El Salvador

1996: Decree No. 926; establishes the Superintendence of Pensions to supervise the system of mandatory private pension schemes and regulates its structure, functions and powers.

El Salvador’s first competition law took effect on 1 January 2006. The law, following some important amendments in 2007, is sound in most respects. It employs enforcement standards that are consistent with best practices in the worldwide competition community. It provides the new competition agency, La Superintendencia de Competencia (Superintendency) with the powers that it needs to enforce the law effectively. In less than three years El Salvador is off to a good – one might say excellent – start. Its experience can serve, in some ways at least, as an example of an effective way to begin to implement a competition policy...

The OECD has been active in promoting competition policy among countries in Latin America and the Caribbean and formed a partnership with the Inter-American Development Bank to further this aim. The principal feature of this partnership has been the annual Latin American Competition Forum (LACF), at which senior officials from countries in the region discuss, in roundtable fashion, issues of competition policy of interest to them. Each of the first four Forums featured a peer review of one country in the region. At the fifth Forum held in 2007, work focused on the four Latin American peer review reports which had been produced in the framework of the Latin American Competition Forum (Brazil, Chile, Peru and Argentina) as well as the peer review of Mexico held in the OECD Competition Committee. This work assessed the impact that the peer reviews have had on competition policy and on the competition agencies in the countries concerned. “Peer review” is a core element of OECD work. The mechanisms of peer review vary, but it is founded upon the willingness of a country to submit its laws and policies to substantive questioning by other members of the international community. This process provides valuable insights to the reviewed country and promotes transparency and mutual understanding for the benefit of all.There is an emerging consensus on best practices in competition law enforcement and in applying competition policy principles to regulatory systems. Countries now co-operate regularly in such areas as anticartel enforcement and international mergers. Peer reviews are an important part of this process. The OECD and the IDB are pleased to have participated in this partnership for the promotion of competition policy in Latin America and the Caribbean. This work is consistent with the policies and goals of both organisations. Sound competition policy will promote economic growth and prosperity, bringing benefits to consumers in the region and substantially improving the business climate. Both organisations would like to thank the Government of El Salvador for volunteering to be peer reviewed at the sixth LACF meeting, held in Panama, on 10-11 September 2008. Finally, we want to thank Mr. John Clark, the author of the report, and the many competition officials whose written and oral contributions to the Forum have been so important to its success.

DPR and Sovereign Bond Issues at Launch appears in Latin American Economic Outlook 2010.

The development history of El Salvador is rich in firsts and lessons learnt. The UN-mediated peace process that put an end to the 12-year civil war in 1992 is a global benchmark. The rapid reform drive that followed, establishing a private sector, export-oriented economic model, helped the country make great economic strides. Social policy innovations like the development of community-managed education institutions have inspired solutions across the developing world. None of these policy experiences was perfect, and some of them failed to fully deliver on expectations. But all are testament to the vision and commitment of those who sought policy solutions to improve the lives of their fellow citizens.

This chapter examines the state of El Salvador’s education system, and its ability to prepare children and young people for the labour market. The review underscores barriers to access, progression and completion, in light of the country’s socio-economic and geographical disparities. It suggests targeted policy recommendations to provide children and youth with the necessary skills to help build El Salvador’s future.

Ce document de travail analyse les liens entre l’emploi informel et l’inadéquation entre niveaux de formation et emploi à partir des données d’enquêtes de ménages qui couvrent 15 pays d’Amérique latine et d’Afrique. Il s’appuie sur une méthodologie unifiée pour mesurer l'inadéquation formation-emploi et l'informalité, conformément aux normes internationales du travail et des statistiques dans ce domaine. Les résultats suggèrent que dans la majorité des pays en développement à revenu faible et intermédiaire pour lesquels des données sont disponibles, les travailleurs occupant des emplois informels ont une probabilité plus élevée d'être sous-éduqués que les travailleurs occupant des emplois formels. Ceux-ci ont, a contrario, plus de chances d'être sur-éduqués. Ces résultats sont cohérents tant pour les travailleurs salariés que pour les travailleurs indépendants. Selon l’analyse ventilée par sexe, ils sont également valables pour les hommes comme pour les femmes. De plus, dans la majorité des pays considérés dans ce document, le lien entre l’inadéquation formation-emploi et l'informalité est également lié à l'étendue de l'informalité dans une région donnée : sur les marchés du travail où l'informalité est plus élevée, les travailleurs informels en particulier ont plus de probabilités d'être sous-qualifiés. Le document examine les implications de ces résultats pour les politiques publiques.

Poverty in El Salvador decreased markedly in recent years, from 40.4% in 2016 to 29.8% in 2022, but remains above the Latin America and the Caribbean (LAC) average of 24.1%. Extreme poverty also decreased, from 10.7% in 2016 to 8.7% in 2022, slightly above the LAC average (8.3%). The Gini index decreased from 40.0 in 2016 to 39.0 in 2021, remaining below the LAC average (44.8). Regarding investment and production transformation indicators, total investment in El Salvador increased from 15.5% of GDP in 2016 to 20.0% in 2022, showing a stronger growth rate than the LAC average trend, which increased from 20.8% to 21.3% over the same period. Private investment also rose in El Salvador, from 13.6% of GDP to 15.8%, equalling the LAC average (15.8% in 2019). The share of exports of high-tech products in total exported manufactured goods increased from 5.4% in 2016 to 7.4% in 2021, placing it slightly above the LAC average (7.2%). Positive perceptions of foreign direct investment (FDI), which declined across the LAC region, showed a slight increase in El Salvador, from 71.3% in 2016 to 72.0% in 2020. The country’s tax revenue increased from 20.5% of GDP in 2016 to 23.3% in 2021, contrary to a regional declining trend. Environment-related tax revenues remained unchanged at 0.6% of GDP from 2016 to 2021, below the LAC average of 0.9%.

Poverty in El Salvador has decreased from 40.4% in 2016 to 30.7% in 2020, although it remained above the Latin America and the Caribbean (LAC) average of 26.3%. Extreme poverty also decreased in that period from 10.7% to 8.3%, below the LAC average (8.7%). The population living in completely informal households was 54.4% in 2018, above the LAC average (36.3%). Regarding environmental indicators, in 2019, greenhouse gas (GHG) emissions per capita were 2.0 tonnes of carbon dioxide equivalent (t CO2e), lower than the averages for LAC (6.3) and countries belonging to the Organisation for Economic Co-operation and Development (OECD) (9.1). That year, the share of the population exposed to air pollution levels that pose risks to human health (PM2.5 at more than 10 µg/m3) was 99.9%, higher than 95.4% for LAC and 61.0% for the OECD. The marine protected area of El Salvador accounted for just 0.7% of its territorial waters in 2021, compared to 7.3% for LAC and 18.6% for the OECD. On the fiscal side, environmentally related tax revenue was 0.5% of GDP in 2020, below LAC (1.0%) and the OECD (2.1%). Total tax revenue as a percentage of GDP in 2020 was 21.9%, on par with the LAC average (21.9%), but below the OECD average (33.5%).

The crisis hit El Salvador’s economy hard. In 2020, gross domestic product (GDP) contracted by 7.9% annually. The population will not equally share the consequences. Based on the latest international comparable estimations, in 2020 the poverty rate reached 36.4%, among the highest in the Latin America and the Caribbean (LAC) region (30.9%). It has increased six percentage points from a year earlier, compared to an increase of four percentage points in LAC. The extreme poverty rate has reached 8%, an increase of 2.4 percentage points, compared to 10.0% and 1.9 percentage points, respectively, in LAC. Public expenditures on health before the crisis stood at 7.2% of GDP, slightly higher than in LAC (6.8%) but lower than Organisation for Economic Co-operation and Development (OECD) countries (8.8%). The perceived quality of health services was negatively affected. In 2020, 54.8% of people declared being satisfied with health care, compared to 48.2% in LAC. People’s satisfaction was 11 percentage points lower than ten years before, a larger decrease than in LAC (8.7 percentage points). Between March 2020 and May 2021 schools were fully closed for 46 weeks, more than in LAC (26 weeks) and the OECD (15 weeks). In 2020, 41.4% of El Salvador citizens thought that the government was corrupt, a lower share than in LAC (72.4%) and the OECD (58.8%).

El Salvador continues to progress in enhancing digital access and use for all, but a digital gap remains. Despite improvements, active mobile broadband subscriptions in 2018 were below Latin American and Caribbean (LAC) and Organisation for Economic Co-operation and Development (OECD) averages, while Internet users represented 33.8% of the population, compared with 62.9% in LAC and 83.4% in the OECD in 2017. More progress is needed in enhancing trust in the digital ecosystem. In particular, trust in online privacy and the Global Cybersecutiry Index are below LAC and OECD averages.

El Salvador has made improvements in the last decades in health and education. The country’s infant mortality rate (12.5 per 1 000 live births) is below the Latin America and Caribbean (LAC) average (14.7), although far from the OECD average (5.7). Concurrently, life expectancy at birth has increased to 73.5 from 64 in 1990, in line with the LAC average of 75.6, and the maternal mortality ratio has improved to 54 per 100 000 live births, below the LAC average (74.4). The country’s net secondary enrolment rate also improved between 2000-16 from 48.2% to 64.3%.