Debt and El Salvador

The Jubilee Debt Campaign recently released a report on nine countries currently suffering debt crises. El Salvador is one of the nine included in their study..

The global financial crisis hit El Salvador hard. Exports dropped, food and energy prices rose and remittances fell – from 20% to 17% of GDP – as El Salvadoran workers in the US were laid off. As a result of higher unemployment and increased food and medicine costs, poverty levels increased too. More than 40% of the population live below the poverty line. Yet the government spent $970 million in 2011 (24% of government revenue) on paying foreign debts, most of which were inherited from the vicious junta of the 1980s.

According to the report, government external debt stands at $6.5 billion (28% of GDP) and private external debt at $4 billion (17% of GDP). As a result, the government is responsible for external annual debt payments of $970 million (24% of revenue, 15% of exports).

The report looks a little partisan to me but I prefer reports that slant in favor of the poor and justice rather than those that slant against the poor and for injustice.