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El Salvador

Background: El Salvador achieved independence from Spain in 1821 and from the Central American Federation in 1839. A 12-year civil war, which cost the lives of some 75,000 people, was brought to a close in 1992 when the government and leftist rebels signed a treaty that provided for military and political reforms.
Government type: republic
Capital: San Salvador
Currency: 1 Salvadoran colon (C) = 100 centavos

Geography of El Salvador

Location: Middle America, bordering the North Pacific Ocean, between Guatemala and Honduras
Geographic coordinates: 13 50 N, 88 55 W
total: 21,040 sq. km
land: 20,720 sq. km
water: 320 sq. km
Land boundaries:
total: 545 km
border countries: Guatemala 203 km, Honduras 342 km
Coastline: 307 km
Maritime claims:
territorial sea: 200 nm
Climate: tropical; rainy season (May to October); dry season (November to April); tropical on coast; temperate in uplands
Terrain: mostly mountains with narrow coastal belt and central plateau
Elevation extremes:
lowest point: Pacific Ocean 0 m
highest point: Cerro El Pital 2,730 m
Natural resources: hydropower, geothermal power, petroleum, arable land
Land use:
arable land: 27%
permanent crops: 8%
permanent pastures: 29%
forests and woodland: 5%
other: 31% (1993 est.)
Irrigated land: 1,200 sq. km (1993 est.)
Natural hazards: known as the Land of Volcanoes; frequent and sometimes very destructive earthquakes and volcanic activity
Environment – current issues: deforestation; soil erosion; water pollution; contamination of soils from disposal of toxic wastes; Hurricane Mitch damage.
Environment – international agreements:
party to:  Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Nuclear Test Ban, Ozone Layer Protection, Wetlands
signed, but not ratified: Law of the Sea
Geography – note: smallest Central American country and only one without a coastline on Caribbean Sea

El Salvador, the smallest Spanish-speaking nation in the Western Hemisphere, is located on the western side of the Central American isthmus. With an area of 21,041 square kilometers, the country is only slightly larger than Massachusetts. It is roughly rectangular in shape with 515 kilometers of land boundaries and 307 kilometers of coastline on the Pacific Ocean. El Salvador is bounded by Guatemala to the west and Honduras to the north and east, and it is separated from Nicaragua on the southeast by the Golfo de Fonseca.


El Salvador, along with the rest of Middle America (a region comprising mainly Mexico and Central America), is one of the most seismologically active regions on earth, situated atop three of the large tectonic plates that constitute the earth’s surface. The motion of these plates causes the area’s earthquake and volcanic activity.

Most of Central America and the Caribbean Basin rests on the relatively motionless Caribbean Plate. The Pacific Ocean floor, however, is being carried northeast by the underlying motion of the Cocos Plate. Ocean floor material is relatively dense; when it strikes the lighter granite rocks of Central America, the ocean floor is forced down under the land mass, creating the deep Middle America Trench that lies off the coast of El Salvador. The subduction of the Cocos Plate accounts for the frequency of earthquakes near the coast. As the rocks constituting the ocean floor are forced down, they melt, and the molten material pours up through weaknesses in the surface rock, producing volcanoes and geysers.

North of El Salvador, Mexico and most of Guatemala are riding on the westward-moving North American Plate that butts against the northern edge of the stationary Caribbean Plate in southern Guatemala. The grinding action of these two plates creates a fault, similar to the San Andreas in California, that runs the length of the valley of the Rio Motagua in Guatemala. Motion along this fault is the source of earthquakes in northernmost El Salvador.

El Salvador has a long history of destructive earthquakes and volcanic eruptions. San Salvador was destroyed in 1756 and 1854, and it suffered heavy damage in the 1919, 1982, and 1986 tremors. The country has over twenty volcanoes, although only two, San Miguel and Izalco, have been active in recent years. Violent eruptions are rare. From the early nineteenth century to the mid1950s , Izalco erupted with a regularity that earned it the name “Lighthouse of the Pacific.” Its brilliant flares were clearly visible for great distances at sea, and at night its glowing lava turned it into a brilliant luminous cone.

Physical Features

Two parallel mountain ranges cross El Salvador east to west with a central plateau between them and a narrow coastal plain hugging the Pacific. These physical features divide the country into two physiographic regions. The mountain ranges and central plateau covering 85 percent of the land comprise the interior highlands. The remaining coastal plains are referred to as the Pacific lowlands.

The northern range of mountains, the Sierra Madre, forms a continuous chain along the border with Honduras. Elevations in this region range from 1,600 to 2,200 meters. The area was once heavily forested, but overexploitation led to extensive erosion, and it has become semibarren. As a result, it is the country’s most sparsely populated zone, with little farming or other development.

The southern range of mountains is actually a discontinuous chain of more than twenty volcanoes, clustered into five groups. The westernmost group, near the Guatemalan border, contains Izalco and Santa Ana, which at 2,365 meters is the highest point in El Salvador. Between the cones lie alluvial basins and rolling hills eroded from ash deposits. The volcanic soil is rich, and much of El Salvador’s coffee is planted on these slopes.

The central plateau constitutes only 25 percent of the land area but contains the heaviest concentration of population and the country’s largest cities. This plain is about 50 kilometers wide and has an average elevation of 600 meters. Terrain here is rolling, with occasional escarpments, lava fields, and geysers.

A narrow plain extends from the coastal volcanic range to the Pacific Ocean. This region has a width ranging from one to thirty-two kilometers with the widest section in the east, adjacent to the Golfo de Fonseca. Near La Libertad, however, the mountains pinch the lowlands out; the slopes of adjacent volcanoes come down directly to the sea. Surfaces in the Pacific lowlands are generally flat or gently rolling and result from alluvial deposits from nearby slopes.

El Salvador has over 300 rivers, the most important of which is the Rio Lempa. Originating in Guatemala, the Rio Lempa cuts across the northern range of mountains, flows along much of the central plateau, and finally cuts through the southern volcanic range to empty into the Pacific. It is El Salvador’s only navigable river, and it and its tributaries drain about half the country. Other rivers are generally short and drain the Pacific lowlands or flow from the central plateau through gaps in the southern mountain range to the Pacific.

Numerous lakes of volcanic origin are found in the interior highlands; many of these lakes are surrounded by mountains and have high, steep banks. The largest lake, the Lago de Ilopango, lies just to the east of the capital. Other large lakes include the Lago de Coatepeque in the west and the Lago de Güija on the Guatemalan border. The Cerron Grande Dam on the Rio Lempa has created a large reservoir, the Embalse Cerron Grande, in northern El Salvador.


El Salvador has a tropical climate with pronounced wet and dry seasons. Temperatures vary primarily with elevation and show little seasonal change. The Pacific lowlands are uniformly hot; the central plateau and mountain areas are more moderate.

The rainy season, known locally as invierno, or winter, extends from May to October. Almost all the annual rainfall occurs during this time, and yearly totals, particularly on southern-facing mountain slopes, can be as high as 200 centimeters. Protected areas and the central plateau receive lesser, although still significant, amounts. Rainfall during this season generally comes from low pressure over the Pacific and usually falls in heavy afternoon thunderstorms. Although hurricanes occasionally form in the Pacific, they seldom affect El Salvador.

From November through April, the northeast trade winds control weather patterns. During these months, air flowing from the Caribbean has had most of the precipitation wrung out of it passing over the mountains in Honduras. By the time this air reaches El Salvador, it is dry, hot, and hazy. This season is known locally as verano, or summer.

Temperatures vary little with season; elevation is the primary determinant. The Pacific lowlands are the hottest region, with annual averages ranging from 25°C to 29°C. San Salvador is representative of the central plateau, with an annual average temperature of 23°C and absolute high and low readings of 38°C and 7°C, respectively. Mountain areas are the coolest, with annual averages from 12°C to 23°C and minimum temperatures sometimes approaching freezing.

People of El Salvador

El Salvador’s population numbers about 6.2 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 1.7 million people; an estimated 42% of El Salvador’s population live in rural areas.

Population: 6,704,932 (July 2005 est.)
Age structure:
0-14 years:  37.68%
15-64 years:  57.27%
65 years and over:  5.05% 
Population growth rate: 1.85% 
Birth rate: 28.67 births/1,000 population 
Death rate: 6.18 deaths/1,000 population 
Net migration rate: -3.95 migrant(s)/1,000 population 
Infant mortality rate: 28.4 deaths/1,000 live births 
Life expectancy at birth:
total population:  70.03 years
male:  66.43 years
female:  73.81 years 
Total fertility rate: 3.34 children born/woman 
noun: Salvadoran(s)
adjective: Salvadoran
Ethnic groups: mestizo 90%, Amerindian 1%, white 9%
Religions: Roman Catholic 86%
note: there is extensive activity by Protestant groups throughout the country; by the end of 1992, there were an estimated 1 million Protestant evangelicals in El Salvador
Languages: Spanish, Nahua (among some Amerindians)
definition: age 10 and over can read and write
total population: 71.5%
male: 73.5%
female: 69.8% (1995 est.)

History of El Salvador

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 Colón). The first Spanish attempt to subjugate this area failed in 1524, when Pipil warriors forced Pedro de Alvarado to retreat. 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 1900-30 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 temporary 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 of 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 9-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 Economy

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 1979-90, 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 carried out by the Cristiani and Calderon Sol governments, including the privatization of the banking system, telecommunications, public pensions, electrical distribution and some electrical generation, reduction of import duties, elimination of price controls on virtually all consumer products, and enhancing the investment climate through measures such as improved enforcement of intellectual property rights.

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 1996. Growth in GDP in 1996 was a mere 2.1%, but by 1997 it had picked up to 4%. In 1998, El Salvador’s economy grew by 3.2% compared to the 4.2% growth posted in 1997. The damage caused by Hurricane Mitch to infrastructure and to agricultural production reduced 1998 growth by an estimated .5%. Growth weakened further (to 2.6%) in 1999 due to poor international prices for El Salvador’s principal export commodities, weak exports to Central American neighbors recovering from Hurricane Mitch, and an investment slowdown caused by the March 1999 presidential elections and delays in legislative approval of a national budget. It picked up slightly to 3% in 2000. Because of the earthquakes that struck the country in January and February, the economy grew less than 2% in 2001. Inflation for 1998 was 4% and remained stable in 1999-2000. Thanks to the introduction of the U.S. dollar as legal tender and despite the earthquakes, inflation in 2001 was only 3.5%.

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 was generous, the government has focused on improving the collection of its current revenues. A 10% value-added tax, implemented in September 1992, was raised to 13% in July 1995. The VAT is estimated to have contributed 51% of total tax revenues in 1999, due mainly 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 colón depreciated from five to the dollar in 1989 to eight in 1991, and in 1993, was informally pegged at 8.73 colónes to the dollar, later adjusted to 8.79.

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 $150 million, with the total estimated at more than $1.9 billion for 2001. As of December 1999, net international reserves equaled $1.8 billion or roughly 5 months of imports. Having this hard currency buffer to work with, the Salvadoran Government undertook a “monetary integration plan” beginning January 1, 2001, by which the dollar became legal tender alongside the colón. No more colónes are to be printed, the economy is expected to be, in practice, fully dollarized, and the Central Reserve Bank dissolved, by late 2003. The FMLN is strongly opposed to the plan, regarding it as unconstitutional, and plans to make it an issue in the 2003 legislative elections.

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. External debt stood at $2.8 billion at the end of 1999. Debt service amounted to 2.5% of GDP in 1998 and 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 second structural adjustment loans 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. Total non-U.S. Government aid, excluding nongovernmental organizations (NGO) assistance and bilateral loan programs, reached $38 million in1999. Although official figures show relatively small and diminishing aid flows, the total is probably larger. Significant amounts come in through NGOs and are channeled to groups not generally included in official statistics, such as political parties, unions, and churches.

Some $300 million has been contracted from international institutions and governments for infrastructure works and social programs to be undertaken. The debt profile is expected to increase over the next several years as the international donor community has pledged $1.26 billion to finance El Salvador’s reconstruction and modernization. Large loans now being sought to finance reconstruction from the 2001 earthquakes will further alter the country’s debt profile.

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.

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 $1.9 billion entered the national economy during 2001. 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. 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.

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.

GDP: purchasing power parity – $24 billion (2000 est.)
GDP – real growth rate: 2.2% (1999 est.), 2.5% (2000 est.)
GDP – per capita: purchasing power parity – $4,000 (2000 est.)
GDP – composition by sector:
agriculture: 12%
industry: 22%
services: 66% (1999 est.)
Household income or consumption by percentage share:
lowest 10%: 1.2%
highest 10%: 38.3% (1995)
Inflation rate (consumer prices): 1.3% (1999 est.), 2.5% (2000 est.)
Labor force: 2.35 million (1999)
Labor force – by occupation: agriculture 30%, industry 15%, services 55% (1999 est.)
Unemployment rate: 10% (2000 est.)
revenues: $1.5 billion
expenditures: $1.73 billion (1999)
Industries: food processing, beverages, petroleum, chemicals, fertilizer, textiles, furniture, light metals
Industrial production growth rate: 5% (2000 est.)
Electricity – production: 4.1 billion kWh (1999 est.)
Electricity – production by source:
fossil fuel:  45.65%
hydro:  41.01%
nuclear:  0%
other:  13.34% (1999)
Agriculture – products: coffee, sugarcane, corn, rice, beans, oilseed, cotton, sorghum; beef, dairy products; shrimp
Exports: $2.5 billion (f.o.b., 1999), $2.8 billion (f.o.b., 2000)
Exports – commodities: offshore assembly exports, coffee, sugar, shrimp, textiles, chemicals, electricity
Exports – partners: United States 63%, Guatemala 11%, Honduras 7%, Costa Rica 4% (1999)
Imports: $4.15 billion (c.i.f., 1999), $4.6 billion (f.o.b., 2000)
Imports – commodities: raw materials, consumer goods, capital goods, fuels, foodstuffs, petroleum, electricity
Imports – partners: United States 51%, Guatemala 9%, Mexico 6%, Japan 3%, Costa Rica (1999)
Debt – external: $4.1 billion (2000 est.)
Economic aid – recipient: total $252 million; $57 million from US (1999 est.)
Currency: Salvadoran colon (SVC); US dollar (USD)

Map of El Salvador