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USAID Programs in El SalvadorWith a population of only 6.3 million as of 2022, El Salvador is the smallest country in Central America. Despite this, it continues to face large economic problems, ranking as the second slowest economic growth rate in Central America.

Over the years, El Salvador has faced various fluctuations in economic stability. In 2020, the country’s Gross Domestic Product (GDP) dropped from 2.5% to -7.9%, a result of the COVID-19 pandemic’s adverse effects on job opportunities and poverty rates.

Even after the GDP stabilized in 2022, El Salvador continues to face fiscal sustainability issues, increasing extreme poverty rates from 0.38% to 0.39%.

USAID in El Salvador

The United States Agency for International Development (USAID) uses the Integrated Food Security Phase Classification (IPC) to analyze how critical a nation’s food insecurity is. Nations are classified from Phase 1 to Phase 5, where Phase 1 is minimal and Phase 5 is famine.

Before the end of 2022, heavy rainfall and flooding caused an extreme humanitarian crisis, impacting millions of people in Central America. This led to an increase in food insecurity, changing the rankings of El Salvador, Guatemala, and Honduras in an IPC Phase 3 Crisis or worse. 

With the assistance of programs from USAID, positive strides have been made to provide economic and humanitarian growth in El Salvador. These programs provide support for gender-based violence, children’s education and increase funding for humanitarian needs, especially in extreme crises. With natural disaster initiatives, USAID has contributed approximately $400 million to the rehabilitation and rebuilding of damaged infrastructures in El Salvador.

Economic Competitiveness Project

According to USAID, providing ample job opportunities through job creation and placement is vital to preventing irregular migration, boosting trade and offering educational support.

The Economic Competitiveness Project, a $47.8 million program, aims to provide micro, small and medium enterprises with support to economically grow their businesses through competitive “innovation and technological development.” This not only encourages businesses to grow intellectually but to boost trade and raise income. With more programs to increase employment opportunities and thus reduce poverty, the inclination to engage in crime is greatly reduced. 

Gloria de Kriete Foundation

USAID has also partnered with the Gloria de Kriete Foundation to provide $14.2 million to academically gifted children for increased access to educational support. This has been used to positively change more than 2,100 students’ lives via funding for scholarships, financial aid and other educational needs. With this partnership, young residents of El Salvador have become more prepared to pursue post-academic job opportunities.

Citizen Security

USAID programs in El Salvador also work to prevent violence by partnering with community organizations to establish after-school programs that educate and rehabilitate youth and provide them with a safe space to learn and grow. 

While El Salvador recorded high crime rates with 103 homicides per 100,000 residents in 2015, police efforts have caused rates to rapidly decrease by 56.8% due to a “widespread crackdown on gang violence” in 2022.

USAID programs, such as Citizen Security Project and NIDO: Building Safe Communities, work to deter children from crime. With $43 million in support, the Citizen Security Project offers after-school programs for past criminal offenders. This helps rehabilitate, educate and offer support for youth. The NIDO project partners with Glasswing International to integrate youth into after-school programs that help provide citizen security through various training exercises. 

These programs, along with the tireless efforts of the El Salvadorian government and police force, have resulted in a substantial decrease in homicide rates to 15 per 100,000 residents and an increased trust of security officials and policemen by 20%.

Humanitarian Assistance

El Salvadorans are at a 95.4% risk of natural disasters. USAID is now allocating $42.5 million to provide crisis support for El Salvador, Guatemala and Honduras during natural disasters. These funds also include assisting in the prevention of food insecurity through donating food and providing shelters for protection against violence.

Through this aid, millions of people in Central America can also receive assistance for the restoration of crops and other needs. Allocating funds has worked to aid in disaster relief for years. During Tropical Storms 12-E in 2011 and Amanda in May 2020 USAID workers provided countless hours of assistance for “temporary shelters, water, hygiene kits and temporary educational and recreational activities in shelters.”

Looking Toward the Future

USAID has worked to help the people in El Salvador for decades and has only increased its support since COVID-19.

With various USAID programs in El Salvador committed to growing safe, sustainable communities, the future continues to brighten. Economic growth continues to rise with the investment into young academic futures. Violent crime rates are plummeting. While there is still room for economic growth, USAID programs continue to make strides in fostering a brighter tomorrow for the people of El Salvador.

– Kristina Gaffney
Photo: Flickr

Remittances to El Salvador

The Trump administration has announced an end to temporary protected status (TPS) for the 200,000 El Salvadoran refugees residing in the U.S. Immigrants have until Sept. 9, 2019, to either obtain a green card or to exit the country. Critics of the policy argue that El Salvador is unable to support an influx of citizens and point to the importance of remittances to El Salvador for the families that depend on this source of income.

 

Why Refugees Need TPS

El Salvadoran immigrants were granted temporary protected status in 2001 following two devastating earthquakes. Once enrolled in the program, immigrants have access to social security cards and a pathway to legal employment.

TPS status was originally granted to El Salvadoran refugees for only 18 months. However, previous administrations have repeatedly extended the program due to other adverse conditions like poverty and violence, as these have worsened since the earthquakes. For a country not at war, El Salvador has the highest homicide rate in the world: 108 per 100,000 people.

 

Remittances to El Salvador

El Salvadoran workers send billions of dollars annually back home to their families. These money transfers are called remittances. El Salvador has one of the highest remittance rates in the world.

In 2016, approximately 1.2 million El Salvadoran immigrants lived in the United States. They sent $4.6 billion in remittances back to El Salvador, making up 17 percent of the country’s Gross Domestic Product (GDP). Remittances to El Salvador have a much larger impact on the country’s economy than foreign aid. The United States sent only $88 million in aid to El Salvador in 2016.

According to Manuel Orozco, a political scientist with Washington D.C. think-tank InterAmerican Dialogue, between 80 and 85 percent of El Salvadoran immigrants send money back home. Orozco estimates that the average immigrant sends $4,300 annually. More importantly, Orozco estimates that one in 20 El Salvadoran households depend on remittance for survival.

 

How Remittances Help Those in Poverty

Remittances to El Salvador often help the poorest families access education, clothing, medicine and financial support for elderly citizens. In 2013, about 33 percent of households receiving remittance were considered poor, while about 46 percent were considered vulnerable. This suggests that remittance payments play an important role in keeping vulnerable households above the poverty line.

Remittances made up about 50 percent of monthly household income for recipients. Remittances constituted an even larger percentage of monthly household income for rural households and female- and elderly-led households.

Additionally, households receiving remittance in 2013 were more likely to have access to running water, bathrooms and electricity than the average household in El Salvador. Rates of home ownership were higher in remittance households than in the average El Salvadoran household.

In 2013, 94 percent of households receiving remittances used part of the money on consumption spending. Remittances increase domestic spending by providing poor families with a greater disposable income. Eliminating this source of revenue has the potential to hurt El Salvadoran businesses and, consequently, the El Salvadoran economy.

According to economist Cesar Villalona, “It’s a cycle. If remittances went down it would plunge people into poverty and reduce spending, which would hurt companies, causing unemployment and hitting government finances.” President Trump’s repeal of temporary protected status for El Salvadoran refugees could have devastating effects on the nation of El Salvador as a whole.

– Katherine Parks

Photo: Flickr