Unleashing Central America’s Growth Potential : El Salvador

Unleashing Central America’s Growth Potential : El Salvador

Although El Salvador’s modest pace of growth has reduced poverty and inequality in recent years, it has not been sufficient to move the country toward the income levels of wealthier economies. The objective of this study is to investigate the drive...

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Bibliographic Details
Main Authors: Ulku, Hulya, Zaourak, Gabriel
Format: Report
Language:English
Published: World Bank, Washington, DC 2021
Subjects:
GROWTH DRIVERS
TOTAL FACTOR PRODUCTIVITY
STRUCTURAL TRANSFORMATION
LABOR PRODUCTIVITY
BANKING
INNOVATION
PROPERTY RIGHTS
HUMAN CAPITAL
CORRUPTION
EXPORT DIVERSIFICATION
Online Access:http://documents.worldbank.org/curated/en/965361626425285624/Unleashing-Central-America-s-Growth-Potential-El-Salvador
http://hdl.handle.net/10986/35976
id okr-10986-35976
recordtype oai_dc
spelling okr-10986-359762021-07-21T05:10:49Z Unleashing Central America’s Growth Potential : El Salvador Ulku, Hulya Zaourak, Gabriel GROWTH DRIVERS TOTAL FACTOR PRODUCTIVITY STRUCTURAL TRANSFORMATION LABOR PRODUCTIVITY BANKING INNOVATION PROPERTY RIGHTS HUMAN CAPITAL CORRUPTION EXPORT DIVERSIFICATION Although El Salvador’s modest pace of growth has reduced poverty and inequality in recent years, it has not been sufficient to move the country toward the income levels of wealthier economies. The objective of this study is to investigate the drivers and constraints of growth and productivity in El Salvador from 1990 to 2017 and explore areas with high growth potential. The value added of this study is to provide an in-depth analysis of the drivers and constraints of El Salvador’s growth using a wide range of analytical tools. Historically, El Salvador’s growth is driven by factor accumulation, both labor and capital, and not overall productivity. The binding constraints for growth are identified as: (i) security, (ii) innovation, (iii) human capital, (iv) property rights, (v) limited access to finance for small firms, and (vi) corruption. Higher productivity and output growth can be achieved through quality upgrading and an export diversification strategy focused on metal, plastic, and chemical products. The country’s strategic location with access to many markets, a growing labor force, and a solid industrial base can support the expansion of the tradable sector to achieve higher and more inclusive growth. Development goals can be achieved with a long-term commitment to structural reform and investment. 2021-07-20T21:18:56Z 2021-07-20T21:18:56Z 2021-07-16 Report http://documents.worldbank.org/curated/en/965361626425285624/Unleashing-Central-America-s-Growth-Potential-El-Salvador http://hdl.handle.net/10986/35976 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work Economic & Sector Work :: General Economy, Macroeconomics and Growth Study Latin America & Caribbean El Salvador
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic GROWTH DRIVERS
TOTAL FACTOR PRODUCTIVITY
STRUCTURAL TRANSFORMATION
LABOR PRODUCTIVITY
BANKING
INNOVATION
PROPERTY RIGHTS
HUMAN CAPITAL
CORRUPTION
EXPORT DIVERSIFICATION
spellingShingle GROWTH DRIVERS
TOTAL FACTOR PRODUCTIVITY
STRUCTURAL TRANSFORMATION
LABOR PRODUCTIVITY
BANKING
INNOVATION
PROPERTY RIGHTS
HUMAN CAPITAL
CORRUPTION
EXPORT DIVERSIFICATION
Ulku, Hulya
Zaourak, Gabriel
Unleashing Central America’s Growth Potential : El Salvador
geographic_facet Latin America & Caribbean
El Salvador
description Although El Salvador’s modest pace of growth has reduced poverty and inequality in recent years, it has not been sufficient to move the country toward the income levels of wealthier economies. The objective of this study is to investigate the drivers and constraints of growth and productivity in El Salvador from 1990 to 2017 and explore areas with high growth potential. The value added of this study is to provide an in-depth analysis of the drivers and constraints of El Salvador’s growth using a wide range of analytical tools. Historically, El Salvador’s growth is driven by factor accumulation, both labor and capital, and not overall productivity. The binding constraints for growth are identified as: (i) security, (ii) innovation, (iii) human capital, (iv) property rights, (v) limited access to finance for small firms, and (vi) corruption. Higher productivity and output growth can be achieved through quality upgrading and an export diversification strategy focused on metal, plastic, and chemical products. The country’s strategic location with access to many markets, a growing labor force, and a solid industrial base can support the expansion of the tradable sector to achieve higher and more inclusive growth. Development goals can be achieved with a long-term commitment to structural reform and investment.
format Report
author Ulku, Hulya
Zaourak, Gabriel
author_facet Ulku, Hulya
Zaourak, Gabriel
author_sort Ulku, Hulya
title Unleashing Central America’s Growth Potential : El Salvador
title_short Unleashing Central America’s Growth Potential : El Salvador
title_full Unleashing Central America’s Growth Potential : El Salvador
title_fullStr Unleashing Central America’s Growth Potential : El Salvador
title_full_unstemmed Unleashing Central America’s Growth Potential : El Salvador
title_sort unleashing central america’s growth potential : el salvador
publisher World Bank, Washington, DC
publishDate 2021
url http://documents.worldbank.org/curated/en/965361626425285624/Unleashing-Central-America-s-Growth-Potential-El-Salvador
http://hdl.handle.net/10986/35976
_version_ 1764484188581396480

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