Fighting inequality in El Salvador during the COVID-19 pandemic.

Is the Nayib Bukele administration doing enough to reduce the high levels of inequality among Salvadorans?

Inequality in El Salvador
 November 13, 2020   By Eddie Galdamez

Inequality in El Salvador is one of the main reasons the country has large problems related to health, education, poverty, and violence. In recent years, El Salvador has been making progress toward becoming a nation with more equality; but, there is still a long way to go.

It is difficult to see the country’s work regarding inequality when you see poverty all over the territory. Nevertheless, according to a report released by InequalityIndex.org, only Costa Rica is doing better than El Salvador when committing to reduce inequality.

The rank goes from 1 to 158.

2017 2018 2020
Overall Rank 67 64 50
Public Services 60 77 95
Taxes 63 54 26
Workers rights 102 78 52

Central American Nations

2017 2018 2020
Belize N/A 115 53
Guatemala 109 86 117
El Salvador 67 64 50
Honduras 96 81 62
Nicaragua N/A N/A N/A
Costa Rica 34 38 40
Panama 148 109 108

This report is the third of its kind since 2017; it ranks 158 governments worldwide on their commitment to reducing inequality among its population. The examination measures the government’s policies and actions concerning public services, taxes, and workers’ rights.

In the report released in October 2020, only Costa Rica is doing better than El Salvador. Costa Rica ranks 40 out of 158 nations, and El Salvador Ranks 50. At the bottom of the Central American list is Guatemala, with a rank of 117.

The COVID-19 pandemic and inequality.

The 2020 COVID-19 pandemic has shown that the entire world was not prepared to deal with such an event. However, nations that have low inequality have been able to deal with the pandemic better.

The COVID-19 pandemic revealed that the previous Salvadoran governments were not spending enough on health care or health facilities. Also, most Salvadorans work in the informal sector; therefore, they have no access to labor protections such as sick pay that could have help during the quarantine.

Even though the country was not prepared to deal with the pandemic, El Salvador is the nation in Central America that has done the best in managing COVID-19. As of today, El Salvador has the least amount of confirmed coronavirus cases.

Even though El Salvador has a good number regarding COVID-19, the Salvadoran economy has been hit hard in 2020. It will take a long time for the country’s economy to recover and help cut the inequality gap.

The Nayib Bukele administration plan for 2021.

The administration of President Nayib Bukele presented its 2021 budget proposal to the Legislative Assembly for approval. This budget increases social spending that should help with inequality.

Bukele’s budget aims to reduce inequality by increasing spending on health, education, and public security. The proposed budget for social areas is about 40% of the proposed $7,453.5 million budget.

According to Inequalityindex.org, social spending helps reduce inequality between the wealthy and the poor.

“Social spending on public services such as education, health, and social protection has been shown to have a strong impact on reducing inequality, particularly for the poorest women and girls who are the most dependent on them.”
Inequalityindex.org

This proposed budget by the Bukele administration most likely not get approved by the Salvadoran congress, mainly because it will increase the public debt to new heights, and it is right before an election.

The proposed budget has a deficit that has to be cover by acquiring more public debt. The Central American Institute for Fiscal Studies (ICEFI) predicts that at the end of 2020, the Salvadoran debt will represent 92% of the country’s GDP.

The proposed budget approval comes right before legislative elections; this complicates things as the opposing political parties, ARENA and FMLN, don’t want to be seen soft on the Bukele administration.

The prosed budget by the Bukele administration can help reduce the inequality gap in El Salvador. However, it can also put at risk the country’s rating if the government cannot meet its obligations.

“Our economic forecasts are consistent with a 2020 fiscal deficit of 11% of GDP, up from 3.1% in 2019. Revenues fell nearly 10% in the first seven months of the year while spending was up 26% in the same period.”
www.fitchratings.com


Inequality in El Salvador.

The inequality gap in El Salvador is a problem that has to be dealt with sooner than later. The country’s problems with violence, health, education, and poverty can be traced back to inequality.

Failure to tackle this growing crisis will hinder the country from moving forward. Inequality is bad for El Salvador; it reduces economic growth and worsens health and education.

It is a good sign that El Salvador ranks second in Central America fighting inequality: However, there is a long way to reduce the inequality gap.

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