1. Background Note: El Salvador
An indigenous woman creates a flower arrangement for a celebration, Panchimalco, El
Salvador, May 6, 2007. [© AP Images]
[Country Map]
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. 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 est.): 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 ninth grade. Attendance (grades 1-9)--90.4%. Literacy--84.0%
nationally; 77% in rural areas.
Health: Infant mortality rate (2005)--23/1,000 (source: UNICEF). Life expectancy at birth
(2007)--70.8 years.
Work force (about 1.7 million, 2007): Agriculture--17%; services--48.7%;
industry--15.7%; construction--7.6%; government--4.5% (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), and Democratic Change (CD).
Suffrage: Universal at 18.
Economy

2. GDP (2007): $20.4 billion; PPP GDP $41.56 billion (2007 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.

3. 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 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
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 vote.
In March 2006 legislative 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,

4. 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 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, through the
International Criminal Investigative Training Assistance Program (ICITAP) and now
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

5. 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--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 May 2008 was about $5.5 billion, 27.02% 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 2007, the Central Bank estimated that
remittances totaled $3.7 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

6. 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 an agreement with Israel is being considered. Exports in 2007 grew
7.4% while imports grew 13.1%. 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,

7. 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 has been a committed member of the coalition of nations fighting
against terrorism and has sent eleven 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.
Escalón, phone: 2263-9494.