Leadership travels to Washington, DC to garner support for sustainable development and rural growth strategies.
By Nathan Weller, Program and Policy Director
Last month, EcoViva and leaders from El Salvador traveled to Washington, D.C. to discuss the future of El Salvador’s coastal zone. We met with House and Senate leadership, the State Department, federal agencies, and members of the international NGO community. The trip was a response to local communities’ concerns and questions about a new round of impending foreign aid destined for El Salvador, and a follow-up to our Congressional outreach and Briefing last year on the Hill.
In meetings, we highlighted the importance of local communities taking a lead role in development to help improve this aid, and the necessity for future investments to build off the existing, successful initiatives in the region. We also stressed the need to prioritize social and environmental safeguards and their application in new, unprecedented levels of private sector growth to be spurred on by the Millennium Challenge Corporation (MCC).
Come September, the United States government and the MCC will likely approve an aid package designed to spur economic growth and foreign direct investment in El Salvador. So far, this package consists of $277 million in U.S. taxpayer money over the next 5 years, focusing primarily on economic growth in the country’s rural coastal zone.
Through this 5-year “compact”, the MCC will invest in improved transportation infrastructure, and greater access to education and professional training programs. The MCC will also support several targeted private sector initiatives that contribute to El Salvador’s development goals—substantially multiplying the $U.S. $277 million investment. Overall, the funding is designed to reduce poverty by expanding the country’s export sector, guided by foreign policy overseen by the Obama Administration’s Partnership for Growth initiative.
Completely by coincidence, a separate delegation comprised of members of the Funes administration and Salvadoran private sector was also in Washington. Their trip was primarily to demonstrate a strong linkage between the Funes administration and the Salvadoran private sector. Republican members of the House have criticized the MCC of late in hopes of taking this second compact away from El Salvador, and discrediting both a left-leaning government in the region, as well as the Obama administration.
As the compact’s approval is discussed in the halls of Washington, farmers and fishers in rural communities are also discussing its significance, and the possibilities for their participation. For them and local government officials, a thriving Bay of Jiquilisco and its people are the greatest engine for sustainable rural growth along the coast.
Communities are not alone in this view. It is also shared by the current Salvadoran administration, and a cross-section of the U.S. and international aid mission. The Bay’s importance for many stakeholders likely spawns from the thousands of families and hundreds of rural cooperatives that farm, fish and steward Central America’s most prominent coastal ecosystem. Quite simply, the Bay of Jiquilisco, when managed appropriately, likely represents the most cost-effective source of millions of dollars added to El Salvador’s Gross Domestic Product each year.
In the Bay of Jiquilisco area, the Salvadoran government has made rural growth a significant priority. Public expenditures in regional programs on agriculture, education, health, and flood management are at historic levels. These initiatives have succeeded primarily because of the pro-active participation of the local community and productive sectors, which played a key role in execution and oversight. A swath of U.S.-backed agencies, including USAID, the Fund for the Initiative of the Americas (FIAES), the InterAmerican Foundation, the National Ocean and Atmospheric Administration (NOAA), the US Fish and Wildlife Service, and the National Fish and Wildlife Foundation, also invest significant federal resources on local programs in the region.
These institutions rely on organizations like EcoViva and the Mangrove Association to oversee and execute programs that improve sustainable development and rural growth. Each federal institution focuses on what it is good at, whether it’s wildlife conservation, coastal policy, disaster response, or rural development. The MCC is no exception, focusing on economic growth as a strategy to reduce poverty.
During the initial planning phases of the MCC compact design, officials from the Salvadoran administration acknowledged the capacity of local organization in the Bay of Jiquilisco, and specifically reached out to the local cooperatives to understand their needs to spur local growth. Roadways and small scale fishing wharfs were planned, and proposals to improve the farming and fishing sectors were collected.
In speaking with officials in both Washington and El Salvador, EcoViva learned that many of these proposals may no longer be considered eligible for MCC funding. Secondary roadways and wharfs, like those proposed in and around the Bay of Jiquilisco to bring fish and produce to market, are now to be funded through loans from InterAmerican Development Bank , rather than the MCC aid. This implies that the government of El Salvador and its people must incur more public debt in order to support an economic growth strategy that acknowledges the coastal zone’s comparative advantage.
Other proposals, submitted by the local shrimp and farming sector, may not exhibit the appropriate characteristics to garner MCC funding. Unlike the first compact, executed in El Salvador’s Northern Zone, the MCC and the government of El Salvador are focusing their resources on aligning planned investment in public goods like roadways and electricity with substantial private sector capital projects. Based on these requirements, a new hotel that requires energy, a roadway, and wastewater treatment may seem more attractive to the MCC than channeling for a rural irrigation district.
Foreign aid is not a panacea. Every program or package is designed with each agency’s perspective on development, and within their own limitations. The MCC is known for engaging the private sector in development and helping to reform recipient country’s policies to spur growth. This seems particularly relevant in the Bay of Jiquilisco, where for over a decade, the non-government sector has shaped successful rural growth strategies and rural policy, in collaboration with local and national authorities and the U.S. aid mission. However, based on its model for development in El Salvador, the MCC does not appear to consider local development organizations in its definition of the private sector. This could limit its effectiveness by excluding key stakeholders who have been proactive in promoting a sustainable rural economy.
This new round of MCC aid offers unprecedented, new resources toward the country’s long-neglected coastal areas, but also poses significant challenges to El Salvador’s current institutional and regulatory framework—challenges that can be overcome through an engaged and informed civil society.
In Washington, federal officials and Hill staff received EcoViva and our Salvadoran partners openly and with interest. They generally agree with our call that the U.S. should look before it leaps on complex reforms to foster Public Private Partnerships and greater investment along a vulnerable coastline. However, regarding the possible impact and implications of the big things that are on the horizon for El Salvador’s coast and economy, the consistent reply from authorities in Washington was: “let’s wait and see.”
EcoViva and a growing coalition of local and national actors are not waiting around, and will continue conveying the local perspective to officials in Washington as this initiative progresses.
**Updated 7/31/2031- Our partners in El Salvador just received official confirmation that their proposal for a rural irrigation system- submitted by a coalition of local actors that includes community members and locally based NGOs- has been denied. The official reason given was “The zone is prone to flooding and the project is not feasible in this environment.”