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The Human Development Report of the United Nations Programme "From poverty and consumerism to the welfare of the

people" is emphasized that all models performed so far in El Salvador have had a fundamental flaw: low wages make workers the main advantage in entering international markets. PNUD makes a thorough analysis of the last 60 years of public policy and concludes that El Salvador has historically had a weak macroeconomic and social policies have had an alternative in the development process. According to the report is a mistake to believe that the country has had a solid macroeconomics, just because there has been stability in prices and the exchange rate. Moreover, while public spending has been increasing to reach 11% of GDP, is still 5% lower compared to other Central American countries. The Human Development Report of the United Nations Programmed "From poverty and consumerism to the welfare of the people" is emphasized that all models performed so far in El Salvador have had a fundamental flaw: low wages make workers the main advantage in entering international markets.

The smallest country in Central America geographically, El Salvador has the third-largest economy in the region. In the last two decades, El Salvador has made considerable progress in social and economic transformation, undertaking significant social sector reforms that led to improvements in social indicators. These reforms contributed to an increase in the countrys Human Development Index--which aggregates measures of life expectancy, adult literacy and school enrollment, and income per capita--from 0.524 in 1990 to 0.674 in 2010, and a decrease in the share of households living in poverty by 23.2 percentage points, from 59.7% in 1990 and 36.5% in 2010. El Salvador ranks 105th in the Human Development Index worldwide. Much of the improvement in El Salvador's economy is a result of the privatization of the banking system, telecommunications, public pensions, electrical distribution and some electrical generation; reduction of import duties; elimination of price controls; and improved enforcement of intellectual property rights. Capping those reforms, on January 1, 2001, the U.S. dollar became legal tender and the economy is now fully dollarized. However, El Salvadors economy remains strongly linked to world and U.S. economic cycles. From 2000 to 2010, the Salvadoran economy averaged 2% annual economic growth, with GDP receding by 3.1% in 2009 due to the financial crisis and recovering only

to 1.4% growth in 2010. El Salvador was expecting 1.4% economic growth in 2011, lower than previously anticipated. These rates of growth are decidedly below the Latin American average, and the Government of El Salvador is determined to reverse these trends by laying the groundwork for a development model built on a new cycle of investment and economic growth through the Partnership for Growth (PFG) initiative.

El Salvador's economic development in the 1980s was hindered by a resource drain caused by the country's civil conflict, natural disasters, a lack of economic expertise, and adverse changes in the terms of trade. Consequently, by 1987 El Salvador's economic output barely equaled 80 percent of its 1978 level, and exports were only the third most important source of foreign exchange after foreign aid and remittances from Salvadorans living abroad. The most damaging of these factors was the civil conflict, particularly its impact on the country's infrastructure. By mid-1987 observers estimated that the total cost to the economy based on lost agricultural production, damaged infrastructure, and funds diverted from economic to military purposes was about US$1.5 billion. El Salvador entered the 1970s as a relatively poor middleincome country with per capita income greater than that of Thailand and slightly less than that of the Republic of Korea (South Korea), Malaysia and Costa Rica. Its overall level of development was roughly comparable to these countries as well, judging by such indicators as industrial contribution to the gross domestic product (GDP), life expectancy, the cost of labor, and per capita income. El Salvador had one other important characteristic in common with these other four countries--a hard-working, productive, and motivated labor force. El Salvador's annual rate of investment growth (3.5 percent), however, lagged substantially behind the other four during the 1960s. During this decade, gross investment grew annually by 24 percent in South Korea, 16 percent in Thailand, 7.5 percent in Malaysia, and 7.1 percent in Costa Rica. El Salvador's inferior rate of investment growth continued and in some cases widened during the 1970s. By 1982 Salvadoran development had fallen far behind that of South Korea, Malaysia, Thailand, and even Costa Rica. Industrial production hovered around 20 percent of GDP, whereas in the other countries it accounted for between 27 percent (Costa Rica) and 40 percent (South Korea). Salvadoran per capita income fell to about a third of South Korea's and Malaysia's, half of Costa Rica's, and 15 percent below that of Thailand. Making matters worse, El Salvador's terms of trade had deteriorated much more rapidly than had that of the other countries. Between 1982 and 1986, El Salvador fell even further behind as it failed to diversify its exports away from agricultural commodities and into manufactured goods. In 1986 per capita GDP was almost half its level of 1977, and the country entered a period of

disinvestment. As other middle-income countries appeared to be taking off, El Salvador was regressing. Salvadoran Economic Developments from 1995-2012 20.02.2013

In recent years, El Salvador has presented different strengths and weaknesses in its main economic activities and human development. This note has been compiled indices, indicators and scales important for the country from the standpoint of economic and social, that allow to know the progress and setbacks in the national economy (in terms of course depends on each reader) . In some cases, the information presented covers longer periods due to the importance of economic development, for example in the Gross Domestic Product (GDP) and GDP per capita (GDP per capita). In the case of indices, are presented to El Salvador positions obtained according to the evaluation of international organizations like the World Bank, the World Economic Forum, the United Nations Program for Development and the Heritage Foundation.