El Salvador's Economic Development Challenges
A few weeks ago, the Inter-American Dialogue looked into some of the economic challenges confronting El Salvador in 2016 with A New Strategic Approach for El Salvador’s Economic Development Challenges.
From 2004-2008, you saw additions and new construction throughout the country. Salvadorans were saving money in the US before earning enough to return to their native country where they would open a small business or "retire." However, the US and global economic crisis put a dent in their savings. At the same time, the escalation of violence made it more difficult to return to El Salvador in order to open and successfully operate a new business. Extortion and generalized violence has a way of doing that. Instead of returning to El Salvador to live out their remaining years alongside family, their families emptied the country and made their way north (the "unaccompanied minors crisis").
I'm not sure what's going on right now, but there have been efforts to make it easier for Salvadoran Americans to invest in their native country. The Millennium Challenge Corporation Compact II between the US and El Salvador involved a road show of sorts throughout the US. They were seeking ideas and commitments from the Salvadoran ex-pat community here in the US.
The coastal and maritime emphasis of the second compact is also somewhat targeted at Salvadoran-Americans. When they return to El Salvador for vacation or to reconnect with family, it doesn't hurt to have places along the coast where they can spend a few days. While some fear that such development will turn El Salvador's coast into another Cancun for US college students, I always thought the target was Salvadorans themselves.
In the age of the knowledge economy, a central development challenge for El Salvador is to strengthen the human capital base of their youth and workforce. Education, skills attainment and workforce training are not only precarious but also disconnected from the demands of a competitive labor force in the global economy. Moreover, the labor force feels entirely demotivated to stay in their homeland when there are no means to achieve the material circumstances that can be enjoyed in the modern society.
An innovative development strategy integrating migration, remittances, savings and education can help El Salvador attain greater levels of development and ensure that Salvadorans have opportunities without having to migrate. The approach links migration and development through five unique and innovative components:
• Financial education for remittance recipients,
• Access to credit for small enterprises—especially those in the knowledge economy,
• Promotion of diaspora-driven trade opportunities (the so-called “nostalgia trade”),
• Diaspora funding of education using remittance platforms, and
• After-school programs in areas of high emigration.I don't know what the empirical evidence says, but I always thought that Salvadorans traveled to the United States in search of temporary work. They spent a few years working around the clock in the US. They would send some money home to support their families (remittances) but then would keep a percentage aside for long-term plans.
From 2004-2008, you saw additions and new construction throughout the country. Salvadorans were saving money in the US before earning enough to return to their native country where they would open a small business or "retire." However, the US and global economic crisis put a dent in their savings. At the same time, the escalation of violence made it more difficult to return to El Salvador in order to open and successfully operate a new business. Extortion and generalized violence has a way of doing that. Instead of returning to El Salvador to live out their remaining years alongside family, their families emptied the country and made their way north (the "unaccompanied minors crisis").
I'm not sure what's going on right now, but there have been efforts to make it easier for Salvadoran Americans to invest in their native country. The Millennium Challenge Corporation Compact II between the US and El Salvador involved a road show of sorts throughout the US. They were seeking ideas and commitments from the Salvadoran ex-pat community here in the US.
The coastal and maritime emphasis of the second compact is also somewhat targeted at Salvadoran-Americans. When they return to El Salvador for vacation or to reconnect with family, it doesn't hurt to have places along the coast where they can spend a few days. While some fear that such development will turn El Salvador's coast into another Cancun for US college students, I always thought the target was Salvadorans themselves.
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