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Tuesday, August 16, 2005

El Salvador & CAFTA

From the Washington Post:

Economists who have studied CAFTA's potential impact on the Salvadoran economy say that to see real benefits from the agreement, the country's government must first deal with a host of social challenges. These issues include a high crime rate, poorly educated workforce and weak infrastructure in some parts of the country, according to a report... released by the International Monetary Fund last week. The IMF also found that El Salvador needs to develop better oversight of its financial system and increase its national savings.

If CAFTA prompts the Salvadoran government to tackle those issues, the agreement could create a ripple effect that strengthens the country's economy and attracts foreign investment in many industries, economists said. Industries that stand to gain include light auto-parts manufacturing and niche agriculture focused on food products indigenous to the country, Garza said.

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