Country Report:
El Salvador
Contents:
Socio economic situation El Salvador
RET (Red Empresarial de Trueque)
Building Production Chains
Role of Strohalm
More information
Socio economic situation El Salvador
El Salvador is the smallest country of the region with 20,749
km2 and most densely populated. Of its 6.3 millions (in 2000)
habitants 60.3 % lives in urban areas.
With a GDP of 13,217 millions US$ in 2,000, El Salvador
reaches an average income per capita of 2,100 US$ and is
certainly one of the more prosperous countries in the region.
However the distribution of the welfare is very concentrated,
which results in a rather low Human Development Index of
the UNDP of 0.70 occupying place 105 out of 173 countries.
About 21 % of the population lives with less than a dollar
per day and 44.5 % with less than 2 dollars per day.
Through history, natural disasters such as droughts, hurricanes
and in particular earthquakes but as well political unrest
have been destabilizing factors for the development of economic
activity.
Agriculture is still the dominant sector of the economy,
accounting for three quarters of export earnings. Coffee
and sugar are the most important crops, but attempts have
been made at diversification. Today, the most stable - and
growing – revenues come from the more than 1 million
Salvadorians living and working in the United States.
The country has adopted the dollar as its
national currency.
RET (Red Empresarial de Trueque)
The RET is a network of small enterprises in the capital
San Salvador, who exchange products and services between
them without using the national money, but a system of internal
accounts (expressed in UDIs) in a computer administration.
Through their participation, members increase their sales
and have access to interest free loans in UDIs.
The RET is coordinated by FADEMYPE, a leading local institution
for micro and small enterprises development with a strong
emphasis on integrated local development.
Building production chains
The Strohalm project aims to expand operations between members
facilitating the development of production chains where buyers
pay their suppliers of inputs in the local currency. One
of the main strategies used will be the convertibility of
UDIs in national currency at the top of the production chain,
in case of very limited possibilities to spend the amount
of internal (UDI) currency received from local buyers.
To attract the necessary liquidity in dollars consumers
will be incorporated and stimulated to change dollars for
UDIs which have a higher purchasing power and can be spent
within the RET network (Circuit of Consumers and Commerce – C3).
The expected results of the project are twofold: A) Activation
of the local economy of the intervention zone B) Lessons
about the impact, efficiency and applicability of the method.
Role of Strohalm
Strohalm plays an advisory role, including selection and
training of local staff, methodological support, software
development, project and impact monitoring.
More information:
• About RET : http://www.redintercambios.com
• About FADEMYPE : http://www.conamype.org/fademype
• About Strohalm in Honduras : [email protected]
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