Salvador economy struggles to get back on board; Guerrilla attacks on city buses explain why fare increases go up today
Starting today, Salvadorans will have to pay 25 centavos (10 cents) to ride a city bus. That's a 25 percent increase over yesterday's fare.
Terrorism, more than inflation, is what is behind this price hike that will be felt in a country whose per capita income is only $570.
Leftist guerrillas, who have singled out buses as special targets because they are the principal means of transportation, have blown up or burned 114 buses since Feb. 1. That brings the total number of buses put out of action by guerrillas in the 2 1/2 years of civil war here to 1,027.
The higher bus fare is just one indication of the war's impact on the Salvadoran economy.
Observers estimate guerrilla damage to roads, railroads, electric facilities, buildings, bridges, and the buses to be between $70 million and $100 million. This does not include replacement cost or the almost-impossible-to-calculate psychological effect of the terrorist acts.
As one economist in San Salvador says,''The business attitude of Salvadorans has become totally defensive.''
Unemployment in this nation of 4.5 million people is 30 percent and the population is growing steadily. Production of El Salvador's main exports has declined dramatically during the past two years.
Coffee production is down 25 percent. Cotton output has fallen 50 percent and sugar production has dropped 30 percent. Prices for basic staples such as rice, beans, and sorghum are 25 to 50 percent higher. The nation's foreign currency reserves now have fallen into the red by $200 million. There is a thriving black market for dollars.
The economic situation and lack of confidence in the future have caused an enormous flight of dollars out of the country.
''The wealthy simply collected and went,'' says a foreign businessman here.
One economic analyst estimated $725 million left the country during the last three years, but then conceded he might have underestimated.
''It could easily be as much as $1 billion,'' he says. (Some other observers have suggested as much as $3 billion.) The analyst warns, however, that ''there will be no way to keep aid money coming into the country from going out again.''
It's like trying to get water out of a towel. It's harder to get the water out as the towel dries,'' he says, wringing an imaginary towel. ''American and international aid dampens the towel and increases the opportunity for capital flight.''
But, says a Salvadoran business leader, ''Dollars are the key to getting the wheels of the economy turning again.''
The United States has already earmarked $140 million to help prod the Salvadoran economy in 1982 and President Reagan has asked Congress to consider an additional $128 million under his Caribbean Basin Initiative.
Other international donors, such as the World Bank, and the International Monetary Fund, are expected to contribute a total of $150 million, bringing the total foreign aid figure to more than $400 million for 1982. This does not include the $80 million in US military aid to El Salvador.
Because of this massive influx of dollars and a changing political situation, the economic analyst sees some brightness ahead. Despite terrorism's serious impact on the economy, he feels ''there is room for growth,'' adding, ''the left won't be able to put a ceiling on the nation's growth.''
''El Salvador's economy is going to bottom out some time in 1982,'' he states with conviction. But some observers worry the US might withhold additional aid if ultrarightist Roberto d'Aubuisson heads the next government.