In El Salvador, the five-year, $461 million compact seeks to improve the lives of Salvadorans through strategic investments in:

• Education
• Public services
• Agricultural production
• Rural business development
• Transportation infrastructure 

The largest of the compact’s components, the transportation project, intends to physically unify El Salvador’s Northern Zone with the rest of the country, enabling new economic opportunities for rural households, lower transportation costs, and decreased travel times to markets. 

Background

In 1992, El Salvador signed a monumental Peace Accord that ended a decade of civil conflict which cost over 70,000 lives and left nearly two-thirds of El Salvador’s population in poverty.  During that conflict, human capital formation lagged, public investment was deferred, and deterioration of the natural resource base accelerated.  The northern region of El Salvador (the Northern Zone) fared the worst, as its mountainous territory served as the primary conflict zone, increasing violence and instability in the area and causing an exodus of large numbers of inhabitants.  Despite significant national economic growth and poverty reduction that followed the Peace Accord, economic and social progress has stagnated in El Salvador in recent years.

Overcoming these obstacles and physically unifying the Northern Zone with the rest of the country are national priorities.  The population of the Northern Zone requires a comprehensive development program to enable it to fully participate in El Salvador’s growth, the benefits of regional integration, and the economic opportunities brought about by the recently signed Central America-Dominican Republic-United States Free Trade Agreement.