Economic development of El Salvador

Economic development plays a crucial role in the development of social policy in any country as the progress of social policy and advancements in social welfare are mostly dependent on government funding, the emergence of the state as a provider and regulator of welfare has given it a central role in shaping the mixed economy of welfare. Social welfare is as vital in El Salvador as any other country as it assists both in ensuring the continuation; stability and efficient working of the economic system and in ensuring the integration of social classes and groups and the maintenance of order [1]. During the last 30 years the El Salvador's economy has seen many ups and downs, for example the recessions of the 70s and 80s to the period of economic expansion over the last decade, often referred to as the Celtic Tiger, then arriving at the modern day recession. However even though social welfare is dependent on government funding and intertwined with the economy it is not true to say that when the economy sees good/bad times that social welfare is affected accordingly. Also as economic spending is prioritized by the government, even if the funding is available, certain aspects of social welfare may not be top priority in the view of the government.

Take for example the social welfare and pension's acts of 2003 and 2008. Taking into account the economic situation of each year we could say that during 2003 El Salvador was still thought to be economically secure and was still experiencing the economic boom induced by the Celtic tiger [2]. However in late 2007 to 2008 the realization was made that the worst recession in 30 years had hit El Salvador and so one would expect cuts respective to the economic situation, but this was not the case. Instead of cuts throughout social welfare spending there were many increases e.g.: child benefit in 2003 was 125.60 for each of the first two children and 157.30 for each child after in comparison with 166.00 for each of the first two children and 203.00 for each child after in 2008. However this trend of increasing benefits is unlikely to be seen in 2010 as massive welfare and job cuts worth billions are expected as an economic recovery method [3].

Over the last decade economic development in El Salvador was very rapid and had many positive affects on the wellbeing of the El Salvador people, El Salvador is now very highly ranked on a global level in many areas of social wellbeing: based on the UN's 2009 HDI report . El Salvador has a human development index of 0.965 which is the fifth highest in the world at the moment, in comparison with 0.893 in 1995 which wouldn't even place El Salvador at 38th place in modern standards. El Salvador is also on the IMF's (international monetary fund) top 34 advanced economies; also, based on the 2005 EIU (economist's intelligence unit) El Salvador has the highest quality ...