Deindustrialization, labour and violence in El Salvador

Abstract

This study explores how deindustrialization is influencing the labour market in El Salvador. The variables under analysis are disaggregated by sex in order to permit an analysis of the differences in the ways that women and men react to deindustrialization. The results indicate that deindustrialization has led to a decline in quality employment and an upswing in self-employment, at the same time that the female labour force participation rate has risen and the male participation rate has fallen. This all occurred in parallel with the economic measures introduced in the 1990s and reflects the role that women have assumed in order to safeguard the well-being of their families. Deindustrialization has also been associated with increasing violence, since it paves the way for an increase in poor-quality jobs. This article concludes by underscoring the importance of reinstating tariff protections and supporting a reindustrialization process, together with regional integration, gender equality and education.

The Moderation of Frente Farabundo Martí Para La Liberación Nacional’s Economic Orientation in El Salvador, 2009-2019

“…Firstly, the manufacture sector's contribution to the GDP was reduced to 20% in 2013 from 25% in 2001. Then, within the same timeframe, value added in the agriculture sector declined from 14.6% to 10.84% (Cáceres, 2018). The decline in these sectors was accompanied by an increase in imports of nondurable consumer goods, which accounted for 6% of its GDP in 1990, to 12% in 2013, along with a downturn in the national manufacture output.…”

“…The drop in the import tax rate, which drastically declined to 5.8% in 2009 from 22.68% in 1986, enabled products from abroad to take the lead in El Salvador's economy and impeded their domestic industry, showcasing how liberalisation failed to push for export expansion in El Salvador. As the domestic industry suffered from liberalisation, El Salvador's unemployment rate rose and led to a high emigration rate (Cáceres, 2018). Furthermore, its high unemployment rate, along with dependency on the informal economy, contributed to the increase of crime rate, as more of El Salvador's populations relied on criminal businesses, which were interwoven with other acts of violence, such as drug trade, smuggling, 'security services', and many others.…”

“…Furthermore, its high unemployment rate, along with dependency on the informal economy, contributed to the increase of crime rate, as more of El Salvador's populations relied on criminal businesses, which were interwoven with other acts of violence, such as drug trade, smuggling, 'security services', and many others. These phenomena presented risks for investments which further enhanced deindustrialisation and decapitalisation (Cáceres, 2018). Deindustrialisation was evident in El Salvador's economic performance.…”

Crisis Eruptions: A Comparative Analysis of Right-wing Populism in El Salvador and Guatemala

“…In spite of democratization and efforts at hegemony, the 1990s also saw the dismantling of remaining state regulations and moved El Salvador and Guatemala from the traditional agrarian export model to a more extractivist agrarian system (Granovsky-Larsen, 2018; Alonso-Fradejas, 2012; Almeida, 2015;. The removing of tariffs and capital controls under the Central American & Dominican Republic Free Trade Agreement (CAFTA-DR) (Spalding, 2014) and the onset of structural adjustment coincided with the virtual deindustrialization of the coastal regions where secondary manufacturing had been concentrated (Cáceres, 2018;Robinson, 2004;Van der Borgh, 2000) and the transition to a combination service and extraction economy, subsidized by the valorization of migrant workers (Aguilar-Støen, 2020;Almeida, 2015;Garni & Wehyer, 2013).…”

“…Even as the capitalist class remained composed of the same oligarchic family elites which controlled the pre-neoliberal social structure, family ties were sidelined by inter-elite relations facilitated by multinational corporate boards, directorships, and foundations (Warnecke-Berger, 2020;Bull, 2014a;Robinson, 2003;Arzú, 1993). The capitalist class captured the majority of wealth created by free trade and structural adjustment (Mowforth, 2014;Spalding, 2014), resulting in massive inequality (Cáceres, 2018;Díaz, 2012) and weakened state and regulatory institutions as the removal of capital controls allowed tax based to be eroded and transnational investment pressured for removing regulations (Oritz Loaiza, 2020;Bull, 2016;Robinson, 2003). The intentional "weak state" design of El Salvador and Guatemala, impunity, and the liberalization of international trade also permitted the growth of elite-driven elicit trades and activity, intertwining gang activity, the military, and formal businesses (Delpech, 2013;Moodie, 2010;Peacock & Beltrán, 2003).…”