EL SALVADOR: COUNTRY CONDITIONS AS THEY RELATE TO

S E C R E T SAN SALVADOR 000700

SIPDIS

C O R R E C T E D C O P Y (CHANGE PARAS 2-6 TO SBU)

FROM THE AMBASSADOR
PRM/PIM FOR CRISTINA NOVO; WHA/CEN FOR HILLARY THOMPSON

E.O. 12958: DECL: 06/11/2018
TAGS: EAID ES PGOV PHUM PREF SMIG
SUBJECT: EL SALVADOR: COUNTRY CONDITIONS AS THEY RELATE TO
TEMPORARY PROTECTED STATUS (TPS)

REF: SECSTATE 60473

Classified By: Ambassadsor Charles Glazer for reasons 1.4(b) and (d)


1. (C) Summary: The U.S. government should extend Temporary
Protected Status (TPS) for the nearly 250,000 Salvadoran
beneficiaries living in the United States. El Salvador has
still not finished reconstructing infrastructure damaged by
the two severe earthquakes which struck the country in 2001.
The transportation, housing, education, and health sectors
are still suffering from the 2001 quakes, the lingering
effects of which seriously limit El Salvador's ability to
absorb a large number of potential returnees. Deteriorating
economic conditions stemming from rising global commodity and
energy costs, as well as the potential for generating serious
adverse political ramifications, argue in favor of extending
TPS benefits for our most important ally in the region. End
summary.


2. (SBU) El Salvador's ability to absorb 250,000 potential
returnees is complicated by the simple fact that recovery
from the devastating earthquakes of 2001 is not yet complete.
Of the 276,000 homes destroyed, only about half have been
rebuilt with the assistance of programs sponsored by USAID,
other international donors and the Salvadoran government
(GOES). While the USAID programs were completed in 2006,
other donor efforts have lagged. Most of the reconstruction
work on the seven main hospitals will not be completed until
2009, while other related public works projects remain
incomplete as well. Infrastructure recovery was further set
back by the October 2005 landfall of Tropical Storm Stan,
which brought widespread flooding, loss of homes, and
destruction of crops and infrastructure across El Salvador.
An eruption of the Santa Ana volcano in the same month also
caused localized destruction of communities and crops in the
surrounding areas. A series of volcanic earthquakes that hit
western El Salvador in late 2006 resulted in the displacement
of an additional 2,000 families whose homes were destroyed.


3. (SBU) In addition to the above problems, El Salvador
continues to suffer from inadequate road infrastructure,
particularly in rural areas where tertiary roads are closed
during the rainy season. This infrastructure shortcoming
limits farmers access to markets, and complicates access to
health and education systems. An influx of TPS returnees
would further strain already overburdened health and
education sectors in El Salvador's rural communities.
Although the Millennium Challenge Corporation (MCC) will
build new primary and secondary roads in the impoverished
northern corridor of El Salvador, these roads will not be
completed for another three years or more.


4. (SBU) While El Salvador's economy is growing (4.7 percent
increase in real GDP in 2007),it is under considerable
stress from the global spike in energy, commodity, and food
costs. Higher food and gasoline costs are seriously harming
Salvadoran consumers, and threatening to reverse economic
progress that the country has made since the 1992 Peace
Accords. Fuel prices have doubled in the past year, driving
up transportation costs, inflating shipping bills, and making
a trip to the grocery store a painful experience for
hard-pressed Salvadoran consumers. Headline inflation hit
8.4 percent in May. Staple foods have been particularly
affected; in the year ending in January 2008, maize prices
rose 38 percent, red beans 68 percent, and milk 11 percent.
The resulting impact on the basic food basket has been
dramatic: the rural basket rose from USD 101 to USD 123 (22
percent),while the urban basket went from USD 140 to USD 160
(14 percent). In that Salvadoran food prices are strongly
dependent on energy, the recent sharp price increases in
petroleum are expected to further drive up food prices in the
short term.


5. (SBU) The U.S. is helping to accelerate growth through
implementation of CAFTA-DR, USAID programs (trade, labor, and
environmental capacity-building),and a USD 461 million MCC
compact agreement. The success of these efforts, however, is
compromised by general economic conditions. In light of the
continued deterioration in Salvadoran economic prospects, the
country is ill-prepared to receive an influx of returning
migrants should TPS not beextended.


6. (SBU) Compounding the economic sitation, El Salvador
continues to suffer through a ublic security crisis that
threatens to undermin confidence in democratic governance.
The countr faces stubbornly high levels of violent crime,
uch of it generated by transnational street gangs hat
engage in strong-arm extortion, car theft, sae of
counterfeit and stolen goods, and street-leel drug
distribution. El Salvador's murder rate- the highest in the
TEMPORARY PROTECTED STATUS (TPS)

western hemisphere - discourages foreign investment and
curtails economic growth. The cost of crime to the
Salvadoran economy is estimated at about 11 percent of GDP.
Perhaps more importantly, spiraling crime rates cause
citizens to lose faith in the ability of the police, the
judiciary, and traditional political parties to deliver on
promises of improved public security. El Salvador's National
Civilian Police (PNC),although well-intentioned, are
undermanned, under-financed, and hard-pressed to deal with
the massive scale of criminal violence besetting Salvadoran
society. The Salvadoran judiciary, the national prison
system, and the social service agencies tasked with
counseling at-risk youth and rehabilitating adult offenders
are similarly overwhelmed by their respective caseloads.
Adding upwards of 250,000 returnees to an already volatile
public security situation in a country facing sustained
economic difficulties could well prove to be the proverbial
straw that breaks the camel's back.


7. (S/NF) Although the decision on TPS is not primarily
political in nature, responsible stewardship of U.S. national
interests nonetheless requires us to consider the potential
political ramifications of the cancellation of TPS for
Salvadoran nationals. El Salvador will hold municipal,
legislative, and presidential elections in January and March

2009. In the current political milieu, a significant
percentage of the electoral support that the ruling
right-wing ARENA party enjoys is derived from the widely-held
perception that ARENA can manage the bilateral relationship
with the U.S. to the benefit of the Salvadoran populace. In
contrast, the left-wing FMLN, which is mounting its most
serious bid ever to defeat ARENA in a presidential election,
has yet to convince most Salvadoran voters that they can
pursue what could be a hard-left governing agenda while at
the same time maintaining a cooperative, productive bilateral
relationship with the U.S. A decision to cancel TPS during
the current electoral cycle would likely be played up by the
FMLN in the press and in the campaign as a loss of U.S.
support for the country and current administration -- an
unearned political windfall benefiting the FMLN and
influencing the outcome of 2009 elections. Terminating TPS
could also dramatically undermine this administration's
ability to support us in Iraq, other peacekeeping missions,
and other global and hemispheric issues where we depend on
the proactive leadership of the Saca administration.


8. (C) For all these reasons, I strongly urge the Department
to work with DHS and other interested parties to ensure an
additional eighteen-month extension of TPS for Salvadoran
nationals resident in the U.S.
GLAZER