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The Salvadoran Economy
Net International Reserves. BCR
Figures in Million $US
Banco Central de Reserva, based on their balance sheets
Risk Qualification
El Salvador is in the 4th group of risk qualification
that is done by the OCDE. Investment qualification
by the most important agencies is BB+.
Foreign Trade Of Goods and Services
Since the 1990’s El Salvador has been characterized
by its process of openness centered on the
liberalization of prices, privatization, monetary, fiscal
discipline, and openess to commerce. After Chile, El
Salvador is the second country in terms of commerce
openness in Latin America. It is due to this open
mentality combined with the free trade agreements
(regional and multiregional) that its competitiveness
on an international level has improved in a stable
manner throughout the last years.
It has free trade agreements with its neighboring
countries: Honduras, Guatemala, and Nicaragua;
also with the United States, Panama, Chile, Mexico,
the Dominican Republic, Taiwan, Colombia, and Peru
opening doors to numerous business opportunities.
Also, in the future it is going to sign an agreement
with Europe, which currently has the Generalized
Preference System. On the horizon are plans to
restart negotiations with Canada, which have been
interrupted since 2001.
These treaties have been signed within a framework
of understanding among two or more countries,
eliminating rates on the included products in the
free circulation program between borders. These
agreements guarantee a healthy climate for direct
investment. We are going to detail the six Free Trade
Agreements (TLC) signed by El Salvador.
El Salvador – Mexico
Effective since March 15, 2001 until 2010 for national
products or services intended for Mexican territory.
Exports to Mexico surpassed USD$13 million in
2000 to USD$42 million in 2006, diversifying the
exportable offer from 179 products before the TLC
to 231 in 2006.
Investments grew from USD$67 million before the
TLC to USD$652 million in 2006.
Free Trade Agreement El Salvador –
the Dominican Republic
Effectve since October 4, 2001. In 2004 the customs
tax relief program ended, leaving 99.2% of the
products free from cutoms for the countries which
signed the agreement. Exports to the Dominican
Republic surpassed USD$12million to USD$49
million in 2006. Some of the main export products
are medicines, plastic brooms, pencils, cookies,
juices, and others.
Free Trade Agreement El Salvador – Chile
Effective since June 1, 2002. It establishes a
commerce-free zone that propels the growth and
diversification of goods and services between the
signing countries.
Free Trade Agreement El Salvador – Panama
Effective since April 12, 2003. It was the first TLC
between two dollarized economies. It grants total
abolition of cutoms on the products included in the
treaty.
By 2006 exports to Panama reached USD$63
million, a 36% increase on exports since 2003.