In addition, approximately 55,900 people were rendered homeless. The areas that suffered the most were the low-lying coastal zones, particularly in the floodplain of the Lempa and San Miguel Grande Rivers. Three major bridges that cross the Lempa were swept away, restricting access to the eastern third of the country and forcing the emergency evacuation of many communities. The heavy rainfall, flooding, and mudslides caused by Hurricane Mitch also severely damaged El Salvador's road network. Along with the three major bridges over the Lempa River, 12 other bridges were damaged or destroyed by the Mitch flooding.

The largest single-affected sector was El Salvador's agriculture. Nearly 18% of the total 1998–99 basic grain harvest was lost. Coffee production was hit particularly hard; 3% of the harvest was lost in addition to 8.2% that was lost earlier in the year due to El Niño. Major losses of sugarcane, totaling 9% of the estimated 1998–99 production, were sustained primarily in the coastal regions. Livestock losses amounted to $1 million, including 2,992 head of cattle. In addition to these losses, El Salvador also had to face the threat of disease outbreak. The Ministry of Health recorded a total of 109,038 medical cases related to Hurricane Mitch between 31 October and 18 November 1998; 23% of these cases were respiratory infections, followed by skin ailments, diarrhea, and conjunctivitis.

Reconstruction from Mitch was still underway when, in early 2001, the country experienced a series of devastating earthquakes that left nearly 2,000 people dead or missing, 8,000 injured, and caused severe dislocations across all sectors of Salvadoran society. Nearly 25% of all private homes in the country were either destroyed or badly damaged, and 1.5 million persons were left without housing. Hundreds of public buildings were damaged or destroyed, and sanitation and water systems in many communities put out service. The total cost of the damage was estimated at between $1.5 billion and $2 billion, and the devastation thought to equal or surpass that of the 1986 quake that struck San Salvador. Given the magnitude of the disaster, reconstruction and economic recovery will remain the primary focus of the Salvadoran Government for some time to come.

The Hurricane Mitch disaster prompted a tremendous response from the international community governments, nongovernmental organizations (NGOs), and private citizens alike. Sixteen foreign governments—including the U.S., 19 international NGOs, 20 Salvadoran embassies and consulates, and 20 private firms and individuals provided El Salvador with in-kind assistance. The Government of El Salvador reports that 961 tons of goods and food were received. The Ministry of Foreign Affairs estimates that contribution in cash given directly to the Salvadoran Government totaled $4.3 million. The U.S. Government has provided $37.7 million in assistance through USAID and the U.S. Departments of Agriculture and Defense.

Following the 2001 earthquakes, the U.S. embassy assumed a leading role in implementing U.S.-sponsored assistance. The U.S. Government responded immediately to the emergency, with military helicopters active in initial rescue operations, delivering emergency supplies, rescue workers, and damage assessment teams to stricken communities all over the country. USAIDs Office of Foreign Disaster Assistance had a team of experts working with Salvadoran relief authorities immediately after both quakes, and provided assistance totaling more than $14 million. In addition, the Department of Defense provided an initial response valued at more than $11 million. For long-term reconstruction, the international community offered a total aid package of $1.3 billion, over $110 million of it from the United States.

Macro-economic trend

The following table shows the main economic indicators in 1980–2017.[13]

Year 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GDP in $
(PPP)
10.10 Bln. 11.91 Bln. 15.39 Bln. 23.42 Bln. 29.60 Bln. 37.34 Bln. 40.00 Bln. 42.63 Bln. 44.03 Bln. 42.97 Bln. 44.09 Bln. 46.00 Bln. 47.73 Bln. 49.39 Bln. 51.00 Bln. 52.73 Bln. 54.67 Bln. 57.00 Bln.
GDP per capita in $
(PPP)
2,143 2,431 2,930 4,175 5,042 6,193 6,600 7,013 7,206 6,999 7,158 7,431 7,673 7,903 8,120 8,357 8,623 8,948
GDP growth
(real)
−8.6 % 0.6 % 4.8 % 6.4 % 2.2 % 3.6 % 3.9 % 3.8 % 1.3 % −3.1 % 1.4 % 2.2 % 1.9 % 1.8 % 1.4 % 2.3 % 2.4 % 2.4 %
Inflation
(in Percent)
17.4 % 22.3 % 28.3 % 10.0 % 2.3 % 4.7 % 4.0 % 4.6 % 7.3 % 0.5 % 1.2 % 5.1 % 1.7 % 0.8 % 1.1 % −0.7 % 0.6 % 1.0 %
Government debt
(Percentage of GDP)
... ... ... 26 % 27 % 39 % 39 % 38 % 39 % 48 % 50 % 50 % 55 % 55 % 57 % 58 % 59 % 59 %

See also

References

  1. ^ "World Bank forecast for El Salvador, June 2018 (p. 152)" (PDF). World Bank. Retrieved 11 September 2018.
  2. ^ "Ease of Doing Business in El Salvador". Doingbusiness.org. Retrieved 24 November 2017.
  3. ^ "Export Partners of El Salvador". CIA World Factbook. 2012. Retrieved 25 July 2013.
  4. ^ "Import Partners of El Salvador". CIA World Factbook. 2012. Retrieved 25 July 2013.
  5. ^ "Sovereigns rating list". Standard & Poor's. Retrieved 26 May 2011.
  6. ^ "El Salvador GDP - real growth rate". Indexmundi.com. Retrieved 11 June 2015.
  7. ^ a b "Finance & Development, March 2011 - Spreading the Wealth". Finance and Development - F&D. Retrieved 11 June 2015.
  8. ^ "Income, Poverty, and Health Insurance Coverage in the United States: 2008" (PDF). Census.gov. Retrieved 16 October 2017.
  9. ^ "El Salvador". Data.worldbank.org. Retrieved 11 June 2015.
  10. ^ "International Reserves and Foreign Currency Liquidity - EL SALVADOR". Imf.org. Retrieved 11 June 2015.
  11. ^ García, Gabriel (27 July 2017). "SALA ANULA REFORMA DE PENSIONES". La Prensa Gráfica. Retrieved 27 July 2017.
  12. ^ Blitzer, Jonathan (23 January 2017), "The deportess taking our calls: How American immigration policy has fuelled an unlikely industry in El Salvador.", The New Yorker
  13. ^ "Report for Selected Countries and Subjects". Retrieved 28 August 2018.

External links

Central Reserve Bank of El Salvador

The Central Reserve Bank of El Salvador (Spanish: Banco Central de El Salvador) is the central bank of El Salvador, which controls the currency rate and regulates certain economic activities within El Salvador. The bank was originally privately owned, but was brought under state control through The Law of the Reorganization of Central Banking.

The bank is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion. In 2013, the bank made a joint Maya Declaration Commitment with the Superintendencia del Sistema Financiero of El Salvador to carry out a series of concrete and measurable actions.

Coffee production in El Salvador

Coffee production in El Salvador has fueled the Salvadoran economy and shaped its history for more than a century. Rapidly growing in the 19th century, coffee in El Salvador has traditionally provided more than 50% of the country's export revenues, reaching a peak in 1980 with a revenue of more than $615 million. With the political and economic turmoil resulting from a civil war in the 1980s, the coffee industry has struggled to recover entirely, and by 1985 earned around $403 million from coffee.Yields of green coffee, a Salvadoran speciality declined in absolute terms from 175,000 tons in 1979 to 141,000 tons in 1986; a 19 percent drop attributed directly to decreased levels of investment caused by the war. Since 2000, the industry has been greatly affected by increased competition from other countries on the world market, whose cheaper coffee beans have caused prices to plummet. As of 2002 coffee trading is only responsible for 3.5% of El Salvador's GNP and over 90% of El Salvador's coffee is grown in shade coffee plantations and around 80% of El Salvador's forests are associated with shade coffee plantations.

Colón (currency)

The colón (₡) refers to two Central American currencies:

the Costa Rican colón (CRC), used in Costa Rica since 1896

the Salvadoran colón (SVC), used in El Salvador from 1892 until 2001, when it was replaced by the American dollar

El Salvador and the International Monetary Fund

El Salvador has been a member of the International Monetary Fund (IMF) since 1946. Their quota currently consists of 287.20 million SDR. The country has received loans from the IMF in the past, but most recently has received only standby loans and currently has no outstanding payments. As of June 2017, the standby arrangements total 1,442,300 SDR while the government has only drawn upon 132,250 SDR.

Electricity sector in El Salvador

El Salvador is the largest producer of geothermal energy in Central America. Except for hydroelectric generation, which is almost totally owned and operated by the public company CEL (Comisión Hidroeléctrica del Río Lempa), the rest of the generation capacity is in private hands. With demand expected to grow at a rate of 5% in the coming years, the Government's 2007 National Energy Strategy identified several hydroelectric and geothermal projects as the best option to meet demand in the future and to diversify the country's energy mix.

This would also reduce the dependence on traditional thermal sources and, with that, the vulnerability to high oil prices that the country started to face in 2005. El Salvador is also one of the countries included in the SIEPAC project, which will integrate the electricity network of the country with the rest of the Central American region.

Foreign relations of Denmark

The foreign policy of the Kingdom of Denmark is based on its identity as a sovereign state in Europe, the Arctic and the North Atlantic. As such its primary foreign policy focus is on its relations with other nations as a sovereign state compromising the three constituent countries: Denmark, Greenland and the Faroe Islands. The Kingdom of Denmark has long had good relations with other nations.

It has been involved in coordinating Western assistance to the Baltic states (Estonia, Latvia, and Lithuania). The country is a strong supporter of international peacekeeping. Danish forces were heavily engaged in the former Yugoslavia in the UN Protection Force (UNPROFOR), with IFOR, and now SFOR. The Kingdom of Denmark also strongly supported American operations in Afghanistan and has contributed both monetarily and materially to the ISAF. These initiatives are a part of the "active foreign policy" of the Kingdom of Denmark. Instead of the traditional adaptative foreign policy of The unity of the Realm, Kingdom of Denmark is today pursuing an active foreign policy, where human rights, democracy and other crucial values is to be defended actively. In recent years, Greenland and the Faroe Islands have been guaranteed a say in foreign policy issues, such as fishing, whaling and geopolitical concerns.

Following World War II, the Kingdom of Denmark ended its two-hundred-year-long policy of neutrality. The Kingdom of Denmark has been a member of NATO since its founding in 1949, and membership in NATO remains highly popular. There were several serious confrontations between the U.S. and the Kingdom of Denmark on security policy in the so-called "footnote era" (1982–88), when an alternative parliamentary majority forced the government to adopt specific national positions on nuclear and arms control issues. The alternative majority in these issues was because the Social liberal Party (Radikale Venstre) supported the governing majority in economic policy issues, but was against certain NATO policies and voted with the left in these issues. The conservative led Centre-right government accepted this variety of "minority parliamentarism", that is, without making it a question of the government's parliamentary survival.

With the end of the Cold War, however, the Kingdom of Denmark has been supportive of U.S. policy objectives in the Alliance.

Danes have a reputation as "reluctant" Europeans. When they rejected ratification of the Maastricht Treaty on 2 June 1992, they put the EC's plans for the European Union on hold. In December 1992, the rest of the EC agreed to exempt Denmark from certain aspects of the European Union, including a common defense, a common currency, EU citizenship, and certain aspects of legal cooperation. The Amsterdam Treaty was approved in the referendum of 28 May 1998. In the autumn of 2000, Danish citizens rejected membership of the Euro currency group in a referendum. The Lisbon treaty was ratified by the Danish parliament alone. It was not considered a surrendering of national sovereignty, which would have implied the holding of a referendum according to article 20 of the constitution.

History of El Salvador

The history of El Salvador begins with several Mesoamerican nations, especially the Cuzcatlecs, as well as the Lenca and Maya. In the early 16th century, the Spanish Empire conquered the territory, incorporating it into the Viceroyalty of New Spain ruled from Mexico City. In 1821, the country achieved independence from Spain as part of the First Mexican Empire, only to further secede as part of the Federal Republic of Central America two years later. Upon the republic's dissolution in 1841, El Salvador became sovereign until forming a short-lived union with Honduras and Nicaragua called the Greater Republic of Central America, which lasted from 1895 to 1898.In the 20th century, El Salvador had endured chronic political and economic instability characterized by coups, revolts, and a succession of authoritarian rulers. Persistent socioeconomic inequality and civil unrest culminated in the devastating Salvadoran Civil War in the 1980s, which was fought between the military-led government and a coalition of left-wing guerrilla groups. The conflict ended in 1992 with a negotiated settlement that established a multiparty constitutional republic, which remains in place to this day.

El Salvador's economy was historically dominated by agriculture, beginning with the indigo plant (añil in Spanish), the most important crop during the colonial period, and followed thereafter by coffee, which by the early 20th century accounted for 90 percent of export earnings.

Index of Central America-related articles

This is an Index of Central America-related articles. This index defines Central America as the seven nations of Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama.

Index of El Salvador-related articles

The following is an alphabetical list of topics related to the Republic of El Salvador.

List of Salvadoran departments by Human Development Index

El Salvador has a HDI of 0.674 as of 2017, which is considered 'medium human development'. It is the second highest in Central America (Costa Rica being the first at 0.740). It is the smallest country in Central America, with over 6.6 million people living in its area of 21,041 km2 (8,124 sq mi) as of 2018. This document lists the fourteen departments of El Salvador in order of highest to lowest human development.

Outline of El Salvador

The following outline is provided as an overview of and topical guide to El Salvador:

El Salvador – sovereign country located on the Pacific Coast of Central America. The area was originally called by the Pipil "Cuzhcatl", in Spanish "Cuzcatlan", which in Nahuatl means "The Land Of Precious Things". After the Spanish conquest, the land was baptized by Spanish conquistadors as "Provincia De Nuestro Señor Jesucristo El Salvador Del Mundo" ("Province of Our Lord Jesus Christ, The Savior Of The World"), now abbreviated as "República de El Salvador". The country borders the Pacific Ocean between Guatemala and Honduras. With a population of approximately 5.8 million people, it is the most densely populated nation in Central America and is undergoing rapid industrialization.

Pupusa

Pupusa is thick cornmeal flatbread from the Pipil culture of El Salvador. It is stuffed with one or more of the following ingredients: cheese (usually a viscous cheese called quesillo that is very common in certain countries), chicharrón (pork rinds), squash, refried beans, or cheese with loroco. It can also be made with a mix of ingredients such as cheese, beans, and chicharrón. It is typically accompanied by curtido (a spicy cabbage slaw), and tomato salsa, and is traditionally eaten by hand, without the use of utensils.

The preparation process of this dish consists of many diverse steps, and the use of a variety of ingredients, those of which also constitute economic support for the productors. Pupusas also display a similitude to Venezuelan arepas.

The pupusa is the most common staple food of El Salvador, most likely because it is a traditional dish that has been passed down from generation to generation. Although the specific origin of pupusas is unknown, anthropological studies show that was started in Central American territories, most especially in the western part of El Salvador. Although there are existing controversies that have taken on an international character about the origin and right of the traditional dish, these controversies have not triggered any significant consequences.

Salvadoran Stock Exchange

The Salvadoran Stock Exchange, Bolsa de Valores de El Salvador (BVES) is the stock exchange in the nation of El Salvador. The exchange is used for the securitization of various government infrastructure projects. The exchange was established in 1992. It is overseen by Central Securities Depository (CEDEVAL). The market grew from handling U.S. $600 million initially to more than U.S. $3 billion by 2006 and almost $6 billion by the end of 2011. Rolando Duarte was chief of the BVES as of 2013. In 2009 there were 34 companies trading on the exchange, the vast majority in finance or insurance businesses.

Salvadoran colón

The colón was the currency of El Salvador between 1892 and 2001, until it was replaced by the U.S. Dollar. It was subdivided into 100 centavos and its ISO 4217 code was SVC. The plural is "colones" in Spanish and the currency was named after Christopher Columbus, known as Cristóbal Colón in Spanish.

Telecommunications in El Salvador

Telecommunications in El Salvador include radio, television, fixed and mobile telephones, and the Internet, centered primarily around the capital, San Salvador.

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