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EL SALVADOR'S NEW BEGINNING
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Over the last ten years, the remarkably resilient people
of El Salvador have been taking meaningful strides to overcome long-standing
adversity and their efforts have created a new beginning that is catapulting
the country into the vanguard of Central America's rising stars.
With a history of conflict, poverty and natural disaster, Central America's
smallest nation has countered its misfortune and emerged as a stable society
with one of the region's most dynamic economies. A complex interaction
of domestic and international influences have resulted in sustained economic
opportunity which is based partly on signficant connections to global trade
and investment. The ongoing changes are motivating and challenging
the country's self-reliant people who are striving for prosperity without
compromising national self-determination. While El Salvador's sudden
prominence seems to be improving the quality of life, there is a growing
dependence on foreign investment firms and multinational corporations.
There are questions about whether the new prosperity will continue to benefit
the local economy or be funneled to large overseas sponsors as the economy
expands. Moreover, the cost of living is increasing and some areas
of the country have experienced a rise in crime rates as the society experiences
rapid transition. Salvadorans are cognizant of the complex challenges
that remain and the need for ongoing efforts to ensure lasting improvement
and to overcome the negative side effects that have occurred. Yet
there is a rising level of confidence in a land where possibilities are
expanding along with the country's stabilization. With high expectations
and pragmatic action, El Salvador is increasingly optimistic about its
future and prospects are clearly improving as the country adjusts to a
new era.
EXPANDING HORIZONS
The OAS publication, "AMERICAS," offers an insightful
report that elaborates on recent developments and emphasizes a positive
view for the future. According to the article, the country has a
stable economic system and a democratic government with elections that
have one of the highest voter participation rates in the world. With
a 3.5% growth rate and a GDP that is around $17 billion, El Salvador is
one of only three Latin American countries with an investment grade rating.
El Salvador has adopted the U.S. dollar as its currency which has reduced
government overhead and made the country more attractive to overseas investors.
Investment is also encouraged by the lowest interest rates in the region
as well as the country's embrace of the Central America Free Trade Agreement.
Since CAFTA provisions tend to favor the capacity of large corporations,
El Salvador is taking steps to support small and mid sized companies as
they strive to adapt and compete in a changing market place. It is
hoped that intensive investment and economic expansion will diminish the
extensive poverty that remains in some areas of the country. The
Millennium Challenge Corporation (a U.S. Development Agency) has allocated
over half a billion dollars for assistance and infrastructure programs
in El Salvador's poorest region where nearly one million people live in
extreme poverty. El Salvador's government is planning a number of
development projects which are said to be public works programs aimed at
reducing poverty and improving the standard of living. Construction
of the "Dry Canal" is the largest public works project currently in progress
and it is an ambitious undertaking. Construction of a deep water
port that can accommodate the newest and largest ships is being combined
with a new road to Puerto Cortez in Belize. Supported by $198 million
in Japanese financing, the state-of-the-art port is intended for the new
ships that are too large for the Panama Canal. When the Port of Cutuco
is complete and the road to Puerto Cortez is established, there will be
a rapid six hour transit linking the Atlantic and Pacific oceans.
SALVADORANS SHAPING THE FUTURE
The foundation for today's prosperity has been created
largely by the Salvadoran people themselves. Nearly 3 million Salvadorans
live and work abroad. Their remarkable talent and initiative has
driven the surge in El Salvador's fortunes as remittances contribute 3
billion dollars to the country's economy. This money sent back from
earnings abroad accounts for a substantial portion of El Salvador's Gross
Domestic Product and the United States is the primary source of this income.
An epic migration has been underway for a quarter of a century and it is
a reflection of one of Central America's most tragic events. El Salvador
experienced a large scale exodus during the turbulent 1980's when nearly
a quarter of the country's population became refugees from the bloody civil
war of 1980-1991. While many Salvadorans believed that American involvement
exacerbated the conflict, the U.S. was also viewed as a safe haven for
refugees. Of the three million people who left El Salvador, 95 percent
moved to the United States. California alone is now home to over
one million Salvadorans and there are large Salvadoran communities in New
York and Florida. The Salvadorans adapted well to American life and
have been providing substantial support to relatives back in El Salvador.
This remittance is increasingly directed toward expanded forms of support
as American Salvadorans are financing economic innovation and offering
business knowledge gained through experience in America. As a result,
traditional trades and skills that have served El Salvador's people for
centuries are being applied through small business endeavors. The
American Salvadorans are investing large sums in El Salvador's economic
infrastructure and this pivotal contribution is creating a solid foundation
for the country. This well integrated and broadly based economy draws
on a wellspring of modest enterprises that are responsive to the country's
needs. The versatile, grassroots economic system accommodates the
environment and reflects the culture of El Salvador. Participation
from overseas Salvadorans has been instrumental in guiding El Salvador's
course of action and it has been a primary catalyst for the country's resilience.
THE SALVADORAN PARADOX
While the "AMERICAS" article is informative, it overlooks
several crucial issues. There is some concern that the influence
of Salvadorans at home and abroad could diminish as economic expansion
becomes increasingly dependent on the dynamics of a global economy.
The basic disparity between the developed and undeveloped world has often
resulted in the usurpation or co-opting of the smaller economy by the larger
economy. Moreover, national sovereignty can be compromised when interaction
with global organizations is unilateral in nature and dependent on initiatives
from one side. El Salvador is walking a tightrope, balancing the
demands of global economics with the requirements of national determination
and economic independence. The country is attempting to connect with
the resources of international financial institutions without compromising
the local control that has been fostered by Salvadorans at home and abroad.
This paradox could represent a valid paradigm for the Third World if interaction
with the global economy is responsive in nature and includes a decision
making process that is accountable. To preserve its local entrepreneurial
economy and to avoid the pitfalls of monopoly from overseas companies,
El Salvador needs participation that is active and interactive. Active
in shaping the goals of the country and interactive with the global institutions
that are impacting the country's future. Interactive participation
is the key phrase that serves as a litmus test for determining valid exchange.
Responsive trade is important for the public interest and for free enterprise.
The powerful influence of globalization tends to overwhelm fragile Third
World governments and shift the policy focus away from internal goals toward
the objectives of the global economy. Large scale international transactions
effect the national interest of the countries involved and the public interest
is often undermined as globalization stifles the dynamics of government
representation. Globalization also stifles free market forces by
disrupting the natural dynamic of economic exchange through conglomeration
and the monopoly of economic resources. For the public interest and
in the interest of free enterprise, it is imperative to have an open and
interactive exchange in the global arena. Interactive participation
modifies globalization so that it becomes responsive to market forces and
accountable to the public interest. The Salvadoran experience moves
from paradox to paradigm when there is participation in the global economy
rather than dependence on globalization. There are some positive
indications for El Salvador as the country moves forward. Time will
tell if the reciprocity of interests will continue to overlap and support
a brighter future.
BRANDON PRESS