Republic of El Salvador
Area: 21,476 sq.
km. (8,260 sq. mi.); about the size of Massachusetts.
GDP: $10.9 billion.
El Salvador's population numbers about 5.8 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-though Protestant groups are growing-and Spanish is the language spoken by virtually all inhabitants. The capital city of San Salvador has about 1.4 million people; an estimated 49% of El Salvador's population lives in rural areas.
Before the Spanish conquest, the area that is now El Salvador was made up of two large Indian states and several principalities. The indigenous inhabitants were the Pipils, a tribe of nomadic Nahua people long established in Central Mexico. Early in their history, they became one of the few Mesoamerican Indian groups to abolish human sacrifice. Otherwise, their culture was similar to that of their Aztec neighbors. Remains of Nahua culture are still found at ruins such as Tazumal (near Chalchuapa), San Andres (northeast of Armenia), and Joya De Ceren (north of Colon).
The first Spanish attempt to subjugate this area failed in 1524, when Pedro de Alvarado was forced to retreat by Pipil warriors. In 1525, he returned and succeeded in bringing the district under control of the Captaincy General of Guatemala, which retained its authority until 1821, despite an abortive revolution in 1811.
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. Guatemalan troops sent to enforce the union were driven out of El Salvador in June 1822. El Salvador, fearing incorporation into Mexico, petitioned the U.S. Government for statehood.
But in 1823, a revolution in Mexico ousted Emperor Augustin Iturbide, and a new Mexican congress voted to allow the Central American provinces to decide their own fate. That year, 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 1900-1930 was relative stability achieved. The economic elite ruled the country in conjunction with the military, and the power structure was controlled by a relatively small number of wealthy landowners, known as the 14 Families. The economy, based on coffee-growing, prospered or suffered as the world coffee price fluctuated.
From 1932-the year of Gen. Maximiliano Hernandez Martinez's coup following his brutal suppression of rural resistance-until 1980, all but one Salvadoran President was an army officer. Periodic presidential elections were seldom free or fair.
From Military to Civilian Rule
From the 1930s to the 1970s, authoritarian governments employed political repression and limited reform to maintain power, despite the trappings of democracy. During the 1970s, the political situation began to unravel. In the 1972 presidential election, the opponents of military rule united under Jose Napoleon Duarte, leader of the Christian Democratic Party (PDC). Amid widespread fraud, Duarte's broad-based reform movement was defeated. Subsequent protests and an attempted coup were crushed, and Duarte exiled. These events eroded hope of reform through democratic means and persuaded those opposed to the government that armed insurrection was the only way to achieve change. As a consequence, leftist groups capitalizing upon social discontent gained strength.
By 1979, leftist guerrilla warfare had broken out in the cities and the countryside, launching what became a 12-year civil war. A cycle of violence took hold as rightist vigilante death squads in turn killed thousands. The poorly trained Salvadoran Armed Forces (ESAF) also engaged in repression and indiscriminate killings. After the collapse of the Somoza regime in Nicaragua that year, the new Sandinista government provided large amounts of arms and munitions to five Salvadoran guerrilla groups.
On October 15, 1979, reform-minded military officers and civilian leaders ousted the right-wing government of Gen. Carlos Humberto Romero (1977-79) and formed a revolutionary junta. PDC leader Duarte joined the junta in March 1980, leading the provisional government until the elections of March 1982. The junta initiated a land reform program and nationalized the banks and the marketing of coffee and sugar. Political parties were allowed to function again, and on March 28, 1982, Salvadorans elected a new constituent assembly. Following that election, authority was peacefully transferred to Alvaro Magana, the provisional president selected by the assembly.
The 1983 constitution, drafted by the assembly, strengthened individual rights; established safeguards against excessive provisional detention and unreasonable searches; established a republican, pluralistic form of government; strengthened the legislative branch; and enhanced judicial independence. It also codified labor rights, particularly for agricultural workers. The newly initiated reforms, though, did not satisfy the guerrilla movements, which had unified under Cuban auspices-while each retained their autonomous status-as the Farabundo Marti National Liberation Front (FMLN).
Duarte won the 1984 presidential election against rightist Roberto D'Aubuisson of the Nationalist Republican Alliance (ARENA) with 54% of the vote and became the first freely elected president of El Salvador in more than 50 years.
In 1989, ARENA's Alfredo Cristiani won the presidential election with 54% of the vote. His inauguration on June 1, 1989, marked the first time that power had passed peacefully from one freely elected civilian leader to another.
Ending the Civil War
Upon his inauguration in June 1989, President Cristiani called for direct dialogue to end the decade of conflict between the government and guerrillas. An unmediated dialogue process involving monthly meetings between the two sides was initiated in September 1989, lasting until the FMLN launched a bloody, nationwide offensive in November that year.
In early 1990, following a request from the Central American presidents, the United Nations became involved in an effort to mediate direct talks between the two sides. After a year of little progress, the government and the FMLN accepted an invitation from the UN Secretary-General to meet in New York City. On September 25, 1991, the two sides signed the New York City Accord. It concentrated the negotiating process into one phase and created the Committee for the Consolidation of the Peace (COPAZ), made up of representatives of the government, FMLN, and political parties, with Catholic Church and UN observers.
On December 31, 1991, the government and the FMLN initialed a peace agreement under the auspices of then Secretary-General Perez de Cuellar. The final agreement, called the Accords of Chapultepec, was signed in Mexico City on January 16, 1992. A nine-month cease-fire took effect February 1, 1992, and was never broken. A ceremony held on December 15, 1992, marked the official end of the conflict, concurrent with the demobilization of the last elements of the FMLN military structure and the FMLN's inception as a political party.
El Salvador is a democratic republic governed by a president and an 84-member unicameral Legislative Assembly. The president is elected by universal suffrage and serves for a five-year term. Members of the assembly, also elected by universal suffrage, serve for three-year terms. The country has an independent judiciary and Supreme Court.
In March 1994, the first post-civil war elections were held with FMLN participation, featuring simultaneous presidential, legislative, and municipal races. ARENA won 39 seats in the Legislative Assembly, the FMLN 21 seats, the PDC 18, the National Conciliation Party (PCN) four, and the Democractic Convergence (CD) and Unity Movement (MU) one each. (The FMLN and PDC caucuses subsequently split.) ARENA presidential candidate Armando Calderon Sol faced FMLN-CD coalition candidate Ruben Zamora in a runoff in April and won with 68% of the vote. UN observers declared the elections free and fair. Armando Calderon Sol of the ARENA party began his five-year term as President on June 1, 1994, and cannot succeed himself.
The March 1997 legislative and municipal elections were conducted in a free and transparent manner, depite the fact that important electoral reforms agreed to three years earlier were not in place, and voter turnout barely reached 40%. The FMLN and opposition coalitions scored impressive gains in both the assembly and throughout the country's 262 municipalities, capturing the mayoral seats in six of 14 departmental capitals, including San Salvador. In the 1997-2000 assembly ARENA will have 28 deputies, the FMLN 27, the PCN 11, and the PDC 7. Several small centrist parties and coalitions will split the remaining 11 seats.
ARENA is El Salvador's leading political party. It was created in 1982 by Roberto D'Aubuisson and other ultra-rightists, including some members of the military. His electoral fortunes were diminished by credible reports that he was involved in organized political violence. Following the 1984 presidential election, ARENA began reaching out to more moderate individuals and groups, particularly in the private sector.
By 1989, ARENA had attracted the support of business groups, and Alfredo Cristiani won the presidency. Despite sincere efforts at reform, Duarte's PDC administration had failed to either end the insurgency or improve the economy. Allegations of corruption, poor relations with the private sector, and historically low prices for the nation's main agricultural exports also contributed to ARENA victories in the 1988 legislative and 1989 presidential elections.
The 1989-94 Cristiani administration's successes in achieving a peace agreement to end the civil war and in improving the nation's economy helped ARENA, led by standard-bearer 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 remains the country's single largest and best organized political party.
In December 1992 the FMLN became a political party, composed of the political factions of the wartime guerrilla movement, and maintained a united front during the 1994 electoral campaign. The FMLN also came in second in the legislative assembly races. Internal political differences, however, among the FMLN's constituent parties led to the breakaway of two of the FMLN's original five factions after the 1994 elections. Despite the defections, the FMLN was able to consolidate its remaining factions and present itself as a viable option to ARENA. It is the second-largest block in the new assembly and due to its strategic control of the mayorships of many departmental cities, over 50% of Salvadorans have an FMLN or coalition-led municipal government.
The right wing of the National Conciliation Party (PCN), which ruled the country in alliance with the military from the 1960s until 1979, maintains a small but steady electoral base. Its fortunes were recently boosted by the addition of high-profile ARENA defectors and a reinvigorated electoral showing in the assembly. Several other smaller parties represented in Legislative Assembly in El Salvador fight for the political center with limited success. The PDC, which had won more municipal elections in 1994 than did the FMLN, continued to splinter. Following the 1994 election, those opposed to the then party leadership formed the Social Christian Renovation Party (PRSC). Subsequently, the remaining PDC leadership split into two factions that battled each other in court and before the Supreme Electoral Tribunal for most of 1996. The CD, which had been the principal party of the left before the peace accords, and the MU, a party based in the Salvadoran evangelical movement, combined with the FMLN to elect a coalition candidate as mayor of San Salvador.
Compliance With the Peace Accords
While most aspects of the accords have been largely implemented, important components such as judicial reform remain incomplete. The peace process set up under the Chapultepec Accords was monitored by the United Nations from 1991 until June 1997 when it closed its special monitoring mission in El Salvador.
During the 12-year civil war, human rights violations by both left- and right-wing forces were rampant. The accords established a Truth Commission under UN auspices to investigate the most serious cases. The commission reported its findings in 1993. It recommended that those identified as human rights violators be removed from all government and military posts, as well as recommendingjudicial reforms. Thereafter, the Legislative Assembly granted amnesty for political crimes committed during the war. Among those freed as a result were the 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 required the establishment of the Ad Hoc Commission to evaluate the human rights record of the ESAF officer corps. In 1993, the last of the 103 officers identified by this commission as responsible for human rights violations were retired, and the UN observer mission declared the government in compliance with the Ad Hoc Commission recommendations.
Also in 1993, the Government of El Salvador and the UN established the Joint Group to investigate whether illegal, armed, politically motivated groups continued to exist after the signing of the peace accords. The group reported its findings in 1994 stating that death squads were no longer active but that violence was still being used to obtain political ends. The group recommended a special National Civilian Police (PNC) unit be created to investigate political and organized crime and that further reforms be made in the judicial system. The government created the PNC's Organized Crime Investigation Unit (DICO) and took other steps in response to the report, although not all the group's recommendations have been implemented.
The peace accords provided for the establishment of a Human Rights Ombudsman's Office. Victoria Velasquez de Aviles succeeded Carlos Molina Fonseca as Ombudsman in 1995.
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 and National Guard were abolished, and military intelligence functions were transferred to civilian control. By 1993-nine months ahead of schedule-the military had cut personnel from a wartime high of 63,000 to the level of 32,000 required by the peace accords. By early 1997, ESAF strength stood at less than 17,000 (including uniformed and non-uniformed personnel). 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. Clear institutional guidance from the Minister of Defense proscribing the military from any political involvement in the electoral process was clearly followed in the March 1997 elections.
National Civilian Police
The new civilian police force, 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. As of late 1996, the PNC had over 10,500 officers. The United States, through the Department of Justice's International Criminal Investigative Training Assistance Program (ICITAP), has led international support for the PNC and the National Public Security Academy (ANSP), providing over $28 million in non-lethal equipment and training since 1992.
The PNC faces many challenges in building a completely new police force. With common crime rising dramatically since the end of the war, over 110 PNC officers had been killed in the line of duty by late 1996. PNC officers have also arrested a number of their own in connection with various high-profile crimes.
Both the Truth Commission and the Joint Group identified weaknesses in the judiciary and recommended solutions, the most dramatic being the replacement of all the magistrates on the Supreme Court. This recommendation was fulfilled in 1994 when an entirely new court was elected. The process of replacing incompetent judges in the lower courts, and of strengthening the attorney general's and public defender's offices, has moved more 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.
Over 35,000 eligible beneficiaries from among the former guerrillas and soliders who fought the war received land under the Peace Accord-mandated land transfer program which ended in January 1997. The majority of them have also received agricultural credits. The international community, the Salvadoran Government, the former rebels, and the various financial institutions involved in the process continue to work closely together to deal with follow-on issues resulting from the program.
Principal Government Officials
El Salvador maintains an embassy in the United States at 2308 California Street NW, Washington, DC 20008 (tel. 202-265-9671). There are consulates in Chicago, Houston, Los Angeles, Miami, New Orleans, New York, and San Francisco.
The Salvadoran economy continues to benefit from a commitment to free markets and careful fiscal management. The impact of the civil war on El Salvador's economy was devastating; from 1979 to 1990, losses from damage to infrastructure and means of production due to guerrilla sabotage as well as from reduced export earnings totaled about $2.2 billion. But since attacks on economic targets ended in 1992, improved investor confidence has led to increased private investment. Rich soil, moderate climate, and a hard-working and enterprising labor pool comprise El Salvador's greatest assets.
Much of the improvement in El Salvador's economy is due to free market policy initiatives launched by the Cristiani government in July 1989, including the privatization of the banking system, reduction of import duties, and elimination of price controls on virtually all consumer products. The successor government of President Calderon Sol has continued market liberalization, further reducing tariffs and enhancing the investment climate through measures such as improved enforcement of intellectual property rights. Perhaps its most significant achievement has been the opening of the telecommunications and electrical sector to competition, a step that establishes the framework for the privatization of the telephone and electric companies set to begin in 1997.
The post-war boom in the Salvadoran economy began to fade in July 1995 after an abrupt shift in monetary policy was followed by a June increase in the value added tax (VAT) and price hikes in basic public services. The slowdown lingered into the new year and the Volume Index of Economic Activity (IVAE) declined throughout the first half of 1996, led by a dismal performance in the retail sector. Inflation remained stubbornly higher than expected, reaching a 10% annual rate by July 1996. The slump contributed to a larger-than-expected government deficit. Tax revenues were down from early projections and expenditures were up, due to an increase in teachers' salaries and government downsizing at the end of 1995 that required payment of a special severance package. Virtually every sector lobbied for a sectoral stimulus package, including tariff protection, tax cuts, and special credit lines. The government took considerable criticism for its perceived neglect, but steadfastly refused to intervene and spend the economy back to health.
The outlook improved toward the end of 1996. Key indicators, such as industrial electrical consumption, cement consumption, and air cargo traffic were all up. The IVAE index began to move up, but more importantly, the retail sector showed improved performance in the third and fourth quarters. Prices of basic foodstuffs fell in September and October. Inflation for the year was projected at 9% and real GDP growth was estimated at 4%.
In mid-1995, the government of El Salvador flirted briefly with the idea of switching to a dollar economy, going a step further than the fixed exchange rate proposed by the President. The government took a number of administrative steps that substantially increased the liquidity in the economy and helped fuel 1995's boom. Following intense pressure from the World Bank, the government made the political decision to abandon the dollarization idea in early 1996. Subsequent tightening of the monetary policy by the Central Bank contributed to the onset of what the government called deceleration.
Fiscal policy has been the biggest challenge for the Salvadoran Government. The 1992 peace accords committed the government to heavy expenditures for transition programs and social services. Although international aid has been generous, the government has focused on improving the collection of its current revenues. A 10% value-added tax (VAT), implemented in September 1992, was raised to 13% in July 1995. The VAT is estimated to have contributed 54% of total tax revenues in 1996; collections in the first nine months of the year were up 21% over 1995, in part due to the rate increase, but also to improved collection techniques.
A multiple exchange rate regime that had been used to conserve foreign exchange was phased out during 1990 and replaced by a free-floating rate. The colon depreciated from five to the dollar in 1989 to eight in 1991, and in 1993 was informally pegged at 8.75 colones to the dollar. Large inflows of dollars in the form of family remittances from Salvadorans working in the United States offset a substantial trade deficit and support the exchange rate. The monthly average of remittances reported by the Central Bank is around $85 million, with the total estimated at more than $1 billion for 1996. As of August 1996, net international reserves equaled roughly four months of imports.
Foreign Debt and Assistance
El Salvador's external debt decreased sharply in 1993, chiefly as a result of an agreement under which the United States forgave about $461 million of official debt. As a result, total debt service decreased by 16% over 1992. Total external debt went down from $2.245 billion in 1994 to approximately $2.2 billion in 1995 and did not rise significantly in 1996. Debt service fell correspondingly from 3.3% of GDP in 1994 to 3.0% in 1996. El Salvador has eliminated all payment arrears, and its debt burden is considered moderate.
The Government of El Salvador has been successful in obtaining significant new credits from the international financial institutions. Among the most significant loans are a second structural adjustment loan from the World Bank for $52.5 million, another World Bank loan of $40 million for agricultural reform, a $20 million loan from the Central American Bank for Economic Integration to be used to repair roads, and a $60 million Inter-American Development Bank loan for poverty alleviation projects. Although official figures show relatively small and diminishing aid flows, the total is probably larger. Significant amounts come in through non-governmental organizations and are channeled to groups not generally included in official statistics, such as political parties, unions, and churches. Total non-United States Government aid reached $800 million in 1995 and 1996.
El Salvador historically has been the most industrialized nation in Central America, though a decade of war eroded this position. In 1995, 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 three years have made an important contribution to the Salvadoran economy.
El Salvador's balance of payments continued to show a net surplus. Exports in 1996 grew 11% while imports declined, narrowing El Salvador's almost 2-to-1 trade deficit. As in the previous year, the large trade deficit ($1.5 billion) was offset by foreign aid and family remittances. 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 (CACM) 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. 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. President Calderon Sol has indicated that he expects to implement a tariff regime between 0 and 6% for all traded goods by 1999.
Total U.S. exports to El Salvador reached $1.7 billion in 1995, while El Salvador exported $844 million to the U.S. Salvadoran exports to the U.S. grew in 1996 to $895 million. U.S. exports are projected at $1.68 million. 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. Over 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.
Agriculture and Land Reform
Before 1980, a small economic elite owned most of the land in El Salvador and controlled a highly successful agricultural industry. About 70% of farmers were sharecroppers or laborers on large plantations. Many farm workers were under- or unemployed and impoverished.
The civilian-military junta which came to power in 1979 instituted an ambitious land reform program to redress the inequities of the past, respond to the legitimate grievances of the rural poor, and promote more broadly based growth in the agricultural sector. 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.
In May 1997, President Calderon Sol met with President Clinton and his counterparts from Central America, Belize, and the Dominican Republic at the Costa Rica summit to celebrate the remarkable democratic transformation in the region and reaffirm support for strengthening democracy, good governance, and promoting prosperity through economic integration, free trade, and investment. The leaders also expressed their commitment to the continued development of just and equitable societies and responsible environmental policies as integral elements of sustainable development.
El Salvador is a member of the United Nations and several of its specialized agencies; the Organization of American States (OAS); the Central American Common Market (CACM); the Central American Parliament (PARLACEN); and the Central American Integration System (SICA). It actively participates in the Central American Security Commission (CASC), which seeks to promote regional arms control. 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.
In July 1969, El Salvador and Honduras fought the 100-hour Soccer War over disputed border areas and friction resulting from the 300,000 Salvadorans who had emigrated to Honduras in search of land and employment. The catalyst was nationalistic feelings aroused by a series of soccer matches between the two countries. The two countries formally signed a peace treaty on October 30, 1980, which put the border dispute before the International Court of Justice.
In September 1992, the court issued a 400-page ruling, awarding much of the disputed land to Honduras. Although there have been tensions between citizens on both sides of the border, the two countries have worked to maintain stability, and signed an agreement in November 1996 to establish a framework for negotiating the final disposition of citizens and property in the affected areas. El Salvador and Honduras share normal diplomatic and trade relations.
U.S.-Salvadoran relations remain close and cordial. U.S. policy toward El Salvador seeks to promote:
In FY1996, U.S. Government assistance to El Salvador was about $60 million, including $10 million of PL-480 (food assistance). Bilateral aid in general has declined since the end of the war with 1997 total economic assistance projected at $32 million. The Salvadoran government relies increasingly on loans from international lending institutions to finance special projects.
In February 1996, Secretary of State Warren Christopher visited El Salvador to sign an agreement providing $10 million to complete the Land Transfer Program. In his address to the Legislative Assembly the Secretary reiterated U.S. support for hemispheric commitments to sustainable development and free trade. Continued U.S. and international engagement has been instrumental in keeping the Salvadoran peace process on track.
Principal U.S. Embassy Officials
The U.S. embassy in El Salvador is located at Final Blvd. Santa Elena, Antiguo Cuscatlan, La Libertad (tel.: 503-278-4444; fax: 503-278-6011).
U.S. ties to El Salvador are dynamic and growing. Approximately 9,000 American citizens live and work full-time in El Salvador. Most are private business persons 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 the full range of visa, passport, federal benefit, absentee voting, and related citizenship services to this community.
The American Chamber of Commerce in El Salvador is located at 87 Avenida Norte No. 720, Apto. A, Colonia Escalon, San Salvador, El Salvador (tel.: 503-223-3292; fax: 503-224-6856).
Other Contact Information:
U.S. Department of
This information is courtesy of the U.S. Department of State, March 1998
To comment on this service,
send feedback to the Web Development Team.