Subsidy Policy in El Salvador

In 1999, government spending on subsidies was $13 million, a figure which has multiplied 30 times, reaching $471 million in 2012.

Wednesday, July 3, 2013

In an event organized by the Salvadoran Chamber of Consulting Firms (Camsec) and the Union of MSMEs, union president, Jorge Daboub, revealed that while in 1999 the country spent $13 million on payments of subsidies, specifically for liquefied gas oil, by 2012 they had increased to $458 million, which represents an increase of 3523.1%.

The energy subsidy is the category which has had the greatest growth over the last 12 years, going from $8 million in 2000 to $201 million in 2012, growth of 2412.5%. In addition, subsidies for domestic consumption have increased with propane gas subsidies going from $13 million in 1999 to $136 million in 2012 and the public transport subsidy increasing from $9 million in 2005 to $64 million last year.

According to Daboub, the outstanding issue is fiscal policy, which in recent years "has been a populist policy" with "high unproductive current spending and does not solve problems faced by the poor."

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