El Salvador

Aid provided by the United States and other donors has fallen far short of the amount needed by El Salvador to move ahead with post-war reconstruction and reform programs mandated by the 1992 peace agreement. The Salvadoran government estimates that it needs about $1.83 billion through 1996 to finance the remaining programs mandated by the peace agreements, but government and international donors, including the United States, have committed only $1.15 billion so far--a shortfall of about $682 million. Donors have pledged another $197 million in assistance, but the agreements for this funding have not been finalized and obtaining more donor pledges is unlikely. The Salvadoran government may be able to increase its own contributions however, as better-than-expected economic growth is forecast over the next several years. The development of the National Civilian Police and its academy has been slow due to insufficient funding. Although police recruits from the academy are being deployed, they are undertrained and poorly equipped. Land distribution to ex-combatants and landless civilians as well as the National Reconstruction Plan have been delayed by disagreements between the government and former opposition forces over program elements. These programs have also been plagued by technical and administrative problems. The upshot is that only 12 percent of all planned recipients had received land as of June 1993, and only about $32 million of the $98 million earmarked for the National Reconstruction Plan has been disbursed.

GAO found that: (1) the Salvadoran government will need $1.83 billion through 1996 to implement the mandated programs; (2) although the United States and other international donors agree that the estimated costs are realistic, they have committed only $1.15 billion to date; (3) high-priority programs are more underfunded than low-priority programs because of donors' restrictions on the use of their funds; (4) donors are not likely to increase the level of their funding; (5) the Salvadoran government expects that the programs will be implemented on a more modest scale than originally planned due to funding shortfalls, but it may be able to increase its own contributions because of greater than forecasted economic growth, improved tax collections, and two unrestricted loans; (6) the three programs have not been implemented as rapidly as expected; (7) insufficient funding has slowed the development of the National Civilian Police and its academy, which has resulted in the deployment of undertrained and poorly equipped recruits; (8) political negotiations over program elements between Salvadoran factions and administrative and technical problems have delayed land transfers and the National Reconstruction Plan; and (9) the Agency for International Development has acted to correct some of the administrative and technical problems associated with the land transfers and the National Reconstruction Plan.