Nestled along the Pacific coast of Central America, El Salvador is a middle-income country home to around 6 million people. Since the establishment of a republican government in 1992, following a decade-long civil war, widespread gang violence and economic turmoil have plagued the country. Nonetheless, poverty rates have consistently declined by a total of 14% from 2000 to 2023, suggesting that El Salvador is trending upwards.

“The world’s coolest dictator,” Nayib Bukele, is attempting to transform El Salvador into a burgeoning digital hub, with Google announcing plans to open offices there in 2024. However, even during this wave of digitization and Bukele’s crackdown on organized crime, poverty in El Salvador remains a major problem.

As of 2023, 30.3% of the population lives in poverty, while 40% of the population lives in a situation of vulnerability. This is everything to know about poverty in El Salvador.

Everything To Know About Poverty in El Salvador

• The COVID-19 Pandemic Impacted Poverty: The COVID-19 pandemic exacerbated economic conditions for many living in poverty. The poorest households lost between $90 to $100 of monthly income during the pandemic, and have yet to recover these wages. Furthermore, the likelihood of falling into poverty grew from 14.4% to 20% during the pandemic and has not decreased since.
• Changing Weather Patterns are Worsening Poverty: In 2024, heavy flooding interfered with construction and public investment projects, slowing economic growth in El Salvador. The flooding forced almost 4,000 people into shelters and interfered with small-scale agriculture and fishing. This placed the poorest Salvadorans at great risk of food insecurity. Experts estimate that a severe natural disaster in El Salvador could potentially double the number of people living in extreme poverty.
• Bitcoin and Digitization is Still Inequitable: El Salvador invested heavily in digital projects in order to spark economic growth—adopting Bitcoin as the official currency in 2021—but these investments have not reached some of the most impoverished and rural segments of society. El Salvador ranks last in broadband access among Latin American and Caribbean countries. Additionally, automation threatens the jobs of seven out of 10 El Salvadorans working in poverty, showing the limitations of technological development.
• Job Opportunities are Poor, Particularly for Women: Job inactivity is acute, as 1.7 million Salvadorans are not seeking a job, while women in El Salvador suffer some of the highest inactivity rates in all of Latin America. Additionally, working age women (ages 20 to 44) suffer higher poverty rates than men, and the gap in these rates is still growing.
• The Urban-rural Divide Persists: Rural populations experience significantly worse income and job opportunities versus urban populations, as well as access to services such as clean water or sanitation. The extremely poor in rural areas make just $31 per month, while the non-poor in urban areas make $710 per month on average—a massive discrepancy.
• Education is a Major Hurdle: Salvadorans complete an average of 7.3 years of schooling, but these numbers are much worse for rural areas, at only 5.6 years. Children living in poverty have the lowest rates of literacy and school attendance. Education is a very effective pathway out of poverty, as poverty rates drop to 16% with secondary schooling and only 5% with a university education, but it unfortunately remains inaccessible to many.
• Remittances Underlie the Salvadoran Economy: El Salvador was in the top 10 countries in the world for the highest flow of remittances in 2023, and the government recently created an e-wallet to help make remittance transfers easier. Salvadorans make up the fourth largest immigrant group in the United States, so much of the money being sent to El Salvador is earned by workers in the U.S. However, remittances can discourage formal employment, meaning a reliance on them could become an obstacle to growth.

Solutions

CLOC-Vía Campesina-El Salvador, a grassroots advocacy group representing peasants, small farmers, indigenous people and other disadvantaged groups, fights for the rural poor in El Salvador. It is tied to the global La Vía Campesina movement, which has connected peasants around the world in a struggle for food sovereignty and security since 1993. CLOC-Vía Campesina-El Salvador is calling on the government for greater credit and funding to rural farmers, phytosanitary programs to eliminate screwworms and integration of rural farmers into local markets. 

The Salvadoran American Humanitarian Foundation (SAHF) operates out of Miami in tandem with its Salvadoran sister group, FUSAL, to combat poverty in El Salvador. The groups focus on childhood development and malnutrition, educational disparities and natural disaster relief. In 2023, they sent an astounding $43 million in humanitarian goods to El Salvador, including glasses, food, wheelchairs, blankets, medicine and oral rehydration packets, which reached more than 100,000 people.

What Is Next for El Salvador?

Although these challenges to ending poverty in El Salvador remain, the country is making major strides towards poverty reduction. Compared to Latin American countries with similar income levels, El Salvador has some of the lowest poverty rates, and income inequality in El Salvador is among the lowest in all of Latin America. Additionally, the country has begun to manage its debt and spending effectively, which qualifies El Salvador to receive a $120 million loan from the IMF. This funding will allow the government to begin addressing some structural causes behind poverty, such as corruption, weak access to credit and low employment. Compared to its peers, El Salvador is on the right track to eradicating poverty, but they still have a lot of work left to get there.

– Max Turnacioglu

Max is based in Bethesda, MD, USA and focuses on Business and Politics for The Borgen Project.

Photo: Flickr