El Salvador’s Five-Year Economic and Social Development Plan

At the beginning of every Salvadoran President’s term in office, he or she must present a five-year social and economic development plan that will guide their administration. In mid-April, Technical Secretary Alex Segovia unveiled the outline of President Funes’ five-year plan, which includes a strategic outlook to 2024.

Administration officials say the plan will be open and flexible so that it can incorporate international agreements made by the Economic and Social Council and others. The goal of the five-year plan is to have a tool that will help direct the national government and promote cohesion and cooperation. The plan will also promote transparency in managing the government and promote national unity.

In a presentation last week in Washington DC, Segovia said:

“the priorities are poverty, equality, and all other social issues. These will make up 43% of the programs and projects, which will exceed $4.5 billion dollars”

Reactivation of the economy and incentives for agricultural production is a top priority for the administration. During the presentation in Washington DC, Segovia also stressed that inclusion of the Salvaodran Diaspora in politics and local development is also a top priority. Vice-minister of Salvadorans Living Abroad Juan José García agreed and said that they will continue working towards their promise to promote the reforms necessary for Salvadorans living abroad to vote in El Salvador.

Economist César Augusto Sención Villalona recently stated, “if the Government of Mauricio Funes succeeds in executing the five-year plan of which we know only a little, the country would achieve a more just and equitable society.” He continued that the five-year plan would likely require an investment of 4.5 billion dollars, which El Salvador does not have. He mentioned a few ways of securing the resources, the first of which is through international loans – an issue that has been debated in El Salvador over the past couple of months. Sención points out that there is no way El Salvador could take on more debt, and it is unlikely that the Legislative Assembly would approve taking such a large loan.

Sención suggested two other ways for the Funes Administration to implement their plan without going into debt. The first is through extreme fiscal reform, which some sectors of El Salvador would reject. The second is for the government to look for greater external cooperation from South American and establish stronger ties with China, Russia, Brazil, and Cuba. He also suggests they join Petrocaribe – the Caribbean oil alliance with Venezuela of which Nicaragua, Hondura, Guatemala, and many others are members. Sención says that entering Petrocaribe would not only give El Salvador access to fuel, but also they would also be able to access a fund to purchase tractors and machinery that allow them to improve the agricultural sector. They would be able to repay part of the loan with agricultural products. In recent months, some economists have been critical of President Funes for not publishing a plan sooner.

Criticism has grown over the past couple of weeks because instead of presenting a full five-year plan, the administration only had a 23-page power point presentation that outlined some of the issues and proposals. In response to the criticisms, Sención responded that Funes inherited a very tough economy and has had to focus on the basics – making sure the hospitals have medicines, increasing the agricultural packages, and providing housing and education.

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