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El Salvador: President Sanchez

Friday, March 21, 2014

The ex guerilla Salvador Sanchez is the new president of El Salvador, following a run-off election last week.

Sanchez takes power, in a country which has been a leader in developing regional businesses.

At the same time, the new president will face several tough issues, including limited support, a weak economy and increasing violence.

On the positive side, several Salvadoran business groups are regional leaders.

The Poma group owns the main business center in each Central American country.

Robierto Kriete founded Taca, the regional air carrier, which recently became part of Colombia’s Avianca.

Salvadorans created Cuscatlán, one of Central America’s first regional banks, which in 2006 merged with Citi.

At the same time Sanchez will need to deal with several tough challenges.

As far as support is concerned, some members of the business community are concerned about a turn to the left, following the election of a top commander of the rebel army during El Salvador’s 1980s civil war.

Sanchez and his party, the Farabundo Marti National Liberation Front, won by only one percentage point over Norman Quirós, candidate of the center-right Arena party.

With regard to the economy, El Salvador during the past three years has had zero growth in income per person.

Unemployment is above 16%, the highest level since 1990, foreign investment is weak, and public debt by next year could reach 65% of GDP.

Violence in El Salvador is another key issue.

With more than 500 deaths in the first two months of this year, homicides were up 25%, compared to the same period in 2013.

Sanchez will take office in June.

In one of his first acts as President-elect, Sanchez called for national unity.

El Salvador will need it.