Economy

El Salvador's economy has traditionally been strong. Around 1970, El Salvador economy lead the region. Agriculture had traditionally been the primary source of the nation's income and still accounts for about 25% of employment. The main exports included coffee, sugar, textiles, and shrimp. The devastating effects of the war compromised our leading position. Underproduction cost the economy $2 billion each year. The government responded by devoting up to half of its budget to battling the guerrillas.
The final peace agreements were signed on January 16, 1992. As to this day, the peace process, under the United Nation's supervision, is marked to be one of the most successful. After many social changes, the following years were characterized by rising unemployment and rising criminality. A National Civil Police was created to replace the old and discredited National Guard. The economy however rebounded. ARENA, the political party in power, launched extensive reforms and a massive reconstruction program, which attracted international investment and made national companies more competitive. Free Zone manufacturing for export is an increasingly important element of the Salvadoran economy. Over 300 US companies are now based in El Salvador, including many electrical and telecommunication companies. While agriculture has become less important, the tourism and the service sector have been viewed as a big opportunity to spark economic growth. The financial sector still is one of the strongest in Central America. Remittances from family members living abroad, mostly in the USA, account for as much as 10% of the country's GNP.