This information comes from the assessment conducted in country for the El Salvador report, which was published in January 2005.
For many reasons, El Salvador is a role model for the Central American Free Trade Agreement (CAFTA) region. Since implementation of its Final Peace Agreement in January 1994, El Salvador has experienced numerous and far-reaching achievements in economic development and institutional capacity building. There exists a seriousness of purpose in reforming public institutions that has produced tangible results, including a highly functioning Company Registry and a similarly effective Real Property Registry; a customs service that has made dramatic strides in efficiency and effectiveness; and improved managerial and automation practices in several other government agencies.
Although there are systems that are significantly less effective – in particular, the courts, the bankruptcy system, and the institutions that educate, train, and support lawyers – there is a sense in El Salvador that real progress is being made toward economic development. Statistics bear out the anecdotal evidence. Over the past three years, although much of Latin America has experienced negative economic growth rates, El Salvador has maintained an average annual growth rate of approximately 2 percent.
This report identifies certain overriding themes in El Salvador’s CLIR and trade environment that should be incorporated into reform programs on a crosscutting basis. These issues include the profound lack of public confidence in the judiciary, which results in virtual nullification of the effectiveness of myriad soundly drafted commercial laws; the lack of meaningful standards or oversight in certain vital professions, especially lawyers and notaries; and the importance of small and medium-sized enterprises (SMEs) in the further development of El Salvador’s economy. A fourth issue that plays a part in formulating future reform efforts is that of El Salvador’s recent and significant successes; that is, El Salvador has achieved notable competence and demonstrated important leadership in several areas that bode well for future reforms not only in the country but also in the region.
