RAYMOND, Maine — H.Res 408 is a resolution designed to encourage El Salvador to protect all democratic institutions in the nation. El Salvador has had a difficult path to building its democracy, seeds officially planted in 1992 when its poverty rates reached 60%. H.Res 408 encourages the United States to promote economic development within El Salvador. Preserving El Salvador’s democratic institutions could ensure the country’s economy can sustain its growth, specifically within its gross domestic product.
A Breakdown of H.Res 408
Rep. Albio Sires, a New Jersey Democrat, introduced H.Res 408 last May with more than 31 cosponsors. Much of the resolution dictates the U.S.’s duties to encourage El Salvador to rebuild trust within the nation itself while protecting its progressive development. H.Res 408, in its first line, directly states its intent: “Urging the Government of El Salvador to respect the country’s democratic institutions.”
The U.S. has no power over El Salvador, but some in the U.S. government are determined to uphold all relations with the Salvadoran government. Rep. Sires is using H.Res 408 to encourage the fostering and development of the relationship with a caveat in Subsection 20 urging the U.S government to partner with its Salvadoran counterparts, formulate policies in the country that would reduce poverty rates in El Salvador while building long-lasting economic growth.
El Salvador’s Path to Democracy
El Salvador’s government has been democratic for nearly 30 years, but the establishment of the country’s democratic institutions took centuries. In the 1500s, the country was a part of the Spanish Empire, and after that, a member of the United Provinces of Central America, or UPCA. The UPCA dissolved in the early 19th century, and El Salvador created an executive in the form of a president. Yet, even this was not the Salvadoran democracy that would be introduced more than a century later.
In 1961, the right-wing National Conciliation Party seized power — with military backing — igniting a civil war. For the next three decades, El Salvador’s two parties — the NCP and the left-wing Farabundo Marti National Liberation Front — struggled for control. The FMLN was formally recognized as a political party by the United Nations in 1991. Within a year, peace accords were signed, finally ending the war. It was also that year that, for the first time in El Salvador’s history, it seemed a democracy was imminent.
The FMLN did not win the presidency until 2009, but El Salvador’s economy continued to improve. Yet in 2021, it faces trouble.
Lessening the Nation’s Poverty Rates and Improving Its GDP With the U.S
Since poverty peaked in the early 1990s, El Salvador has ’dropped its rate to less than 30%, even getting closer to 20%. But then the COVID-19 pandemic hit, and that poverty rate has encroached 30% again. In early 2018, officials from the International Monetary Fund and the World Bank predicted El Salvador’s GDP would grow through 2021.
Democracy has helped El Salvador’s economy improve over the years with a number of economic policies and changes. In the country’s early days, currency was a variation of the Spanish peso. But in 2001, El Salvador changed its currency system to the U.S dollar. The impact of foreign investments in El Salvador
and its GDP has remained positive since then — except for 2011, a year of record-high flooding, which ultimately cost more than foreign investments and the GDP could keep pace with.
Since then, El Salvador’s economy and GDP have remained steady, bolstered by foreign investments —-raising its annual growth in 2019 by a positive 2%. El Salvador’s trade consists of 29% of its GDP, and the U.S is its strongest trading partner. Nearly half of all Salvadoran exports in 2019 went to the United States, contributing $1.8 billion to its economy. That number was lower than in past years, chiefly as a result of the pandemic.
El Salvador joined the Central America-Dominican Republic Free Trade Agreement in 2004 with the United States. This decision to join the trade agreement is the type of policy and relationship-building the U.S. appears to urge El Salvador to pursue and develop with H.Res 408.
How Will H.Res 408 Help Preserve El Salvador’s Democracy and Economy?
H.Res 408 recognizes where El Salvador has struggled in the past to promote progress and maintain it. As the U.S. has no power over El Salvador, it still trusts the country as an economic partner. H.Res 408 is intended to encourage El Salvador to take an outsider perspective to determine what policies have improved the country. The resolution does not force El Salvador to act on anything specific, and the U.S. continues to push for economic policies it believes will benefit El Salvador, and benefit its citizens and economy.
The adoption of the U.S dollar for El Salvador’s currency helped create value in its economic system for outside investors. Continuing and furthering trade with the U.S., and joining the Central America-Dominican Republic Free Trade Agreement, were decisions that has since given El Salvador room to expand — or downsize — its export business as needed.
At least as far as the U.S. is concerned, a democratic government made both decisions, and H.Res 408 is designed to encourage El Salvador to preserve it.
H.Res 408 does not infringe on El Salvador’s government, but is a resolution drafted to sustain the United States-Salvadoran partnership. It’s a tool to help El Salvador grow on the world stage.
– Clara Mulvihill