ARENA government's commitment to free market initiatives and conservative fiscal management that include the privatization of the banking system, telecommunications, public pensions, electrical distribution, and some electrical generation, reduction of import duties, elimination of price controls, and an improved enforcement of intellectual property rights. The GDP has been growing at a steady and moderate pace since the signing of peace accords inin an environment of macroeconomic stability. A problem that the Salvadoran economy faces is the inequality in the distribution of income.
Bring fact-checked results to the top of your browser search. Despite its traditional concentration on agriculture, the country is not self-sufficient and must import food.
At the root of this problem is the disproportionate distribution of land, which favours commercial crops and leaves many peasants landless and unable to grow subsistence crops. During the civil war years, in the s and the early s, the U. By the mids El Salvador had expanded its service industryand in the early s it increased its amount of agricultural exports and number of reconstruction projects.
In El Salvador signed a free-trade agreement with the United States that further boosted its export income. However, in the late s, these accomplishments had been offset by high oil prices, natural disasters, and a decline in the number of maquiladoras manufacturing plants that import and assemble duty-free components for export.
These factors prevented El Salvador from paying off its external debt, and the country continues to rely partly on foreign aid. Agriculture, forestry, and fishing The most important agricultural products in El Salvador are coffeecotton, corn maizeand sugarcane.
Several species of palm and coconut trees grow in the coastal zone, and there are many varieties of tropical fruit, such as coconut, tamarind, melon, watermelon, and mango. Nontraditional agricultural products e. Nevertheless, coffee alone still accounts for a substantial part of the value of total agricultural production.
Cattle raising is also an important activity. Valuable wood is obtained from the cedar, mahogany, laurel, nispero, and madrecacao trees and is used for the manufacture of furniture.
The trunk of the balsa tree yields excellent lumber as well as resin that is used in the manufacture of antiseptics and medicinal gums. It is also used for fuel. Most of the fish caught commercially or for sport come from offshore waters and coastal lagoons; they consist chiefly of crustaceans including lobster and shrimpmullet, snappers, jacks, groupers, sharks, and anchovies.
Resources and power There is no mineral exploitation of significance in El Salvador.
Manufacturing In the midth century, there was a steadily increasing investment in industry, stimulated by the Central American Common Market.
Industrial plants were set up throughout the country, and existing facilities were expanded, helped by government incentives, an advanced banking system, and development credits from abroad. Manufacturing underwent a serious decline beginning ina result primarily of civil unrest and political instability.
Manufactures include beverages, canned foods, organic fertilizers, cement, chemical products, pharmaceuticals, cigarettes, shoes, cotton textiles, leather goods, petroleum products, and electronics.
By the early s this trend had been reversed, and a comprehensive privatization program was implementedwhich continued through the early s. In El Salvador adopted the U. Among other imports are machinery parts, foodstuffs, petroleum, and chemical products.
Services Since the early s services have accounted for about three-fifths of GDP.Encompassing that million is million located in the largest city, and also the capital of El Salvador, San Salvador. El Salvador became an independent republic in and is now divided into 14 departments which have municipalities/5(1).
During the civil war years, in the s and the early s, the U.S. government supplied El Salvador with large amounts of military and economic aid in order to counter the leftist parties and guerrilla units that had formed in response to the actions of the governing junta. - - El Salvador forms part of the short-lived United Provinces of Central America, which also includes Costa Rica, Guatemala, Honduras and Nicaragua.
The United States of America foreign policy on El Salvador is best explained by President Obama’s approach on Latin America where the United States is focused on economic growth and equality, energy and climate control, and regional and citizen security (Foreign Policy, ).
A challenge in El Salvador has been developing new growth sectors for a more diversified economy. As many other former colonies, for many years El Salvador was considered a monoexporter economy. This means, an economy that depended heavily on one type of export. After El Salvador’s civil war which lasted for 12 years the economy has experienced mixed results from the ARENA government.
The ARENA party known as the Nationalist Republican Alliance started in