El Salvador Country Assistance Strategy

More general information about  Country Assistance Strategies

The evaluation of the Bank's assistance strategy for El Salvador from 1989 to 2000 finds the program’s outcome highly satisfactory. Bank assistance helped create the conditions for faster growth, private sector development, and reduced poverty and gender differences. Both Bank and Government actions accounted for the positive results, as they shared common objectives, worked to solve problems and to anticipate challenges. The substantial institutional change supported by the Bank improved economic management, governance, and financial accountability and management in selected sectors.

El Salvador Country Assistance Evaluation (226k pdf)

El Salvador Country Assistance Strategy (449k pdf)

World Bank Assistance Strategy Projects US$485 Million to El Salvador over Four Years

 WASHINGTON, February 22, 2005 – The World Bank Group’s Board of Directors today discussed the institution’s new Country Assistance Strategy (CAS) for El Salvador, which projects financial assistance to total US$485 million between 2005 and 2008, in addition to knowledge sharing and advisory services. As part of the new CAS, the Bank approved today a US$100 million Development Policy Loan to support the Government of El Salvador's strategy to accelerate broad-based and equitable economic growth.

 “El Salvador has an impressive record of economic and social reforms and is well positioned to recapture growth, but the challenge for the country is to ensure that future growth is equitable, sustainable, fosters social cohesion, and reduces poverty,” said Jane Armitage, the World Bank’s country director for Central America. “The current CAS will support El Salvador's 'Safe Country 2004-2009' agenda with up to US$485 million in financing and analytical, technical and advisory assistance to accelerate broad-based growth, increase employment, build human capital, improve access to basic socioeconomic infrastructure and markets, and enhance security and reduce vulnerability.”

 The CAS provides the framework for the Bank's assistance to El Salvador through 2008, outlines financing and non-lending support aimed at the following objectives:

• To support equitable, broad-based growth, the strategy projects a total of US$300 million in development policy loans -including the US$100 million loan that was approved today- in addition to a US$10 million loan to support increased small and medium enterprise access to the benefits of trade.

• To improve equity through human capital and expand access to basic infrastructure, assets and markets, the Bank is targeting US$125 million in financing to support land administration and education reforms.

• To enhance security and reduce vulnerability in the country, the Bank will prepare a US$35 million social protection and local development loan, a US$10 million loan to support the continued modernization of the state, and a US$5 million loan for a pilot program to the payment of environmental services.

 El Salvador is also expected to be eligible for grants to promote environmental conservation, and for HIV/AIDS programs. As part of the Bank's non-lending services, analytical studies and technical assistance will be provided on issues such as infrastructure, investment climate, financial sector, CAFTA, as well as social protection, health and education, in addition to updates on the country's poverty and economic profile.

 In preparation of the CAS, the Bank worked closely with government officials and consulted with representatives from a broad spectrum of El Salvadoran society. A workshop held on November 16, 2004 in San Salvador, drew input from representatives of organizations including trade unions, the private sector, NGOs, research centers, academic institutions, community organizations, and legislators. 

Broad-Based Growth Development Policy Loan

 As part of the Bank's new assistance strategy for El Salvador, the Bank today approved a US$100 million Broad-Based Growth Development Policy Loan to contribute to the Government's objectives of reigniting growth, increasing private investment and trade, reinforcing macroeconomic stability and strengthening fiscal sustainability; and increasing the efficiency and transparency of public sector management.

 “The development policy loan supports El Salvador’s policy agenda of accelerating broad-based growth and allows for diversification of sources of financing at competitive rates,” said Carlos Felipe Jaramillo, the Bank's Lead Economist for Central America.

 The development policy loan will support the country's ability to expand trade opportunities and improve its investment climate, while expanding tax revenues and reducing the fiscal burden of pension reform. Public sector modernization efforts will improve services in procurement, e-government, and public financial management.

 Following this first development policy loan, the Bank's new assistance strategy for El Salvador envisages two additional development policy loans of US$100 million – with a possible third in 2008 -  to enhance governance, transparency and efficiency in public spending, as well as other government initiatives in public sector

 The US$100 million, fixed-spread loan carries a total repayment period of twenty-one years and a one year grace period.

More information on the Broad-Based Growth Development Policy Loan (275k pdf)

More information on the Country Assistance Strategy (449k pdf)