El Salvador - Current economic position and prospects

W TI"HN Report No. WH-115a OE WEEK This report was prepared for use within the Bank and the Association. It may not be published nor may it be quoted as representing their views. The organizations accept no responsibility for the accuracy or completeness of the contents of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND, DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION CURRENT ECONOMIC POSITION AND PROSPECTS EL SALVADOR April 9. 1962 Department of Operations Wvnesr nieunisp1here CURRENCY EQUIVALENTS U.S. $1 = Z. 5 colones () 1 = U. S. 40 cents 1 million = U.. S. $400, 000 AT.L AF CNYTNTP Page _ No BASIC DATA ............................. i SUMMARY AND CONGLUSIONS .................... ii I. THE ECONOMY ................... 1 II. THE DECADE OF THE 'FIFTIES ................. 2 III. RECENT ECONOMIC DEVELOPMENTS ............... 4 IV. PROSPECTS ................................ 10 STATISTICAL APPENDIX ....................... 13 i BASIC DATA Area: 8,061 square miles Population, 1960: 2,612,000 Average annual increase, 1957-1960 3.5% Population density 323 per square mile Gross National Product (1960): 1,250 million colones Per Capita Product (1960: ahut 9200 Origin of Gross Domestic Product, 1954: % of GDP Agriculture 36.8 Industry 23.7 Commerce and transportation 22.4 Servi nf 17.1 Tot.al r.P I000 million dollar-s7 Coffee 62 77 CV of t ot -l exports 8O9 6 Cotton 3 16 10 1U U LU GI-L V.V 1-U54/O L/ Other 5 24 o oa total exportsou .Lotal Exports UU .L-L Total Imports 48 122 Government Finances, 1960: Total Revenues 170.5 million colones Total Expenditures 169.61 mLlion cLne Money Supply, Prices and Foreign Exchange Reserves: Decline in money supply (end 1959 to Sept. 1961): 20% Decline in cost of living index (end 1959 to Sept. 1961): 17 Decline in foreign exchange reserves (end 1959 to Sept. 1961): 52% External Public Debt, June 30, 1960: Outstanding $36.0 million "is.L se WI.2-h111 9LE million Major reported additions (July I_n-- on10,1311)mll a rear, oervie~ OIL Tot-a-.L iJUU Outstanding: 1964 - $7.2 million % of 1960 Export Receipts: 6.2% ii SUMIARY AND CONCLUSIONS 1. Durine the decade that ended in 1958. the economy of El Salvador expanded at a very rapid rate; gross national product increased by about 71 a year. The rapid rate of 7rowth was lar-elv the conseouence of a spectacular rise in export earnings. Initially, export earnings increased because of an imorovement in coffee prices. The resultine increased nrofits of coffee producers were reinvested to increase coffee and later cotton production. The production and exnortq of othfr nnmmndities increased very rapidly over the period, which provided more export earnings and stimulated the Leneral exnansionary nlimntp Pvpn more, 2. In addition ton t.he- Inocally rPorAf.ti fiin(q_ prg- qmmintsq of' foreign capital, attracted partly by sound financial policies, freedom of canital movemens,q. and qtable owhange rate were invested in nev inru.strial enterprises and basic transportation and power facilities. 3. While considerable progress was made towards diversification of V_ __ -- -_ -_ - - .***- _ - - __'Sfl - -FJ7a.LS£S A he~ g s oc a problem of the country; the mass of the rural population continued to live at " - " ' LlA 0'.- JL ± P A..L--V OY , J~~ J U C~LL L 4r' were drastically reduced and the level of investment fell to early 1950 product declined by almost h%; in 1960 economic conditions continued to UV u c u. mn autuver 1.U, ullu uoveIrumenl wad overu"QWow alnu c cLv."- military Junta took power. Uncertainty caused by these political events increaseU econoici problems. During the last ouarter of 1960 net foreign reserves declined drastically, imports increased and there was a substantial fi.ght of apital; both were facilitated by a sharp rise in domestic bank credits. A second coup d'etat took place in January 1961, when a new Junta assumeu vower. . eginning in the Lst quarter o1 10U, and throughout the first half of 1961, the Government of El Salvador took a series of measures inutndU tu deal with social and economic problems. To cope with the loss of reserves, a standby agreement was arranged with the IF. The Central can was nationalized, exchange controls were introduced and ceilings were imposed on credit expansion. Social measures, providing basically for some redistribution of income and an improvement in living conditions of the rural population, were introduced and later revised. 6. The immediate objectives of the stabilization program have been attained. The level or domestic credit has been reduced; the loss of reserves has been halted. The fiscal deficit of 1961 is likely to have been substantial; it was fihanced mainly from accumulated cash reserves. iii 7 Tli a i-r n-irr+.n 1man f tif~ f-vta + nnmlii nar wi+.Ii nn i-ri.q n .q, due to the social measures taken, and an uncertain political situation, ities expect that considerable improvement will take place as a result of: crop; the enactment of new laws being considered to provide investment ~L$~L UV~~ -A ULIU U %Li ZttaaL UU T, U L UQ "1T%JLLL .tLI tn Ia.u ±iu received in the last half of 1961 from the 7xport-Import Bank and the Inter- Amr. a ruvelv7nmnt Bank. Avomne isuo el aev6uxgo I U.)LLL; LU I -LVCX Ut LIVt;OUIi U ~ L I tUt:LU YtIZ t2l; Ur7r,_LIILII, Ul. bear fruit and are helping to provide employment opportunities and to offset iRe u.u±±ue ±o uive ±uoume. Loug-ra[ugeL prutu:u-e W-Ls uLptIu IItVL±y LI development plans that are now being made. Prospects for an increase in COffee export earnings are poor. . Lutner expan[IZoU of tne proucIon of cotton and other agricultural products is only possible within the narrow -LU - eu by the avalaUle Lana resources. Inus, greater eInorw Lu industrialize seem essential in order to utilize the most abundant resource of the economy -- manpower -- and to create a oasis for sustained economic growth. 9. A number of projects are being planned for public and private investment which, if carried out, could provide a basis for economic growtn in the near future. The Central American Common 4arket is providing and should continue to provide a stimulus for industrial development. Projects for public investment now under consideration will represent considerable capital requirements both for internal and external costs. 7l Salvador now faces serious problems in mobiliAing from the budget the d6iestic funds needed for proposed public investments. 10. There appears to be some capacity to sustain additional debt on conventional terms. However, this capacity becomes limited when it is aeen in the light of El Salvador's modest-prospectv- for; exports and economic. growth, the low living standards of the mass pf the people apd the rapid growth of population. T . 'UV 'OC)AMRfrV 1. El Salvador, with an area of 8,000 square miles, is the smallest Central American Cordilleras, bounded by Guatemala in the west and Honduras Coast with an average width of 60 miles. Most of the country is hilly and mountainous, but there are three distinct geographic regions: the first is the hot coastal area which produces mainly cotton and some food crops. The second, the central plateau, crosses the country from east to west, and is most densely populated. It provides soil and climatic conditions suitable for coffee production. Tme third section, the northern part of the country, is mountainous and arid. 2. El Salvador is very densely populated with 323 inhabitants per square mile, as compared with the average for Central imerica of 6& per square mile. The population is increasing very rapidly at an annual rate of 3.5%; at this rate, it would double during the next 25 years. Per capita income is low; it is estimated to be about $200. The distribtion of-income is very uneaven. More than 70% of one population live outside the cities under very primitive conditions. In recent years, a small middle class has emerged, composed mostly of professionals and small entrepreneurs. The small class of wealthy land owners and entrepreneurs is well educated and skilled. El Salvador's literacy rate is about 4ON. 3. The economy is basically agricultural. Climatic conditions, land resources and an abundant labor supply have, in the past, favored a very intensive production of good-to-excellent quality coffee. Until about 1955 the country relied almost entirely on coffee for its exports. Since then cotton increased its share in exports from 8% in 1955 to over 205 in 1959. By 1960 most readily available land resources were in use and there remains little new land that could be brought under cultivation at the nresent state of technology. There are virtually no mineral resources. The existing gold and silver mines have experienced constantly declining production since 1950. The only other mineral deposits of value are limestone, which are sufficient to supply the country's cement industry, 4. As its principal developable resource, 21 Salvador possesses a large labor force with a demonstrated ability to acquire skills rapidly. - 2 - II. THE DECADE OF THE I'FFTTTE 5. During the decade that ended in 1958, the economy of El Salvador expanded at a very rapid rate. Gross national product inre-e ------ 7% per year. The rapid rate of growth was largely the result of a spectE- lr PnanADinn nf +.ho =Vor7-+ one.+-" bu+ Jt+- feac 41-+"+ed 'br a sA,'.,+a+4 - " inflow of foreign capital which resulted in the establishment of industrial '__- - -' prou deI bas~ic- 'd.L,J L I U jjVW~ ± L L-L.L U. OU L,.L. monetary and fiscal conditions contributed to a suitable climate for expansion. 6. Export earnings, which accounted on the average for about 25% of ,"ose- dome,-Sti rout ros from X-__ -1"71. z-~~ - *irf .L ---1 . gr LUO L.'1L 4 IIL±LUc± ill± ± UQ a pe aks Lf 346 million colones in 1957, or at almost 10% a year. This improvement was at first a direct CuSEqunCe of an increase in export prices lor coffee; the higher earnings of the producers were reinvested to a considerable extent to jJ.1pVUUUibus. nowever, an expansion of coffee production teyona he level permitted by increased yields was hindered by limited land suitable for coffee. This, and a growing awareness of the dangers of a monoculture led land owners to increase the production of cotton. The availability of suitable soil made accessible by highway construction and an ample supply of farm labor encouraged this development. Financed from the substantial profits in coffee, cotton production and exports rose at a spectacular rate. The area devoted to cotton production was more than doubled between 1950 and 1957. Yields were improved and total production increased almost six times between 1950 and 1957. The share of cotton in total exports rose from less than 4% in 1950 to over 11% in 1957. The rising income from coffee and later also from cotton facilitated a further diversification of production. Gross capital formation rose from 12% of GNP in 1950-53 to 16% in 1954-57. A considerable share of private sector profits were invested in production facilities for goods other than cotton or coffee either for export or for domestic consumption. Annual private investment increased from 75 million colones in 1950 to 181 million colones in 1957. A number of light industries were established, which produced mostly for the domestic market. 7. As public revenues in El Salvador are closely geared to foreign trade, the revenues of the Government increased also during these years of rapid export expansion. Some part of these increased revenues was utilized, in addition to substantial borrowing from the IBRD, to expand the basic economic infrastructure in the fields of transportation and power. The private sector, industry and agriculture, responded readily to this stimulus. 8. The low per capita income of "200 per year did not change signifi- cantly durina the'1950's in spite of the good overall rate of erowth before 1958. Moreover, the distribution of incomeudid not improve during the ye-ars of rapid economic exphnsion. It is estimated that. in 1949. 10o-f-the population received over 4l0% of the mtioial income and that in 1955 less than 10% of the pbulation receive more thn f01% of thp national income- Thus. although the average per capita income is A200, the large nass -of the popula- tion receivan far Ips.q than that amnount. Durin. ront v.ars th. Governiment took measures to assist lower income rural and-urban groupse The Instituto de Cnonianninn Rura fmztiwd r groe1n e deelnment and r.ndvid technical assistance t small producers; the Instituto de Vivienda Rural constructed low cost honuse th +trie sold to 1__ 1noym wrnumb* the TPra+o MP 5nTAAy Abastecimiento was established to stbmulate the production of.basic food had a substantial effect on an improvement of housing, diet and educational stanard -fo the rura popuaviwna. -3- /0 uoiiee prices aecined by zu7 in l>)o and by another 107 in L959. Total exports fell by 16% in 1958 but with a sharp increase in cotton pro- Uction in the following year, the fall in exports was only 27. The impact on the economy was not immediate for the level of private investment con-- tinued high through 1950 while public investment increased considerably. The practice of selling a large part of the coffee crop on futures also provided a temporary cushion against the price decline. 1u. However, by 1959 the full effects of the decline in prices began to be felt. In spite of the expansion in cotton production and "other" exports, gross national product declined by 4%, largely as a result of a 40h. drop in gross domestic investment as private investment was cut back to half its 1958 level, i.e., to pre-coffee boom levels. III. RECENT ECONOMIC DEVELOPMENTS 11. Recent economic developments in El Salvador have been affected by changing political conditions. Political disturbances in the late summer of 1960 culminated in a change of government in October, two years before the expiration of the term of the Administration of President Lemus. A six man civilian-military Junta ruled till January 1961 when it was in turn overthrown and replaced by a new Civilian-Military Directo- rate. A new Congress was elected in December 1961. and in January 1962 it elected a Provisional President of the Republic, to serve till July when he is to be succeeded by a President to be elected in April for a five- year term. Production and Trade 12. In the past two years coffee eynort nricns have q1owlv delined. In 1960 production reached a peak both in quantity and in yield per hectare, and the volume of exoorts was also nt ; neak in thnt year. Tn 1-1 vields declined and both volume of production and exports dropped by some 20%. Up to the end of 1960 increasing exports of oilgh c gffeeave rise to the hope that these would somewhat offset the loss of traditional coffee earn- ings. During the last year. however. exoort. of solubT coffee dplined sharply because the five-year contract with an American importer was not renewed. Salvadorean coffee is morn RnAnnivp than other tvnes suitale for soluble coffee, and so far alternative markets have not been found. 13. Production of cotton markedly declined in the 1959-60 season .qnn.qre.n+.I in -o ,-p nz +.n~ tin Aare'Iji 4 r y4% -qv -10 OIO Tr n11" ^-P exports fell sharply and their value was approximately a third below the rap. ith the su unt te16- c year Amfurthes rapidly to reach a record in the 1960-61 crop year. A further substantial ino-rai epcediza66 14. The Salvadorean authorities have continued their attempts to dampen the impact of declining export earnings from coffee by promoting production of other goods. The existing laws to promote industrial deveil- opment and further investments in power facilities and roads have been important measures. Investments in industries obtaining the benefits of the industrial development law amounted to 78 million colones in 1960, the highest figure so far recorded, and industrial production now accounts for about 14% of the gross domestic product. There are a number of established industries in El Salvador, most of which show definite possibilities for further development. The most important group in terms of output and em- ployment is the processing of agricultural and pastural products. It in- cludes mills processing cereals, coffee, cotton and sugar, as well as establishments processing meat and dairy products. In this group, the coffee processing plants are most important. They provide employment for about 12,000 persons and their annual output is valued at about 35 million colones -- about one-fourth of the entire output of the industrial sector. A flour mill costing 6 million colones has been recently constructed; a. sugar refining plant is Droducing for the local market and for export. About 60 textile plants have been established in El Salvador, most of them are small -- only six have an annual production of 500.000 colones. The cotton textile industry is already the largest single employer among the manufacturing industries- It uses high oualitv cotton grown in El Salvador. A cement plant and some small plants producing pharmaceuticals are in operation- An investment gnarantee aorement htwaen the Government of the United States and El Salvador, signed in 1960, may help stimulate the flow of' fr)pi arl %4iir '+~ . li~ T.il inr--rP_q-zP nr7hi,qtrial plrnilim- tion very soon are already under way. Construction of a fertilizer plant at+ +The Pov, ofP Acajutla, hA~ng a proj ected ana upto 1 ilo~ is to begin soon. An oil refinery with a capacity of 14,000 barrels per da sbeing constucteCD also0- nea thle PortV ofL A%%cJ"jtLQ lily 1 .1t;L0LLOWJL% UaVUULU 1 4 uiiy: y-tii.dr,y ULDUOL.L LJ L' J .LLI value of exports since 1955 not only reflects the declining importance of JLL-0 P±±L-_L __Y UUt:: UV0 U. P%LUU UUU 1U U UU 0±1 d-L,U it U I±y LjJU t;1-VW11 _L11 11Z export of other products. 1955 1956 1957 1958 1959 1960 1961 Coffee 86 78 79 73 63 66 56 Cotton 9 16 11 16 21 14 19 Other 6 7 9 12 17 21 21 16. Exoorts listed in the "Other" cateLory have increased their share of total exports continuously since 1955. Their value increased by 37% in 1959 and 28% in 1960. The average annual increase in value sine 1955 has been in excess of 25%. Shrimp exports alone increased from 666,000 colones in 1958 to 12 million colones in 1960 and now rpnrpsent nver h1, of tot.l exports. Other exports, which consist of cotton products, vegetable fats and oils and -rdut of th chmia 4--+ -4-4-1 --1v 1,4 'k-+s 1,- rapidly. ±L .F-. WA. V CjJdLL.LUI~ V.L LUU UVI ~JUU U LUL Ii L1~ 1tI V=U i has meant a diversion of some agricultural land from the production of food I. C± yL U-L u.L se 1d1JL ICdOULI C1u PU ajoy L"kULjk utu rupt ndve utZn grown on lands of lower fertility, production of beans, rice and sorghum have all dcliued since 195-56. On The other hand, production and yields of corn have been well-maintained, though there has been no expansion to .eep pace with the growth of population. As a result, El Salvador depends to a considerable extent on imports of food stuffs which in recent years Nave cCourILeM for about 1-37 of total imports. 19. Of other imports, machinery and equipment have accounted for ap- proximately one-firth in recent years, but in 190 the proportion rose to 25%. Notwithstanding the growth of manufacturing industry there has been no absolute decline in imports of manufactured goods (other than machinery and equipment) though as a proportion of total imports, the share of manufactures has fallen from 40% in the early 1950's to about 36%, in the past two years. 20. Fuels and lubricants continue to account for about 61f of total imports, while chemical products, mainly fertilizers, now account for about 15%, a significant rise by comparison with the early 1950's. 21. El Salvador's exports are sold to few countries. Most of the coffee exports go to Germany and the United States and almost all cotton exports go to Japan. -.6 - 1u neta r Th-,rrnl cr--^. T111 Ci a -1 __ A _ I-A 4- - 4- 4... 6. rn o -LvuuLVaU~ia ~iu'u a ~ u ~ UasUL .~4 4P L IJ.L~CO management in the past. A stable rate of exchange has been maintained since J-93h4, exchange oQ1Utrols, were noU:L_tabl by Uteir. abe c " inflationary pressures have been so small that the average rise in the cost of living inuex hau been barely 17/ annually in te past dcUaue. The index has not changed during the last two years. 23. During the period of high export earnings, monetary expansion facilitated El Salvador's economic groath. The expansion was justified by rising production and large exchange reserves, also it was partially offset by an improvement in the net position of the Government vis-a-vis the banking system. When coffee prices declined, the Central Bank tightened its monetary policy somewhat. At the end of 1956, a cut in commercial credit took place, which, together with a rise in non-monetary liabilities, public holdings of mortgage bonds, time deposits and bank reserves, resulted in a reduction of money supply. 2h. Beginning in 1959 the monetary situation grew more difficult because of a.deterioration in Government finance and an expansion of credit to the private sector. To finance a fiscal deficit in 1959, the Government reduced its deposits with the Central Bank from 65 million colones to 17 million colones and Bank credit to the private sector was expanded by 24 million colones above the already high levels. The infla- tionary impact of these expansions, however, was offset by an increase in savings and bank reserves and a balance of payments deficit, and total money supply expanded by less than 2%. 25. In 1960 conditions deteriorated further. particularly during the last quarter of the year when economic difficulties were worsened by poli- tical uncertainties. Between September and December, total bank credit expanded from the high level of 321 million colones to 37h million colones, an increase much beyond what normal cron financing and other activities would have required. Foreign reserves declined from $30.7 million to 112.5 million, at which noint thev were .*21.3 million less than in December 1959. The loss of reserves resulted in part from decisions of foreign and private investors to nostnone investments, an increase in imports. and a substan- tial flight of capital. 26. In January 1961, exchange controls were established in an effort +.n imnrnvP fnvmian Pehango resrve. Dnrino the first several months of 1961 there was a seasonal contraction of credit, but the total level was nprmi+ttr ts Ymain very high. Forign exnhann rPsrvn failed to show their normal seasonal recovery and remained at low levels. 27. Steps towards stabilization were taken in July 1961 in agreement with the TMF A nrinninnI menre Tas the 1chedied treduction of outstand- ing Central Bank rediscounts and advances through 1961. Also, El Salvador rpnurchased tho 9llc : million ran ande +ho ealirc s+mndby ith the T74 and received a one-year renewal. In addition, the U.S. Treasury granted a million 10-5nar balance of payments loan, and U.S. private banks established Central Bank in mid-1961. C2. The immediate objectives of the stabilization program have been achieved. The level of domestic credits has been reduced and the decline o 0reign exchange reserves has been stoppea. In January 162 a further agreement was reached with the IMF on a substantial reduction in ceilings on domestically financed bank credits to the private sector in the course of first semester of 1962 and on the continued limitation on bank credit extended to the Government. 29. Since restrictions on bank credit might reduce investments which would accelerate production of products for local consumption and for exports, the Central Bank took steps to supplement domestic resources with external resources mainly to finance capital goods imports needed for agricultural and industrial development. In November 1961 it signed a loan agreement with the Inter-American Develorment Bank for "2.5 million (includ- ing '4900,000 equivalent in colones) to finance medium-term credits for industrial projects. It also signed a loan of A2 million for assistance to small farmers and livestock growers. In addition, it also decided to use the colones counterpart of a $10 million Export-Import Bank loan to extend the terms of some existing commercial bank credits. Public Finances 30. Public revenues have in the past been closely geared to foreign trade. About two-thirds of total revenues have been derived from taxes on imports and exports. Revenue has amounted on the average to about 13% to 14% of GNP, which is less than in Costa Rica and Guatemala. but more thar in Honduras and Nicaragua. In the past, about 60% of total expenditures accounted annually for administration expenses. about 20% for transfers to public entities, 10% for development expenditures by the Central Government. The remainine 10% has been used for npnsions and sonial nninritr nnyments and the amortization of public debt. 31. During the period of high export earnings, public revenues exceeded extenditurPs And shbtantial cash baIanno er nwr cmnultn This changed radically when export earnings declined in 1958. Revenues dpclinedr fro188 mRrilIon Ieonone -in Off7 toA17 million cooe in -9off and continued to be depressed in 1959 and 1960. Expenditures which were 19nt60 mllion co1nnt r in of7 were reduced to abou t 161 morlooinar 1960 largely by contraction of expenditures other than those for ordina,r adminiStration. -8 - 32. During the first nine months of the 1961 fiscal year, revenues fell further mainly due to a decline in receipts from export and import duties. With continued efforts to restrict imports, it seems unlikely that the level of revenues will have improved during the last three months of 1961. Revenue from other taxes tended to rise in recent years; however, they still account for somewhat less than 40% of total revenues. 33. Government expenditures in the first nine months of the current year have increased slightly over those in the same period of 1960 mainly because of increased expenditures for administration and for subsidies. Cash expenditures in 1961 are estimated at about 180 million colongs, about 20 million colones above probable 1961 revenues. It should be possible to finance the major portion of the 1961 budgetary deficit with the remaining accumulated cash reserves. 34. The Government faces a serious problem in balancing its budget in 1962 and following years. It no longer has cash balances which hitherto have been a main source of funds to cover its recent deficits, nor, under the new Standby Agreement with the IMF, may it resort to Central Bank borrowing to finance budget deficits. 3A. If the Government is to maintain spending on develonment at the same levels as in the past five years -- roughly 2q to 30 million colones annually -- it will need to take measures to restrict non-development exoenditures. to increase fiscal revenues and to obtain funds abroad. Some reduction in general expenditures may prove nossible, but, with the rapid growth of nonulation and intensiflring social needs, this source is not likely to be a major contributor of the funds required. 36. Increases in fiscal revenues sufficient to maintain develonment revenues in 1961. New tax measures have been introduced, but estimates of yield of these measures or of improvements in collections which might be made are not available. It is doubtful that an increase of the magnitude to a greater extent than in the recent past on foreign loans to finance to continue. Nevertheless, El Salvador will have to make every effort to mobilize resmesmeources to finance development projects, particularly if the level of development spending is to rise. Social Legislation. 37. The Juntas which ruled in late 1960 and 1961 laid wreat emphasis on measures intended to improve social conditions in the countr. They issued a series of decrees of which the most important provided for: a slum tenement rents by one-third; protection of workers' salaries, prompt and direct payment of wages and limitation of deductions; a minimuri daily wage for employees of commercial establishments; improvement of the conditions of rural labor, including dietary requirements and minimum housing conditions; and increase of the income tax in the higher-income brackets and of corporate taxes. 38. 1fhile these reforms are intended to deal with existing social conditions, their implementation will be difficult during a time or eco- nomic stagnation. If rigidly enforced, the laws affecting rural labor could raise real labor cost and accordingly result in a reduction or pro- duction and employment. Moreover, some of the measures were rather hastily introduced and changes have been found necessary. There was not enough food available to comply with the dietary provisions of the rural labor law; since it was found highly impractical to provide food under the conditions prescribed, the law was changed to allow producers to pay slightly higher cash wages. The new income tax law, which taxed reinvested corporate earnings at the same rate as personal income, had a dampening effect on investment incentives but subsequently the Government revised this provision and broadened the tax exemptions under the Indus- trial Development Law to provide for additional incentives for investment. IV. PROSPECTS Balance of Payments and Production Prospects 39. With the heli of loans from the I.B.R.D., totalling in all $35 million, substantial investments have been made in the basic services of power and transDortation. Electric power is and will continue to be in ample supply and the road system will provide more efficient transport. The managerial class has shown ability to conceive and carry forward new projects successfully. E1 Salvador's central location, its road and port facilities, its policy of fostering Drivate investments, both domestic and foreign, and the good labor supply, should help develop manufacturing ac- tivities further. nrticularly for Penrts to the Central American Common Market. In December 1961 the provisions of the industrial development law were substantilly broanned to nrovide greater incentives for the estab.- lishment or expansion of industry. The election of a Congress in December 1901 Tnqv -rTp 1 i ni +A _n.o n novi- n~rl nf' rn-o c:+.n hl p nol i +A r-..1 jrr.9j i rnq r this would contribute to a favorable climate for further economic growth. hO. The develnnment.n +. h Salvadorian conoimy in th f,-rpe_ab3e future, however, will continue to depend heavily on the exTort sector. proutio aln eports exr erninds bci ntinue In dJ-end m-rn production and e,-ports, export eaxy-ings will coni;i-.nti -'-. dc-.ir,od mainly n co.ffee _-d cottono 41. Frospects ror corree exports from t 6alvacor continue oU u poor. In view of the large accumulating world supply of coffee, prices are expected to remain depressed. Even if an international coffee price agreement could be reached, it appears highly likely that prices will be below their present level. 42. The newly introduced social legislation will tend to increase labor cost of coffee producers. Thus, as a consequence of increased costs and less attractive prices, marginal producers will tend to leave the coffee sector. In addition, under the present cost conditions, coffee producers have indicated that they may attempt to reduce cost by resorting to using less labor by reducing the amount of fertilizing or omitting clearing of the grounds under coffee trees before the picking season. Both could result in a further decline of production. On balance, it seems likely that, taking into account the possibility of a further down- drift of coffee prices, export earnings for coffee for the next five years may decline moderately. 43. As indicated above, with the failure to renew the contracts with American importers, there is at present little hope that it will be possible to export substantial amounts of soluble coffee in the future. The high ouality Salvadorian coffee may prove to be too costly compared with cheaper types which are mostly used in the production of instant coffee. 44. El Salvador's cotton is of good quality and is produced under very intensive methods of cultivation; as almost all exports are sold to Japan, cotton sellers are vulnerable to developments in that market and attempts are now being made to sell elsewhere. Japanese buyers have recently put Salvador's cotton producers on notice that they are in the process of changing to a new tve of machinery which recuires longer staple cotton with a higher tensile strength than the kind Salvador is nresent1v nroducing. However, it appears that it will be possible to change production to the new type of cotton to meet the change in demand. Tn view of the U.S. cotton price and nroduction policies and world supply and demand for cotton, a significant change in the price of cotton seems unlikely. 4q. Due to limited land resources, a further expansion of cotton production is likely to be limited to about 20% to 30% above 1961 cottcn Pxnorts Tn vipw of the ranid grnwth of the rate of iroduaction during the past years, this increase may be expected to have materialized by 19(4. raisint notton nxnort valies at that time to about '38 million, compared with i130 million in 1962. 46. Coffee and cotton exports together account now for about 75% Of total export umip nthr Arnort.s which have risen at an annual rate of more than 20% in recent years consist of cotton products and manufactumes, sugar, shrim,n chemicals, food products and other products. El Salvador is making strong efforts to increase these exports further. ivern stbl pliticanl co%nHndiins and pronpr ince.nt.iVt-q. these exr)orts should continue to grow, particularly with the growth of trade in the Central American Common Market. 47. On balance, therefore, it seems reasonable to expect that 31 Salvador will be able to increase its foreign exchange earnings by about 3% to 3.5% a year for the next five years. This rate would be higher than that achieved during the last three years but considerably lower than that of the five years prior to 1957. By 1965, this would result in exports valued at about $135 to $140 million. 48. With regard to production for the domestic market, prospects for expanding agricultural output are quite limited. Land resources are scarce and there is relatively little new land that can be brought economically under cultivation. 49. Modern agricultural techniques are widely emnloved in El Salvador and yields are high. This is not only true for export crops, but also to some extent for domestic food crons- Declining vields fnr some fonci rron production have been due to shifting production to soil of a lower quality, as better lands have hpen taken n for Ponnrt.np o cin. i view of the poor prospects for coffee, this process could be reversed to some extent, but it nrohably would not incrae outu+ sfficently + rAce El avadoese dependence on food import requirements. To reduce the food import requirements snmeTdh ~ ~ ~ ~ _-___ I~~ .F,rrn ------- - ~t''~out and esals ------nc industry, but this will take time. The present supply of meat animals is f -- - -~~ + -'- ".- ~ f tj+ on milk and44 ea ,t catl has been declining; in 1960 it was 30% lower than in 1950. Moreover, the cattleL are notz ofgodqaltVnd11H±~ U_LL 1r LoPLurw of population, it is to be expected that imports of foodstuffs will increase at at least the samie rateas in. thLAe recenLt pa T I - the pae-Pndsrai zation is to be stepped up to provide employment opportunities for the excess quantities than in the past. The demand for fuels, chemicals and other im- W...- CLa~~L ~ ~ L J.LJ% J CI. UrJ, .1U LO Uj__1%:;L LI(t )1,-U .Vz _?Pj-4 1 - - _ - T .41-4 ___ -.-.L earnings alone will suffice to maintain an adequate rate of growth of imports, and E Salvaudor will need to rely on an inlow of capitLU 1rom abroaU to a greater extent than in the past to sustain her economic development. Prospects for Public Investment 51. The expansion and diversification of production, together with investment requirements needed to improve the living conditions and educational standards of the rapidly growing population will make sub- stantial public investments necessary in the next few years. In 1961, El Salvador obtained loans in foreign exchange amounting to $16 million from the Inter-American Development Bank, the Export-Import Bank and the Development Loan Fund for an initial stage of her water and sewerage - 12 - construction program, for the building of an airport, for a small irrigation project, a small pilot rural electrification projecu and fUr agricultural and industrial development. In addition, the Eximbank provided a balance of payments loan of 4P10 million, repayable in 10 years. 52. El Salvador has plans for a further series of projects whic could be undertaken during the next three years. These include construction of roads, the expansion of electric power facilities and the expansion and moderniza- tion of the telecommunications system. These projects would cost a total of about $45 million or which almost $29 million would be in foreign exchange and $16 million in local currency. In addition, El Salvador has submitted to the United States Government a group of projects for financing under the Punta del Este emergency assistance plan. These include educational, public welfare, road, housing and some agricultural projects, and are estimated to cost about $42 million including an undetermined amount of local currency cost. 53. To the extent that these projects are well chosen, they should assist considerably in improving social and economic conditions, which should in turn contribute to political stability and so to a climate favorable to further private investment. Plans for the projects are in an early stage and it is therefore difficult to estimate which of them might be sufficiently advanced for financing in the near future. 54. Budgetary allocations for development expenditures in the last few years can be estimated to have been in the order of $10 - $12 million per year. In addition, CEL, the public power agency, is expected to finance about one-third of its capital requirements to 1969 from internal cash gen- eration; this would average about $500.000 Der year to 1963 but $1.5 million per year to 1969. As indicated above, it will be difficult to maintain the level of budgetary allocations for development purposes or to increase them as may be required by the expected investment program unless additional efforts are made to mobiliz inter-nnl reourc.s 55. Fihnnina of ivsmnsfromn bnd issues hasnmt with some. siit-rss in the past. Dutstanding bonds issued by the public power enterprise, the Acaiutla port authority and the mortp hank amounted to 5L million colones in September 1961, of which 18 million colones were held by private investors. In the onrsent business o+a ubtana surns in tein near future on this source for any substantial sums for investment. - 13 External Debt 56. As of June 30, 1961 the external debt of El Salvador amounted to $36 million and major reported additions to the end of December 1961 amounted to $14.6 million. Service on this debt will reach a peak of $7,2 million in 1964, equivalent to 6% of 1960 foreign exchange earnings. Service payments are scheduled to decline to about $5 million in 1967 and $3 million in 1969. 57. The relatively modest level of debt service suggests that El Sal- vador would be in a position to incur new foreign debt for important projects. However, the low living standard of the people, the pressures of rapidly rising population and the modest prospects for her exports and for her economic growt. are important factors which place limits on the extent to which El Salvador should pi-udently incur new debt. STATISTICAL APPENDIX 1. External Public Debt Outstanding as of June 30, 1961 with Major Reported Additions to December 22. 1961 2. Estimated Contractual Service Payments on External Public Debt Outstanding as of June 30, 1961 with Mio Renorted Additions to December 22, 1961 3* Pion"lntion Growth, 1/4-1960 4. Distribution of Size and Area of Agricultural Holdings, 1950 5. Tna Area and Hse 1Q51QA 7. Gross Domestic Product by Sector, 1950-1960 8 * Area, Production and Yield of' Basc Cop, 50"96 9. Production of Selected Industries, 1951-1960 11. BJuilding CJostuctU±in, 1950-195 12. Investment in Industries Obtaining Benefits of Industrial Development Law, 1952-190 13. Gross Domestic Investment, 1950-1958 14. Balance of rayments, 1953-1958 15. Export Earnings, 1951-1962 and 1965 16. Regional Balance of Payments, 1957-1961 17. Total Exports and Volume and Value of Principal Exports, 1950-1960 18. Composition of Imports, 1953-1961 19. Composition of Exports, 1955-1960 20. Indices of Volume and Prices of Ekports and Imports, 1950-1959 21. Stabilization Credits, 1961 22. Public internal Debt, 1952-1961 23. Selected Indicators of Private Savings, 1950-1960 24. International Reserves, 1955-1961 25. Fiscal Revenues and Other Income, 1956-1960 26. Government Revenues, 1960-1961 27. Government Expenditures, 1960 and 1961 28. Central Government Expenditures by Purpose, 1954-1960 29. Central Government Cash Revenue and Expenditures, 1956-1961 30. Factors of Expansion and Contraction of Money Supply, 1950-1960 31. Summary Accounts of the Banking System of El Salvador, 1957-1961 TABLE 1: Extern,l Public Debt Outsta a of Junn 30, 1961 ';ith njor Re- ported Additions to December 22, 1961 (thousand dollars) Debt outstanding Major reported item June 30,1961 additions Net of Ineluding July 1 - undisbursed undisbursed December 22, 1961 TOTAL EXTERNAL PUBLIC DEBT 24.450 36.02h 14,575 Publicly-issued bonds 2,26 2.h06 - IBRD loans 22.OLL 29.968 - Inter-American Development Bank - h,575 U.S. Government loans 3 650 10,000 Export-import Bank- 10,000 TABLE 2: Estimated _Contractualbi vcePyet on External*ubi Db Ottad ing as of June 30, 1961wit Major Reported Additions to Decemk>er 22, 1961 ja (thousand dollars) Debt outstanding plus Payments during year Year undisbursed Januarv 1 Amortization Interest Total Total debt 1961 36.024 /b 2.h 963 3.507 1962 49,016 - 2,718 2,168 h,886 1963 h6298 3.255 2.361 5.616 1964 43,043 4,969 2,216 7,185 1965 38,074 5,106 1,96 7,62 1966 32,968 5,345 1,694 7,039 1967 27,623 3,821 1,429 5,250 1968 23,802 3,911 1,219 5,130 1969 19,891 2,o06 1,033 3,039 1970 17,885 2,112 927 3,039 1971 15,773 2,214 818 3,032 1972 13,559 2,300 703 3,003 1973 11,259 2,389 578 2,967 1974 8,870 2,210 454 2,664 1975 6,660 1,246 350 1,596 /a insludes all debt listed on Table 1. 7aOutstanding as of June 30th; payments for the full year 1961. Source: IBRD,Ec,-oomic Staff, - --rf n - - - - - - -1 1nr . - 1 IABL 3 ropuLation Growthn, LY5-.LYOU Population Crude Birth Rate Crude Death Rate % Rate Year (in 1000) per 1000 per 1000 or increasa'- 1945 1753 38.1 16.1 2.2 19_6 1776 36.1 15.5 2.1 19h7 1799 41.2 15.0 2.6 19>48 1823 38.5 1h.5 2.h 1949 1847 39.5 13.2 2.6 1950 1856 48.5 14.7 3.4 1951i 195. 8. o 15. 3, 1952 2020 48.7 16.3 3.2 -195 2c88 3PA17.9 -1.7 . r_7) MAV V L41 .7 -L4*j 1954 2158 48.1 15.0 3.3 1955 2232 47.1 14.2 3.3 19 1 2. 1. £uU 4UCU L4 ).L4 1957 2350 48.9 1h.0 3.5 *i nr, 0 ni , l', , - r 1958 243) 47.3 13.9 ). 1959 2520 45.9 11.9 3.4 1960 2612 465 10.8 3.6 /1 Computed by deducting crude death rate from crude birth rate. Source: U.N. Statistical Year Book Central Bank. TABLE li.: Distribution of Size and Area of Agricultural ,oldings. 1950 Agricultural Average ioldings ____Area Ildings Size/Location No. loo ectare 5 in nectares EL SALVADOR Less than 2 Hectares 105.605 61 83,216 5 0.8 From 2 to 99.9 " 66,573 38 672,872 45 10.1 100 dectares and more 2.026 1 774.237 50 382.2 Total 174,204 100 1,530,325 100 Western Zone Less than 2 Hectares 25,486 72 16,783 5 0.7 From 2 to 0. '' 9,2h8 26 12,603 3 13.5 100 Hectares and more 582 2 228,709 62 393.0 Po4al 3 16 10 37 0i9 100 ýJent.ral Zone Less LlttLa 2 Heares 47,9 67 Ui,8 64 .8p From 2 to 99.9 " 30,605 38 291,423 h 9.5. n - T o^- n-ýr' 1.i.n C f- 1UV Hectares and more U79 - 335,144 53 Total 81,387 100 667,360 100 Eastern Zone Less than 2 Heetares 30,230 53 25,945 5 0.9 From 2 to 99.9 i 26,720 ho 2O,86u 5I 1. 100 Hectares and more 551 1 200,079 41 363.1 Total 57,501 1uu 49u6u 1UV Source: Ministry of Economy. TABLE 5. Land Area and Use. 1950-1960 (1000 hcctares) 19 0 19 6 0 % of % of Land Use Area Total Area Area Total Area Land under cultivation for exportable crops: Coffee 119.0 5.6 115.4 5.5 Cotton 19.0 009 56.6 2.7 Sugar Cane 7.0 0.3 14.5 0.7 Land under cultivation for food crops: Corn 117.0 5.5 179.5 8.5 Beans 39.0 1.8 18.8 0.9 Rice 14.0 0.7 10.9 0.5 Sorghum 82.0, 3.9 87.1 4.1 Fruits 20.011 019 37.8 1.8 Natural Pastures and Grain Land 700.Q/ 33.1 704.4 33.3 Forests and Marsh Lands 250.0Z 11.8 205.5 9.7 Other Lands not under cultivation 749.0 35.4 685.5 32.4 TOTAL 2116.0 100 2116.0 100 /1 Estimated. Source: Central Bank. TABLE 6 GPIInvestr, Government Revenues and telated ata 1946 and 1050-191 1946 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 -Jan.-Siept GNP at current prices (million colones) 435 846 925 895 973 1,022 1,100 1,205 ... 1,267L 1,219A 1,250 ... Annual change in % 18.6 20.0 9.3 - 3.3 8.7 5.0 7.6 9.5 5.1 5.1 - 3.8 2.5 ... Population in 1000 1,776 1,856 1,920 1,986 2,054 2,122 2,193 2,268 2,350 2,434 2,520 2,612 ... Annual rate of growth in $ 2.1 3.4 3.4 3.2 3.3 3.3 3.3 3.4 3.5 3.4 3.4 3.6 ... Per capita GRP at current prices (colones) 245 465 482 451 474 482 502 531 ... 523 484 479. Domestic Investment (million colones) in 1950 prices ... 96.1 112.5 105.2 117.4 1149.7 171.1 196.9 208.2 220.7 1:30.9 ... ... % change ... 18.3 17.0 - 6.5 11.6 27.5 14.3 15.1 5.7 6.0 - 40.7 Exports (f.o.b.) (million colones) 65.5 171.0 21L1.6 218.3 222.0 262.6 267.3 281.8 346.2 290.1 283.4 292.0 248.0 as % of GNP 15.2 20.2 22.9 24.4 22.8 25.7 24.3 23.4 ... 22.9 23.3 23.41 ... Imports (c.i.f.) (million colones) 52.8 12).7 157.2 173.2 181.1 216.9 229.7 261.8 287.6 270.1 2148.8 306.0 205.7 annual rate of change in % ... 18.3 3).2 10.2 4.6 19.8 5.9 14.0 9.9 - 6.1 - 7.9 23.0 Government Revenues (million colones) '58.84 88.4 117.7 129.5 137.6 167.4 164.7 170.6 189.5 167.7 156.7 170.5 124.1 as % of CNP 10.0 10.4 12.8 14.5 14.2 16.3 15.0 14.2 ... 13.2 12.9 13.6 ... Government expenditures (million colones) 51.8 88.7 121.5 127.8 136.1 154.0 153.4 153.0 169.0 169.9 165.3 161.2 121.4 Cost of Living Index (1953 - 100) - 82 95 94 100 104 105 107 102 107 107 106 106Z2 preliminary 2 1947 April, 1961. Source: Central Bank. ~ 7: Gross Domestic Poduct bSctor,195-196C (miillion colones, at 1950 prices) 1950 -1951 1952 1953 1954 1955 1956 1957 1958 1959 l960 Agricultural production 366.7 329.7 358.2 340.5 388.8 397.5 404.7 >408 465.1 451.9 Minerals 5.8 5.2 5.5 5.6 4.3 5.0 5.0 4.9 5.0 4.9 - Manufaeturing 97.1 101.8 113.9 129.4 136.6 141.1 15>4.9 172.5 169.7 169.1 - Construction 44.4 44.1 42.9 55.0 69.4 79.6 116.6 108.7 111.5 104.7 Electric Power 3.9 4.6 5.1 5.9 6.6 7.7 9.2 10.5 12.3 11.7 - Commerce 174.0 170.7 186.2 167.9 216.4 224.6 239.7 255.5 262.1 257.3 - Transportation 10.6 12.0 12.7 14.0 14.7 16.8 17.6 16.3 17.1 17.1 - Governnent services 148.2 56.3 56.7 63.6 66.7 63.4 65.2 71.8 66.6 72.0 - Private services 95.2 91.8 99.0 101.7 114.5 118.6 130.4 137.0 14o.o 137.4 - TOTAIV 8145.9 816.1 880.3 903.7 1018.1 1054.3 1142.8 1218.2 1249.9 1226.7 1270.0 % Rate of Growth of G)P 2.9 -3.5 7.9 2.7 12.7 3.6 6.7 8.3 2.6 -1.8 3.5 - - - - - -(in percent) Agricultural production 43.4 40.4 40.,7 37.7 38.2 37.7 35.4 36.2 37.2 36.8 - Minerals 0.7 o.6 0.6 o.6 0.4 0.5 0.4 0.4 04 o.4 - Manufacturing 11.5 12.5 12.9 14.3 13.4 13.4 13.6 1,4.2 13.6 13.8 - Construction 5.3 5.4 4.9 6.1 6.8 7.6 10.2 8.9 8.9 8.5 - Electric Power 0.5 0.6 006 0.7 0.7 0.7 0.8 0.9 1.0 1.0 - Coimerce 20.6 20.9 21.2 20.8 21.3 21.3 21.0 21.0 21.0 21.0 - Transportation 1.3 1.5 1.4 -1.6 1.4 1.6 1.6 1.3 1.4 1..4 - Governent Services 5.7 6.9 6.5 7.0 6.6 6.0 5.7 5.9 5.3 5.9 - Private Services 11.3 11.3 11.3 11.j 11,.3 1. .. 22 TOTAL!/ 10010 100.0 100.0 100.0 100.0 100.0 100.0 100,0 100.0 100.0 - /1 May not add because of rounding. Sourcet ECLA and Ministry of Economy. TABLE;8:Area, Przduction and Yield of Basic Crops, 1950-1961 (area and production in 1000) 1950/51 1951/52 1952/53 1953/54 1954/55 1955/56 1956/57 1957/58 1958/59 1959/60 1960/61 FOOD CROPS Corn: Area 117 155 201 186 177 173 166 156 178 182 180 Production 4,41o 3,865 3,945 3,945 3,c8 3,319 3,454 3,229 3,077 3,400 3,920 Yield 37.7 24.9 19.6 21.2 21.5 19.2 20.7 20.8 17.2. 18.7 21.8 Beans: Area 39 25 25 24 23 35 27 25 17 17 19 Production 579 438 442 382 336 1447 606 292 226 262 223 Yield 1,4.8 17.5 17.6 15.9 14.6 12,8 15.1 11.7 13.4 15.6 11.8 Rice: ärea: 14 15 16 12 12 10 16 15 13 13 n. Production 441 381 334 349 289 338 393 319 285 300 285 Yield 31.5 25.4 20.9 29.1 24.1 33.8 25.3 21.6 22.5 23.4 26.2 Area 82 86 93 94 107 122 97 83 89 84 87 Production 2,058 2,367 1,980 2,357 2,59o 2,696 2,514 1,876 1,689 1,628 1,777 Yield 2:5.1 27.5 21.3 25.1 224.2 22.1 25.9 22.5 18.9 19.3 20.,4 EXPORT CROPS Coffee: Area 119 113 122 94 5 n5 115 115 118 118 118 Production 1,559 1,280 1,697 1,303 1,668 1,578 1,984 1,825 2,017 2,132 1,916 Yield ]3.1 11.3 13.9 13.9 14.5 13.7 17.2 15.8 17.1 18.1 16.2 Cotton: Area 19 30 28 21 30 46 38 40 54 40 56.05 Production 135 214 234 281 445 669 704 782 863 650 912.0 Yleld 7.1 7.1 8.4 13.3 15,1 14.7 18.3 19.6 16.0 16.3 16.3 S ar Cane: rea' 7.1 6.1 6.7 7.2 6.3 6.1 6.8 7.0 7.0 7.0 7.4 Pllduction(suw 573 591 672 658 7514 776 995 931 994 1,036 1,082 Yield 80.7 96.8 100.3 91.>4 119.6 127.2 16.3 133.0 142.0 1>48.0 146.2 1 Area in hectares of 2.>47 acres; Production in quintals of 46 kilograns each; yields are in quintals per hectare. g/ Preliminary Source: Office of Statistics and Census. TABLE 9 Production of Selected Industries, 1951-1960 (million colones) Food & non- Liquors Textiles Cement & Alcoholic and and Cement Year Beverages Beer Cloth Products OthersA Total 1951 14.4 11.8 14.9 1.0 23.7 65.8 1952 10.5 17.5 11.5 1.0 27.5 680 1953 12.5 18.8 14.4 3.8 28.6 78.0 1954 13.0 16.6 17.7 6.4 28.0 81.7 1955 14.9 19.0 13.5 6.5 34.3 88.2 1956 27.0 19.1 13.5 7.0 37.8 104. 1957 34.7 22.2 18.9 8.3 41.5 125.5 1958 30.7 18.4 20.3 8.5 42.7 120.5 1959 28.5 16.4 20.2 7.8 43.3 116.2 1960 28.9 17.9 29.3 8.1 45.0 129.2 /1 Includes soap, vegetable oil, cigarettes and henequen products. Source: Office of Statistics and Census , TABLE 10. Extraction of Precious Metals- Salt and Line, 190L-1960 Years GOLD SILVER MINERAL SALT LIE (troy ounces) (troy ounces) ('000 metric tons) ('000 metric tons) 1945 11,397 221,143 18.3 6.5 1946" 21,808 291,688 69.2 9.3 1947 10,755 285,893 16.7 13.5 1948 20,77( 8 216,342 21.57. 1949 27,090 280,310 22.5 11.1 1950 29,460 499,174 23.6 6t6 1951 24,666 362,063 24.7 8o8 1952 25,732 349,181 27.7 4.1 1953 19,934 348,328 29.1 3.5 1954 5,325 256,772 37.7 4.6 1955 3,817 230,053 48.5,, 4. ] 1956 2,983 161,475 49.9L-L 4.3 1957 2,508 172.305 50.7A1 - 1958 2,400 193,586 52.41 - 1959 2.70 200.L60 SL.31 - 1960 1,100 76,809 56.2L - S c Ofe o , f- Scns d Source: Office of' Statistics and Census,"Bu2lletins and Annual TABLE]D:Building Construction, 1950-1959 Permits Estimated Value San Salvador only: (millicn colones) 1950 377 14.9 1951 271 12.3 1952 344 11.5 1953 345 13.3 1954 384 13.1 1955 328 11.4 Entire Country: 1956 565 29.1 1957 1,075 32.5 1958 979 20.6 1959 909 24.1 1960 1,103 29.1 Source: El Salvador Statistical Yearbook. TABLE 12: Investment in Industrics Ot.ining Bcnefits cf -Lnu str ia evelpetL'c, 1992- Lk7z0 Declared Investment Number of Number of Annual Curiulative pearE Employees (million colones) 1952 4 2,400 h.8 4.8 1953 26 3.700 1.7 19.5 195h 28 3,100 21.5 L1.0 1955 21 1,10 5. 6.2 15362,hO0 18.1 6. 1957 2 1,100 6.1 70. 1958 20 500 557. 1 1o6 1 ,nn 10 9 o) -196$ 27 2,1 D0n 78.n 17290 /i Preliminary. Ministry or Economy, Source: Department of Economic Promotion. T1L,E '3: Grcs Dmestic Ir.vestment, 1950-1958 (million colones, at 1950 prices) Year to Sources of Financing Type of Investment Year Toal Chare Du 1ic P c Construction Machinery Other 1950 96.1 18.3 21.h 74.7 77.7 h3.4 36.7 16.0 1951 112.5 17.0 26.5 84.0 74.6 43.1 50.6 18.8 1952 105.2 - 6.5 32.0 73.1 69.5 41.9 45.7 17.5 1953 117.4 11.6 36.6 80.8 68.1 53.7 hh..1 19.6 1954 149.7 -27.5 31.7 118.0 78.8 67.9 56.9 24,.9 1955 171.1 14.3 20.6 150.5 88.0 77.8 64.8 28,.5 1956 196.9 -15.1 23.9 176.0 89.4 90.2 74.4 32.3 1957 208.2 5.7 27.0 181.2 87.0 106.2 67.2 34.8 1958 , 220.7 6.0 35.2 180.7 81.8 108.9 73.6 38.2 1959a0 130.9 -o.7 43.3 87.6 66.7 58.6 72.3/ - a/ Current prices. Includes wachinery and other. Source: Ministry of Economy, TABLE 1Balance of Payments, 1953-1958 Yillion colones)- 1953 1954 1955 1956 1957 1958 1959 1960 A& Current Transactions and Donations 21.7 22.4 5.1 15.1 7.3 4.7 1.5 -69.1 Exports f.o.b. 235.1 261.5 266.2 307.3 317.7 295.0 279.5 256.5 Imports c.i.f. 2/ -185.9 -217.3 -230.2 -:262.1 -288.0 -270.8 249.3 306.5 Trade Balance .2 E47 36. 1. 2'9.7 24.2 30.2 -0.0 Foreign travel (net) - 15.5 - 16.6 - 21.6 - 19.4 - 17.6 - 8.9 - 12 9 -10.0 Investment income (net) - 6.1 - 6.5 - 6.6 - 6.7 - 6.2 - 8.3 - 9.0 - 9.8 Other services - 7.5 - 0.2 - 3.9 - 6.5 - 1.7 - 4.2 - 8.3 - 1.9 Donations 1.6 1.5 1.2 2.8 3.1 1.9 1.5 2.6 Total Services and Donations - 27.5 -2-l . - 30.9 -297 -22 -_19. -2. 7 -19.1 1. Capital Transactions - 3.2 - 14.0 - 16.0 5.3 - 0.4 4.7 - 1804 9.1 Private long-term capital (net) - 6.9 - 11.9 - 10.9 - 4.h - 4.3 2.0 - 7.4 3.2 Private saort-term capital (net) - 5.8 - 1.0 - 2.9 2.3 - 5.1 1.0 - 7.2 Official loans received 10.7 1.7 0.9 9.6 10.9 5.0 1.2 5.6 Official repayments - 1.2 - 2.8 - 3.1 - 2.2 - 1.9 2.3 - 5.0 - 5.1 Other - - - - - 1.0 - - 4.0 0. Net Errors and Omissions - 18.1 - 1.9 - 4 .3 - 288 9.3 8.7 - 8.0 5.1 Total (A through C) 0.4 6.5 - 15.2 - 8.4 16.2 0.7 - 24.9 -54.9 14onetar movements Net IMF-positi -i- 6.3 - 9.6 - 11.4 14.4 Banks' short-ten liabilities - 1.2 3.0 0.9 - 1.7 3.9 12.1 15.5 Banksr portfolio securities On.crease- 6.9 - 4.7 0.6 0.7 0.9 1.4 1.3 2.6 Bank's short-term assets (increase -) 3.7 - 3.9 10.8 - 0.3 2.3 - 6.l - 2.4 21.3 Monetary Gold (increase - ) 0.8 0.9 o.8 0.8 - 8.3 0.1 2.5 1.1 Total - 0.4 - 6.5 15.2 8.4 - 16.2 0, 7 24.9 54.9 No sign indicates credit; minus sign indicates debit. 2/Includes non-monetary gold. Source: IMF, Lalance of Pay-ents Yearbock. Table 15 EXPORT EARNINGS, 1951-1961, 1965 1951 1952 1953 1954 1955 1956 1957 195 1959 1960 1961 1962 1965 DFFEE Volume in 1000 p. of 69 kg. 942.2 972.2 943.5 891.1 1008.9 927.0 1206.2 1166.9 1202.7 1297.1 1071.5 1o9.0 1200.0 Unit price 80.7 79.8 81.2 103.2 90.13 9h.3 90.3 72.1 59.3 59.1 57.4 51.h 50.0 Value (idjnions dollars) 76.0 '77.6 76.6 92.0 91.6 87.4 109.8 84.1 71.3 76.7 61.5 57.0 60.0 ¢ per poimd 53.1 52.5 53.4 67.8 59.7 62.0 59.4 47.4 ho.o 38.9 37.7 33.8 Co'ION Volume (mi11ion kg.) h.05 7.h2 9.h9 9.07 13.92 29.57 27.15 32.46 L7.2:1 30.L? 37.05 54.5h 68.20 Unit Price ($ per kilo) 3..01 0.71 .67 0.72 0.65 0.59 0.58 0.56 0.19 0.52 0.55 o.55 0.56 Value (millions dallare) 4.1 5.3 6.4 6.5 9.1 17.6 15.8 18.1 23.2 15.8 20.4 30.0 38.0 Ol'HFE E XPORTS Value (million dolars) 4.5 3.2 5.8 6.5 6.2 7.7 12.9 13.8 18.9 24.1 - - 40.0 TOTAL EXPORTS Value (illions dollars) 8.6 86.1 88.8 105.0 106.9 112.7 138.5 116.0 113.4 n6.6 - - 138.0 Annual Rate of Change - 1.8 3.1 18.2 1.8 5.4 22.9 -16.2 - 2.2 2.8 - - In % of Total Iport Value: COFFIEE 89.8 90.1 86.3 87.6 85.7 77.6 79.3 72.5 62.9 65.8 38.0 )TTON 4.8 6.1 7.3 6.2 8.5 15.6 11.14 15.6 20.5 13.5 24.0 of__. 5.4 3.7 6.5 6.2 5.8 6.8 9.3 11.9 16.7 20.7 38.0 2ource: Centri B-ank TAELE 16: R,-gicnal Eala'ce ofPaymn ts 1957-1961 (million colones) I M P O RT S E XPOR T S Country 1957 1958 1959 1960 1961 1957 1958 1959 1960 1961 Jan.-July Jan.-July America 186.o 173.6 16o.3 183,4 9>.5 177.2 138.7 13.0 134.8 82.7 Canada ~E.2 ~~7. ~2. 2.0 2.3 5,9 1.0 03 Colombia 1.2 1.1 0.7 0.4 0.1 - 0.2 -- - United States 148.3 130.6 1io.4 131.2 65.9 158.2 115.2 100.7 102.4 61.6 Guatemala 6.2 7.6 10.7 13.0 9.4 5.9 7.4 10.4 15.2 10.2 Honduras 12.4 15.7 16.2 15.7 9.7 5.9 8.6 10.1 9.9 6,7 Mexico 5.3 5.0 4.3 5.1 2.5 0,2 - 0.1 0,2 - Nicaragua 2.1 1.9 3.0 3.5 1.1 2.9 2.9 4.2 3.6 1.7 Panama 2.1 2.9 2.4 2.7 0.5 0.1 0.1 0.2 0.4 0.2 Venezuela 1.4 1.8 3.3 3.3 1.4 - 0.1 1.0 0.1 - Other 2.6 2.5 3.8 3.3 1.1 1.8 7.7 1.8 2.0 1.8 ASia 16.9 13.2 12.2 22.6 12.2 17.3 31.7 42.2 34.2 - Japan T.7 13.1 12.1 22.3 12.2 17.3 31.7 2.0 ~33 - Other 0.2 0.1 0.1 0.1 - - - .2 .6 - Europe 84,.4 82.4 75.5 98.7 55.9 15146 119.6 107.1 122.0 8648 Germany 22.9 25. 21.9 31.3 -î¯6~. l.7 ~91~. 79.1 97.2 72.,7 Belgium 13.1 8.9 7.1 11.5 6.9 7.0 5.2 3.5 4. 4 2.2 Denmark 1.0 1.6 1,7 2.3 1.3 0.3 0.7 1.7 2.2 1.1 France 4.6 3.1 4.4 4.9 2.1 10.9 1.2 3.3 0.5 0.1 Great, Britain 13.,4 11.9 10.0 12.3 6.9 4.6 3.0 4.5 1.6 0.2 Holland 17.-7 19.0 17.9 20,.8 14..5 12.8 6.9 7.9 7.3 5.9 Italy 4-.5 4.1 5,2 6.7 3.1 5.6 5.4 4.8 2,2 1.5 Sweden 2.3 3,1 2.3 2.2 1.0 3.9 2.1 1.8 3.9 2.4 Switzerland 2.5 3.2 2.,5 ... 2.2 0.7 0.7 0.3 - 0.6 Other 2.-4 2.1 2.5 6.7 1c3 1.0 0,3 0.2 2.7 0.1 Others 0.4 0.9 0.9 1.3 1.0 0.2 0.1 0.1 1.0 0.1 TOTAL (colones) 287.6 270.1 248.8 306.0 163.6 346.2 290.1 283.4 292.0 206.9 TOTAL (dollars) 115.0 108.0 99.5 122.4 65.4 138.5 116.0 113.4 116.8 82.8 Trade Balance (dollars) - - - - 23.5 8.0 13.9 -5.6 17.4 Source: Central Bank. TADLE 17: Tctal Expcrts and Volume ad Vlue of F-rincipal E)porte, , 1950-1960 COFFEE COTTON Value Volume Value Vol-ume Value oflo % of total Year million Thousand sacks million million Tptal Exports export value colones of S9 kg. colones kg i million colones Coffee Cotton 1950 154.5 992.2 6.5 4.2 173.8 88.8 3.7 1951 190.1 942.2 10.2 4.0 213.8 88.9 4.7 1952 194.0 972.2 13.2 7.4 220.7 87.0 6.0 1953 191.5 943.5 16.0 9.5 224.0 85.5 7.1 1954 230.0 891.1 16.3 9.1 262.6 87.0 6.2 1955 228.8 1,008.9 22.8 13.9 267.3 85.6 8.5 1956 218.4 927.0 4L.0 29,6 281.8 77.5 15.1 1957 274.6 1,206.2 39.6 27.1 346.2 79.3 11.4 9 210.3 1,166.9 4,.2 32.5 290.0 72.4 15.6 1959 178.2: 1,203.2 58.0 47.2 283.4 162.9 20.5 191.7 39.4 292.0 65.7 13.5 1/ The export values in this table differ from those shown in other tables, in that coffee exports are calculated on basis of market prices while elsewhere they are based on the exporters' declara- tion to Customs. Sou.rce: Central Bnk. TABLE:8:Cc asition of Imports, 1953-1961 millin colones) 1953 195h 1955 1956 1957 1958 1959 1960 1961 Jan-June 1. Food products and live animals 29.8 35.8 33.7 39.4 36.2 41.6 42.5 43.2 20.0 As percentage of total 16.2 16.5 l.7 15.0 12.6 15.4 17.1 14.1 14.3 2. Beverages, tobacco and non-edible 10.1 11.1 l0.4 10.9 11.0 10.1 9.2 0.4 4.8 raw materials (except fuel) 5.5 5.1 4.5 h.2 3.8 3.7 3.7 2.8 3.4 As percentage of total 3. Manufactured goods (except machinery and equipment) 74.6 88.2 90.9 98.6 111.3 98.5 87.6 111.4 52.4 As percentage of total 40.6 4o.7 39.5 37.6 38.6 36.5 35.2 36.4 37.3 4. Machinery and equipment 37.2 42.7 51.5 58.9 65.5 60.1 51.7 78.1 32.8 As percentage of total 20.3 19.6 22.4 22.5 22.8 22.2 0.8 25.5 23.4 Of which: for agriculture 6.0 5.5 6.5 4.9 4.5 for industry 2h.6 31.6 31.0 26.2 21.7 for-transportation 16.1 17.3 19.2 17.8 22.2 5. Ful and mineral lubricants 12.5 13.9 13.8 16.7 18.7 18.3 17.8 18.4 8.7 As percentage of total 6.8 6.4 6.0 6.4 6.5 6.7 7.2 6.0 6.2 6. Chemical products 19.3 25.1 29.5 37.3 44.8 K1.6 39.9 46.5 21.6 As percentage of total 10.5 11.6 12.8 14.2 15.6 15.4 16.0 15.2 15.4 Total imports 183.5 216.9 229.7 261.8 287.6 270.2 248.7 306.0 140.3 Annual rate of change 18.2 5.9 14.0 9.8 -6.1 -8.o 2:3.0 Source: Office of Statistics and Census TABLE 19 Coposition of Exports, 1955-1960 (thous.nd coLonus) 1955 1956 1957 1958 1959 1960 Soluble coffee - 1,851 9,861 3,1.5 12,435 10,726 Unrefined sugar 62 103 486 338 119 1,960 Refined Sugar 666 354 1,133 2,3 2,302 1,481 Sugar Candies 186 218 352 725 .1,099 1,023 Shrimp 25 37 116 666 1,985 12,051 Eggs 297 373 172 271 806 999 Fresh fruits 59 170 200 591 928 980 Margarine 11 62 59 163 636 807 Vegetable shortening 291 152 788 380 553 1,077 Cotton seed oil 833 1,424 2,558 1,197 .1,219 2,195 Cotton seed oil, flour and 1,452 2,291 2,970 2,374 3,126 3,069 cake Cotton fibre and yarn - - 29 355 1,661 3,106 Common cotton fabrics 157 13 503 496 871 2,163 Sesame seeds 1,929 1,478 1,338 1,662 1,535 790 Perfumes, soaps, cosme- .5" 378 753 1,246 1,56 951 tics, etc. Balsam 357 274 h97 526 628 610 Insecticides, fungicides, disinfectants 44 81 88 110 547 1,360 Cafe Oro 228,829 218,379 274, 582 210,229 178,187 191,687 Ginned cotton 22,823 43,985 39,583 45,233 57,953 39,434 Other 8,771 10,202 10,091 12,960 15,215 15,534 TOTAL 267,327 281,827 346,.159 290,057 283,32 291,981 Source: Office of Statissitt-d Gensus. TABLE 20indices of Volume and Prices of Exports and Imports, 1950-1959 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 Volune of' exports 100 95 98 100 93 110 115 142 143 167 Coff ee 105 100 102 100 94 109 98 126 123 129 Cotton 45 43 78 100 97 143 321 292 345 509 Voluie of imports 76 86 96 100 120 130 141 154 1h6 143 Export prices 89 101 100 100 125 109 110 109 91 74 76 Coffee ö89 97 100 100 127 110 117 114 93 75 Cotton 90 148 108 100 105 99 85 85 82 72 Import prices 88 101 99 ico 98 97 101 102 101 95 95 Terms of trade 101 100 101 100 128 112 109 107 90 77 80 Sour'ce: f> Internatienl Finan eiédl'Sta.tistics. TA2LE 21: Stabiliz,tion Credits 1961 (million dollars) January February March April May June July August September October November - drawn 11.25 11.25 11.25 1.25 11.25 9.25 5.00 5.00 6.00 7.00 7.00 - balance - - - - 2.00 6.25 6.25 5.25 4.25 4.25 Federal Reserve Bank of i.Y. 9.00 9.00 8.00 5.00 4.00 1.00 - - - Chase Manhattan Bank 1.00 1.00 - - - - - - Bank of America 1,00 1.00 1.00 1.00 1.00 - 3.00 3.00 3.00 3.00 3.00 U.S. Treasury - drawn - - - - - - - balance - --- - 6.O00 Export-Import Bank - drawn - - - - - - - 6.00 6.00 - balance - - -- - - - 4.,00 4.00 Total Drawn 22.25 22.25 20.25 17.,25 16.25 10.25 8.00 8.00 9.00 16.00 16.00 Source: Central Bank. TAELE 22: uiblic Internal Eti, 1952-1961 (million colones) D e c e m b e r 31 Sept. 30 152- 1953 19954 1955 1956 5957 195 1959 1960 1961 Is sues, C.E.L. bondsjL 12.5 15.0 18.0 17.9 23.2 23.6 22,3 20.8 19.3 17.8 Treasury notes 10.0 9.4 9.5 10.0 4.0 4.0 4.0 1.6 - - Valle de la Esperanza bonds - -- 7.3 7.9 7.6 7.2 6.9 6.6 CEPA bondså - -_ 7.2 13-h 16.9 18.3 2L 7 29.7 TOTAL 22.5 214. 27.5 27.9 41.7 48.9 50.7 47.9 50.9 54.1 Bondholders Governnent and official institutions 12.2 12.9 16.4 12.9 17.2 13.4 17.3 16.3 13.7 16.7 Banco Central de Reserva 3.6 9.6 4.0 5.6 9.3 19,3 15.8 15.1 15.2 15.0 Commercial Banks 2.0 2.0 1.9 1.8 3.2 2-7 2.3 2.8 4.6 4.3 Others 4.7 - 5.2 7.6 12.0 13.6 15.3 13.9 17.h 18.1 /1 Bonds of C.E.L., most of which have been in the hands of the Government, Official Institutions and the Central Bank. /2 Held by Central Bank and Government Institutions. /3 Bonds of the Acajutla Port. Commission., Source: Central Bank. TABLE 2I: S6lected Indicutors of PrivLte Savingsy 1950-1960 (million colones) End of Year 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 / Holdings by the Public Savings deposits in commercial banks 1.8 1.9 1.6 2.6 3.3 4.8 8.7 Mortgage bank bonds 13.3 18.2 19.0 20.5 26.7 42.1 55.4 65.5 69.5 78.0 80.0 CELbondsh/ 2.9 3.4 3.6 4.1 4.5 4.8 4.6 4.6 4A. 3.9 3.8 CEPA bonds.3 - - - - - - 5.7 9.0 10.3 10.0 10.0 aAs of March 31, 1960. /2 Rio Lempa Commission. /3 Acajutla Port Commission. SJouce: Ce[ntral. BankI. TABLE 2h: International ReServes, 1955-196J. (mril]liozn dýllars) C e ri t r a 1 B a n k O t h e :r B anks Barking system Grold and Foreign Foreign Net Foreign Exchange Net Exchange net f oreign Exchange Reserves Liability Reserves Assets Liabilities Reserves reserves 1955 38.7 2.2 36.5 5.9 0.2 5.7 42.2 1956 38.6 5.0 33.6 5.5 0.2 5.3 38.9 1957 39,8 0.11 39.4 6.4 1.2 5.2 hh.6 1958 37,.8 2.5 35.3 :..2 l06 9.6 h.9 1959 March 38.2 - 38.2 12.9 0.9 12.3 50.2 June 43.9 - 43.3 12.8 0.5 12.3 56.2 Sept. 34.7 2.1 32.6 7.5 1.0 6.5 39.1 Dec. 37.7 12.7 25.0 9.2 0.9 8.8 33.8 196D March 41,.9 3.2 38.7 8.7 0.9 7.8 46.5 June ho.6 2.2 38.h 6.1 1.2 h.9 43.3 Sept. 34.1 5,0 29.1 3.6 2.0 1.6 30.7 Dec. 33.0 22.0 12. 0 h.h 3.9 3.5 12,5 1961 March 32,2 Z0.3 11,9 3.8 2.3 1.5 13.h June 23.8 10.2 13.6 h1 2.5 1.6 15.2 Sept. 9.0 12.C 2.7 2.0 0.7 12.8 Dec. * 11.1 16.0 3.1 3.1 - 16 1 SFo]l'owi:ng draiwing of 6 million on the 7-year Eximbank balan2ce of payments loean. Soxrce: Central Bank , A2 25 : Fiscal Revrues -nd Other T 2 arm , 1956-1960 (thousand colones) 1956 1957 1958 1959 1960 1. Taxes 157.776 175,571 153.h89 141.067 15h.636 On Imports 59,035 t3193 59,373 ý8:365 69;3T On Exports L3,503 5h,573 35.93 24,801 26,.298 Other Taxes 55,2h3 57,805 58,663 57,901 52,501 2. Sales of Merchandises and Products 1,729 1673 1,612 1,560 6 3. Ser ice. 6,n56 65 6,55 r, 620 7, 37 . Duties, Licence 3ec ,6 ,457 2230 5. Other Revenues 2,618 3,356 3,553 h,737 REVENUES 170,639 189,509 167,701 156,670 170,546 6. Other Incones 292 1,915 983 318 438 SUB-TOTAL 170,931 191,2, 168,64 156,9P 170,9P 7. Adjustment for non-Cash Receipts (1) 3,154- 3,055- 1,599- 0,402+ 2,265- TOTAL 167.h66 188,369 167,085 157,390 168,719 PUBLIC EX=NDITWRES 1. General AA ni i nr ant in i92, i89 9r9, ,r, C , 107, 66rv1 r 16 2. uapital (Equipment & Property) 19,357 22,870 18,141 11, 411 10,505 3. Subsidies and Other Transfers to Government Institutions 30,ho5 33,662 31,434 28,h29 26,585 4. Pensions and Social Security Contribution 5,311 5,910 6,537 7,156 7,766 5 ). Pu1c De 3 0 3 T1^ I-L3,973 7,038 7,19 9 . i U U-.Lu11C4u_)TU UJU .5144 I - ,u y 6. Other 1,948 3,810 4,13 3,587 1.61 SUB-TOTAL 152,970 169,033 169,893 165,282 161,211 7. Expenditures during the year but applicable to previous years' budgets (2) 23,163 11,411 10,491 14,t07 5,514 TTL 176,3 1 80 Rn,k 18Rnn,38 180,n089 169,725C 8. Surplus or Deficit -8,667 7,925 -13,299 -22,699 -1,006 (1) The net cLan,e in accounts receivable at the end of year wt Versed S-igl. (2) ..xpenditures a.plicable to previous years' Budgets not included in (1) to ( ). Source: O entral BanK. nAzL 26 : ~~~~rnment ~~ evnus «1901961. UIUDuLIsnL coLUes) Jan.-Sept. Jan.-Sept. 1960 1960 1961 on Imports 69,834 51,331 43,554 on Exports 2629 23,28 19,A053 ný- Other Taxes 58,504 h6,893 49,404 Sales of Merchandises and ro duc ts ,78u 6L1 fl s --~é, jr-0n r,0os - , Servicees 7,3 95,53-)9 u,45> Duties, Licence Fees, etc. 2,308 1,787 1(84 Other Revenues h,657 3,855 3,793 REVENtjES 170,546 133,628 124,u7 Other Incomes h38 n.a. n.a. SUB-TOTAL 170,984 Adjustment for non-Cash Receipts 2,265 TOTAL 168,719 'i This figure represents the net chlange in balance of Accounts Receivaule. Source: Ministry of Finance. MnT 7 97 - arTrnn+ V.yncnri tr. P An and 1961/-1 1960 1960 1961 1 "e L AA 4+4- -I7 cfiA 70 7A Rn 01l 2. Capitalr a une year ouA 6,f TotIPL al Expenditures (cashI bais 169,726yVi.jLL - 1 12,6 13,'b- 8. PoIsin for payent to) be made O..LU-±U z: V V')- .1 J7 ./L & C 47L+ 4. -4U1jLJ JO1 ttllU OUL-Lc-Lt. u d UJ.Y I V% IC7.W r' - -ht 1 2 - -- £ t, . ruu rerU lj eouutstanding Uo. U T'ler Lp U4._____ . Expenditures during the year but applicable to previous Budgets 8,515 8,o6 11,075 Total Expenditures (cash basis) 169,726 125,563 p32,r o5 8. Provisions for payments to be made. Amount represents outstanding balance at the end of year or period 13,050 15,433 13,656' 9. Cash expenditures and provisions for payments 182,776 140,996 146,101 L.Refers to numbers (1) to (6) figures, which correspond to cash expenditures of the current Fiscal Year. In order to obtain the total cash expenditures during the year, number (7) has to be added as shown. Source: Ministry of Finance. TABLE 28: Ccntr.al. Go,v.rnýmcni t pnit byuros, 1954-1960 (million colones) A e t u a l 1954 1955 1956 1957 1958 1959 1960 General Administration 44.4 46.3 43.6 57.2 59.5 56.2 48.2 Defense 19.4 16.4 15.9 18.1 18.1 15.6 15.3 Social and Economic Development (a) Agriculture, public works, econom,ic development 29.,7 30.5 35.3 33.5 28.9 25.8 26.4 (b) Culture, health, social welfare 44.2 37.3 41.0 43.5 45.0 45.5 48-5 (c) Pensions, social security 11.6 12.7 13.8 13.1 14.4 15.2 15.6 Public Debt Service 4.7 10.2 3.4 3.6 4.0 7.0 7.2 TOTAL 154.0 153.4 153.0 169.0 169.9 165.3 161.2 In Percent of Total Genera.l Admainistration 28.8 30.2 28.5 33.8 35.0 33.9 29.9 Defense 12.6 10,.7 10.4 10.7 10.7 9.3 9.5 Jocial and Economic Development (a) Agriculture, public works, economic development 19.3 19.8 23.1 19.9 17.0 15.6 16.4 (b) Culture, health, social welfare 28.7 24.,3 26.7 25.7 26.5 27.5 30.1 (c) Pensions, social security 7.5 8.3 9.1 7.8 8.4 9.2 9.7 Pubkic Debt Service 3.1 6.6 2.2 2.1 2.4 L4.2 4.4 TOTPI 100.0 100.0 100.0 100.0 100.0 100.0 100.0 SourCe: Central Bank. TABLE 29: Contr:.1 Govurrnant Cc.sh Revenues =ad Expeiitures, 1956-1961 (million colones) EndAo APero -I4- Oct 10C7O 1 Tor,O -i0oA IoAl Est imat e Government Revenues 167.5 188.4 167.1 157.4 168.7 160.0 Government Expenditureli 176.1 180.4 180.4 180.1 169.7 180.0 Surplus or Deficit -8.6 8.0 -13.3 -22.7 -1.0 -20.0 Government Cash Balances with the Banking System 48.9 64.0 44.7 17.0 15.8 LI Tnr-1iir.- fjh+b mm -j7 i. ou e~ W Centra EaIZ-1. Table, 30FACToRS OF EXPANSION AND CONTRACTIoN OF MONEY SUPPLY, 1950 - 1960 (million colones) Entd of Set 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1960 196b I. Net International Reseirvegiv in 2109.81 ELL I.kL 16.2 l2.6 11L 2W,o 3i(.S &1.2 lk Central Bank 9 • 95. 105.2 103.0 1,0 .1 90.0 83.7 100.0 90.7 67.9 35.1 78.0 35.8 other Banks 4 4.1 6.5 6.9 11.3 14.2 13.1 13.0 24.0 22.0 1.4 4.0 1.8 II. Net operationa of Central Bank 22.6 LLj. J..A å.A 109.Z 106l 9.M 23.5 Z2_W D.6 Loans and investmenta 7.0 27.7 40.3 42.2 0,8 87.5 114.IL 112.2 95.4 100.5 124.0 80.1 99.0 Other assets 1.0 1.4 1.2 2.5 6.5 6.6 6.8 7.4 9.7 9.8 11.1 11.9 14.9 Ninus: Non monetary liabilitiea 6.4 6.6 7.3 8.5 8.9 10.2 12.0 12.9 13.2 16.9 16.0 18.4 19.14 Net operations of other banks 23.0 8.h 30.3 IWI 42.6 _41 60 o e1._0 2.0 hI.5 55.1 5. 41.7 Loans, disaconta & investmenta 85.1 9.3 1>. 6 118.0 1:~3 205.5 25"6 291.1 2 ~ 309.4 37.9 317. 321.1 Other assets 8.4 8.0 8.7 11.14 12.2 15.3 18.5 20.9 24.8 29.0 34.9 31.1 38.4 pinus! mon monetary liabilitiesa2/ 70.4 78.0 85.1 90.:3 123.4 173.4 217.2 251.1 268.5 297.0 337.7 298.3 317.7 IV. SWbaidiary coin 5.6 6.6 6.6 7.3 7.4 7.8 7.8 7.9 7.9 8.1 7.2 72 V. Government Deposite wiLth~ Central :14.4 11.2 16. 15.. 34.9 44.7 k8.3 62.7 43.9 16.4 5. 21. 8.1 MNET SUPpu (I+II+IxIIIv-v - VI+TEI) l 14. 168.2 176.0 1 1 i 225 2.3 12~3 216. 20. _- VI. Currency in cireclation ~ ~~.2 ~2 Currency outoide Central Bank 78. 87~6 l" 102.14 12.31 .6 117.9 n18. in.2 13.8 109.2 99.1 95.2 Minum Currency in other banka 2.6 3.6 4.7 5.1 7.1 6.3 7.7 10.5 li.6 13.4 11.0 11.7 10.7 VII. Sight depositsy .8 6Lg 72.0 78.7 B7.7 99.8 115.3 117.8 113.0 '6.1 1.05.1 104.1 88.3 In Central Bank :12.9 15.5 I .o 12.5 9~ 10~9 13.6 1.2 10.~ ~ 13.4 12.9 -13 1~. In other banke 39.9 45.7 56.0 66.2 78.5 88.9 101.7 106.6 102.2 102.7 92.2 90.7 76.5 Net imternational reserves of the Central Bank incýlude nøt holdings of gold and foreign exchange plus nøt participation in D. International reserves of other banks constitute their net holdings of exchange and short-tern foreign investments. 2 Mainly bonds in circulation, foreign exchange deposits, long-term and saving deposits in colones. Excluding deposits of Government and official institutions. Source: Central Bank Table 31: SUMMAR! ACCOUNT OF THE BANKING SYSTEM OF EL SALVArOR, 1957 - 1961 (milli,ns colones> Fnnma SECTOR D 0 M E S T I C C R E D I T S OTHER T 0 T A L MDNErY LIABLILITIE3 NR MONETARY LIABILITIES Aet " I rs MEe Ent To Pri,atc TÖTL ASSETS, ASSETS . Currency DemMand asUpitA. CredItepoite-) et Credi Bator CREDIT NET Liabilities in C1 i Deposits TOTAL Tota Moey Bande Acotåg. 11.- ber n5. 4.0 i1.5 34.1 -66.3 -32.2 292.1 859.9 11.6 363.0 107.5 ?17.8 225.3 157.7 37.2 81.9 38.6 - narab 125.7 0.8 124.9 31.0 -66.9 -35.9 294.9 259.0 13.8 397.7 102.8 128.2 231.0 166.7 43.8 83.3 39.6 Jkna 130.6 2.1 128.5 29.5 -69.5 -40.O 282.3 242.3 15.2 386.0 914.8 1187 213.5 172.5 147.8 85.0 39.7 stber 111.7 9.6 102.1 28.6 -56.3 -27.7 280.4 252.7 16.7 371.5 88.7 108.0 196.7 174.8 49.4 84.2 41.2 Decemb.r 120.0 7.9 112.1 29.9 -46.0 -16.1 284.6 268.5 16.8 397.4 99.6 113.0 212.6 184.8 55.0 88.6 l41.2 - Marah 127.6 2.4 125.2 28.3 -4.0 -15.7 275.7 260.0 20.0 405.2 92.6 119.1 -212.0 193.2 62.0 88.9 42.3 .len 141.8 1.4 140.4 28.6 -42.3 -13.7 259.3 245.6 18.7 404.7 87.5 110.1 197.6 207.1 71.6 93.2 42.3 September 1135.4 7.7 97.7 29.5 -28.4 1.1 279.7 280.8 18.9 397.4 83.4 103.8 187.2 210.2 73.4 93.5 43.3 December 118.7 24.1 84.6 29.4 -18.1 11.3 310.5 321.8 18.5 2142.9 100.4 116.1 216.5 208.14 75.6 89.6 43.2 March 126.7 10.3 116.;4 29.5 -29.6 - 9.1 306.5 306.11 18. 441.2 914.5 127.0 221.5 219.7 86.2 88.5 45.0 Jine u6.8 8.5 108.3 29.9 -32.0 -.1 304.4 302.3 18.6 429.2 88.5 113.2 2,01.7 227.5 90.2 92.8 44.5 September 94.2 17.5 76.7 29.4 -23.6 5.8 315.0 320.8 20.1 hr?.6 87. 104.1 191.5 226.a 85.9 94.4 45.8 December 93.7 62.8 30.9 31.3 -16.7 114.6 358.9 373.5 2h.2 k28.6 98.2 105.1 203.3 225.3 83.0 96.5 45.8 m1 March 90.0 56.8 33.2 31.0 -21.0 10.0 362.3 372.3 26.5 432.0 914.2 106.8 201.0 231.0 89.0 95.6 46.4 !69.8 31.8 38.0 33.7 -15.9 17.8 336.9 354.1 22.6 415.3 85.7 109.3 195.0 220.3 80.9 93.7 45.7 September 59.k 27.5 31.9 30.9 - 9.4 21.5 332.5 344.o 27.5 03.4 84.6 88.3 172.9 230.5 95.1 88.7 46.7 &treet Centrmi Bank