The 'real' war in Salvador: reversing economic tailspin
Sitting in his office beneath maps of El Salvador's war, a high-level military observer talks about more than fighting. ''What's really important here ,'' he says, ''is the economy.''Skip to next paragraph
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Later, beside a pool in the balmy evening air, a senior Salvadorean bureaucrat echoes that view. ''The real battlefield,'' he says, ''is the economic arena.''
And how has that battle for the economy - which the leftist guerrillas have announced as the principal target of their military strategy - been going?
''The economy gets worse every day,'' says US Ambassador Deane R. Hinton, adding, ''There's a clear trend downward.''
In a detailed report issued last month, the American Embassy here has assessed what it calls ''war damage'' to the Salvadorean economy.
''By almost any measure, the Salvadorean economy has been in a three-year tailspin,'' says the report. It notes that:
* Since 1979, real gross domestic product (GDP) has declined by about 25 percent.
* Export earnings fell 33 percent between 1979 and 1982.
* In the same period, real per capita income fell 30 percent, shrinking the average Salvadorean's yearly earnings from $670 to $470.
Since 1979, too, the nation's resources of people and money have been rapidly moving overseas. Ambassador Hinton says there are already some half-million Salvadorean refugees in the United States. And a Western economic observer estimates that $1 billion in private funds has already been withdrawn from the country.
But how much of that economic shift is attributable to guerrilla activity?
US officials say there is a difficulty in separating war damage from the effects of worldwide recession, high interest rates, and the continuing decline in the price of Salvador's major crop, coffee.
However, the US report pegs direct costs of the war at nearly $600 million. The bulk of that amount is charged to lost agricultural production (worth $235 million), along with increased central government costs for defense ($145 million) and care of refugees ($6 million). Damage to factories, bridges, buses, and the nation's electrical system also played a major role.
Beyond that are the indirect and largely unquantifiable costs - increased food imports, loss of tourism revenues, imports of diesel fuel to run standby electrical generators when guerrillas attack power installations, and public health costs when those power outages interrupt the electric pumps used in rural drinking water systems.
As though that were not enough, the heavily agricultural nation also suffered a severe drought last summer - followed by floods last fall.
''It is difficult to believe that all the bad things that have coincided against El Salvador can continue into the future,'' says Salvadorean President Alvaro Magana.
An economist and former banker, Dr. Magana takes an optimistic view. ''I am sure that the economic picture is going to change completely next year,'' he says - forecasting higher prices for cotton and sugar (the nation's major crops behind coffee), an end of the world recession, lower interest rates, and falling oil prices.