A. M. With more than $1.5 billion in financing over the last three years, El Salvador has positioned itself as a regional benchmark in territorial modernization, after reducing its number of municipalities from 262 to 44 with support from the Development Bank Desarrollo de América Latina y el Caribe (CAF).
In this context, the CAF report, presented in San Salvador, places the country as the most recent and notable case of municipal consolidation in Latin America and the Caribbean. It also compares it with reforms implemented in Japan and Europe, as the restructuring seeks to optimize public management, improve investment, and respond to demographic changes.
Sergio Díaz Granados, CAF’s Executive President, stated that “El Salvador is a strategic partner for the institution.” In this regard, he noted that the 2024-2029 country strategy prioritizes inclusive development, competitiveness, and territorial resilience. He also highlighted projects such as El Salvador Vivas, the submarine cable, and the debt-for-nature swap for the Lempa River.
Finance minister Jerson Posada emphasized the importance of financial cooperation. “In three years, we have completed 25 operations totaling over $1.5 billion. Strategic planning and efficient resource management are key to achieving sustainable development”, he said.
However, although the territorial reform represents a step forward in administrative efficiency, the report warns that El Salvador maintains a low level of decentralization. It also faces challenges such as inequality in access to basic services, where improved sanitation varies between 20% and 90% depending on the municipality.
Despite these gaps, local governments played a key role in public investment. In 2021, they executed 40% of national spending, surpassing the central government, which managed 25%. However, challenges regarding equity persist, as only 11% of mayoralties were led by women in that same year.
Finally, CAF reiterated its commitment to supporting municipal modernization in El Salvador through financing, technical assistance, and training, with the goal of strengthening competitiveness and closing territorial gaps.
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