El Salvador looks towards new strategies to stimulate growth

The Salvadorian Association for Private Business presented a new package with proposals to rekindle growth and strengthen El Salvador’s economy.

The ANEP, or El Savador’s National Association for Private Business is unwilling to let go of its initiatives towards economic growth. The trade union presented new proposals in the form of a package last week.

There are four pillars to ANEP’s package: reduction of poverty, economic growth, strengthening democratic institutions, and a fiscal responsibility pact.

The proposal was passed on to the government, which has not yet considered it as they themselves are struggling to work towards an end to the crisis. ANEP’s president, Luis Cardenal, suggests that instead of trying to wriggle itself out of the crisis, the country should pursue long-term economic goals, through what he considered the country’s highest potential industries. Those include: tourism, logistics, international services and agro industrial exports.

Context seems to favor the proposal, as currently, the Salvadorian government is amidst discussions concerning a tax reform. If the package were to be considered by the government, it could well be integrated into the reform process.

“Today we are at a time of crisis, but we have to work towards generating employment, it’s the only thing that will drag us out of the financial mess” Said Cardenal.

A key point is the proposal is to cut down on subsidies. ANEP criticized the $4,6 billion that the State gave away, assuring that they have not been fruitful at all. School absenteeism is not down despite subsidies and poverty has not gone down despite assistance in basic services.

ANEP also gave a sign of caution regarding the recommendations issued by the IMF, which suggested considerable austerity measures and stricter fiscal policies including heavier taxation. However, Cardenal guarantees that making this sacrifices means saving up somewhere else.

Cardenal expressed the urgency with which the government needs to consider these new solutions, as the measures they are taking on their own are purely reactionary to the crisis, whereas those proposed by ANEP are intended to solve issues at their core, assuring long term shelter from the storm.

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