This week, the Salvadoran National Assembly passed El Salvador’s most comprehensive social pact to date with its citizens. The “Development and Social Protection Law” institutionalizes 14 existing social and development programs which currently target the most vulnerable sectors of society.  The law’s backers, including the outgoing Funes administration, say that this new law provides much-needed efficiencies in tackling deep-seated inequality, social exclusion, and entrenched poverty. It also provides greater assurances that many of the most popular social programs enacted by the Funes administration remain intact—regardless of any new administration’s priorities or political leanings.

Since 2009, the Funes administration has overseen historic expenditures toward social programs, many of which target vulnerable rural areas like the Lower Lempa and Bay of Jiquilisco. In 2008, budget outlays for social programs equaled just under $41 million. By 2012, this figure had ballooned to nearly $182 million, with two thirds of the funding originating from tax revenue (Source: Techincal Secretary to the Presidency). These expenditures, and the programs they supported, also aligned with marked reductions in overall poverty and inequality. Between 2011 and 2012, the number of Salvadoran households living in extreme poverty decreased from 12 percent to 9 percent, and total poverty dropped from around 40 percent in 2011 to 35 percent in 2012. Likewise, El Salvador’s GINI coefficient, or measure of income inequality, dropped by eight points between 2008 and 2012, a significant improvement.

The Development and Social Protection Law acknowledges that an integrated, multi-agency approach is needed if the positive impacts of these social programs are to be sustained. Programs like El Salvador’s pensions for retired military and civilian and access to health care, provide the basis for the social safety net characteristic of developed, democratic societies. Other projects such as “School Packets” and “Glass of Milk” ensure that impoverished families can afford elementary education by providing uniforms and backpacks made by local cooperatives, and children receive a nutritious, locally-sourced meal at public schools. Still other programs like “Ciudad Mujer”, cash payments for temporary work (PATI), and the Family Agriculture Plan (PAF) offer important access to vocational training and start-up capital for cottage-level, small-medium sized enterprises. For our partner communities in the Lower Lempa, the PAF program also provides farming cooperatives with a new source of income: nearly half of the corn seed supplied by the government to help over 340,000 small-scale farmers produce nationwide is sourced directly from the Lower Lempa.

In the past, many of these programs suffered inefficiencies from inappropriate design and inconsistent execution, even leading some to question whether they represented nothing more than politically-motivated handouts. Today, the new Development and Social Protection Law will help institute transparency mechanisms as well as a system to consult beneficiaries about the design and reach of social programs. A national plan will be produced with broad public input, and executed by an inter-ministerial body overseen by the President. A new, “multi-dimensional” approach to measuring poverty will also be instituted, taking into account an integrated view of household employment, access to health care and education, food security, and basic services.

Many hard questions still remain, including how these programs will be financed and whether or not the Development and Social Protection Law signals permanent and ultimately unsustainable entitlements. But for now, El Salvador’s gaping inequality will remain on the agenda, and social programs can be implemented more efficiently, and evaluated openly for their successes and shortcomings alike.  These all represent important steps toward progress.