According to the ratings agency the political polarization that characterizes the Legislature which will take office on May 1 could hamper the implementation of the fiscal reforms that the country needs.
From an article by Fitch Ratings:
El Salvador's New Legislature May Yield Fiscal Restraint
Fitch Ratings-New York-23 March 2015: Gains by opposition parties in El Salvador's legislative assembly could result in a compromise to improve the sustainability of public finances but political polarization is likely to continue weighing on the prospects for growth-enhancing and security reforms, Fitch Ratings says.
Fitch Ratings has maintained its BB-rating but noted prevailing structural weaknesses such as low competitiveness, crime, weak human capital and the high cost of energy.
From a press release issued by Fitch Ratings:
Fitch Ratings has affirmed the long-term long-term debt rating in both dollars and local currency at 'BB-'. Fitch also affirmed the ratings of bonds in foreign and local currency without gurantee from El Salvador at 'BB-', maintaining the negative outlook.
The opposition in the Assembly is calling for government approval of the bill on fiscal responsibility before approving the issuance of debt of $1.15 billion and a proposed tax package.
The lawmakers argued that there is a need to thoroughly scrutinize the text of the proposed reforms, as there is uncertainty over the destination the government will chose for the proceeds as well as strategies to revive the national economy in order for the state to ensures there is liquidity rather continuing to generate more debt for the country.
The tiny margin separating the winner of the presidential election from his opponent does not favor institutional stability.
According to the Supreme Electoral Tribunal of El Salvador, 6,364 votes is the difference that separates the official candidate of the Farabundo Marti National Liberation Front (FMLN) from his opponent Norman Quijano, from the ARENA party.
The company owned by Venezuela and a group of municipalities from the ruling party continue to diversify; now they sell water and finance housing projects.
The Alba business conglomerate announced through José Luis Merino, Alba Petróleos advisor and coordinator of the ruling FMLN party, that it is to add a new business to those already it established in El Salvador since it came into the country in 2006.
In scenarios where no candidate managed to win a direct election, the results of the first round confirmed the trends of voters to the left in both countries.
In a second round on March 9th in El Salvador and on April 6th in Costa Rica the next presidents of both nations will be chosen, after two elections ended with no candidate receiving the required majority to be declared president.
The strategies for El Salvador to enter into Petrocaribe include the creation of a state run company for importing and marketing petroleum products.
Elmundo.com.sv reports that "José Luis Merino , FMLN leader and senior advisor to Alba Petroleos in El Salvador, says the party does not have an agreement model to join Petrocaribe, in the case that they win the presidential election next year. "
The Superintendency of Competition could set minimum and maximum transient prices for air tickets, in the national interest or because of public need.
The initiative a proposal by the Frente Farabundo Martí para la Liberación Nacional (FMLN) to the Salvadoran Congress to amendment Article 22 of the Civil Aviation Act so that the Superintendency of Competition (SC) can set those rates.
FUSADES is asking the Salvadoran Congress to make reforms to the Special Act on Public-Private Partnerships in order to ensure its effectiveness.
The Salvadoran Foundation for Economic and Social Development (FUSADES) is refering to the reforms that have been put forward by the ARENA party which among other things suggest that the Agency for Promotion of Exports and Investments of El Salvador (PROESA) be in charge of monitoring the administration of the law. The recently passed legislation "includes a new administrative institution: the Directorate of Public-Private Partnerships", reported Laprensagrafica.com.
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