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124-693: Located in Southern El Salvador , in the Rio Lempa valley, at the foot of San Vicente (Chinchotepec) Volcano. A commercial center for the surrounding agricultural area, it also trades in cotton goods, baskets, salt, and lumber. An earthquake in 1932 caused severe damage. Zacatecoluca was the birthplace of José Simeón Cañas, who fought for and secured the emancipation of slaves in Central America by Spaniards in 1825. Zacatecoluca houses many traditional Spanish buildings including

248-739: A Bitcoin city at the base of a volcano in El Salvador. In the first 18 months of Bitcoin adoption, the cryptocurrency was rarely used by the local population or tourists, leaving USD the de facto standard for transactions. In 2021, El Salvador received a $ 40 million loan for small enterprises and projects for climate action, from the European Investment Bank to the country's development bank, Banco de Desarollo de el Salvador. $ 20 million will be used to assist investments in renewable energy projects, specifically photovoltaics , biogas , and micro hydro projects. Up to 50% of

372-597: A talud - tablero style of architecture that is associated with Nahua culture and corresponds with their migration history from Anahuac. In eastern El Salvador, the Lenca site of Quelepa is highlighted as a major pre-Columbian cultural center and demonstrates links to the Mayan site of Copan in western Honduras as well as the previously mentioned sites in Chalchuapa, and Cara Sucia in western El Salvador. An investigation of

496-529: A Maya-Lenca crown princess, Antu Silan Ulap I, organized resistance to the conquistadors. The commonwealth of the Lenca was alarmed by de Moscoso's invasion, and Antu Silan travelled from village to village, uniting all the Lenca towns in present-day El Salvador and Honduras against the Spaniards. Through surprise attacks and overwhelming numbers, they were able to drive the Spanish out of San Miguel and destroy

620-526: A decade of war eroded this position. In 1999, manufacturing accounted for 22% of GDP. The industrial sector has shifted since 1993 from a primarily domestic orientation to include free zone ( maquiladora ) manufacturing for export. Maquila exports have led the growth in the export sector and in the last 3 years have made an important contribution to the Salvadoran economy. Mining in El Salvador expanded in scope from artisanal mining to industrial mining at

744-440: A few families. Throughout the last half of the 19th century, a succession of presidents from the ranks of the Salvadoran oligarchy, nominally both conservative and liberal, generally agreed on the promotion of coffee as the predominant cash crop , the development of infrastructure (railroads and port facilities) primarily in support of the coffee trade, the elimination of communal landholdings to facilitate further coffee production,

868-571: A geothermal project Enel had invested in. Four years later, Enel indicated it would seek arbitration against El Salvador, blaming the government for technical problems that prevent it from completing its investment. The government came to its defence claiming that Art 109 of the constitution does not allow any government (regardless of the party they belong), to privatize the resources of the national soil (in this case geothermic energy). The dispute came to an end in December 2014 when both parties came to

992-788: A government census. Among the Mesoamerican nations that historically controlled the region are the Mayans , and then the Cuzcatlecs . Archaeological monuments also suggest an early Olmec presence around the first millennium BC. In the beginning of the 16th century, the Spanish Empire conquered the Central American territory, incorporating it into the Viceroyalty of New Spain ruled from Mexico City . However

1116-536: A hub for innovation. In the 21st century, numerous call centers serving North American markets have been developed in El Salvador, including Ubiquity Global Services and Synnex . The industry benefits from the availability of a large English speaking work force, composed of deportees from the United States. A challenge in El Salvador has been developing new growth sectors for a more diversified economy. As many other former colonies, for many years El Salvador

1240-509: A major global IT outsourcing and software development firm, has a significant workforce in the country employing nearly 1,500 people in high tech and customer service roles. The startup scene has also been growing with firms such as HugoApp employing 600 locals and providing delivery and ride sharing services to nearly 1 million users in the Central American / CAFTA region. In 2020, the government announced its "Digital Agenda 2020"

1364-437: A net surplus. Exports in 1999 grew 1.9% while imports grew 3%, narrowing El Salvador's trade deficit. As in the previous year, the large trade deficit was offset by foreign aid and family remittances . Remittances are increasing at an annual rate of 6.5%, and an estimated $ 1.35 billion will enter the national economy during 1999. Private foreign capital continued to flow in, though mostly as short-term import financing and not at

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1488-518: A permanent commercial presence in El Salvador or work through representative offices in the country. The Department of State maintains a country commercial guide for U.S. businesses seeking detailed information on business opportunities in El Salvador. In an analysis of ARENA's electoral defeat in 2009, the U.S. Embassy in San Salvador pointed to official corruption under the Saca administration as

1612-549: A permit to explore the El Dorado gold mine in 2002, but were denied a license to mine in 2008, following local opposition. Mining for metal was banned in 2017, although the creation of a mining regulator in 2021 and the arrest of anti-mining activists in 2023 prompted public speculation that the government is considering resuming mining. El Salvador has 0.9 million fixed telephone lines, 0.5 million fixed broadband lines and 9.4 million mobile cellular subscriptions. Much of

1736-493: A plan to digitize government services, digitize identities, make it easier to start businesses, attract foreign investment and improve the education system. Finally, the passing of the Bitcoin Law in 2021 made El Salvador the first country in the world to adopt a cryptocurrency ( Bitcoin ) as legal tender, this move seeks to improve access to financial services to the non-banked and under banked while also making El Salvador

1860-472: A result of the Napoleonic Wars , with the resulting inability to control its colonies effectively. In November 1811 Salvadoran priest José Matías Delgado rang the bells of Iglesia La Merced in San Salvador, calling for insurrection and launching the 1811 Independence Movement . This insurrection was suppressed, and many of its leaders were arrested and served sentences in jail. Another insurrection

1984-615: A settlement, from which no details have been released. The small country had yielded to pressure from the Washington-based powerful ICSID . A 2008 report by the United Nations Conference on Trade and Development indicates that one third of the generation of electricity in El Salvador was publicly owned while two thirds was in American hands and other foreign ownership. In terms of how people perceived

2108-551: A shadowy figure, a rich anti-communist banker called Rodolfo Duke, and later installed the vice-president Martínez as president. The revolt was probably caused by the army's discontent at not having been paid by President Araujo for some months. Araujo left the National Palace and unsuccessfully tried to organize forces to defeat the revolt. The U.S. Minister in El Salvador met with the Directorate and later recognized

2232-531: A significant reason for public rejection of continued ARENA government. Subsequent policies under Funes administrations improved El Salvador to foreign investment, and the World Bank in 2014 rated El Salvador 109, a little better than Belize (118) and Nicaragua (119) in the World Bank's annual " Ease of doing business " index. As per Santander Trade, a Spanish think tank in foreign investment, "Foreign investment into El Salvador has been steadily growing during

2356-431: A stake in a peaceful and prosperous future for El Salvador. At least 525,000 people—more than 12% of El Salvador's population at the time and perhaps 25% of the rural poor—benefited from agrarian reform, and more than 22% of El Salvador's total farmland was transferred to those who previously worked the land but did not own it. But when agrarian reform ended in 1990, about 150,000 landless families still had not benefited from

2480-486: A team of experts working with Salvadoran relief authorities immediately after both quakes, and provided assistance totaling more than $ 14 million. In addition, the Department of Defense provided an initial response valued at more than $ 11 million. For long-term reconstruction, the international community offered a total aid package of $ 1.3 billion, over $ 110 million of it from the United States. The following table shows

2604-515: A trend toward lower interest rates in El Salvador, helping many to secure credit in order to buy a house or a car. Over time, displeasure with the change has largely disappeared, though the issue resurfaces as a political tool when elections are on the horizon. In June 2021, President Nayib Bukele said he would introduce legislation to make Bitcoin legal tender in El ;Salvador. The Bitcoin Law

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2728-556: A union named the Federal Republic of Central America . In early 1822, the authorities of the newly independent Central American provinces, meeting in Guatemala City, voted to join the newly constituted First Mexican Empire under Agustín de Iturbide . El Salvador resisted, insisting on autonomy for the Central American countries. A Mexican military detachment marched to San Salvador and suppressed dissent, but with

2852-588: A vest-like armour made of three inch cotton which arrows could not penetrate, and long spears. Both armies suffered many casualties, with a wounded Alvarado retreating and losing a lot of his men, especially among the Mexican Indian auxiliaries. Once his army had regrouped, Alvarado decided to head to the Cuzcatlan capital and again faced armed Cuzcatlec. Wounded, unable to fight and hiding in the cliffs, Alvarado sent his Spanish men on their horses to approach

2976-632: A volcanic eruption, after which it never regained its former prominence. Another major Pre-Columbian settlement is Cara Sucia in the far west of the country, which began as a small settlement around 800 BC at the beginning of the Middle Preclassic, during the Late Classic (600-900 AD), Cara Sucia emerged as a major urban settlement, before being abruptly destroyed during the 10th century. The Pipil people , Nahua speaking groups migrated from Anahuac beginning around 800 AD and occupied

3100-482: Is also 1 government owned broadcast station. El Salvador's IT Industry 's history started early with several IT outsourcing companies such as Gpremper and an early search engine that predated Google in 1995 called "Buscaniguas". The industry has since expanded with companies such as Creativa Consultores, Applaudo Studios, and Elaniin providing software and website design services to clients globally while employing thousands of people. Canadian Telus International ,

3224-655: Is also developing ports and infrastructure in La Unión in the east of the country, in order to use the area as a "dry canal" for transporting goods from Gulf of Fonseca in the Pacific Ocean to Honduras and the Atlantic Ocean in the north. Currently there are fifteen free trade zones in El Salvador. The largest beneficiary has been the maquila industry, which provides 88,700 jobs directly, and consists primarily of cutting and assembling clothes for export to

3348-463: Is now Salvadoran territory was made by the admiral Andrés Niño , who led an expedition to Central America. He disembarked in the Gulf of Fonseca on 31 May 1522, at Meanguera island , naming it Petronila, and then traversed to Jiquilisco Bay on the mouth of Lempa River . The first indigenous people to have contact with the Spanish were the Lenca of eastern El Salvador. In 1524, after participating in

3472-799: Is the second most 'business friendly' country in South America in terms of business taxation. It also has a young and skilled labour force and a strategic geographical position. The country's membership in the DR-CAFTA, as well as its reinforced integration to the C4 countries (producers of cotton) should lead to an increase of FDI." Foreign companies have lately resorted to arbitration in international trade tribunals in total disagreement with Salvadoran government policies. In 2008, El Salvador sought international arbitration against Italy's Enel Green Power, on behalf of Salvadoran state-owned electric companies for

3596-477: The Greater Republic of Central America , which dissolved in 1898. After the mid-19th century, the economy was based on coffee growing. As the world market for indigo withered away, the economy prospered or suffered as the world coffee price fluctuated. The enormous profits that coffee yielded as a monoculture export served as an impetus for the concentration of land into the hands of an oligarchy of just

3720-599: The Preclassic Period and earlier. A notable archaeological site in western El Salvador is Chalchuapa , which was first settled around 1200 BC, and became a major urban settlement on the periphery of the Maya civilization during the Preclassic Period and was heavily involved in the trading of valuable items like ceramics, obsidian, cacao and hematite. The settlement was heavily damaged around 430 AD by

3844-629: The Salvadoran Civil War from 1979 to 1992, fought between the military-led government backed by the United States , and a coalition of left-wing guerrilla groups. The conflict ended with the Chapultepec Peace Accords . This negotiated settlement established a multiparty constitutional republic, which remains in place to this day. During the civil war and afterwards, large numbers of Salvadorans emigrated to

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3968-603: The Salvadoran First Division . El Salvador El Salvador , officially the Republic of El Salvador , is a country in Central America . It is bordered on the northeast by Honduras , on the northwest by Guatemala , and on the south by the Pacific Ocean . El Salvador's capital and largest city is San Salvador . The country's population in 2024 was estimated to be 6 million according to

4092-623: The conquest of the Aztec Empire , Pedro de Alvarado , his brother Gonzalo, and their men crossed the Rio Paz southward into Cuzcatlec territory. Upon their arrival, Spaniards were disappointed to discover that the Pipil had little gold compared to what they had found in Guatemala or Mexico. The small amount of gold that was available had to be panned so that it could be obtained. Eventually,

4216-606: The election . He was sworn in as president on 31 May 2014. He was the first former guerrilla to become the president of El Salvador. In October 2017, an El Salvador court ruled that former president Funes and one of his sons had illegally enriched themselves. Funes had sought asylum in Nicaragua in 2016. In September 2018, former president Saca was sentenced to 10 years in prison after he pleaded guilty to diverting more than US$ 300 million in state funds to his own businesses and third parties. On 1 June 2019, Nayib Bukele became

4340-555: The glyptodont Glyptotherium , the llama Hemiauchenia , and the horse Equus conversidens . El Salvador has likely been occupied by humans since the Paleoindian period, based on fluted stone points found in western El Salvador. Archaeological knowledge of Pre-Columbian civilisation in El Salvador is poor, due to its high population density limiting excavation, as well as volcanic eruptions blanketing potential archaeological sites. This lack of knowledge particularly effects

4464-766: The Cuzcatlec to see if they would fear the horses, but they did not retreat, Alvarado recalls in his letters to Hernán Cortés . The Cuzcatlec attacked again, and on this occasion stole Spanish weaponry. Alvarado retreated and sent Mexican messengers to demand that the Cuzcatlec warriors return the stolen weapons and surrender to their opponent's king. The Cuzcatlec responded with the famous response, "If you want your weapons, come get them". As days passed, Alvarado, fearing an ambush, sent more Mexican messengers to negotiate, but these messengers never came back and were presumably executed. The Spanish efforts were firmly resisted by Pipil and their Mayan-speaking neighbours. They defeated

4588-583: The Salvadoran left had formed the Farabundo Martí National Liberation Front , or FMLN. By the end of the 1970s, government-contracted death squads were killing about 10 people each day. Meanwhile, the FMLN had 6,000 to 8,000 active guerrillas and hundreds of thousands of part-time militia, supporters, and sympathizers. The U.S. supported and financed the creation of a second junta to change the political environment and stop

4712-685: The San Sebastián mine in the 1970s. Chemicals from that mine polluted the San Sebastián River. Mining ceased during the Salvadoran Civil War . After the war, the country's right-wing government proposed 33 mining zones, issuing exploration licences to American, Australian, and Canadian companies. The plan was met with opposition of many local community and community leaders, who successfully blocked exploration in Chalatenango in 2005. Pacific Rim Mining Corporation obtained

4836-481: The Santa Lucia Catholic Church and used to hold the house where José Simeón Cañas lived, until poor economy due to the many years of war caused the local government to sell the house to a supermarket branch, the house was destroyed and a poorly marked stone on the left of the supermarket entrance is all that is left of Cañas' housing legacy. Santa Lucia Catholic Church holds a dear history to

4960-424: The Spaniards and what was left of their Tlaxcalan allies, forcing them to withdraw to Guatemala. After being wounded, Alvarado abandoned the war and appointed his brother, Gonzalo de Alvarado , to continue the task. Two subsequent expeditions (the first in 1525, followed by a smaller group in 1528) brought the Pipil under Spanish control, since the Pipil also were weakened by a regional epidemic of smallpox. In 1525,

5084-452: The Spaniards recognized the richness of the land's volcanic soil. Following this discovery, the Spanish crown began granting land based on the terms of the encomienda system. Pedro Alvarado led the first incursion to extend their dominion to the domain of Cuzcatlan in June 1524. When he arrived at the borders of the kingdom, he saw that civilians had been evacuated. Cuzcatlec warriors moved to

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5208-541: The Spanish Crown. The most important internal factors were the desire of local elites to control the country's affairs free of involvement from Spanish authorities, and the long-standing Creole aspiration for independence. The main external factors motivating the independence movement were the success of the French and American revolutions in the 18th century, and the weakening of the Spanish Crown's military power as

5332-460: The U.S. Departments of Agriculture and Defense. Following the 2001 earthquakes, the U.S. embassy assumed a leading role in implementing U.S.-sponsored assistance. The U.S. Government responded immediately to the emergency, with military helicopters active in initial rescue operations, delivering emergency supplies, rescue workers, and damage assessment teams to stricken communities all over the country. USAIDs Office of Foreign Disaster Assistance had

5456-498: The U.S. dollar became legal tender alongside the Salvadoran colón , and all formal accounting was done in U.S. dollars. With the adoption of the U.S. dollar, El Salvador lost control over monetary policy. Any counter-cyclical policy response to the downturn must be through fiscal policy, which is constrained by legislative requirements for a two-thirds majority to approve any international financing. The 1992 peace accords committed

5580-490: The U.S. dollar became legal tender alongside the colón , and all formal accounting was undertaken in U.S. dollars. This way, the government has formally limited its possibility of implementing open market monetary policies to influence short term variables in the economy. Since 2004, the colón stopped circulating and is now never used in the country for any type of transaction; however some stores still have prices in both colons and U.S. dollars. In general, people were unhappy with

5704-526: The U.S., 19 international NGOs, 20 Salvadoran embassies and consulates, and 20 private firms and individuals provided El Salvador with in-kind assistance. The Government of El Salvador reports that 961 tons of goods and food were received. The Ministry of Foreign Affairs estimates that contribution in cash given directly to the Salvadoran Government totaled $ 4.3 million. The U.S. Government has provided $ 37.7 million in assistance through USAID and

5828-516: The United Nations ending the 12-year civil war. This event, held at Chapultepec Castle in Mexico, was attended by U.N. dignitaries and other representatives of the international community. After signing the armistice, the president stood and shook hands with the newly ex-guerrilla commanders, an action which was widely admired. The so-called Chapultepec Peace Accords mandated reductions in

5952-579: The United States. El Salvador signed the Central American Free Trade Agreement (CAFTA), negotiated by the five countries of Central America and the Dominican Republic, with the United States in 2004. In order to take advantage of CAFTA-DR, the Salvadoran government is challenged to conduct policies that guarantee better conditions for entrepreneurs and workers to transfer from declining to growing sectors in

6076-509: The United States. From 1980 through 2008, nearly one million Salvadorans immigrated to the United States, such that by 2008, they were the sixth largest immigrant group in the US. El Salvador's economy has historically been dominated by agriculture, beginning with the Spanish taking control of the indigenous cacao crop in the 16th century, with production centred in Izalco , along with balsam from

6200-587: The Viceroyalty of New Spain had little to no influence in the daily affairs of the isthmus, which was colonized in 1524. In 1609, the area was declared the Captaincy General of Guatemala by the Spanish, which included the territory that would become El Salvador until its independence from Spain in 1821. It was forcibly incorporated into the First Mexican Empire , then seceded, joining the Federal Republic of Central America in 1823. When

6324-489: The basis of conflicts that would shape the political situation of El Salvador in the years to come. ARENA governments have followed policies that intend to develop other exporting industries in the country as textiles and sea products. Tourism is another industry Salvadoran authorities regard as a possibility for the country. But rampant crime rates, lack of infrastructure and inadequate social capital have prevented these possibilities from being properly exploited. The government

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6448-462: The central and western regions of El Salvador. The Nahua Pipil were the last indigenous people to arrive in El Salvador. They called their territory Kuskatan , a Nawat word meaning "The Place of Precious Jewels," back-formed into Classical Nahuatl Cōzcatlān , and as Cuzcatlán . It was the largest domain in Salvadoran territory up until European contact. The term Cuzcatleco is commonly used to identify someone of Salvadoran heritage, although

6572-476: The coastal city of Acajutla and waited for Alvarado and his forces. Alvarado approached, confident that the result would be similar to what occurred in Mexico and Guatemala. He thought he would easily deal with this new indigenous force since the Mexican allies on his side and the Pipil spoke a similar language. Alvarado described the Cuzcatlec soldiers as having shields decorated with colourful exotic feathers,

6696-623: The colonial period, San Salvador and San Miguel were part of the Captaincy General of Guatemala, also known as the Kingdom of Guatemala ( Spanish : Reino de Guatemala ), created in 1609 as an administrative division of New Spain . The Salvadoran territory was administered by the mayor of Sonsonate, with San Salvador being established as an intendencia in 1786. In 1811, a combination of internal and external factors motivated Central American elites to attempt to gain independence from

6820-492: The conquest of Cuzcatlán was completed and the city of San Salvador was established. The Spanish faced much resistance from the Pipil and were not able to reach eastern El Salvador, the area of the Lencas. In 1526 the Spanish founded the garrison town of San Miguel in northern Managuara—territory of the Lenca, headed by another explorer and conquistador, Luis de Moscoso Alvarado , nephew of Pedro Alvarado. Oral history holds that

6944-553: The country in 1979 to enter politics after working on projects in Venezuela as an engineer. On 15 October 1979, a coup d'état brought the Revolutionary Government Junta (JRG) to power. It nationalized many private companies and took over much privately owned land. The purpose of this new junta was to stop the revolutionary movement already underway in response to Duarte's stolen election. Nevertheless,

7068-408: The country produced 685 thousand tons of maize , 119 thousand tons of coconut , 109 thousand tons of sorghum , 93 thousand tons of beans , 80 thousand tons of coffee , 64 thousand tons of orange , in addition to smaller yields of other agricultural products such as watermelon , yautia , apple , manioc , mango , banana , rice etc. The ultimate goal was to develop a rural middle class with

7192-597: The country's many volcanoes ), 23% from hydro and the rest is from fossil fuels. According to the National Energy Commission, 94.4% of total injections during January 2021 came from hydroelectric plants (28.5% - 124.43 GWh), geothermal (27.3% - 119.07 GWh), biomass (24.4% 106.43 GWh), photovoltaic solar (10.6% - 46.44 GWh) and wind (3.6% - 15.67 GWh). El Salvador historically has been the most industrialized state in Central America, though

7316-531: The damage was estimated at between $ 1.5 billion and $ 2 billion, and the devastation thought to equal or surpass that of the 1986 quake that struck San Salvador . Given the magnitude of the disaster, reconstruction and economic recovery will remain the primary focus of the Salvadoran Government for some time to come. The Hurricane Mitch disaster prompted a tremendous response from the international community governments, nongovernmental organizations (NGOs), and private citizens alike. Sixteen foreign governments—including

7440-510: The definite form "El Salvador", The Savior, again a reference to Jesus, rather than Salvador. The legislature reaffirmed the country's name as El Salvador with another law passed in 1958. During the Pleistocene El Salvador was inhabited by now extinct megafauna species, including the elephant-sized giant ground sloth Eremotherium , the rhinoceros-like Mixotoxodon , the gomphothere (elephant-relative) Cuvieronius ,

7564-655: The early 1990s brought major benefits in terms of improved social conditions, diversification of the export sector, and access to international financial markets at investment grade level. Crime remains a major problem for the investment climate. Early in the new millennium, El Salvador's government created the Ministerio de Medio Ambiente y Recursos Naturales — the Ministry of Environment and Natural Resources (MARN) — in response to climate change concerns. In March 2014, former FMLN guerrilla leader Cerén narrowly won

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7688-403: The economy. El Salvador has already signed free trade agreements with Mexico, Chile, the Dominican Republic, and Panama, and increased its exports to those countries. El Salvador, Guatemala, Honduras, and Nicaragua also are negotiating a free trade agreement with Canada, and negotiations started on 2006 for a free trade agreement with Colombia. El Salvador's balance of payments continued to show

7812-511: The estimated 1998–99 production, were sustained primarily in the coastal regions. Livestock losses amounted to $ 1 million, including 2,992 head of cattle. In addition to these losses, El Salvador also had to face the threat of disease outbreak. The Ministry of Health recorded a total of 109,038 medical cases related to Hurricane Mitch between 31 October and 18 November 1998; 23% of these cases were respiratory infections, followed by skin ailments, diarrhea, and conjunctivitis. Reconstruction from Mitch

7936-567: The fall of Iturbide on 19 March 1823, the army decamped back to Mexico. Shortly thereafter, the authorities of the provinces revoked the vote to join Mexico, deciding instead to form a federal union of the five remaining provinces (Chiapas permanently joined Mexico at this juncture) known as the Federal Republic of Central America . El Salvador declared its independence from the Federal Republic of Central America on 30 January 1841. El Salvador joined Honduras and Nicaragua in 1896 to form

8060-469: The federation dissolved in 1841, El Salvador became a sovereign state, then formed a short-lived union with Honduras and Nicaragua called the Greater Republic of Central America , which lasted from 1896 to 1898. From the late 19th to the mid-20th century, El Salvador endured chronic political and economic instability characterized by coups, revolts, and a succession of authoritarian rulers. Persistent socioeconomic inequality and civil unrest culminated in

8184-420: The garrison. For ten years the Lencas prevented the Spanish from building a permanent settlement. Then the Spanish returned with more soldiers, including about 2,000 forced conscripts from indigenous communities in Guatemala. They pursued the Lenca leaders further up into the mountains of Intibucá . Antu Silan Ulap eventually handed over control of the Lenca resistance to Lempira (also called Empira). Lempira

8308-417: The government of El Salvador is committed to a free and open economy. Total U.S. exports to El Salvador reached $ 2.1 billion in 1999, while El Salvador exported $ 1.6 billion to the United States. U.S. support for El Salvador's privatization of the electrical and telecommunications markets has markedly expanded opportunities for U.S. investment in the country. More than 300 U.S. companies have established either

8432-601: The government of Martínez, which agreed to hold presidential elections. He resigned six months prior to running for re-election, winning back the presidency as the only candidate on the ballot. He ruled from 1935 to 1939, then from 1939 to 1943. He began a fourth term in 1944 but resigned in May after a general strike. Martínez had said he was going to respect the constitution, which stipulated he could not be re-elected, but he refused to keep his promise. Beginning in January 1932, there

8556-473: The government to heavy expenditures for transition programs and social services. The stability adjustment programs (PAE, for the initials in Spanish) initiated by President Cristiani's administration committed the government to the privatization of banks, the pension system, electric and telephone companies. The total privatization of the pension system has implied a serious burden for the public finances, because

8680-487: The government will finance the deficit by reducing expenditure in other posts. The emission of bonds and the approval of a loans need a qualified majority (3/4 of the votes) in the parliament. If the deficit is not financed through a loan it is enough with a simple majority to approve the budget (50% of the votes plus 1). This would facilitate an otherwise long process in Salvadoran politics. Despite such challenges to keep public finances in balance, El Salvador still has one of

8804-412: The highest lands in the country, many of these lands were expropriated from indigenous reserves and given or sold cheaply to those that could cultivate coffee. The government provided little or no compensation to the indigenous peoples. On occasions this compensation implied merely the right to work for seasons in the newly created coffee farms and to be allowed to grow their own food. Such policies provided

8928-569: The indirect taxes. A value-added tax (VAT) of 10%, implemented in September 1992, was raised to 13% in July 1995. The VAT is the biggest source of revenue for the government, accounting for about 52.3% of total tax revenues in 2004. Remittances from Salvadorans working in the United States sent to family members are a major source of foreign income and offset the substantial trade deficit of around $ 2.9 billion. Remittances have increased steadily in

9052-411: The land beneficiaries. El Salvador's energy industry is diversified across fossil fuels , hydro , other renewables (mainly geothermal ) for local electricity production, along with a reliance on imports for oil . El Salvador has an installed capacity of 1,983 MW generating 5,830 GWh of electricity per year, 52% of this comes from renewable sources including 29% from geothermal (produced from

9176-405: The land was divided into the province of San Salvador, which means "Holy Savior"; a Spanish title for Jesus . From 1579 that also including the province of San Miguel (Saint Michael). San Salvador would become, throughout the colonial era, an alcaldía mayor (great mayor's office), intendancy, and finally a province with a provincial council, and the province of Izalcos (which would become be called

9300-519: The last decade and reached an all-time high of $ 2.9 billion in 2005—approximately 17.1% of gross national product ( GNP ). Remittances have had positive and negative effects on El Salvador. In 2005, the number of people living in extreme poverty in El Salvador was 20%, according to a United Nations Development Program report. While Salvadoran education levels have gone up, wage expectations have risen faster than productivity. This has led to an influx of Hondurans and Nicaraguans who are willing to work for

9424-428: The last few years. In 2013, the influx of FDI increased. Nevertheless, El Salvador receives less FDI than other countries of Central America. The government has made little progress in terms of improving the business climate. In addition to this, the limited size of its domestic market, weak infrastructures and institutions, as well as the high level of criminality have been real obstacles to investors. However, El Salvador

9548-466: The left-wing party to win presidential elections led to its selection of a journalist rather than a former guerrilla leader as a candidate. On 15 March 2009, Mauricio Funes , a television figure, became the first president from the FMLN. He was inaugurated on 1 June 2009. One focus of the Funes government has been revealing the alleged corruption from the past government. ARENA formally expelled Saca from

9672-553: The levels of previous years. The Central American Common Market continued its dynamic reactivation process, now with most regional commerce duty-free. In September 1996, El Salvador, Guatemala, and Honduras opened free trade talks with Mexico. This trade alliance is also known as the Northern Triangle in relation to the Central American economies that are grouped together by proximity and location. [3] Although tariff cuts that were expected in July 1996 were delayed until 1997,

9796-633: The levels of public corruption in 2014, El Salvador ranks 80 out of 175 countries as per the Corruption Perception Index. El Salvador's rating compares relatively well with Panama (94 of 175) and Costa Rica (47 of 175). Hurricane Mitch hit El Salvador in late October 1998, generating extreme rainfall of which caused widespread flooding and landslides. Roughly 650 km were flooded, and the Salvadoran Government pronounced 374 people dead or missing. In addition, approximately 55,900 people were rendered homeless. The areas that suffered

9920-484: The loan line will be used to assist small and medium-sized enterprises who were affected by the COVID-19 pandemic . Fiscal policy has been one of the biggest challenges for the Salvadoran government. In December 1999, net international reserves equaled US$ 1.8 billion. Having this hard currency buffer to work with, the Salvadoran government undertook a monetary integration plan beginning in January 2001 by which

10044-410: The low single digits in nearly two decades – part of a broader environment of macroeconomic instability which the integration of the United States dollar has done little to improve. One problem that the Salvadoran economy faces is the inequality in the distribution of income. In 2011, El Salvador had a Gini Coefficient of .485, which although similar to that of the United States, leaves 37.8% of

10168-466: The lowest tax burdens in the American continent (around 11% of GDP). The government has focused on improving the collection of its current revenues with a focus on indirect taxes. Leftist politicians criticize such a structure since indirect taxes (like the value added tax) affect everyone alike, whereas direct taxes can be weighed according to levels of income and are therefore more punitive toward productive people. However, some basic goods are exempt from

10292-504: The majority of the eastern population has an indigenous heritage of Lenca origin, as do their place names such as Intipuca , Chirilagua , and Lolotique . Most of the archaeological sites in western El Salvador such as Lago de Guija and Joya De Ceren indicate a pre-Columbian Mayan culture. Cihuatan shows signs of material trade with northern Nahua culture, eastern Mayan and Lenca culture, and southern Nicaraguan and Costa Rican indigenous culture. Tazumal 's smaller B1-2 structure shows

10416-469: The manufacturing sector. The colón , the currency of El Salvador since 1892, was replaced by the United States dollar in 2001. As of 2019 economic improvements had led to El Salvador experiencing the lowest level of income inequality among nearby countries. Among 77 countries included in a 2021 study, El Salvador had one of the least complex economies for doing business. After the Spanish conquest ,

10540-559: The mayor's office of Sonsonate). In 1824 the two jurisdictions were united in the State of Salvador, a part of the Federal Republic of Central America . After the dissolution of the Federal Republic of Central America, the country was referred to as the "Republic of Salvador" ( República del Salvador ), but in 1915, the Legislative Assembly passed a law which officially stated that the country's name should be rendered as

10664-640: The meantime, the guerrilla movement was spreading to all sectors of Salvadoran society. Middle and high school students were organized in MERS (Movimiento Estudiantil Revolucionario de Secundaria, Revolutionary Movement of Secondary Students); college students were involved with AGEUS (Asociacion de Estudiantes Universitarios Salvadorenos; Association of Salvadoran College Students); and workers were organized in BPR (Bloque Popular Revolucionario, Popular Revolutionary Block). In October 1980, several other major guerrilla groups of

10788-565: The middle class and the latter the interests of the Salvadoran military. PDC leader José Napoleón Duarte was the mayor of San Salvador from 1964 to 1970, winning three elections during the regime of PCN president, Julio Adalberto Rivera Carballo , who allowed free elections for mayors and the National Assembly. Duarte later ran for president with a political grouping called the National Opposing Union (UNO) but

10912-525: The most were the low-lying coastal zones, particularly in the floodplain of the Lempa and San Miguel Grande Rivers . Three major bridges that cross the Lempa were swept away, restricting access to the eastern third of the country and forcing the emergency evacuation of many communities. The heavy rainfall, flooding, and mudslides caused by Hurricane Mitch also severely damaged El Salvador's road network. Along with

11036-786: The nature and effects of the violence, and...recommend methods of promoting national reconciliation". In 1993 the Commission delivered its findings reporting human rights violations on both sides of the conflict. Five days later the Salvadoran legislature passed an amnesty law for all acts of violence during the period. From 1989 until 2004, Salvadorans favoured the Nationalist Republican Alliance (ARENA), voting in ARENA presidents in every election ( Alfredo Cristiani , Armando Calderón Sol , Francisco Flores Pérez , Antonio Saca ) until 2009. The unsuccessful attempts of

11160-509: The new president of El Salvador. Bukele was the winner of February 2019 presidential election . He represented GANA, as he was denied participating with the newly formed Nuevas Ideas party. ARENA and the FMLN, El Salvador's two main parties, had dominated politics in El Salvador over the past three decades. Economy of El Salvador The economy of El Salvador has experienced relatively low rates of GDP growth, in comparison to other developing countries. Rates have not risen above

11284-525: The newly created private Pension Association Funds did not absorb coverage of retired pensioners covered in the old system. As a result, in July 2017, the Government of El Salvador wanted to take $ 500 million from the privatized pension system to cover retired pensioners from the old not privatized system, but the Supreme Court of El Salvador declared this move unconstitutional. The government lost

11408-492: The oligarchy opposed agrarian reform , and a junta formed with young reformist elements from the army such as Colonels Adolfo Arnoldo Majano and Jaime Abdul Gutiérrez , as well as with progressives such as Guillermo Ungo and Alvarez. Pressure from the oligarchy soon dissolved the junta because of its inability to control the army in its repression of the people fighting for unionization rights, agrarian reform, better wages, accessible health care and freedom of expression. In

11532-502: The party in December 2009. With 12 loyalists in the National Assembly, Saca established his own party, the Grand Alliance for National Unity (GANA), and entered into a tactical legislative alliance with the FMLN. After three years in office, with Saca's GANA party providing the FMLN with a legislative majority, Funes had not taken action to either investigate or to bring corrupt former officials to justice. Economic reforms since

11656-430: The passage of anti- vagrancy laws to ensure that displaced campesinos and other rural residents provided sufficient labour for the coffee fincas (plantations), and the suppression of rural discontent. In 1912, the national guard was created as a rural police force. In 1898, General Tomas Regalado gained power by force, deposing Rafael Antonio Gutiérrez and ruling as president until 1903. Once in office he revived

11780-573: The people of Zacatecoluca, as an image of Virgin Mary placed on top is said to have stopped an eruption of lava and ash from completely destroying the city and its local population. On May 11, 1844, Zacatecoluca received the title of Generous and Loyal City becoming the Departmental Head of La Paz on February 21, 1852. The local professional football club is named Platense and they are former national league champions. They currently play in

11904-556: The population below the poverty line, due to lower aggregate income. The richest 10% of the population receives approximately 15 times the income of the poorest 40%. As of 3 November 2014, the IMF reports official reserve assets to be $ 3.192B. Foreign currency reserves (in convertible foreign currencies) are $ 2.675B. Securities are $ 2.577B with total currency and deposits at $ 94.9M. Securities with other national central banks (BIS and IMF) are $ 81.10M. Securities with banks headquartered outside

12028-584: The population is able to access the internet through their smartphones and mobile networks, which liberal government regulation promotes mobile penetration over fixed line including the deployment of 5G coverage (which testing of began in 2020). Transition to digital transmission of TV/radio networks was done in 2018 with the adaptation of the ISDB-T standard. There are hundreds of privately owned national TV networks, cable TV networks (that also carry international channels), and radio stations available; while there

12152-501: The practice of presidents designating their successors. After serving his term, he remained active in the Army of El Salvador and was killed on 11 July 1906, at El Jicaro, during a war against Guatemala . Until 1913 El Salvador was politically stable, with undercurrents of popular discontent. When President Manuel Enrique Araujo was killed in 1913, many hypotheses were advanced for the political motive of his murder. Araujo's administration

12276-456: The prevailing wage. Also, the local propensity for consumption has increased. Money from remittances has increased prices for certain commodities such as real estate. With much higher wages, many Salvadorans abroad can afford higher prices for houses in El Salvador and thus push up the prices that all Salvadorans must pay. In 2018, El Salvador produced 7 million tons of sugarcane , being heavily dependent on this product. In addition to sugarcane,

12400-418: The ranges of La Libertad and Ahuachapán . This was followed by a boom in use of the indigo plant in the 19th century, mainly for its use as a dye. Thereafter the focus shifted to coffee , which by the early 20th century accounted for 90% of export earnings. El Salvador has since reduced its dependence on coffee and embarked on diversifying its economy by opening up trade and financial links and expanding

12524-557: The reform actions. The 1992 peace accords made provisions for land transfers to all qualified ex-combatants of both the FMLN and ESAF , as well as to landless peasants living in former conflict areas. The United States undertook to provide $ 300 million for a national reconstruction plan. This included $ 60 million for land purchases and $ 17 million for agricultural credits. USAID remains actively involved in providing technical training, access to credit, and other financial services for many of

12648-412: The reporting country $ 13.80M. SDRs are at $ 245.5M. Gold reserves (including gold deposits and, if appropriate, gold swapped) reported at $ 271.4M with volume in millions of fine Troy ounces at $ 200k. Other reserve assets are financial derivatives valued at $ 2.7M. Having this hard currency buffer to work with, the Salvadoran Government undertook a monetary integration plan beginning 1 January 2001, by which

12772-423: The revenues from contributors and absorbed completely the costs of coverage of retired pensioners. This has been the main source of fiscal imbalance. ARENA governments have financed this deficit with the emission of bonds, something the leftist party FMLN has opposed. Debates surrounding the emission of bonds have stalled the approval of the national budget for many months on several occasions, reason for which in 2006

12896-413: The shift from the colón to the U.S. dollar, because wages are still the same but the price of everything increased. Some economists claim this rise in prices would have been caused by inflation regardless, even had the shift not been made. Some economists also contend that now, according to Gresham's law , a reversion to the colón would be disastrous to the economy. The change to the dollar also precipitated

13020-648: The site of La Laguna in Usulutan has also produced Copador items that link it to the Lenca-Maya trade route. By 1521, the indigenous population of the Mesoamerican area had been drastically reduced by the smallpox epidemic that was spreading throughout the territory, although it had not yet reached pandemic levels in Cuzcatlán or the northern portion Managuara. The first known visit by Spaniards to what

13144-794: The size of the army, and the dissolution of the National Police, the Treasury Police, the National Guard and the Civilian Defence, a paramilitary group. A new Civil Police was to be organized. Judicial immunity for crimes committed by the armed forces ended; the government agreed to submit to the recommendations of a Commission on the Truth for El Salvador (Comisión de la Verdad Para El Salvador) , which would "investigate serious acts of violence occurring since 1980, and

13268-545: The spread of a leftist insurrection. Napoleón Duarte was recalled from his exile in Venezuela to head this new junta. However, a revolution was already underway and his new role as head of the junta was seen by the general population as opportunistic. He was unable to influence the outcome of the insurrection. Óscar Romero , the Roman Catholic Archbishop of San Salvador, denounced injustices and massacres committed against civilians by government forces. He

13392-539: The three major bridges over the Lempa River, 12 other bridges were damaged or destroyed by the Mitch flooding. The largest single-affected sector was El Salvador's agriculture. Nearly 18% of the total 1998–99 basic grain harvest was lost. Coffee production was hit particularly hard; 3% of the harvest was lost in addition to 8.2% that was lost earlier in the year due to El Niño. Major losses of sugarcane, totaling 9% of

13516-415: The use of Marxist–Leninist ideology. In December 1930, at the height of the country's economic and social depression, Martí was once again exiled because of his popularity among the nation's poor and rumours of his upcoming nomination for president the following year. Once Araujo was elected president in 1931, Martí returned to El Salvador and, along with Alfonso Luna and Mario Zapata, began the movement that

13640-552: The western part of the country, killing an estimated 2,000 people. The government suppressed the rebellion brutally, killing between 10,000 and 40,000 people, mostly, Pipil peasants. Many of the rebellion's leaders, including Ama and Martí, were captured and executed. Historically, the high Salvadoran population density has contributed to tensions with neighbouring Honduras , as land-poor Salvadorans emigrated to less densely populated Honduras and established themselves as squatters on unused or underused land. This phenomenon

13764-487: Was General Maximiliano Hernández Martínez . In December 1931, a coup d'état was organized by junior officers and led by Martínez. Only the First Regiment of Cavalry and the National Police defended the presidency (the National Police had been on its payroll), but later that night, after hours of fighting, the badly outnumbered defenders surrendered to rebel forces. The Directorate, composed of officers, hid behind

13888-582: Was a major cause of the 1969 Football War between the two countries. As many as 130,000 Salvadorans were forcibly expelled or fled from Honduras. The Christian Democratic Party (PDC) and the National Conciliation Party (PCN) were active in Salvadoran politics from 1960 until 2011, when they were disbanded by the Supreme Court because they had failed to win enough votes in the 2004 presidential election. Both parties have since reconstituted. They share common ideals, but one represents

14012-549: Was brutal suppression of a rural revolt known as La Matanza . In the unstable political climate of the previous few years, social activist and revolutionary leader Farabundo Martí helped found the Communist Party of Central America, and led a communist alternative to the Red Cross, called " International Red Aid ", serving as one of its representatives. Their goal was to help poor and underprivileged Salvadorans through

14136-454: Was considered "the voice of the voiceless", but he was assassinated by a death squad while saying Mass on 24 March 1980. Some consider this to be the beginning of the full Salvadoran Civil War , which lasted from 1980 to 1992. An unknown number of people "disappeared" during the conflict, and the UN reports that more than 75,000 were killed. The Salvadoran Army 's US-trained Atlácatl Battalion

14260-418: Was considered a mono exporter economy. This means, an economy that depended heavily on one type of export. During colonial times, the Spanish decided that El Salvador would produce and export indigo , but after the invention of synthetic dyes in the 19th century, Salvadoran authorities and the newly created modern state turned to coffee as the main export of the economy. Since the cultivation of coffee required

14384-430: Was defeated in the 1972 presidential elections. He lost to the ex-minister of interior, Colonel Arturo Armando Molina , in an election that was widely viewed as fraudulent; Molina was declared the winner even though Duarte was said to have received a majority of the votes. Duarte, at some army officers' requests, supported a revolt to protest the election fraud, but was captured, tortured and later exiled. Duarte returned to

14508-489: Was followed by the Melendez-Quinonez dynasty that lasted from 1913 to 1927. Pio Romero Bosque , ex-minister of the government and a trusted collaborator of the dynasty, succeeded President Jorge Meléndez , and in 1930 announced free elections, in which Arturo Araujo came to power on 1 March 1931, in what was considered the country's first freely contested election. His government lasted only nine months before it

14632-568: Was later truncated by the military. On 22 January 1932, thousands of poorly armed peasants in the western part of El Salvador revolted against the government and Martínez. The rebellion occurred amid widespread unrest over suppression of democratic political freedoms following the cancelation of the results of the 1932 legislative election. The rebels were led by  Feliciano Ama  and  Farabundo Martí and were largely composed of indigenous people and communists. The rebellion made gains initially, capturing several towns and cities across

14756-542: Was launched in 1814, which was also suppressed. In 1821, in light of unrest in Guatemala, Spanish authorities capitulated and signed the Act of Independence of Central America , which released all of the Captaincy General of Guatemala (comprising current territories of Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica and the Mexican state of Chiapas ) from Spanish rule and declared its independence. In 1821, El Salvador joined Costa Rica, Guatemala, Honduras and Nicaragua in

14880-477: Was noteworthy among indigenous leaders in that he mocked the Spanish by wearing their clothes after capturing them and using their weapons captured in battle. Lempira fought in command of thousands of Lenca forces for six more years in Managuara until he was killed in battle. The remaining Lenca forces retreated into the hills. The Spanish were then able to rebuild their garrison town of San Miguel in 1537. During

15004-437: Was overthrown by junior military officers who accused his Labor Party of lacking political and governmental experience and of using its government offices inefficiently. President Araujo faced general popular discontent, as the people had expected economic reforms and the redistribution of land. There were demonstrations in front of the National Palace from the first week of his administration. His vice president and minister of war

15128-615: Was passed by the Legislative Assembly on 9 June 2021, with a majority vote of 62 out of 84. Bitcoin officially became legal tender ninety days after the publication of the law in the official gazette. As part of the law, foreigners can gain permanent residence in El Salvador if they invest 3 Bitcoin into the country. In January 2022, The International Monetary Fund (IMF) urged El Salvador to reverse its decision to make cryptocurrency Bitcoin legal tender. Bitcoin had rapidly lost about half of its value, meaning economic difficulties for El Salvador. President Bukele had announced his plans to build

15252-613: Was responsible for the El Mozote massacre where more than 800 civilians were murdered, over half of them children, the El Calabozo massacre , and the murder of UCA scholars . On 16 January 1992, the government of El Salvador, represented by president Alfredo Cristiani , and the FMLN, represented by the commanders of the five guerrilla groups – Schafik Hándal , Joaquín Villalobos , Salvador Sánchez Cerén , Francisco Jovel and Eduardo Sancho , all signed peace agreements brokered by

15376-516: Was still underway when, in early 2001, the country experienced a series of devastating earthquakes that left nearly 2,000 people dead or missing, 8,000 injured, and caused severe dislocations across all sectors of Salvadoran society. Nearly 25% of all private homes in the country were either destroyed or badly damaged, and 1.5 million persons were left without housing. Hundreds of public buildings were damaged or destroyed, and sanitation and water systems in many communities put out service. The total cost of

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