Here is a round-up of a variety of this week's news stories from El Salvador.
1. Millennium Challenge funds awarded. The US government approved a second round of direct aid to El Salvador through the Millennium Challenge Corporation (MCC) program. In its press release announcing the approval, the MCC stated:
Washington, D.C.—At its quarterly meeting today, the Millennium Challenge Corporation’s Board of Directors approved a five-year, $277 million compact with El Salvador to improve its competitiveness and productivity in international markets, and was briefed on MCC’s latest efforts in open data and transparency.
“I am very pleased that the Board of Directors took this step in approving the compact with El Salvador,” MCC Chief Executive Officer Daniel W. Yohannes said today. “This compact represents a tremendous opportunity to help reduce poverty in El Salvador by spurring investment and increasing economic growth.”
A thorough analysis concluded that low productivity in internationally traded goods and services is a primary constraint to economic growth in El Salvador. The Government of El Salvador has committed to contribute $88.2 million on top of MCC’s investment, constituting a combined total of $365.2 million targeted toward three interrelated projects:
- investing in the institutional capital of El Salvador to streamline regulations and enhance the investment climate;
- investing in human capital to improve the quality of education and better match students’ skills with the demands of firms engaged in international trade; and
The Board discussed the need for the Government of El Salvador to maintain a strong commitment to good governance and the rule of law.
- investing in physical capital to reduce transportation and logistics costs along a critical coastal highway and at the border with Honduras.
Mr. Yohannes said, “We expect the Government of El Salvador to make continued progress on strengthening the investment climate and rule of law, including respect for judicial independence. We also expect the government to make progress in combating money laundering and effectively implementing its trade agreements. Efforts by the current government and the next government to demonstrate tangible, sustained progress on these issues will be critical to our partnership.”The first round of MCC funds had been used in the northern zone of the country to improve a highway across the northern tier and to improve infrastructure, agriculture and education in the area.
2. Former ARENA ministers in the Saca administration are charged with corruption. El Salvador's attorney general is prosecuting the ex minister of public works Jorge Nieto and other officials for corruption. The charges surround the building of a stretch of highway known as Diego de Holguín Boulevard (renamed Monseñor Romero Boulevard when it was finally completed in 2012). The project cost more than $100 million or 4 times the original budget and took more than 5 years.
Tony Saca was president during the time when the alleged corruption took place. The charges come as Saca is running for another term as president as the candidate on the ticket a coalition of political parties including GANA.
3. El Salvador prepares for independence celebrations. El Salvador celebrates the 192nd anniversary of Central America's independence from Spain on September 15. The event is marked by parades and other civic events on that date and throughout the month of September.
4. Threat of flooding subsides. Heavy tropical rains affected much of El Salvador this week, prompting the environment ministry to raise the alert level to yellow on Thursday until it was dropped earlier today. September and October have frequently been the months when destructive flooding from tropical storm systems can threaten El Salvador.
5. Drug trafficking arrests target Texis cartel. Police in El Salvador arrested 16 suspected drug traffickers in a major sweep. From InsightCrime:
Police in El Salvador have rounded up 16 alleged members of the Texis Cartel, in the latest sign that authorities are edging ever closer to cartel kingpin "El Chepe Diablo."
Among the arrests made in a series of raids in various locations in the east of the country were former congressman Antonio Ascencio and several cattle ranchers, reported La Prensa Grafica.
The 16 stand accused of drug trafficking linked to the Texis Cartel and the recently arrested Roberto Herrera, alias "El Burro," who has been formally charged with running a car theft ring but is believed to be a leading Texis Cartel trafficker.
Police also raided three ranches and other residences, one of which belonged to Herrera.
The arrest of El Burro Herrera marked a breakthrough for the El Salvador authorities in their attempts to crack the Texis Cartel, a key link in the Central America drug trafficking chain, which for years has eluded authorities, mainly thanks to its high-level network of corrupt contacts.
Herrera was one of three key figures in the Texis Cartel, along with Juan Umaña Samayoa -- the mayor of Metapan, where the organization's power structure is centered -- and Jose Adan Salazar Umaña, alias "El Chepe Diablo," -- president of the first division of Salvadoran soccer, and owner of a business empire based around a chain of hotels.