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Multi-dimensional Review of El Salvador : Strategic Priorities for Robust, Inclusive and Sustainable Development
- Author / Creator
- Available as
- Online
- Summary
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El Salvador has made significant development progress in the past 30 years. The end of the civil war in 1992 marked the establishment of a liberal democracy and an open export-led development model...
El Salvador has made significant development progress in the past 30 years. The end of the civil war in 1992 marked the establishment of a liberal democracy and an open export-led development model, which led to a reduction in poverty and inequality. However, with economic growth averaging a modest 2.4% in the years before the COVID-19 pandemic, and productivity growth of 0.1% over the past decade, the post-war model has not generated the economic momentum or the jobs that the country needs. Decisive action is necessary to kickstart more robust, inclusive and sustainable development. Based on a multi-dimensional analysis of development in El Salvador, this report makes four priority recommendations: 1 build the conditions for a productive transformation and modernisation of the economy; 2 increase the quantity, quality and relevance of education; 3 manage water resources better to deliver water and sanitation for all in a sustainable manner; and 4 modernise the State so it can effectively deliver key public goods, from security to education to health, and successfully steer the next stage in the country's development.
Details
- Creator
- OECD
- Format
- Books
- Language
- English
- Publication
-
- 1st ed
- Paris : OECD Publishing, 2023
- Series
- Physical Details
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- 1 online resource (502 pages)
- ISBNs
- 9789264644663, 9264644660, 926476691X
- OECD Development Pathways - https://doi.org/10.1787/23087358 -- OECD Development Pathways - The<i> OECD Development Pathways </i>series helps developing and emerging economies to identify innovative policy solutions to their specific development challenges. Higher levels of well-being and more equitable and sustainable growth cannot be achieved by merely reproducing the experience of industrialised countries. For each of the countries studied, the series proposes options for action in specific policy areas and at the broader strategic level. It identifies the binding constraints to development across all sectors and proposes whole-of-government solutions -- Book.
- Intro -- Foreword -- Acknowledgements -- Editorial -- Reader's guide -- The process of the multi-dimensional review of El Salvador -- Structure of the report -- Benchmarking countries and groups -- Facts and figures of El Salvador -- Executive summary -- Three inter-related constraints to sustainable development in El Salvador -- Strategic recommendations for robust, inclusive and sustainable development -- 1 Overview: Obstacles, opportunities and priorities for development in El Salvador -- A brief history of development in El Salvador -- The COVID-19 pandemic in El Salvador: Impacts and responses -- The evolution of the pandemic in El Salvador -- El Salvador reacted to the crisis with sizeable response measures -- Impact of the pandemic and post-pandemic situation -- The crisis and its response highlight some of the structural obstacles to development in El Salvador -- Some of the pandemic-response measures can help fill important structural gaps -- Key trends shaping El Salvador's development -- The past and future of migration have profound impacts on the country's development -- Urbanisation is an important determinant of the availability and demand for public services -- Climate-change risks will become more pressing in El Salvador -- Changes in global trade can offer opportunities for El Salvador -- The Central American integration process presents challenges and opportunities for El Salvador -- Overview of development performance in El Salvador -- How's life in El Salvador? Performance in citizen well-being -- Moving ahead towards the UN Sustainable Development Goals (SDGs) -- Key constraints to development in El Salvador -- The model of economic development has not delivered robust inclusive growth
- The ability of the state to provide key public goods and services is limited by the lack of fiscal space, capacity constraints, and the low legitimacy of key institutions -- Better management of natural resources is a critical condition for development -- The way forward: Priorities for action -- Main policy recommendations of the Multi-dimensional Review of El Salvador -- Accelerating productive transformation in El Salvador -- Overcoming cross-cutting obstacles to competitiveness and productivity growth in El Salvador -- Optimise production transformation policies, and improve their co-ordination, alignment and evaluation -- Towards integrated water resource management and water and sanitation for all -- Increasing educational attainment and developing relevant skills -- Towards better public governance for a modern State -- Options and priorities to deepen co-operation between the OECD and El Salvador -- Recommendations and priority actions for robust, inclusive and sustainable development in El Salvador -- Notes -- References -- Part I Initial Assessment -- Part I Initial Assessment -- 2 Multi-dimensional analysis of development in El Salvador -- People -- Despite falling income poverty and inequality, deprivations in areas such as education, social protection and employment compromise the capabilities of future generations -- The social protection system needs to achieve higher coverage and better targeting -- The education system faces low attainment levels and high dropout rates -- Reforms have contributed to improvements in healthcare coverage, yet the system lacks quality in certain areas -- Labour market outcomes are tarnished by informality and under-employment -- Prosperity -- Growth has underperformed vis-à-vis peer countries -- Investment remains sub-trend, despite recent strength
- Dollarisation has helped to keep inflation and interest rates low, but credit has not fuelled growth -- Economic informality is a critical area of concern -- Value added and productivity have risen, albeit slowly -- The real economy is constrained by framework conditions -- External competitiveness is under pressure -- The role of remittances -- Partnerships -- A step change in revenue generation needs a revolution in tax culture -- Fiscal space is constrained by debt-servicing costs and the wage bill -- Debt reduction needs to be carefully managed -- Local government has a larger role to play in El Salvador's development -- Migrant workers and official flows are key sources of finance -- Peace and institutions -- The peace accords triggered a series of unprecedented reforms, but achieving the primacy of the rule of law requires further efforts -- The peace accords triggered a series of significant yet insufficient institutional changes -- Personnel-related changes have been limited in scope -- The momentum of the process was not sufficient to consolidate the cultural changes required to build peace -- The weakened institutional framework failed to prevent the spread of new forms of violence after the civil war -- The cost of violence -- Obsolete legal frameworks in certain key areas, and cumbersome mechanisms, limit the efficiency of the Salvadoran state -- El Salvador lacks effective legislation on the management of human resources in the public sector -- El Salvador has implemented initiatives to improve integrity, prevent and combat corruption, and increase transparency, but these efforts lack co-ordination -- The Salvadoran State faces great challenges in modernising and streamlining the administrative processes
- El Salvador's policy making needs to become more internally coherent and respond better to the particular needs of citizens across the country -- The statistical system of El Salvador has improved, but it faces institutional and capacity challenges -- Planet -- El Salvador is highly vulnerable to natural hazards -- The country is threatened by the severity of natural hazards -- Demographic pressure and unplanned land use exacerbate the country's fragility with regard to natural hazards -- El Salvador possesses weak institutional capacities to fight efficiently against pollution and the degradation of forests -- El Salvador is affected by the continuous degradation of its natural forests -- El Salvador is exposed to a high degree of soil and air pollution -- El Salvador faces various institutional weaknesses in reducing pollution -- The management of water resources hinders the economic and social development of El Salvador -- Scarcity, pollution and insecure access constitute the major threats to water resources -- The lack of regulation and consensus in the management of water has long been a severe development constraint that is also affecting El Salvador's economy and productivity -- Notes -- References -- Part II Strategic recommendations -- Part II Strategicrecommendations -- 3 El Salvador needs a productive transformation to overcome its development challenges -- Low productivity growth in El Salvador limits improvements in living standards and competitiveness -- Structural transformation can help to accelerate productivity growth -- El Salvador's exports are concentrated in goods with moderate levels of economic complexity, skills and technology intensities -- FDI in El Salvador is directed towards low-skilled activities, and does not flow to the most innovative and technology-intensive sectors
- El Salvador's participation in Global and Regional Value Chains (GVCs) has untapped potential to increase productivity -- Only a small fraction of Salvadoran firms are globally competitive, and there are wide differences within sectors -- The size of the informal sector is a drag on productivity and job quality in El Salvador -- Notes -- References -- 4 Overcoming cross-cutting obstacles to competitiveness and productivity growth in El Salvador -- El Salvador should address key barriers to competitiveness and productivity growth, and target strategic sectors -- El Salvador's high rates of crime are a constraint for the private sector -- Recommendations to mitigate the impact of crime and violence on the development of the private sector -- Improving the quality of El Salvador's transport and energy infrastructure would reduce business costs for private companies -- Road and transport infrastructure -- Electricity supply -- Recommendations to improve and modernise transport, logistics and energy infrastructure in El Salvador -- Removing obstacles to international trade, and to a further deepening of regional integration, is important to stimulate El Salvador's exports -- Removing obstacles to international trade, and to a further deepening of regional integration, is important to stimulate El Salvador's exports -- Recommendations to eliminate barriers to international trade -- Reducing the length and costs of administrative procedures -- Recommendations to reduce the length and cost of administrative procedures -- Access to finance remains an obstacle for micro and small enterprises in El Salvador -- Recommendations to improve access to credit for MSEs -- Accelerating digitalisation can contribute to productivity growth and make El Salvador more attractive to private investment -- Recommendations to accelerate digitalisation in El Salvador
- Enabling productive transformation through innovation and research and development (R&