VZCZCXYZ0000
RR RUEHWEB

DE RUEHSN #1131/01 1181651
ZNR UUUUU ZZH
R 281651Z APR 06
FM AMEMBASSY SAN SALVADOR
TO RUEHC/SECSTATE WASHDC 2186
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEATRS/DEPT OF TREASURY WASH DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHQT/AMEMBASSY QUITO 0835

UNCLAS SAN SALVADOR 001131 
 
SIPDIS 
 
SIPDIS 
 
QUITO FOR D.TITUS 
 
E.O. 12958: N/A 
TAGS: ECON EAID ES
SUBJECT:  SACA'S ANTI-POVERTY PROGRAM AFTER ONE YEAR 
 
REFTEL:  05 SAN SALVADOR 1626 
 
¶1.  Summary.  Torola, a small town on the border with 
Honduras, is the poorest municipality in El Salvador, but 
also the first to receive targeted assistance from the 
Salvadoran Government under Saca's anti-poverty program "Red 
Solidaria."  At least for the next few years that the 
program continues, life for Torola's residents will be 
slightly more bearable, but long-term economic growth will 
depend on the Salvadoran Government's ability to ensure that 
the fruits of other initiatives such as CAFTA-DR and a 
possible MCC project are delivered to the poor.  End 
Summary. 
 
¶2.  Torola, in northern Morazan Department near the Honduran 
border, is the poorest municipality in El Salvador.  Of the 
more than 2,000 residents, 60 percent live on less than 
$0.70 a day and nearly 90 percent live on less than $1.50 a 
day.  More than 55 percent of the houses there have no 
access to running water, and more than 84 percent have no 
electricity.  Destroyed by the civil war, the local economy 
is almost exclusively based on subsistence agriculture, but 
the land is infertile, requiring farmers to plant 8 or more 
acres to achieve yields obtained on 1.5 acres elsewhere in 
El Salvador. 
 
¶3.  Torola was the first beneficiary of President Saca's 
anti-poverty program "Red Solidaria," launched in March 2005 
to provide assistance to the poorest 32 municipalities in El 
Salvador, all of which have poverty rates of above 50 
percent (Reftel).  One axis of the program is a commitment 
families make to participate in public health programs and 
enroll their children in school in exchange for direct 
monetary support of $15-20 month, depending on family size. 
The second axis includes improvements in basic 
infrastructure such as water, roads, electricity, and 
housing.  The third includes projects to improve 
agricultural productivity and to support microfinancing. 
 
¶4.  The government's Fund for Social Investment in Local 
Development (FISDL), working closely with local 
nongovernmental organizations, is the implementing agency 
for the program.  On April 21, 2006, FISDL officials handed 
out $15,000 in cash to more than 600 families in Torola, the 
fourth such transfer there.  Overall, FISDL has provided 
more than $500,000 in cash transfers to families in 
participating municipalities.  Of those families eligible in 
Torola on April 21, FISDL excluded only 12 for failure to 
send their children to school and 8 for not participating in 
public health programs.  To date, 15 municipalities have 
received at least one transfer, with most having just 
received their third.  In the other 17, FISDL has not 
completed census work to determine which families are 
eligible to participate. 
 
¶5.  FISDL officials told emboffs that the program was 
already having a positive impact on the people of Torola. 
They reported that in the eight months they have been 
working there, school enrollment rates are up 30 percent, 
while medical consults have increased 200 percent.  In the 
short term, those achievements are putting additional stress 
on the town's social-service infrastructure--for example, 
there are not enough classrooms to accommodate the new 
students, and medicines are occasionally in short supply. 
FISDL officials, working with the Ministries of Health and 
Education, report that they are working to overcome these 
shortfalls.  A Ministry of Health official who attended the 
transfer in Torola confirmed that the Ministry was beginning 
to concentrate additional resources in participating 
municipalities. 
 
¶6.  Families receiving the transfer in Torola told emboffs 
that they used their transfers to buy food for their 
children.  They reported that prior to the program, their 
children, including some less than one-years old, ate only 
rice and beans.  Now, they said, they can afford to buy 
milk.  Torola is about 8 miles from the nearest paved road, 
and there is usually no local market.  On transfer day, 
there is now a thriving street market offering basic 
supplies for sale to families that until "Red Solidaria" had 
never held so much money at once ($30-40 every two months). 
Vendors told emboffs that business was thriving, and when 
asked said that powdered milk was selling well.  Emboffs 
also noted that ice cream--still a novelty in Torola--was 
also a hit.  On the infrastructure side, emboffs overheard 
FISDL officials and residents discussing a planned 
irrigation project and an ongoing electrification project. 
So far, FISDL reports spending $6.2 million on such 
projects, including some in municipalities where transfers 
have not yet been provided. 
 
¶7.  From the date of the first transfer to the last, the 
program is scheduled to last three years in each 
participating municipality.  FISDL officials acknowledge 
that may not be enough time to create the economic 
opportunities needed to help the poorest of the poor, but 
they are hopeful that economic growth spurred by CAFTA-DR 
and a potential MCA project will support their efforts.  A 
baseline survey to measure the effectiveness of "Red 
Solidaria" is scheduled for July 2006; other surveys are 
planned for the project's mid-point and conclusion. 
 
¶8.  FISDL estimates the program will cost about $150 million 
over its existence.  The Inter-American Development Bank is 
providing $57 million for infrastructure projects, while the 
World Bank is extending a $21 million loan that will support 
healthcare.  [Note: The National Assembly has not yet 
approved these loans, and their passage is by no means a 
sure thing.  End Note.]  FISDL reports that the European 
Union may provide a $40 million grant as well.  The 
Salvadoran Government will pay for the rest of the program. 
 
¶9.  Comment:  In FMLN governed Torola, Mayor Hector Ventura 
was slow to embrace "Red Solidaria."  FISDL officials report 
that he refused to meet with them the first two times they 
visited.  Ventura quickly woke up to the political 
implications of the program, however, and by the time the 
third transfer took place, just before March local 
elections, he was side-by-side with President Saca in the 
town square witnessing the transfer.  In those elections, 
Ventura was re-elected by a healthy margin.  End Comment. 
 
Please visit San Salvador's Classified Website at 
http://www.state.sgov/p/wha/sansalvador/index .cfm. 
 
Barclay