El Salvador has huge development potentials. As a developing country with a GDP per capita of USD 5,548.0 (in 2024), El Salvador has improved its economic, social and other conditions that have helped improve the lives of its people. But it has further potentials to improve its economic conditions, political grounds and other grounds. Its economic and other development potential lies in its strategic location, renewable energy particularly geothermal energy, growth in the tradable sector through investments in infrastructure, and development in its tourism sector. El Salvador — moreover — has the potential to improve tis businesses conditions through digital transformation and improving its industrial base, and improve political and other grounds that can further improve the lives of its citizens.
But there are economic, social and other development challenges, despite its improved conditions on various grounds. There is a declining but high poverty, inflation and unemployment in El Salvador, where economic growth remains low and public debt-to-GDP remains high. Moreover, persistent inequality, a struggling education system with high dropout rates, and the lasting impacts of high rates of crimes (including drug trafficking) due to organized criminal gangs, though these have recently improved to some extent, have been putting hindrances to the human development potential of many in El Salvador, which was rocked by bitter civil war in the late 2oth century. Institutional weaknesses such as historical issues with institutional corruption and high exposure to natural disasters pose significant challenges to development.
Political and other grounds, which are crucial for development though these are often given less emphasized, remain vital challenges to the Republic of El Salvador. Political and civil rights concerns in El Salvador mostly center on a significant concentration of power within the executive branch, the weakening of the rule of law and the erosion of judicial independence in the country. Moreover, the violations of various civil rights including arbitrary arrests, harsh prison conditions, torture and restrictions on freedom of expression and the media put hindrances to ensuring development — at the desired level — in El Salvador. As per the reports of the BBC, the media are among the victims of widespread violence in El Salvador.
But it is not that the government initiatives in El Salvador are absent. Policy-based, legal and other measures are advancing and helping address development challenges in El Salvador and have been playing a vital role in development. For instance, various plans including the Plan Cuscatlán, which outlines priorities for economic development, security, and human development, and the National Development Plan, a more comprehensive, official government document for national planning and development, have helped improve economic conditions, address inequality, a notable concern in El Salvador despite it is more developed than many countries, and address other challenges to development in social and other terms. But these have not been implemented as desired, reducing the chance of development as planned.
Development is further impacted by several limitations to the government efforts in El-Salvador, which became a fully independent republic in 1841. Inconsistent enforcement of laws, limited initiatives to address weak infrastructure, persistent poverty and inequality, poor institutional quality and limited focus on addressing corruption have led to limited outcomes and have been impacting the economic prosperity of many and organized crimes, which lead to the deaths of several thousand every year, along with prison violence, an often occurring event in El Salvador. Additionally, there is insufficient public investment in key sectors like education and a lack of consistent stakeholder dialogue and participation.
But measures are needed to address challenges and improve economic, political and other aspects — desirably. The government needs to ensure high economic growth through a variety of means including ensuring economic diversification and reducing institutional weaknesses. But focus needs to be given to address poverty and growing inequality, through human capital development and entrepreneurial opportunities. Unless poverty is addressed, development may not mean much to a significant portion of people in El Salvador. Addressing gang crimes, which is still challenging though President Nayib Bukele has reduced it much, is vital.
But the government of El Salvador needs to improve its political grounds and address other development challenges. Revitalizing democratic institutions, ensuring electoral fairness, and holding officials accountable for human rights violations will be effective. Ending harassment of the media for reporting corruption and organized crimes will improve various grounds in El Salvador.
