ECONOMIC GROWTH AND EDUCATION

Program Overview (1997-2005)

La Majada coffee cooperative workers weight coffee bags at the processing plant in Juayua, Sonsonate. The cooperative has received technical assistance from USAID’s Regional Quality Coffee Program. Photo by Karen Azucena, USAID.

Under its strategy that began in 1997 and ended in September 2005, USAID helped El Salvador generate conditions favorable to economic growth and the creation of viable income-generating activities for the poor.  Program activities focused on: (a) promoting sound economic policies; (b) facilitating access to financial services and trade capacity building assistance for micro and small businesses and farmers; (c) helping small and medium businesses take advantage of export markets; (d) working with farmers to diversify crops, improve technology and marketing skills, and expand sales; (e) providing essential small-scale rural infrastructure, including roads, bridges, and basic water systems; and (f) improving the quality of basic education in the classroom and through emphasis on early childhood education.

USAID programs contributed to the following achievements:

• Increased tax collections: tax collections, as a percentage of GDP, increased from 11.6 per cent in 2003 to 11.8 per cent in 2004 (an increase of $113 million). Three hundred newly trained auditors from the Salvadoran Internal Revenue Service can now perform computerized, specialized audits.

• Loans for rural borrowers: as of March 2005, assisted financial institutions (FIs) reported 43,775 new rural borrowers, strengthening an estimated 70,000 jobs.  The FIs also reported 18,013 new rural depositors, and 13,084 new loans under $400 to rural micro entrepreneurs.

• Strengthening of Non-Formal Financial Institutions Law: With technical assistance, the Financial System drafted 30 new norms related to non-formal Financial Institutions Law and are awaiting the Superintendent’s approval.

• Access to electricity: 78 per cent of the rural households nationwide obtained access to electricity.

• Enterprise and Export Development: Since 2002, USAID has assisted approximately 5,411 micro, small and medium enterprises, which have generated $13.8 million in new sales.  Technical assistance included production, marketing and management, formation of clusters, export associations, packaging redesign, international certifications for organic products, quality assurance systems and other areas.  USAID co-financed selected enterprises to participate in 58 trade fairs and 18 international trade missions.  Through appropriate training, selected entrepreneurs and professionals can now face the challenges of export management.

• Agricultural development: over 83,000 farmers have benefited from transfer of agricultural technology, marketing, processing, training and other services. Since the beginning of the project, farmers increased sales of non-traditional agriculture products and specialty coffees to $15 million. The coffee sector now exports to global markets through 120 specialty coffee buyers, up from 25 in 2001.

• Small infrastructure projects: USAID financed a total of 150 small infrastructure projects, which includes the construction and equipping of eight rural health clinics and the improvement of 65 rural roads, 24 bridges, 24 potable water systems, and 29 rural schools.  In total, 277,115 Salvadorans have benefited from these projects.

• Early childhood care and education training: 450 kindergarten teachers from the Ministry of Education received training in early childhood care and education methodologies, which benefited over 13,000 children under age seven.  Moreover, government institutions in charge of childhood issues now have a complete study on coverage and quality of early childhood and preschool education.

• Development of the Family School methodology: USAID helped design and implement the Family School methodology which covers topics such as literacy, learning through science and games, and life skills.  The methodology has benefited over 1,000 educators from the formal and non-formal system.

• Strengthening of educational research: USAID’s programs have helped improve educational research and abilities among 2,000 teachers and 250 principals in rural schools.