Building the Peace in El Salvador Foreign Aid, Investment Are Revitalizing This War-Torn State, Bringing Infrastructure Repair and Hope for Economic Future

Article excerpt

AS Salvadoran rebels lay down their arms, a mini-invasion of a different sort is taking place: investors toting briefcases stuffed with marketing plans.

Peace is good for business.

Hotel lobbies and restaurants are jammed with entrepreneurs in Italian suits discussing financing and production schedules. Occupancy rates have been almost 100 percent for the past six months. United Airlines just opened a new route here from Mexico City. The Japanese trade ministry plans to reopen its offices.

In the countryside, heavy equipment and road crews are busy widening and paving roads where only Army convoys dared to go less than a year ago. The $800 million in foreign aid promised for postwar economic reconstruction is starting to flow into the country, aimed primarily at infrastructure repairs.

The new atmosphere followed the Jan. 16 signing of peace accords that ended the 12-year war between the right-wing government and the leftist rebels of the Farabundo Marti National Liberation Front (FMLN). The sides agreed to phased reforms culminating in a final demobilization of rebel forces Oct. 31.

"Prior to the peace accords, companies were reluctant to look at El Salvador as a place to do business. That's sure changing now," says James Berg, who brought a group of 14 US executives here on an Overseas Private Investment Corporation (OPIC) mission in July. It is the first-ever corporate investment mission to El Salvador sponsored by OPIC, the US government agency that provides political risk insurance for US firms.

The Salvadoran Economy Ministry backs up Mr. Berg's assessment. In 1989, at the height of the war that claimed the lives of more than 75,000 Salvadorans, this Central American nation attracted a mere half million dollars of foreign investment. Last year, the figure leaped to $10 million. In the first three months of this year, $5 million poured in.

Today, some of the $1 billion that was moved from the country during the war is returning. One official estimates that in the next two to three years, $100 million could be reinvested. So far, 40 percent of the foreign capital in El Salvador is from the United States.

Richard Rozier is one US investor impressed by what he saw on the OPIC mission. "El Salvador has been out of the tourism business for the last 12 to 14 years. It's got a fabulous airport right on the coast. And only 1,100 {hotel} rooms in the whole country. We feel it has one of the biggest potentials for growth in Central America," says Mr. …


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