United Nations

A/50/455


General Assembly

Distr. GENERAL  

23 October 1995

ORIGINAL:
SPANISH


Fiftieth session
Item 20 (b) of the provisional agenda*


              STRENGTHENING OF THE COORDINATION OF HUMANITARIAN AND
              DISASTER RELIEF ASSISTANCE OF THE UNITED NATIONS,
              INCLUDING SPECIAL ECONOMIC ASSISTANCE:  SPECIAL
              ECONOMIC ASSISTANCE TO INDIVIDUAL COUNTRIES OR REGIONS


Assistance for the reconstruction and development
of El Salvador

Report of the Secretary-General


CONTENTS

  Paragraphs  Page

I.  BACKGROUND ...........................................1 - 8 3

II.  ECONOMIC SITUATION IN 1994-1995 AND OUTLOOK FOR
  1996-1999 ............................................9 - 224

  A.  Economic situation in 1994 ....................... 9 - 144

  B.  Economic outlook for 1995-1996 ................... 15 - 185

  C.  Economic and social development plan for 1995-1999  19 - 226

III.  OBSTACLES TO AND PROSPECTS FOR THE RECONSTRUCTION
  PROCESS AND DEMOCRATIZATION ..........................23 - 347



                       

  *  A/50/150.


95-28637 (E)   021195    071195/...
*9528637*
CONTENTS (continued)

  Paragraphs  Page

IV.  ADVANCES IN RECONSTRUCTION AND THE STRENGTHENING OF
  DEMOCRATIC INSTITUTIONS ..............................35 - 4810

  A.  Financial requirements and response from the
    international community ..........................    35 - 4310

  B.  Progress and implementation of projects ..........    44 - 4812

Annex.  Progress report on the principal programmes and projects
    relating to the process of national reconstruction ............13

/...  A/50/455
  English
  Page

A/50/455
English
Page

I.  BACKGROUND


1.  In January  1992, the peace agreements signed between the Government  of
El  Salvador and  the Frente  Farabundo  Marti  para la  Liberacion Nacional
(FMLN) marked the  formal conclusion of 12  years of political and  military
conflict  which  had  caused  the  loss   of  75,000  lives,  triggered  the
emigration of approximately one out of  every five Salvadorans and displaced
hundreds  of  thousands  within  the  country.    In  addition,  the country
sustained  damage to  its  economic and  social infrastructure  estimated at
more than  $1.6 billion.   In this context,  the peace  agreements set forth
specific  commitments whose  purpose  was  (a)  to  establish  the  specific
requirements for ending the  armed conflict; (b) to tackle some of the  root
causes  of the conflict by  starting from democratic  principles; and (c) to
place  special emphasis  on the  process of  reconstruction  as part  of the
economic and social development of the country.

2.   Foremost among these  commitments were (a) the  demilitarization of the
country,  to  be  accomplished  by transforming  and  downscaling  the armed
forces  and  by demobilizing  FMLN  and  integrating  it  into society;  (b)
replacement of  the old military  police with a  new National  Civil Police,
recruited from the new  National Public Security Academy; (c) reform of  the
judicial system  by establishing the National  Council of  the Judiciary and
its Judicial Training School; (d) the  establishment of the National Counsel
for the  Defence of Human Rights;  (e) reform of  the electoral system;  and
(f) economic  and social agreements and  reforms including,  inter alia, the
establishment of  a  Forum for  Economic  and  Social Consultation  and  the
implementation  of  a  National  Reconstruction  Plan.    Specifically,  the
objective of  this Plan  is to  support the  process of  peace and  national

reconciliation  by  creating the  conditions necessary  for  the social  and
economic integration of those hardest hit by the conflict.

3.  In line with these commitments, El  Salvador is taking up the  challenge
of turning itself  into a country founded on  legal safeguards and the  rule
of law, respect  for the rights  of the  individual, and  the potential  for
opening  up  major  opportunities   for  the  economic   well-being  of  its
inhabitants.  These long-term  goals must in the short term square with  the
need  to stimulate the sustained  expansion of its economy,  which should go
hand  in  hand  with  policies  designed  to  eradicate  poverty  against  a
background of broad democratic participation.

4.   More than three years have elapsed since the signing of the agreements.
During this  period, short-term, immediate-impact  activities linked to  the
complex process  of demobilization and the strengthening or establishment of
democratic  institutions were carried out.   In addition, what stands out is
the implementation of various initiatives regarding  the changes that had to
be  made in  the political  and social  system of  El Salvador  in order  to
create  conditions conducive  to  realizing the  aspirations  of  Salvadoran
society with regard to  the consolidation of the peace process.  This  means
the   establishment,  consolidation   and   operation  of   new   democratic
institutions;  the implementation  of programmes  and projects  relating  to
productive reintegration and  reconstruction anchored in national  long-term
development strategies;  and the need to  fully address  the requirements of
the  people hit hardest  by the conflict  as part  of a  scheme to eradicate
structural poverty.
 5.  In terms of what is happening on the ground  in El Salvador, this broad
agenda  for  consolidating  peace  must be  fleshed  out in  a  very complex
economic  environment; this  environment  should combine  reconstruction and
development  with reconciliation  and democratic  participation.   In  other
words, the  prospects  for  lasting peace  in  El  Salvador  will  call  for
sustained expansion of its economy based on a new model, expansion which  is
stimulated   by  a   modern  State   apparatus  guaranteeing   fairness   of
distribution and  presupposing all  of the  transformations wrought  through
the new democratic institutions.

6.   Since the  signing of  the peace  agreements, the determination  of the
signatories  to look for and  define mechanisms of understanding in order to
comply   with  the   established  mandates   should  be   acknowledged   and
highlighted. The  United Nations Observer  Mission in  El Salvador  (ONUSAL)
played a crucial  role in  verifying that  the parties  had fulfilled  their
commitments.  That Mission wound up its activities on 30 April 1995.

7.   On 6  February 1995,  prior to  the expiry  of the  ONUSAL mandate,  in
response  to a request  from the  Government and from  FMLN, and considering
the   determination  of  both  parties  to  comply  with  their  outstanding
commitments under the  peace agreements, the Secretary-General of the United
Nations set up the United Nations Mission in  El Salvador (MINUSAL).   Since
1 May 1995,  this team has been carrying  out functions similar to those  of
ONUSAL  such as  verifying  the  parties' compliance  with  the  agreements,
extending  good  offices  and providing  updates  on  the various  processes
stemming from the programmes contained in the agreements.

8.  Monthly  progress reports prepared by  MINUSAL on the implementation  of
the  peace  agreements confirm  the parties'  determination  to comply  with
their  obligations.  These  reports have  also shown,  however, that despite
the political  will that  exists, there  are still  obstacles to  compliance
with some of the  commitments established by the peace agreements.  For this
reason the parties  agreed on the need to  extend the Mission's presence  so
as to fulfil United Nations obligations under the  peace agreements.  It was
therefore agreed to extend  the Mission for six  months, with effect from 31
October 1995.


II.  ECONOMIC SITUATION IN 1994-1995 AND OUTLOOK FOR 1996-1999

A.  Economic situation in 1994

9.   The tendency reflected  by the macroeconomic  variables during  1994 in
comparison with  previous years is  confirmed not only  by the recovery  and
stabilization of  the  economy, but  also  by  the existence  of  conditions
favourable  to a  sustained  rate of  growth.   Moreover, this  reflects the
discipline maintained by the Government, from  the beginning (1989), in  its
implementation of  adjustment and  stabilization policies.   However,  while
this  tendency demonstrates  a situation  of  financial equilibrium  in  the
external sector and in  prices as a  direct result of the implementation  of
the  adjustment programme,  the  management of  economic policy  tools which
favour the primary  and secondary sectors  of the  economy is  a task  which
remains to be accomplished.

 10.   With  regard to  the behaviour  of overall  production activity,  the
gross domestic product (GDP)  grew by 6 per  cent, representing a lower rate
of growth than in  preceding years, in  which rates of over 7 per  cent were
achieved.

11.   Last year, the  trade deficit reached  a level  of US$  1,325 million,
higher than  the levels  recorded in  the previous  two years.   The  vigour
displayed by imports was linked primarily  to the economic recovery process,
owing to  the increase in  the demand for  imported goods.   The balance  on
capital account, while  lower than in  1993 (US$  234 million),  stood at  a
favourable level  (US$  224 million).    Net  international reserves  as  of
December 1994 (US$ 788 million) increased by 22 per cent in comparison  with
the previous year.

12.  Inflation  fell to 8.9 per cent  in 1994, continuing its downward trend
in comparison with  1993 (12.1 per cent) and 1992  (19.9 per cent).  On  the
other  hand,  the exchange  rate  maintained  a  uniform  average level  and
experienced  little  relative  fluctuation  from  one  year  to  the   next.
Interest rates  remained at  high levels compared  to the rate  of inflation
and the  minimal fluctuation in the exchange  rate.  It should be noted that
two situations have had  a negative impact on growth targets in the  context
of international competitiveness:  the foreign exchange rate, which  affects
it, and the current rate  of interest on loans (18-20 per cent), which is  a
strong disincentive to investment.

13.   In  the  area  of public  finance, of  particular significance  is the
reduction  in the  non-financial public-sector  deficit as  a proportion  of
GDP, which decreased  from 1.6 per  cent in  1993 to 0.6  per cent in  1994,
thus attaining the target set by the Government.  It  must be noted that the
growth in tax receipts was offset by a proportional decrease in grants.   On
the other hand, the  increase in recurrent  expenses (mainly wages) and  the
lack of  implementation in capital outlay  have contributed  to the increase
in total expenditure.

14.   The discipline  required by  the adjustment  and stabilization process
entailed a social cost.   This cost  is seen in the restrictions  imposed on
the development  of anti-poverty programmes, particularly in rural areas and
in those directly affected  by the conflict.   Finally, the level of  family
remittances  during the  past year  totalled  US$  962.5 million,  which, at
current prices, was equivalent  to 12 per cent  of GDP and was  18 per  cent
larger  than  exports of  goods  and  services (excluding  in-bond  assembly
plants), which helped to  prevent a further deterioration in the standard of
living of a large percentage of the population.


B.  Economic outlook for 1995-1996

15.  The  Government's main targets for 1995  can be summarized as  follows:
GDP growth  in the range  of 6  to 7  per cent;  trade deficit  at US$  1.25
billion,  with exports (including in-bond assembly) estimated to increase by
35  per cent; and  a 20 per cent increase  in net international reserves, to
US$ 960  million. Resources derived  from family  remittances would continue

to grow, to approximately  US$ 1 billion.   Annual inflation for the current
year has been estimated at between 6 and 8 per cent.

 16.  Statistics  available as of June 1995  allow the estimate  of a series
of macroeconomic indicators for  the end of the period.  GDP growth  targets
are likely to be met;  the trade deficit will exceed  that expected, and net
international  reserves  and  family   remittances  will  be  in  line  with
estimates. Estimates also indicate that annual  inflation will exceed 10 per
cent,  due to the impact  of the rise  from 10  to 13 per cent  of the value
added  tax (VAT),  as  well  as to  the expectations  generated by  the long
process of approval of this tax, which had  at one point been proposed to be
set at 15 per cent.

17.  The main macroeconomic targets  set by the Government to  date for 1996
are  to  maintain the  rate  of economic  growth  at above  5  per  cent and
inflation  below  8  per  cent;  to  achieve  a non-financial  public-sector
deficit of not  more than 0.5 per cent  of GDP; to  increase domestic saving
and   capital  deepening  investment,   especially  foreign  investment;  to
consolidate  the  public finance  reforms;  to  improve the  efficiency  and
competitiveness of the  financial system; and to encourage increased exports
in order to avoid widening the trade deficit.  An inflow of foreign exchange
from family  remittances similar  to that  of 1995  is expected.   The trade
deficit will  continue to be financed  by family  remittances, grants, loans
and  private  capital  contributions.    Preliminary  estimates  project   a
positive  balance  of  payments  due  to  an  expected  continuation  in the
accumulation of net international reserves.

18.   It  can be  concluded from  the foregoing  that, based  on  the policy
instruments  used along with  the projections  for 1995  and predictions for
1996,  the  Government  will  continue   the  programme  of  adjustment  and
stabilization, most likely in a phase  requiring the creation of  conditions
favouring the promotion  of a production structure capable of  participating
competitively at the international level.


C.  Economic and social development plan for 1995-1999

19.   The  principal  goal pursued  by the  Government  with regard  to  the
economy  and society for  the period from 1995 to  1999 is that of promoting
the  creation of  an  internationally competitive  economic  structure  that
assures  a  sustained  rate  of  growth;  supported  by  solid  policies  of
employment  and   income  generation   that  would   permit  a   progressive
improvement in the well-being  of the population.  It would necessitate  the
introduction of  major reforms  at the  macroeconomic  and sectoral  levels,
aimed  at  overcoming   the  various  obstacles  that  affect  the   overall
efficiency  and competitiveness of  the Salvadoran  economy as  a whole. The
Government is devoting special effort to  transforming the structure of  the
State, particularly that of the executive  branch, by means of modernization
policies.   These  will  include privatizing  production  and  public-sector
services, promoting decentralization and streamlining management.

20.   In order  to bring  the economy  up to an  internationally competitive
level,  the Government will  attempt to  maintain an  annual economic growth
rate  greater than  5  per cent.    In a  highly  technologically  dependent
production structure  such as  that of  El Salvador, this  will require  the
generation of foreign exchange  from exports in excess of the level demanded
by imports for the medium term.

 21.   In the  macroeconomic sphere,  the principal  reforms anticipated are
concentrated in  the  areas of  trade  policy,  exchange policy  and  fiscal
policy. With regard  to trade policy, tariffs have been undergoing a drastic
reduction  since 1 April 1995,  under the argument  that the previous tariff
structure  presented obstacles  to the  restructuring of  some  enterprises,
principally in the industrial  sector.  In the  area of exchange policy, the
Government   has  proposed,   without  obtaining   consensus,  the   gradual
dollarization of  the economy  so as to  eliminate the exchange  risk, which

will  contribute in  turn to  gradually  reducing  interest rates  and their
effect on finance costs for enterprises.  With regard to fiscal policy,  the
three-point increase  in  the  value  added  tax  has  served  as  a  useful
compensation  for the  loss  in income  owing  to the  recent  reduction  in
tariffs,  and also as  a means for increasing  revenue to finance programmes
related to carrying  out the peace agreements.   Moreover, some changes were
made  in the  legislation on  tax fraud,  and other  initiatives to increase
revenues are being studied or debated.

22.  With regard  to social policy,  the Government has favoured two  areas:
(a)  human  development  and  (b)  human  well-being  and  advancement.   In
connection with the first,  efforts are being made  to improve the standards
and quality of peoples'  lives and to create conditions of equity and social
mobility.  For this purpose, short-  and medium-term improvements are  being
sought  in  health,  nutrition,  education,  housing,  and  social   welfare
services.  Well-being and human advancement  policies are designed to favour
the most vulnerable groups, through the  creation of permanent employment in
programmes directed at small and micro-enterprises.


          III.  OBSTACLES TO AND PROSPECTS FOR THE RECONSTRUCTION PROCESS
                AND DEMOCRATIZATION

23.  The undertakings arising from the peace  agreements are intended to lay
the foundations for a  new form of social  coexistence in which  individuals
have equal  opportunities for  access to benefits  and the rule  of law  and
spirit of  democracy prevail.    To this  end,  the  various organs  of  the
Government  should translate  those commitments  into a permanent  agenda in
which  development  policies  and  strategies  reflect  the  spirit  of  the
agreements.

24.  In view of the above, the challenge is to ensure that the goals of  the
adjustment/stabilization programme, on the one hand, and the  implementation
of a national reconstruction  plan and the consolidation of the rule of law,
on  the other, complement  each other  instead of  being mutually exclusive.
This  means  that  the  policies  of  the  adjustment  programme  should  be
harmonized   with  those   that  concern   the  changes  required   for  the
consolidation of the peace process. This  situation underscores the need for
changes  in  the  development  model, a  view  which has  been  expressed by
various sectors of the Salvadoran society.

25.  The  changes being  promoted are part of  a package of measures  which,
while not  necessarily reflecting the fragility  of the  current model, seek
through  the stabilization programme  to restrict  the growth  of the fiscal
deficit  and  to  finance  it  from  domestic  resources.   In  both  cases,
technical   and  financial  assistance   for  reintegration  programmes  and
democratization clearly require  additional resources, most of which must be
obtained from  external sources.   It also  means that  such programmes  and
those concerned with poverty alleviation and  the modernization of the State
should have political and financial support from the Government.

26.  The implementation of the  programmes concerned with the  reintegration
into   productive  activity  of   former  combatants,  demobilized  military
personnel and landholders, which are being  undertaken in fulfilment of  the
peace agreements,  does not  per se  guarantee the  sustainability of  their
production activities if,  in carrying out  a specific undertaking, emphasis
is  placed  on   the  emergency   (short-term)  aspect   of  the   activity.
Significant  changes are therefore required in the  strategies for providing
benefits to  those groups if the process is to be  sustainable in the medium
and long term.   The country's social and  political stability depends  to a
large extent on the policies by which  it hopes to provide jobs  and regular
income to the population affected by the conflict.

27.  Emphasis should  also be placed  on promoting any activity which  could
help to ensure  the uninterrupted functioning of democratic institutions, in
the spirit  in which they  were created or  consolidated as  provided for in

the  peace agreements.    In  this connection,  it is  important  to provide
political support  and technical and financial  assistance to:   (a) the new
institutions  of the  public  security  system  (National Civil  Police  and
National Public Security Academy); (b) The  National Counsel for the Defence
of Human  Rights; (c) the institutions  which comprise  the judicial system;
and (d) the various organs of the electoral system.

28.   It should  be mentioned that  the follow-up  and evaluation activities
undertaken for  various projects,  particularly those  concerned with  rural
reintegration,  detected signs  of  uncertainty  and apprehensiveness  among
certain sectors  of the beneficiary population,  owing to  the difficulty of
providing for the definitive settlement of  such persons and their  families
and  to  an  environment  which  was  not  conducive  to  the  launching  of
sustainable  production  activities.    In  the  light  of  this  situation,
priority should be given  to: (a) the adoption  of measures to  complete the
process of  land transfer by  incorporating technical assistance  programmes
and providing  direct credits and subsidies;  (b) expediting  the process of
legalization of land titles in rural  human settlements and supporting  such
communities through specific  socio-economic development  projects; and  (c)
the provision  of  more extensive  training,  credit  and follow-up  to  the
beneficiaries of reintegration programmes through small businesses.

29.     Despite   the  significant   achievements  and   progress  made   in
consolidating  and  creating  new  democratic  institutions,  it  is   still
necessary to  support the  requisite actions  and institute  reforms in  the
areas of  legal safeguards, careers  in the police  force and the  electoral
system.

30.  As regards  the improvement of the administration of justice, there  is
a need to continue to screen personnel in  the judiciary and, in general, to
develop  a strategy  for  modernizing the  judicial  system  and effectively
consolidating the rule of law.

31.   As regards  the public  security forces, emphasis should  be placed on
strengthening  and  consolidating the  institution  of  the  National  Civil
Police (PNC) within a legal and  administrative framework which, by  clearly
defining  its mandate, would  ensure that  the PNC  could effectively fulfil
its  objectives of  guaranteeing the  security of citizens  in a  context of
respect for human rights. In this  connection, support is urgently  required
for  actions in  the following  key areas:  (a) functioning  of the internal
oversight  organs;  (b)   consolidation  of  the  leadership  and   planning
structure; and  (c) strengthening  of the criminal investigation  branch and
improving  the  latter's  coordination  with  the AttorneyGeneral's  Office,
which should  effectively exercise functional  leadership of the  Department
of Criminal  Investigation.   This aspect  is of  particular importance  for
overcoming the  constraints on the development  of the  system of protection
in El  Salvador, which have so far  thwarted efforts to resolve the issue of
impunity.  In these circumstances, when  human rights violations take place,
it  is very  difficult  to  identify and  detain the  guilty parties  and to
enforce the corresponding penalties.  Other  problems are also created, such
as violence and public insecurity.

32.   The process  of reconstruction,  democratization  and development  can
also  be affected  by  a change  in  the  situation  regarding the  stay  of
Salvadoran citizens  resident in the United  States whose  current status of
"temporary residents" is due  to expire early in 1996.  The eventual  large-
scale  return migration  will have  an  economic  and social  impact on  the
country:   (a) economic, because  of the impact  of "family  remittances" on
the macroeconomic variables of  the external sector, the loss of income  for
a  significant number  of families which  depend on remittances  and the new
trend towards greater  competition for jobs, and  (b) social, because of the
breakdown in the social fabric in certain areas, which could affect some  of
the successes achieved in the pacification process.

33.  National reconstruction and democratization have advanced  considerably
since  the  signing  of  the  peace  agreements.    Technical  and financial

cooperation  is still  needed  from the  international  community,  however,
failing  which  there  is  little likelihood  of  consolidation  of economic
growth, reconstruction, improved  living conditions for the poorest  sectors
of  the  population,  peace, democracy  and  the  functioning  of democratic
institutions.   It is also desirable that the executive branch of government
and  donors  speed  up  the  process of  disbursing  the  funds pledged  and
approving specific projects that will  make up for the delays in initiating,
continuing or  supplementing the  various programmes  related  to the  peace
process.   In this connection, it is recommended that  donors should improve
the  coordination  of  their  activities  to  ensure  greater  coherence  of
international assistance.

34.  The international community has  responded generously to the  financing
of major infrastructure, social services and  other social projects but less
so at  times to  the appeals  for the  funding of  some programmes  directly
related  to the agreements that  are crucial for the consolidation of peace.
Among  the principal programmes  which still  require financial  support are
those   concerning  the  establishment,  strengthening  and  functioning  of
democratic  institutions  and   those  relating  to  training,  credit   and
incremental housing,  in  order  to guarantee  the reintegration  of  former
combatants, demobilized military  personnel and  the poorer  sectors of  the
population who  have  been affected  by  the  conflict into  the  productive
process and into society.


                IV.  ADVANCES IN RECONSTRUCTION AND THE STRENGTHENING
                    OF DEMOCRATIC INSTITUTIONS

          A.  Financial requirements and response from the international
              community

35.  Since the  signing of the peace agreements, the Consultative Group  has
held three  meetings on El Salvador  under the auspices of the International
Bank for  Reconstruction and  Development (IBRD),  in 1992,  1993 and  1995.
The meeting held recently in Paris on  22 June 1995 was co-sponsored  by the
Inter-American Development Bank (IDB).

36.   At  the three meetings  the Government submitted  its priority funding
requirements for  three substantive  areas to  the international  community:
(a)  the national reconstruction plan; (b) the  supplementary programmes for
implementation   of   the   peace  agreements,   which   include  democratic
institutions; and (c) the economic and social development plan.   The recent
meeting of  the Consultative Group dealt  with important  topics relating to
the consolidation  of peace,  with the emphasis  on:  implementation  of the
land  transfer programme,  including  its  sustainability and  supplementary
programmes;  strengthening of democratic  institutions; strengthening of the
institutions  of   civil  society   (non-governmental  organizations);   and
elimination of rural poverty.

37.  For  the period 1992-1996, funding  priorities for the consolidation of
peace  and   national  reconstruction  were   estimated,  in  1992,  at  US$
1,566,000,000 of  which the  government contribution  was established  at 26
per cent.    On  the basis  of  recent  data,  the  government  contribution
increased to 67  per cent, amounting to  US$ 1,047,000,000, funded by  loans
from  third parties and internal resources. Government sources indicate that
in response to funding  priorities for the past  three years (established in
April  1993),  funding pledges  have  been  obtained from  the international
community in an amount  of US$ 994.3  million, of which donations amount  to
US$  537.4 million  and  loans to  US$ 456.9  million.   Resources  for  the
reconstruction of infrastructure represent the bulk of the latter.

38.   At the last meeting of the Consultative Group for El Salvador, in June
1995, the international community ratified or  announced new pledges for the
period 1995-1997 in an  amount of US$ 108.5 million for projects relating to
the  peace  agreements.    Additional  consultations  with  donors  will  be
required with regard to  these pledges in order  to determine the  amount of

new resources.  Of  these pledges donations  amount to US$ 58.5 million  and
loans to US$  50 million. This latter amount includes US$ 10  million in new
resources  from IDB.   A  number of  donors  have  indicated that  they will
continue  to   channel  their   cooperation  through   the  United   Nations
operational system,  in particular  through the  United Nations  Development
Programme (UNDP).

39.  According to information from the  Government and from the  co-sponsors
of  the  recent  meeting  of  the  Consultative  Group,  the   international
community  pledged  cooperation resources  of  more  than US$  1.3  billion.
These resources  would largely  be allocated  to the  financing of  national
reconstruction  projects,  poverty  alleviation and  medium-term development
programmes.

 40.  In  addition to the financial  cooperation requirements sought by  the
Government  at the last  meeting of  the Consultative  Group, the Salvadoran
delegation  submitted   a  document   on   priority  technical   cooperation
requirements for  projects in  the context  of the  consolidation of  peace.
These  projects were  identified with the participation  of the institutions
designated as recipients of the future  cooperation, or with those  agencies
responsible for  the design and formulation  of projects  connected with the
peace  process.    In  addition,  during the  formulation  of  each  of  the
initiatives, consultations  were held  with the technical  staff of  similar
projects  currently being  implemented and  with representatives  of  donors
interested in each of  the technical cooperation areas  in which funding  is
required.  The work  began in November 1994 with the ongoing cooperation  of
UNDP, other agencies of the United Nations system and ONUSAL.

41.    The  external  resources  sought  from  the  donors for  10  priority
technical assistance projects  amount to US$ 9.8  million.  Up  to September
1995 the donor community had pledged  US$ 4,230,000 (through various funding
mechanisms),  permitting the  implementation  of four  public  security  and
administration of justice projects and the  initiation of activities in  two
other projects  relating to the second of these areas.  UNDP, at the request
of the  Government, is continuing to  promote the  mobilization of resources
to cover  supplementary funding requirements  for administration of  justice
and initiatives to strengthen the fund  for assistance to war-disabled,  the
gradual provision  of housing for  ex-combatants and demobilized  personnel,
and strengthening of the Office of the National  Counsel for the Defence  of
Human Rights.   The second half  of 1995  will see, with the  cooperation of
UNDP and  other United Nations agencies,  the conclusion  of the formulation
of eight  additional technical cooperation projects  in the  areas of public
security, reintegration of former combatants and demobilized personnel,  and
protection and defence of human rights.

42.   It should  be pointed  out that  the main  problem  faced in  securing
funding  for  the  consolidation  of  peace  is  the  decline  in resources,
essentially in  donations, since 1994.   According to  a report prepared  by
UNDP on technical and financial cooperation  for El Salvador for  1992-1996,
there  is a  distinct downward  trend in  cooperation for El  Salvador, even
though there have been new  donors since 1992.  A case  in point is  that of
the  United States Agency  for International  Development (USAID), which has
established new  priorities in  its programme  of external  assistance.   It
should be emphasized  that a high percentage  of the funding made  available
during   1992-1993  pursuant  to   the  commitments  made  under  the  peace
agreements represented funding previously budgeted under regular  programmes
in similar areas.

43.  The decline  in financial resources in support of the consolidation  of
peace,  in  the  context  of  paragraph  25  above,  explains  in  part  the
difficulties  that have arisen  in the  implementation of various programmes
and projects  that are  central to  the process.   This has  to some  extent
influenced  the rescheduling  of the  commitments established  in the  peace
agreements and has even  resulted in greater demands by some segments of the
recipients.

B.  Progress and implementation of projects

44.   Pursuant to  the peace  agreements, sectoral  and thematic  priorities
have been identified and various problems  and projects formulated with  the
aim  of: (a) achieving the  economic and social reintegration of former FMLN
combatants and demobilized  members of the armed forces and solving the land
problem  of those known  as "landholders";  (b) addressing  the economic and
social needs of the communities most affected  by the conflict and improving
the  living conditions  of the  poorest  groups;  and (c)  consolidating and
strengthening democratic institutions.

45.  In the  annex to this report,  a description is given  of the  progress
achieved  in 1994-1995  in  implementing the  main  programmes  and projects
relating to the national reconstruction and democratic development  process.
Implementation of  some of  the ongoing initiatives formulated  and approved
in compliance  with the commitments assumed  under the  peace agreements has
reflected the various reschedulings carried out in some cases.

46.  The development  of some programmes  and projects has been affected  by
budgetary  constraints, delays  in disbursements  of internal  and  external
funds pledged,  deferment of other  initiatives on  which the implementation
of a number  of projects  hinged, and  the unique  nature of  a process  for
which there was no  precedent that might  have helped to expedite  decision-
making.

47.   Non-governmental organizations  and other  civilian institutions  were
involved alongside government bodies and institutions in the  implementation
of projects  relating to  reintegration, reconstruction  and assistance  for
groups affected by the conflict.   A significant number of  non-governmental
organizations  have continued to  cater to the  needs of  affected groups in
specific parts  of the country  through contributions  which various  donors
channel directly  through them.   No  detailed information  is available  on
these projects, which might add to the usefulness of this type of report.

48.   Since 1992,  the country  has received  fresh funding  and pledges  of
cooperation through  various mechanisms.   The  international community  has
responded  to  various appeals  for assistance  through loans  and donations
provided  as part  of  bilateral cooperation  (Australia,  Austria,  Canada,
Denmark,   France,  Germany,  Israel,  Italy,  Japan,  Mexico,  Netherlands,
Norway,  Spain,  Sweden,  Switzerland,  Taiwan  province  of  China,  United
Kingdom of Great Britain and Northern Ireland  and United States of America)
and of  multilateral cooperation (United  Nations bodies and  organizations,
Central American Bank  for Economic Integration,  Inter-American Development
Bank, International  Bank for  Reconstruction and  Development and  European
Union).

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ANNEX

Progress report on the principal programmes and projects
relating to the process of national reconstruction


CONTENTS

  Paragraphs  Page

I.  ECONOMIC AND SOCIAL REINTEGRATION OF FORMER COMBATANTS
  OF FMLN AND OF DEMOBILIZED MEMBERS OF THE ARMED FORCES

  OF EL SALVADOR AND ASSISTANCE TO LANDHOLDERS ..........2 - 3014

  A.  Rural reintegration ...............................6 - 1715

  B.  Urban reintegration ...............................18 - 2317

  C.  Care for the war-disabled .........................24 - 3018

II.  ASSISTANCE TO COMMUNITIES AFFECTED BY THE CONFLICT ....31 - 4919

  A.  Secretariat for National Reconstruction ...........33 - 3620

  B.  Social Investment Fund ............................37 - 3921

  C.  Other initiatives .................................40 - 4721

  D.  Major infrastructure ..............................48 - 4923

III.  STRENGTHENING OF DEMOCRATIC INSTITUTIONS ..............50 - 7923

  A.  Judicial system ...................................51 - 6223

  B.  The electoral process .............................63 - 6925

  C.  Public security ...................................70 - 7426

  D.  Office of the National Counsel for the Defence of
    Human Rights ......................................75 - 7927

1.  Below is a  progress report on some of the programmes and projects  that
have  been implemented in  fulfilment of  the commitments  deriving from the
peace agreements.    This section  also  contains  proposals for  action  to
consolidate the various initiatives under way.   The programmes and projects
have  been grouped into  three categories:   (a) achieving  the economic and
social reintegration  of former  combatants of  the  Frente Farabundo  Marti
para la  Liberacion Nacional  (FMLN) and  demobilized members  of the  armed
forces  and   solving  the   land  tenure   problems  of   those  knows   as
"landholders";  (b)  addressing   the  economic  and  social  needs  of  the
communities  most  affected  by  the   conflict  and  improving  the  living
conditions of the poorest  groups; and (c)  consolidating and  strengthening
democratic institutions.


I.  ECONOMIC AND SOCIAL REINTEGRATION OF FORMER COMBATANTS OF
    FMLN AND OF DEMOBILIZED MEMBERS OF THE ARMED FORCES OF  
    EL SALVADOR AND ASSISTANCE TO LANDHOLDERS               

2.    The  immediate aim  of  the  reintegration  projects  is  to  generate
employment and income as a precondition for  reintegrating former combatants
and demobilized  military personnel into economic  and social life,  thereby
helping to  recover the national productive  capacity and  repair the social
fabric.  To that  end, urban and  rural programmes have been formulated  and
implemented to  facilitate  access to  land  (in  rural areas)  and  improve
conditions  for human  settlements;  to disseminate  knowledge  and  develop
productive skills  in the  beneficiaries; to  provide technical  assistance;
and to offer access to credit.

3.   The Government's programme for  supporting the  reintegration of former
combatants of FMLN  and demobilized members of  the armed forces, which  was
developed  during the  third quarter  of  1992,  provided for  assistance to
10,944 former combatants and  30,000 demobilized military  personnel under a
number of different projects, as  well as agricultural land grants to 25,000
landholders.  Originally, the  rural  reintegration scheme  was  to  include
7,713  former FMLN  combatants and  15,000 demobilized  military  personnel,
while the urban scheme was to cover 3,231 former FMLN combatants and  15,000
demobilized  military personnel. However,  at a  later stage,  the number of

demobilized  military personnel  eligible to participate in  rural and urban
reintegration programmes was considerably reduced.

4.  In 1994 and part of 1995,  the principal reintegration schemes in  urban
areas  focused on  specific projects, most  of which were  completed by July
1995. However,  the implementation  of rural  reintegration initiatives  has
been  seriously delayed,  for reasons  attributable  to  the dynamics  of an
inherently complex process involving, inter alia, land transfers,  technical
assistance  and credit  for  investment.   These  initiatives  will  require
further  attention in the  future in  relation to  both technical assistance
and  refinancing.    The  beneficiaries'  degree  of indebtedness  and  real
ability  to pay must be borne in mind, since  these factors will limit their
opportunities for future access to traditional sources of credit.

5.   Reintegration programmes  for former  members of  the National  Police,
similar to  those implemented for demobilized  members of  the armed forces,
were designed as  part of the  process of demobilizing this  security force.
In view of the background and aspirations of  the participants, most of  the
projects  emphasized   reintegration  in  urban   areas.    The   Government
implemented a two-phase  counselling programme between  October 1993 and May
1995, offering the  second phase in response  to pressures and demands  from
former police  officers who  had not yet  received such counselling.   Under
this initiative, 4,394  former police officers received job counselling  and
further individual profiles were  added to the records.   At the end of this
process, 2,915 beneficiaries  opted for reintegration through the  so-called
industry and services  (micro-enterprise) programme;  401, for  agricultural
reintegration programmes; and  871, for a scholarship programme to  complete
their studies.


A.  Rural reintegration

6.   The economic  and social  reintegration of former  combatants in  rural
areas remains  one of  the most  complex items  on the agenda  of the  peace
agreements  because of the  strategic and  operational criteria  that govern
the various  programmes and projects  from the design  stage onwards.   With
respect  to strategic considerations, the sustainability of any programme of
this  type hinges on the  response to larger challenges, such as alleviation
of poverty,  expansion of employment and  social integration.   With respect
to  operational  requirements, programmes  conceived  from  this perspective
must necessarily encompass  the issues  of land  use and  tenure, access  to
credit, suitable  technical assistance and the development of productive and
social infrastructure.

7.  The land  transfer programme is one of the central features of the peace
agreements  and the cornerstone  of rural  reintegration efforts.   Owing to
difficulties in defining the programme's scope and nature,  in late 1992 the
Secretary-General sent a  team of experts to  help formulate a proposal  for
land  transfer that  would be  acceptable to the  parties.   Originally, the
parties agreed that  the number of  potential beneficiaries would be  set at
47,500  of whom  15,000 would  be demobilized  members of  the armed forces,
7,500 would be  former combatants of FMLN  and 25,000 would  be landholders.
Subsequent  negotiations  reduced  this  beneficiary  population  to  38,096
people,  of whom  8,830 were  demobilized members  of the  armed forces  and
29,266 were either former combatants of FMLN or landholders.

8.  The land transfer programme was plagued  with delays; it was rescheduled
several times,  and a number  of changes  were made in its  procedures.  The
delays were  attributable to  a variety  of factors,  including legal  ones,
such  as  land  registration, and  administrative  ones,  such as  personnel
turnover in the  institutions linked to the programme and delays in payments
to former landowners.

9.   By mid-September  1995, 71.7  per cent  of the total  transfer process,
involving 27,232  beneficiaries, had been completed.   This  means that land
had been transferred to  6,360 (72 per cent)  of the demobilized  members of

the armed forces and 20,872 (71  per cent) of the former  combatants of FMLN
and landholders.

 10.   Of all the  beneficiaries holding titles  to their  land, only 25 per
cent  completed the  registration process in  the land registry  office.  In
the  short term,  it  will be  necessary to  complement national  efforts to
speed up the registration of title deeds.

11.  Various technical assistance programmes  have been developed to support
former combatants  who opted for  reintegration in rural  areas.  The  first
reintegration  programme,  coordinated  by the  United  Nations  Development
Programme  (UNDP) and  launched  immediately after  the  demobilizations  of
1992, was designed to provide six  months of agricultural training to nearly
6,300 former combatants of  FMLN.  A second  programme, also coordinated  by
UNDP,  provided  technical  assistance  to  former combatants  of  FMLN  and
demobilized   members  of   the   armed  forces   through   non-governmental
organizations  and   the  National  Centre   for  Agricultural  and   Forest
Technology (CENTA).   According  to government  reports, another  programme,
which  was  implemented  by  CENTA  until  the  end  of  May  1995, provided
technical assistance  to  over  10,000 beneficiaries  of the  land  transfer
programme.    The European  Union,  meanwhile,  continued  to  focus on  the
Department of Usulutan, assisting 1,500 former  combatants of FMLN and 1,500
demobilized members of the armed forces.

12.   With  respect to  rural credit,  as  of  31 August  1995 the  Banco de
Fomento Agropecuario  had disbursed  5,991 loans  to landholders,  out of  a
total  of 7,456  loan applications.   It  had  also  granted 4,273  loans to
demobilized  members  of   the  armed  forces,  out  of  a  total  of  4,453
applications.  As  of the same  date, all of the FMLN  beneficiaries who had
received land  had  been given  access  to  an initial  credit  specifically
agreed upon  in the  programmes deriving  from the  peace agreements;  still
pending  is  a  second  disbursement  for   those  who  meet  their  payment
obligations for  the first credit.   In addition, 1,500 beneficiaries in the
Department of Usulutan will receive credits from the European Union.

13.   Progress in the  technical assistance and  credit programmes  has been
determined  by the land-transfer  process, owing to difficulties in planning
and  carrying out the relevant activities in a timely fashion, in accordance
with  growing seasons.   In  its resolution  961 (1994), the  United Nations
Security  Council  urged  all  States  and  the  international  institutions
engaged in the fields of development and  finance to contribute promptly and
generously in  support of the  implementation of  all aspects  of the  peace
agreements.

14.   In  order  to  provide technical  assistance  to a  broad  medium-term
programme  for the  reintegration of the beneficiaries  of the land-transfer
programme,  UNDP,  with   the  cooperation  of   the  Food  and  Agriculture
Organization of the United  Nations (FAO) and the United Nations Mission  in
El Salvador (MINUSAL), has developed a preparatory  assistance project which
has the following goals: (a) an evaluation of the economic potential of  the
land transfer programme on the basis  of a situational diagnosis,  including
a quantitative  assessment of the future  impact of  the obligations (debts)
assumed  by  beneficiaries, and  (b)  the  formulation  of viable  strategic
proposals and bases for a medium-term  rural development programme based  on
the  following elements:   technical assistance and  training; direct credit
and  subsidies  for   productive  activities;  and  global  assistance   for
production and social infrastructure and services.

 15.  In order to ensure that new farmers and  their families on transferred
land  are provided with  a minimum  standard of  housing, housing programmes
have been  implemented.   These programmes  are part  of a  set of  measures
which, to  date, have provided  approximately 11,000 individuals,  including
former FMLN combatants  and demobilized armed forces personnel, with  access
to either  emergency or permanent housing.  Under one  such programme, which
is  based on  grants, loans  and  mutual assistance,  1,935 houses  will  be
provided  to former FMLN  combatants and  1,500 houses  to demobilized armed

forces personnel.

16.  UNDP, with external funding, has launched  a programme to provide  core
housing  and latrine facilities for 1,344 participants  in the land-transfer
programme (former combatants  and demobilized military personnel).  Under  a
second project  "incremental housing" has been  provided:   through a system
of self-help housing and mutual assistance,  permanent housing was built for
647 land  transfer programme  beneficiaries.   There are  plans for  another
project to  provide 2,000  houses for programme  beneficiaries if  financing
can be obtained from the international community.

17.  A large portion of the beneficiary  population covered under the  peace
agreements is  to be  found in  rural  human settlements,  which at  present
consist of 10 communities in Chalatenango,  Cabanas and Morazan.   According
to  the  programme's operational  plan,  launched  on  15  August 1995,  the
legalization of  land ownership  in these  settlements may  be completed  by
April  1996.   It  should be  noted that  even  though the  agreements  only
provide  for   legalization  of   land  ownership  in   these  rural   human
settlements,  the  settlements  are  clearly vulnerable,  and  the  need  to
provide them with adequate development assistance cannot be ignored.


B.  Urban reintegration

18.    The support  received  by  those  former  combatants and  demobilized
personnel who  opted for  urban reintegration  has  been channelled  largely
through training  programmes in the industrial  and services  sector, in the
form of administrative/  entrepreneurial and technical vocational  training,
including  access to credit  for the  establishment of  small enterprises or
businesses, and through a scholarship programme.

19.  The training programmes in industry and services had an average  length
of six  months, during  which the  beneficiaries received  an allowance  for
living expenses.  The  maximum credit available was  equivalent to US$ 2,300
for a  fiveyear period, including a  one-year grace period,  at 14 per  cent
interest.   Some 1,685  former FMLN  combatants and  3,097 demobilized armed
forces personnel began the training, with  1,328 former combatants and 2,885
demobilized  soldiers  completing  it.    In  May  1995,  1,083  former FMLN
combatants and  1,863  demobilized members  of  the  armed forces  had  been
granted credit for the establishment of micro-enterprises.

20.  Delays in the preparation of training  programmes and the extending  of
credit  led to  defections among  the beneficiaries  and, as  a result,  the
projected target was not achieved.  It has also become necessary to  propose
that  the programme  should  be strengthened  through  technical  assistance
and/or additional training, including the refinancing of loans.

21.  The programme of support for the  economic reintegration of leaders and
middle-ranking  members  of FMLN,  which was  formulated on  the basis  of a
clear strategy, has  been implemented.  The main components of this project,
which had  a target population  of 600, were:   raising  the academic level;
technical  and  managerial/administrative  training;   counselling  for  the
identification,   formulation   and   implementation   of   micro-enterprise
projects; and credit.  In order to meet  their basic needs, each beneficiary
was  given  a  monthly  allowance (living  expenses)  during  the  six-month
training period.

22.  The following  results were achieved  under the programme:  52  persons
were trained  in senior  management programmes, 200  in vocational  training
programmes and 346  in managerial/administrative programmes, making a  total
of 598 trained  beneficiaries.  Once the  training phase had been completed,
technical assistance  was developed for  the identification and  formulation
of  projects  aimed  at the  establishment  of  micro-enterprises  or  small
businesses.  The process  of extending credit began in May 1994; 481 persons
benefited and,  also  received technical  assistance  to  help them  in  the
start-up phase  of their activities.  The project cost $5  million, of which

$2  million was to  be used for credit.   It should be  pointed out that the
Government,  through  the   Social  Fund  for  Housing,  has  established  a
programme to extend credit to those  programme beneficiaries who require it.
To date, 19 beneficiaries have made use of the programme.

23.    The  scholarship  programme,  aimed  at  former  FMLN  combatants and
demobilized  members  of the  armed  forces  and  the  National Police,  was
designed to  meet needs for  secondary education (diversified  baccalaureate
studies), technological  training and  university education.   To date,  699
former FMLN combatants, 441 demobilized members of the armed forces and  532
demobilized  members  of   the  National  Police  have  benefited  from  the
programme.  The  scholarship pays beneficiaries' living expenses,  transport
and  equipment  costs  and  tuition  for  a period  of  two  to  five years,
depending  on  the  educational level  required  and  the  level  previously
reached.


C.  Care for the war-disabled

24.   Since the Fund for the Protection of the Wounded and War-Disabled as a
Consequence  of the Armed  Conflict was  established in  1992 by Legislative
Decree   No.  416,  its  activities  have  focused   on  administrative  and
operational  organization   and  legislative  reform,  the   identification,
vetting  and  registration  of  beneficiaries,  and  actuarial  studies,  to
mention the most important.

25.   The revised National Census of the Wounded and War-Disabled determined
that  the war-wounded  numbered 11,337  persons, including members  of FMLN,
the  armed forces  and  the  civilian population.    On the  basis  of  this
information,  the technical  evaluation  commissions  of  the Fund  for  the
Protection of the  Wounded and War-Disabled  as a Consequence  of the  Armed
Conflict have been able to establish the degree of disability.

 26.   Projects carried  out under  the supervision  of the Secretariat  for
National Reconstruction benefited a total of  2,398 wounded members of  FMLN
in   programmes  which   provided  medical   care  and   surgery,   physical
rehabilitation,  prostheses, orthotics  and drugs.   They included  32 blind
persons,  who also received rehabilitation.  As far as the rehabilitation of
FMLN beneficiaries  is concerned,  633 were  trained in  the industrial  and
services sector; 824 in agriculture, 2,022  persons having been given  land;
24 are covered by  the programme of support for the economic integration  of
leaders and  middle-ranking  members of  FMLN;  and  40 by  the  scholarship
programme.

27.  The demobilized wounded members of the  armed forces have been provided
by  the  armed  forces  with medical  coverage,  physical  and  occupational
rehabilitation,  and pensions and  compensation.   In addition,  344 of them
have participated in technical and vocational  training programmes.  Some 90
prostheses have been made and 22 have been repaired.

28.  To date,  the Fund for the Protection  of the Wounded  and War-Disabled
has evaluated  10,602 beneficiaries,  of whom  8,840 are  receiving pensions
and  the relevant compensation.   Approximately 93.5 per cent  of the target
has been met.

29.  In addition, the wounded  and disabled have been cared  for by a series
of national and international institutions and/or organizations, which  have
developed  different  programmes  and/or projects  that  have  met  the most
immediate needs of an emergency phase.  As far as international  cooperation
is  concerned,   mention   should  be   made  of   projects  financed   with
contributions  from   the  European  Union,   the  Danish  Association   for
International Cooperation,  the German  cooperation agency  GTZ, the  United
States of America,  UNDP, including its Development Programme for  Displaced
Persons,  Refugees  and   Returnees  (PRODERE),  the  Pan  American   Health
Organization (PAHO) and the United Nations Children's Fund (UNICEF).

30.   A recent  study carried  out by  the Fund  for the  Protection of  the
Wounded and War-Disabled, with the technical  cooperation of UNDP and advice
from MINUSAL, indicates that  the volume of financing  required to care  for
the  wounded  and  disabled  is  such  that it  would  require  the  Fund to
formulate and  develop instruments  and the technical  capability to  devise
and  implement  viable  policies  for  the mobilization  of  resources,  the
administrative   and   financial  management   of   those   resources,   and
comprehensive rehabilitation projects.


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II.  ASSISTANCE TO COMMUNITIES AFFECTED BY THE CONFLICT

31.  The  National Reconstruction Plan, which  initially covered the 115  of
the  country's  262  municipalities  that  were  identified  as  being  most
severely  affected  by  the  conflict,  includes  a  social  and  production
development programme  designed to help meet  the economic  and social needs
of poor communities.  A number of subprogrammes  have been implemented under
this  programme, at  a  total cost  of  approximately $30  million.    These
subprogrammes  included   projects  dealing  with   immediate  or  emergency
assistance, training, credit and technical assistance, education and  social
development,  environmental  protection,  land  and  assistance to  disabled
civilians.

 32.    Communities  affected  by  the  conflict  have  also  benefited from
projects   carried   out  under   other   government   and  non-governmental
initiatives   in    the   areas   of    agricultural   development,   social
infrastructure, training and technical assistance, credit, establishment  of
micro-enterprises, social development and environmental management.


A.  Secretariat for National Reconstruction

33.  The  Secretariat for National Reconstruction  set up by  the Government
to  coordinate  the  implementation  of  the  National  Reconstruction  Plan
initially focused its efforts  on the 1992 demobilization process.  In  1993
it  embarked  on  the  medium-term  phase  involving  the  incorporation  of
projects having a greater impact on  the productive and social reintegration
of  former combatants and  demobilized persons,  in the  context of national
development.   In addition  to its  responsibility for  economic and  social
reintegration projects and the land  transfer programme described above, the
Secretariat also  attends to the needs  of other  population groups affected
by the  conflict.   It coordinates its  work with the  town councils  (local
governments), which  consult with  their communities in open  discussions to
identify   the   most  urgent   priorities.      It   promotes   production,
infrastructure and capital  investment projects in  the areas  of education,
health,  environmental protection,  economic and  social  infrastructure and
municipal development.

34.  In support of reconstruction  projects, the World Food Programme (WFP),
through  a  "food-for-work"  programme,  provided  assistance  to   training
activities under  the National Reconstruction  Plan aimed at  rehabilitating
and reintegrating 14,000  demobilized, repatriated and displaced persons  in
108 municipalities.  Support was  also provided  as part  of the  settlement
process to 14,500 families affected by the war in the form of assistance  to
farmers  and  the rebuilding  of  basic  infrastructure.    To attain  these
objectives, 4,900 tons of foodstuffs were  distributed.  Total project  cost
was  $7.2 million.   To  consolidate project  results, WFP  has approved  an
extension of  the project until  April 1996 and additional  resources in the

amount of $2.2 million.

35.   The  records  show that  from January  1992 to  July 1995,  over 2,500
infrastructure projects were implemented at a total cost of $68 million  for
the  direct  benefit  of  the  inhabitants   of  the  communities  in  which
construction took  place.  This activity  generated over  16,000 jobs during
the period.  The  types of projects carried out under the programme included
1,250 access  roads, 480 schools, 85  health projects,  111 water-supply and
sewerage systems, 210 municipal buildings, 280 electrification projects,  55
community housing units and 35 municipal development projects.

36.   For 1995, a  total of  $40.3 million has  been budgeted  to finance  a
variety of projects.   Of this amount,  $24.1 million has been allocated  to
projects for former combatants, with special  emphasis on the land  transfer
programme, while $6.4 million is to be invested in the basic  infrastructure
programme.   The remaining  funds are allocated to  projects to support non-
governmental  organizations,  major  infrastructure,  micro-enterprises  and
agriculture.   These investments  are expected  to generate  11,000 new jobs
during the year.

  B.  Social Investment Fund

37.    Another  institution   with  a  direct  bearing  on  the  process  of
reconstruction  and improving the  living conditions  of poor  groups is the
Social  Investment Fund, which  channels assistance  to poor  sectors of the
population, including those  uprooted by the  conflict, thereby  meeting the
dual  objective  of  combating poverty  and  strengthening  the  process  of
national reconstruction and reconciliation.  During  1994 and the first half
of 1995,  the Fund  approved 1,997 projects  for a total  of $45.7  million.
The Inter-American Development Bank (IDB)  cooperates with the  Fund through
its Social Investment Programme.

38.   In assessing  community needs and  proposed solutions, the  Fund gives
primary  consideration  to  the   degree  of  poverty   of  the  communities
requesting  support. Accordingly,  it promotes  and finances  infrastructure
and  capital-investment projects  in  the  areas of  education  and  health,
environmental  sanitation,  improvement  of  housing  and  basic   community
facilities, food  programmes for vulnerable  groups, training and  technical
assistance  for  production  and  vocational  centres  for  the  training of
skilled labour.

39.  In  the coming years, the Fund's  greatest challenge will be to promote
local development  by improving  the provision  of municipal  services.   To
that end,  it plans  to finance  the implementation of  projects to  support
production (by  improving markets  and roads,  for example),  which will  be
carried out  by the  municipalities themselves;  at the  same time,  it will
seek to  streamline the implementation of  its investment  plan and allocate
larger amounts for individual projects.


C.  Other initiatives

40.    The Office  of  the United  Nations  High  Commissioner  for Refugees
(UNHCR)  has  cooperated  in  two  specific   areas:    (a)  assistance   to
communities  affected by the conflict and (b) development and implementation
of  the identity papers  project. In  the first  area, quick-impact projects
were  carried   out  between  January   1994  and   April  1995,  benefiting
approximately 22,000  people in repatriated  communities.  Projects  focused
on  drinking-water supply  systems,  basic health  and  nutrition  services,
infrastructure and  production.  Meanwhile,  the identity papers project met
its  goal of providing  new documentation  for 45,000  people whose original
identity records had  been lost during the conflict.   This was achieved  by
providing  municipalities with  technical and  legal assistance  as well  as
training. The project was carried out  jointly with the Salvadoran Municipal
Development Institute.

41.  FAO activities  in support of the Salvadoran peace process have focused
on technical assistance  projects for small-scale farmers in the departments
of Cabanas, northern  Usulutan and Morazan.  The aim of these projects is to
improve current  production systems and  to develop  alternative systems  in
areas with severe  ecological deterioration.  In addition, FAO  participated
with UNDP in  a preparatory assistance project to support the productive and
social reintegration of beneficiaries of the land transfer programme.

 42.  In the context of its  work with communities affected by the conflict,
UNICEF is implementing  a programme of basic  services in priority areas  in
39 municipalities in the departments of  Cabanas, San Vicente and  Usulutan.
The programme includes activities in the  areas of health, education,  water
and sanitation,  nutrition, children in  especially difficult circumstances,
decentralization and strengthening of local governments.  The programme  has
a beneficiary population  of 500,000 people, of  whom 275,000 are under  the
age of 15 and 104,000 are women of child-bearing age.

43.    In  the area  of  agricultural  assistance  to  poor  sectors of  the
population affected by the conflict, projects  have been implemented or  are
being developed  and/or implemented to provide  support to  poor families in
the  departments  most  affected  by  the  conflict  and  where  poverty and
ecological  deterioration  are  the most  acute.   One  such project  is the
agricultural  development  project for  small  farmers  in  the  Paracentral
region  financed by  the  International Fund  for  Agricultural  Development
(IFAD),  UNDP  and  the  Central  American  Bank  for  Economic  Integration
(CABEI).  This  project is intended to  improve living conditions for  5,000
low-income  families in  rural areas in  the departments of  Cabanas and San
Vicente,   through  capital   development  and   training  in   agricultural
production,  agribusiness and  marketing.   From July  1994 to  June 1995, a
total  of $2.3 million  in technical assistance  and credit  was provided to
1,374 families;  of that  amount, $1  million was  earmarked for  investment
projects.  Thirty "model  farms" have been set  up and  are being run by  30
leading  families, who, in  1995 will  train 2,100  farmers in environmental
protection, women's  equal participation,   agricultural diversification and
management  capacity-building for  the marketing  of agricultural  products.
WFP  is supporting  this  project  through the  modality  of  food-for-work,
chiefly  in the areas  of soil conservation, environmental protection, cross
diversification  and   upgrading  housing  and   roads.    The   programme's
contribution represents  2,700 tons  of foodstuffs  valued at  approximately
$1.3. million, benefiting 2,100 families.

44.  Another far-reaching initiative is  the development project for  people
affected by the conflict  in the department of Chalatenango, which seeks  to
bring   about  integrated   development   in  the   communities   concerned.
Beneficiaries  include some  11,000  small farmers  and  small  businessmen.
This  IFAD-sponsored initiative  is being  financed  by  the Fund  and other
donors,  including the  European  Union and  the United  Nations Development
Fund  for  Women  (UNIFEM),  and  is   being  implemented  jointly  by  non-
governmental organizations  and other agencies  which maintained a  presence
in the department during the conflict.  The project began operation in  mid-
1994.

45.  In  1994-1995, PRODERE, funded by Italy,  managed by UNDP and  launched
in 1989, pursued  its final-stage activities, with emphasis on  transferring
the main programmes and  projects carried out in  its start-up phase.  These
activities are now being carried out  through local development agencies (in
the  departments  of  Chalatenango  and  Morazan),   which  is  one  of  the
Programme's  principal achievements.   In  the future,  both  government and
non-governmental institutions  will have  to assume  responsibility for  the
support and management of the different  projects being implemented in  five
of the country's departments  (55 municipalities) which will benefit 165,000
persons.

 46.  In July  1995, the Resident Coordinator  for the United Nations system
and  the  Minister  for  Coordination of  Economic  and  Social Development,
acting on behalf of  the Government of El  Salvador, signed a  memorandum of

understanding  concerning  the  sustainable   human  development   programme
planned for the  northern part of the country.   This programme will  assist
in formulating and  implementing national  policies to  promote and  channel
investments towards these basic areas of development.

47.  The  Culture of Peace Programme was developed with technical assistance
from the  United Nations Educational,  Scientific and Cultural  Organization
(UNESCO)  to  contribute to  the  process  of  reconciliation of  Salvadoran
society within  the framework of a new mode of  coexistence among civilians.
The aim of  this programme is to incorporate  the culture of peace into  the
learning and  education processes by going  beyond the  mere transmission of
knowledge.  To date, seven project documents have  been drawn up jointly  by
the Government  of El Salvador,  non-governmental organizations and  UNESCO.
This  has led to the establishment of the  National Council for Coordination
of the Culture of  Peace Programme in El  Salvador.  This  Culture of  Peace
Programme  has been  adopted as the  fourth component of  the United Nations
Agenda for Peace.


D.  Major infrastructure

48.   Reconstruction  and  rehabilitation  of  major  infrastructure  is  an
essential  component of  the National  Reconstruction Plan,  which  requires
attention in view of the demands generated by  economic growth and the  need
for an expanded infrastructure.

49.    IDB is  the international  financial institution  that has  been most
directly   involved  in   the   reconstruction  and/or   repair   of   major
infrastructure  damaged during the conflict  and in efforts  to expand it to
support the development of  production.  From July  1994 to June  1995, $500
million was approved for  the following:   repair and upgrading of the  road
system (45  per cent);  repair and expansion  of the energy  system (43  per
cent); and  a social investment programme.  Expenditure for  the same period
totalled $62.6 million.


III.  STRENGTHENING OF DEMOCRATIC INSTITUTIONS

50.   The commitments  contained in  the peace  agreements have  led to  the
establishment and strengthening of democratic institutions in  an attempt to
lay the  foundations of  a new democratic  and participatory  socio-economic
system.


A.  Judicial system

51.   The consolidation of peace and  democracy was enhanced in July 1994 by
the appointment of new judges to the  Supreme Court of Justice.  The Court's
composition  reflected a wide range of legal thinking, a situation which has
contributed in turn to an increase in the number of proposals on  mechanisms
for modernizing the administration of justice  and improving the process for
evaluating and removing members of the judiciary.
  52.    To enable  the  institutions of  the  judicial  system  to function
effectively,  a Coordinating  Committee for  the  Judicial System  has  been
established which operates through the Executive  Technical Unit.  The  work
of this  Unit is focused on  the development of  the second judicial  reform
programme  which   is  being  funded  by   the  United   States  Agency  for
International Development (USAID).

53.   Special mention should be made  of the progress made by the Government
in its efforts to coordinate effectively,  through this Committee, the  work
of the  judicial system  and of  the international  cooperation provided  to
this system, which is a unique experience for El Salvador.

54.   The National Council of  the Judiciary, a  body appointed to  evaluate
judicial officials,  has submitted  a report  on its  work for  1994 to  the

Supreme  Court  of  Justice.     The  Court  has   undergone  a  process  of
purification as a  result of which a number  of judges and magistrates  have
been relieved of their duties.

55.   The Judicial  Training School has continued  to expand its activities,
particularly in the  area of training  courses for judicial officers  on the
new criminal,  family and juvenile codes,  including the  application of the
international treaties on these matters which are in force in El Salvador.

56.    The Attorney-General's  Office, which  is  responsible for  directing
criminal  investigation,  has been  provided  with  training  and  technical
assistance  to improve  its professional  performance  in  the courts.   The
constitutional  reforms, in the  process of  being ratified,  will provide a
clear definition of the Office's work and the cooperative role to be  played
by the National Civil Police in criminal investigation procedures.

57.  With the  promulgation of new  codes and laws, the Office of  the Chief
State Counsel has increased its activities  significantly through the use of
public defenders,  given  that judges  of  first  instance are  required  to
provide  a defender  immediately  to  all  detainees  who  do  not  have  an
attorney.

58.  Despite all  the Government's efforts to  improve the administration of
justice and the assistance provided by  the United Nations Observer  Mission
in  El  Salvador  (ONUSAL)  and  MINUSAL  staff,  some shortcomings  remain,
especially  in  the  processing of  criminal  trials:    a  good  number  of
prisoners  are still being  held without  sentencing, a  situation which has
led  the Supreme  Court  of Justice  to establish  a separate  department to
speed up the judicial proceedings for those detainees.

59.  For all  these activities, the Government requested the support of UNDP
in designing  four technical assistance projects,  which were submitted  for
the consideration  of the international community  at the  recent meeting of
the Consultative  Group convened by the World  Bank and IDB on 23 June 1995.
The projects were developed on the  basis of initial proposals  from ONUSAL,
taking into consideration the Mission's accumulated experience and  progress
made in the second  judicial reform project.   The new projects are intended
to  enhance  criminal  investigation  techniques  in  the Attorney-General's
Office, the work of the National Council of  the Judiciary and the  Judicial
Training School, the training of  public defenders and justices of the peace
in  human  rights,  knowledge  of  the  negotiation  process,  signing   and
ratification of  international treaties in the Legislative Assembly, and the
opening of the penitentiary school.

60.  To support  the strengthening of democratic  institutions in the spirit
of the peace  agreements, and in  conjunction with  the Government Plan  for
1994-1999 and  the  National Reconstruction  Plan,  the  Bank began  in  the
second half of  1994 to develop  a programme  for the  modernization of  the
judicial  system costing $25  million ($5  million in  cost-sharing from the
Government of El  Salvador) with the objective of making the judicial system
more efficient.  The IDB loan is intended  for the strengthening of planning
units  in  the  institutions  of  the  judicial  system,  development  of an
integrated information system, development of a  criminal policy, studies on
organization  and  administration,  the  creation  of  new  laws,   relating
especially to  alternative forms  of conflict  resolution and  institutional
and sectoral strengthening in the area of youth.

61.   USAID has  continued to  sponsor the  second judicial  reform project,
providing support for legal reforms and improvements in the systems for  the
administration  of   justice,  judicial  in-service  training,  institution-
building  with regard to  knowledge and  application of  family and juvenile
law, and the new Criminal Code and Code of Criminal Procedure.

62.   Judicial reform  in El Salvador  must take  place within  a process of
national reconciliation, overcoming  of impunity and strengthening of  peace
and democracy. The challenges to be overcome in  each of the institutions of

the  judicial system are  innumerable, giving  rise to  new requirements for
international   cooperation,  of   which  the   following  deserve   special
attention:   enhancing the  investigative skills  of staff  in the Attorney-
General's Office  and the judicial  system in  offences involving  organized
crime; training in international human rights instruments; strengthening  of
management  capability in  the  Office of  the Chief  State Counsel  and the
Supreme  Court  of Justice;  and  knowledge  and  dissemination  of the  new
constitutional  reforms and  legal  standards for  judges  and  magistrates,
trial lawyers and faculties of law.


B.  The electoral process

63.    The  1994  general  elections  marked  significant  progress  in  the
strengthening of peace and  democracy in El Salvador, because for the  first
time  they succeeded  in  involving  political forces  of every  persuasion.
This was subsequently expressed in the  pluralistic composition of both  the
Legislative  Assembly and the  Supreme Court  of Justice,  whose judges were
elected in the second round.

64.  The United  Nations, through ONUSAL and  UNDP, provided this  effort by
Salvadorans   with  technical   and   financial  support   from  third-party
contributions.  The central  technical cooperation  project associated  with
the  electoral  process  cost  $3.5  million,  which  was  managed  by UNDP.
Project   personnel  compiled   the  register   of  voters,   issued   voter
registration cards, acquired  equipment for the Supreme Electoral  Tribunal,
supported the Board of Vigilance and mobilized voters.
65.   In  view  of  the problems  that arose  during the  electoral process,
essentially with voter registration, the major parties participating  signed
an agreement to promote electoral reforms  once the new administration  took
office. In November 1994  the Presidential Commission  for Electoral  Reform
was established, and  its recommendations were transmitted to the  President
of the Republic in July 1995.

66.  The recommendations concerned the preparation of a master plan for  the
modernization  of the  Supreme Electoral  Tribunal, residential  voting  and
proportional  representation  on  municipal  councils.    The  Ministers  of
Justice submitted a bill to the  Legislative Assembly for the  establishment
of a  National Registry  of Natural  Persons and  the creation  of a  single
identity document.

67.   The  Supreme Electoral  Tribunal  itself  is designing  mechanisms for
conducting  a national  voter census  in  1996, at  an approximate  cost  of
$286,000,  with a view  to solving  voter registration  problems, given that
the electoral roll contained over a half million  entries for voters who are
presumed dead, disappeared or simply out of the country.

68.  On three occasions the United  Nations was invited by the Government to
undertake  technical missions in El Salvador, the latest of which took place
in February  1995.  Some of  the recommendations  concerned the Presidential
Commission's  accomplishments, such  as  the National  Registry  of  Natural
Persons, the single identity card for  citizens, residential voting and  the
administrative reorganization of the Supreme Electoral  Tribunal as well  as
the reforms to the Registry of Civil Status, Identity and Voters.

69.  Any reform of the electoral system will require financial support  from
the  international community.   Various  donors  have expressed  interest in
helping with  the preparation of the  National Registry  of Natural Persons,
and others have stated their intention to support some of the reforms.


C.  Public security

70.   The National Public  Security Academy  and the  National Civil  Police
should begin  their  institution-building  phase.   Having met  the  initial
challenge  of  establishing  the  two  institutions  within  the   specified

deadline  and in  order to  ensure  their  viability and  sustainability, in
keeping with the new public security  doctrine, cooperation should focus  on
the  technical strengthening  of both  the  Academy  and the  National Civil
Police.

71.  By August 1995, 7,817 basic-level agents,  149 executive and 61 senior-
level  officers  had  graduated  from  the  Academy  where  a  total  of  32
specialized  courses had been  offered.  A  new specialized  course of study
consisting of  five  months of  theoretical  training  and three  months  of
practical  training in  the National  Civil  Police  was introduced  in July
1995.

72.   The National  Civil Police  continued  to be  deployed throughout  the
country. Of  a total of 8,043  police officers, 7,812  were deployed at  the
operational level.  Efforts to strengthen  the National Civil Police  should
concentrate on  improving the  operation of  its internal  regulatory bodies
(office of  the Inspector General,  control and disciplinary  investigations
units and the disciplinary tribunal); enhancing the operational capacity  of
the  criminal  investigation   division;  establishing   and  putting   into
operation a planning unit; and improving institutional management capacity.

73.   One  of  the  priorities of  the  programme for  modernization of  the
Salvadoran State,  established pursuant to the  peace accords, concerns  the
demilitarization of  the public  security apparatus and the  development and
application of a new  doctrine.  Many groups in society have been expressing
their concern  over  the approaches,  methods  and  operating style  of  the
National  Civil  Police.   In recent  months,  a number  of situations  have
arisen  which  could affect  this process:  principally,  these involve  the
deployment of the army in  rural areas to perform  public security functions
and the announcement  of a  possible extension  of this  deployment to  some
cities;  reports of  human rights  violations by  agents of  the  new police
force;  the  delay  in  appointing  supervisory  personnel  as  well  as the
appointment of  personnel with questionable credentials to certain posts and
the absence  of legal  measures applicable  to the  operation of the  public
security  apparatus  as  a  whole.     Within  the  complicated  process  of
recruiting and deploying  new personnel, the distortions in the  functioning
and operation of the  security apparatus need to be  corrected.  This can be
done  provided that  a national  public  security  policy is  formulated and
implemented, the  appropriate legal framework  is fully  developed and steps
are  taken to ensure  the functioning  and strengthening  of public security
institutions and bodies.  During the basic  and refresher training given  to
police  officers  at the  National  Public  Security  Academy,  coordination
between the Academy and  the National Civil Police  should be improved.  The
Government of  El Salvador has sought the cooperation of MINUSAL in carrying
out  an urgent evaluation  of the  performance of the  National Civil Police
and in making recommendations for improving its functioning and operation.

74.  The consolidation  of the public security institutions is taking  place
against  a backdrop  of  greater  demand for  security in  the light  of the
complicated  crime situation  which characterized  the country  during  this
period
of transition.   Consequently, there should  be full  cooperation with these
institutions, and  the training  provided by  the  National Public  Security
Academy should  be tailored to  the needs identified  by the National  Civil
Police during  its deployment and  operation.  In this  connection, the need
to  train  more  police  officers,  equipping  them  with  sound  legal  and
technical skills,  has led to the  identification of  the following priority
areas  of  assistance  for  the  National  Public  Security  Academy:    (a)
improvement of  the curriculum  to include  a plan  for standardization  and
refresher courses,  a  programme of  specialization and  a modular  training
plan; (b) consolidation  of the system of  further training for teachers and
instructors; and (c) a more efficient admissions process. 


D.  Office of the National Counsel for the Defence of Human Rights

75.  Consolidation  of the rule  of law  and the protection of  human rights
are crucial to  guaranteeing a lasting peace in El Salvador.   The Office of
the National Counsel  for the Defence of Human  Rights, as the main organ of
the national  human rights protection  system, together  with the  judiciary
and  the oversight  bodies of  civil society,  needs further  strengthening.
Consolidation of the  Office of the National Counsel has been accelerated by
the  dynamic efforts  of its  staff,  especially the  current one.   Various
bilateral donors and United Nations agencies,  particularly ONUSAL, UNDP and
UNICEF, have  provided technical and financial  assistance for the  Office's
functioning  and development.  This cooperation has offset  the reduction in
resources allocated under the national budget  for proper functioning of the
Office.

76.  The Office of the  National Counsel for the Defence of Human Rights has
continued to conduct its activities in  accordance with the legal provisions
governing  its operation.  Its energies have been focused primarily on three
areas:   (a)  verification of  events  or  situations that  might constitute
violations of human  rights; (b) institution-building; and (c) human  rights
promotion and education.

77.   Recently, the  Office of  the National  Counsel has  been focusing  on
strengthening its  mechanisms for the  protection and  supervision of  civil
and  political rights.   Those  efforts  benefited  from the  assistance and
advice of ONUSAL and,  in view of the withdrawal of ONUSAL from the country,
additional  cooperation coordinated by  UNDP was  provided through a project
aimed at strengthening the Office's supervisory  and management system.   As
a result  of this cooperation,  the Office is  now better  organized from an
operational standpoint  and uses methods and  procedures which  enable it to
conduct adequate investigations  of cases or  situations that may constitute
human  rights  violations.    These  reforms  have  been  underpinned  by  a
methodological framework  based on a modern  computerized system  and by the
development of other bilateral and multilateral projects.

78.   As a  result of these reforms,  the Office of the  National Counsel is
better equipped to defend human rights.   Its active involvement  in finding
solutions to the various social conflicts that have  arisen in recent months
and  the qualitative  and quantitative improvement in  its solutions clearly
demonstrate  its institutional growth.  In the area of human rights training
and  information  activities,  the  Office   continues  to  do  dynamic  and
effective  work which  has received  support from  various  non-governmental
organizations and UNDP through PRODERE.

79.   In addition  to strengthening  its supervisory  and management system,
the Office needs to make  progress in other areas such as the machinery  for
the protection  of economic, social and  cultural rights; the  strengthening
of  its departmental  branch offices and associated  offices; monitoring the
legality  of  the  activities of  the  National  Civil  Police  and  its own
cooperation  with  the latter.    The  mechanism  of  public censorship  and
available  legal remedies must  be used more effectively  in order to defend
human  rights within  the  framework of  justice as  provided for  under the
constitution.   The  Office also  needs to  establish closer  ties with non-
governmental  human rights  organizations.    These priority  areas will  be
developed  during the  second  phase of  a UNDP  project  financed  by third
parties.


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