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Wednesday, January 25, 2012

El Salvador: Political, Economic, and Social Conditions and U.S. Relations

Clare Ribando Seelke
Specialist in Latin American Affairs

Throughout the last few decades, the United States has maintained a strong interest in El Salvador, a small Central American country with a population of 6 million. During the 1980s, El Salvador was the largest recipient of U.S. aid in Latin America as its government struggled against the leftist Farabundo Marti National Liberation Front (FMLN) insurgency during a 12- year civil war. A peace accord negotiated in 1992 brought the war to an end and formally assimilated the FMLN into the political process as a political party. After the peace accords were signed, U.S. involvement shifted toward helping successive Nationalist Republican Alliance (ARENA) governments rebuild democracy and implement market-friendly economic reforms.

In March 2009, Mauricio Funes, a former television journalist and the first FMLN presidential candidate without a guerilla past, defeated Rodrigo Ávila of the conservative ARENA party in a close election. Funes took office for a five-year presidential term in June 2009. His inauguration marked the end of more than 20 years of ARENA rule and the first transfer of political power between parties since the end of El Salvador’s civil war. Funes’ victory followed strong showings by the FMLN in the January 2009 legislative elections.

Midway through his term, President Funes still has high approval ratings (63% in December 2011), but faces a number of political, economic, and social challenges. President Funes has generally pursued moderate policies that have enabled him to form cross-party coalitions in the National Assembly, but caused periodic friction between him and more radical members of his party. His ability to shepherd legislation through the Assembly may stall, however, as the March 2012 legislative elections draw near. The Funes government has received support from the international community—including $790 million from the International Monetary Fund (IMF)— to boost economic recovery in the wake of the 2009 economic crisis. El Salvador’s recovery has been thwarted, however, by natural disasters. Flooding from Tropical Depression 12E, which hit in October 2011, resulted in some $840 million in losses and damages to the country. The costs of reconstruction may constrain the government’s ability to fund anti-poverty initiatives and public security efforts, although tax reform enacted in December 2011 will generate additional revenue. With El Salvador posting one of the world’s highest homicide rates, President Funes is under significant pressure to improve security conditions.

Maintaining close ties with the United States has been a primary foreign policy goal of successive Salvadoran governments, including the Funes Administration. During a March 2011 visit to El Salvador, President Barack Obama praised President Funes’ “courageous work to overcome old divisions in Salvadoran society and to show that progress comes through pragmatism.” Both leaders pledged to work together to boost economic growth in El Salvador through the new Partnerships for Growth initiative and to more effectively ensure citizen security. U.S. bilateral assistance, which totaled $29.8 million in FY2011, as well as aid provided through the Central American Regional Security Initiative (CARSI) and the Millennium Challenge Corporation (MCC), is supporting those goals. The U.S. government has also provided more than $605,000 in emergency assistance in response to the recent floods. The Administration requested $35.5 million in aid for El Salvador for FY2012. The amount of funding included for El Salvador in the FY2012 Consolidated Appropriations Act (P.L. 112-74) is not yet available. However, in H.Rept. 112-331, the conferees stated their expectation that additional bilateral assistance and International Disaster Assistance be provided to El Salvador for flood relief and reconstruction.

Date of Report: January 11, 2012
Number of Pages: 17
Order Number: RS21655
Price: $29.95

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