El Salvador: Sovereignty issues over Gulf of Fonseca

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Tensions rise in Gulf of Fonseca; El Salvador falls to 107th in Human Development ranking; remittances from the US decline on first two months of 2013

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Tensions rise between El Salvador and Honduras over the Gulf of Fonseca

On 12 March 2013, President of Honduras Porfirio Lobo denounced the presence of military naval forces on the Gulf of Fonseca, claiming these did not allow the safe passage of Honduran ships.

This rift happens a year after a meeting by Presidents Porfirio Lobo (Honduras), Otto Pérez (Guatemala), and Daniel Ortega (Nicaragua) in which all parties agreed to designate the Gulf of Fonseca as a peace zone.

President Lobo responded by saying it will send Honduran ships to the conflict zone to “defend ourselves”. He even threatened to send F-15 fighter jets to protect his country’s sovereignty and its right to a safe passage through the Gulf.

A letter exchange between the Honduran and Salvadoran governments has cooled down the tense diplomatic episode. Salvadoran President Mauricio Funes vowed a continued effort to resolve these issues on a peaceful manner, saying that ‘the region has lost a lot of time and resources on wars, and we believe that we have learned the lesson of how important it is to bet on development’.

On December 2012, a tripartite commission formed by government representatives of El Salvador, Honduras, and Nicaragua was tasked with dealing with territorial disputes through peaceful means and coming up with a solution in 90 days. The three-month deadline has been reached and further meetings have yet to take place.

The broader territorial dispute concerns the issue of land and maritime sovereignty between El Salvador and Honduras dating back two centuries, specifically six pieces of land on the Gulf of Fonseca.

On 11 September 1992, the International Court of Justice ruled on territorial boundaries and the legal status of three islands on the Gulf of Fonseca, which were disputed by Honduras and El Salvador. The Court judged that Honduras held sovereignty over the island of El Tigre, while El Salvador over the islands of Meanguera and Meanguerita.

 

El Salvador slips to 107th in Human Development Index

The 2013 Human Development Report released this week ranks El Salvador on the 107 position, out of 187 countries included on the Human Development Index (HDI) which measures three basic components of human development: health, education, and income. The country slipped one position from the 2011 HDI.

The United Nations Development Program (UNDP) claims this is due to stagnant investment on education, a deficient health system, and poor economic growth during 2012.

Since 1980, El Salvador’s HDI trend remains below the World and the Latin American & Caribbean trend. It also remains below the regional average.

Although not good news, this sign of stagnation may be due more to greater improvements in development in other countries than to El Salvador’s worsening conditions. The ascent of developing nations such as the China, India, Chile, Mexico, and Thailand over the last few years may help explain this trend.

According to the UNDP, El Salvador must embark on reforms that strengthen the State, with a robust fiscal system, innovative development and social programs, and lesser income and gender inequality.

Remittances from the US to El Salvador decline

The first two months of 2013 saw a drop on the remittances send from the US to El Salvador, according to Banco Central de Reserva de El Salvador (Central Reserve Bank of El Salvador– BCR). On January and February 2013, remittances saw a decrease for the same period on 2012, from 591,3 million to 581,2 million. A bulk of the remittances, about 61%, were bank transfers, while the rest was brought by family members from the US.

This slight decrease in remittances may be due to the still delicate state of overall US unemployment (7.7% in February), even after a slight improvement from January (7.9%), and a higher Latino unemployment rate in the US (9.6%). Yet overall remittances from the US have been on the rise in the last few years. For example, remittances on 2012 saw a 7.2% increase from 2011.

Roughly 2.5 million Salvadorans currently live in the United Sates, with some 212,000 on a temporary worker status. Remittances make up a considerable amount of the country’s revenue, accounting for roughly 16% of El Salvador’s GDP. These financial flows have a strong impact on local households in El Salvador, which in turn benefit communities.