About El Salvador

Official name: República de El Salvador (Republic of El Salvador)
Head of State: President Elias Antonio Saca (Arena) (since 2004)
Head of government: President Elias Antonio Saca
Ruling party: Coalition government led by Alianza Republicana Nacionalista (Arena) (Nationalist Republican Alliance)
Area: 21,400 square km
Population: 6.71 million (2005)
Capital: San Salvador
Official language: Spanish
Currency: US dollar (US$) adopted from 1 Jan 2001; the colón is no longer accepted as legal tender.
GDP per capita: US$2,468 (2005)
GDP real growth: 2.80% (2005); *3.8% (2006)
Labor force: 2.90 million (2004)
Balance of trade: -US$3.38 billion (2005)
The Pipels, who arrived from central Mexico, the most famous one known was "Atlacatl" who renamed the area “Cuscatlán", because of the exuberant fertility of the land. Cuscatlán translates as "Land of Precious Jewels" in the native indigenous tongue known as Pipil-Nahuat.
Historical Profile
1821 The Central American provinces (Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador) declared independence from Spain.
1822 Central American confederation annexed itself to the Mexican Empire, under General Agustín de Iturbde, later Emporer Agustín I.
1823 Agustín I was overthrown and Mexico became a republic. The Central American states formed the United Provinces of Central America.
1825 Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador formed the Central American Federation (CAF).
1838 The CAF was dissolved and El Salvador became an independent republic.
Republic of El Salvador. In Spanish, it is "República de El Salvador". The country was named after the Spanish word for "The Savior", in honor of Jesus Christ.
The Capital, San Salvador, is the second largest city in Central America with a population of about 2.2 million.
By the twentieth century, the majority of the population was reduced to poverty and discontent, having been pushed off their land, and the land turned over to crops for export. Most of El Salvador's income came from coffee exports.
1929 Coffee prices plummeted following the US stock market crash.
1932 Uprising of peasants and Indians. The military killed 30,000 people in La Matanza (the massacre).
1961 The right-wing Partido de Conciliación Nacional (PCN) (National Reconciliation Party) came to power following a military coup.
1969 Honduras and El Salvador fought what became known as the 'soccer war', which was prompted by land disputes and El Salvador's win in the World Cup play-offs between the two countries. Over 3,000 people died.
1970s There were demonstrations, civil disobedience and strikes. The esquadrones de muerte (death squads) were formed. Thousands of Salvadoreans were kidnapped, tortured and murdered.
1977 General Carlos Romero was elected president.
1979 Romero was ousted by reformist military officers, although this failed to stem the number of deaths at the hands of military-backed death squads.
1980 Napoleón Duarte became El Salvador's first civilian president since 1931.
1980s Civil war between the US-backed right-wing government and a leftist guerrilla group, Frente Farabundo Martí para la Liberación Nacional (FMLN) (Front for National Liberation), based largely in the countryside. Right-wing groups carried out indiscriminate street killings of 'subversives'. Some rural communities were targetted by the security forces for eradication.
1982 The far-right Alianza Republicana Nacionalista (Arena) (Nationalist Republican Alliance) came to power following violent parliamentary elections.
1984 Duarte won the presidential election and began to negotiate a settlement with the FMLN.
1989 Arena's Alfredo Cristiani was elected president.
1992 A formal cease-fire, under UN auspices, came into effect. An estimated 75,000 people had been killed in the 12-year war.
1994 Political killings and threats continued right up to the elections. Arena's Armando Calderón Sol was elected president.
1997 Arena won the Assembly elections.
1999 Francisco Flores (Arena) won the presidential election.
2000 The FMLN become the largest party in the National Assembly. Arena formed a coalition government with the PCN, giving the right-wing block a majority in the Assembly.
2001 El Salvador adopted the US dollar as its currency. The worst earthquakes for more than a decade resulted in almost 1,500 people dying and 1.5 million being made homeless.
2002 The government declared a state of emergency in response to an outbreak of dengue fever.
2003 In March parliamentary elections, Arena's number of seats fell by two and the PCN's increased by two, while the FMLN had no net gains, although it remained the largest party. A free trade agreement (FTA) with Panama came into effect in April.
2004 On March 21, Antonio Saca (Arena) won the country’s presidential elections. In August 2004 the government of El Salvador along with that of the Dominican Republic, Costa Rica, Guatemala, Honduras and Nicaragua agreed to a proposed Central American Free Trade Agreement (Cafta) with the US.
2005 In March the OAS human rights court voted to re-open an investigation into the El Mozote massacre in 1981. Thousands of people fled the area surrounding the Ilamatepec volcano in October after it erupted. Just days later a tropical storm damaged the area and caused many deaths. 2006 12 March 2006, in national assembly elections, the Arena won 34 seats; the FMLN won 32 seats.
External trade
El Salvador is a member of the Central American Free Trade Agreement (Cafta) along with the US, Costa Rica, Guatemala, Honduras and Dominica Republic.
The maquiladora sector dominates trade with manufactured goods (in particular garments) exported, typically, to the US.
There has been an increase in non-traditional exports such as shrimps, sesame seeds, nuts, fruits and honey.

Imports
Principal imports include raw materials, consumer goods, capital goods, fuels, foodstuffs, petroleum and electricity.

Main sources
US (43.4 per cent total, 2005), Guatemala (8.2 per cent), Mexico (7.8 per cent)

Exports
Principal exports include offshore assembly exports, coffee, sugar, shrimp, textiles, handcrafts, chemicals and electricity.

Main destinations
US (61.0 per cent total, 2005), Guatemala (12.1 per cent), Honduras (7.4 per cent), Nicaragua (4.2 per cent)
Agriculture

Farming

Farming
The agricultural sector of El Salvador’s economy employs approximately a third of the country’s total workforce. The sector contributes about 12 per cent to total GDP. Approximately 34 per cent of total land is arable; 30 per cent permanent pastures.
Coffee is the most important crop. Other major crops are cotton, sugar cane, maize, beans and rice. There has been some diversification within the sector, with non-traditional exports such as sesame seeds, nuts, vegetables, fruits, honey and, above all, shrimps, taking an increasing share.

Production - Reviews
Estimated crop production in 2005 included 822,195t tonnes cereals in total, 5,280,400t sugar cane, 648,045t maize, 65,000t bananas, 75,709t plantains, 26,519t rice, 18,136t cassava, 13,000t potatoes, 147,631t sorghum, 10,814t chillies and peppers, 17,075t oilcrops, 25,416t tomatoes, 98,600t citrus fruit, 78,510t green coffee, 84,300t pulses, 83,686t roots and tubers, 284,948t fruit in total, 141,907t vegetables in total. Estimated livestock production included: 127,042t meat in total, 26,500t beef, 8,313t pig meat, 92,111t poultry, 63,649t eggs, 412,602t milk, 2,362t honey, 6,665t cattle hides.

Fishing

The Gulf of Fonseca is regarded as one of Central America’s greatest natural resources with rich fisheries and diverse marine life, which is shared by Honduras, Nicaragua and El Salvador. Typically, the annual catch is over 18,000mt per year.

Production - Reviews
In 2004, the total marine fish catch was 27,106 tonnes and the total crustacean catch was 10,221 tonnes.

Forestry
The forestry industry in El Salvador is relatively small. Timber imports in 2004 were US$161.2 million, while exports amounted to US$14.8 million.

Industry and manufacturing

Contributing approximately 28 per cent to total GDP and employing around a fifth of the total workforce, the industrial sector is a significant part of El Salvador’s economy.
The national government has made efforts to shift the industrial sector towards manufacturing for export through the development of the maquila (in-bond manufacturing) sector and the creation of free zones. Maquila exports have accounted for the bulk of growth in the export sector since 1992. Investment incentives in the free zones include a 10-year income tax exemption, import duty exemptions or reduced exposure to taxes on equity or assets for 10 years.

Tourism

Tourism has traditionally played an insignificant role in El Salvador’s economy. However, the travel and tourism sector is continuing to expand and now accounts for 7.8 per cent of total GDP, up from 2 per cent in 2000. The industry employs 6.8 per cent of the total labour force.
Financial markets

Stock exchange
The Bolsa de El Salvador was founded in 1964 and is situated in San Salvador.
Banking and insurance
The banking system of El Salvador remained under state ownership until 1991. Thereafter the government implemented market reforms that handed control to private investors. Interest rates are determined by the market.