More on Salvadorans' views about the economy

More polling results from the recent poll by the University of Central America:

How much do you believe the cost of living has increased in El Salvador this year:
None 2.5
Little 11.2
Some 10.3
A Lot 76.0

Of the following, which do you believe is the reason for the increase in the cost of living:
Dollarization 55.2
Unemployment 20.2
Lack of government control of prices 12.1
Increase in petroleum prices 7.7
Other reasons 4.8

In general, do you think El Salvador is going down a
good road, or does it need a change?
Needs a change 87.4
On a good road 10.3
Don't know 2.3

Will CAFTA combat poverty, generate more poverty,
or not have any effect?
Generate more poverty 49.6
Will help combat poverty 24.5
Will not have any effect 22.8
Don't know 3.1

The answers to the foregoing questions suggest widespread disaffection for the policies of the ARENA government, but it is not at all clear that the public views the FMLN as the party to address these issues:

During the present year, has your image of the FMLN improved, worsened, or stayed the same:
Stayed the same 57.8
Worsened 26.1
Improved 14.6
No response 1.5

Do you believe it is necessary for the country to have another party on the left, different from the FMLN:
No 54.5
Yes 44.3
No response 1.1


Anonymous said…
Not an economist but I do have a few questions about the polling data. How would unemployment in a country where employers don´t pay into an unemployment insurance fund cause prices to rise? I understand that the ability of the worker to buy goods and services is severely impacted and maybe that is what people are meaning with their answer, but the question was what is causing prices to rise. Do merchants and providers decide to raise prices because so many people are out of work? Doesn´t sound logical.In that same vein it was pretty amazing how little impact was given to the dramatic rise in oil prices over the last year or two. That accounted for the rise in bus fares, fuel prices, etc. that we´ve seen here over the last few years. Also what is the mechanism in dollarization that would account for a huge rise in prices? I understand that in transition the colon was rounded off to the nearest penny and it always went to the next highest penny instead of the lower, but that wouldn´t account for a perceived big increase in prices. Also doesn´t dollarization prevent governments from printing more and more money which is the biggest cause of inflation. What would have happened the last few years here had there not been dollarization, which brought a stable currency free from political manipulation? The last thing is that everyone I ask here say that the gangs are the biggest problem El Salvador faces. The poll showed crime as by far the biggest problem here, but that gangs merited only a small amount of concern. I wonder how that question was phrased and if people immediately saw the check box for crime and the one for gangs might have been positioned much further down. Anyway, I just have a few questions and maybe someone can help me with them. Thanks, Tim.
Anonymous said…
The economy of El Salvador is closely tied with perception. The problem is one of perception. In reality ,the resources are all there...hardworking people, natural resources, a government that is trying its best, an opposition that is also trying its best and the country has religion.
One can easily envision a beautiful country, manageable in size and can easily be a tourist destination at par with the best in the world.
I still think El Salvador's best bet is in eco-tourism. That will promote the culture,sustain nature, bring livelihood that spans from the grassroots to the corporations, enhance the image of the country, boost the morale of the population.Imagine hotels and restaurants and resorts full , the small independent entrepreneurs busy, and the whole place revived and restored.And all the negatives will be pushed to the periphery by all the positives , till what is left is something that is truly worthy and beautiful, that which is true of El Salvador and its people.
Come on, give the country a chance.
El-Visitador said…
Agree with Wally that the responses are thoroughly inconsistent.

For instance, Q1 sets the framework for "cost of living increase THIS YEAR"

In Q2 "reason for increase of cost of living", most people blame dollarization... which occurred SEVERAL YEARS AGO

Anonymous said…
The sad thing is the disconnect between what is perceived to cause the cost of living increase and what really caused it. It would also be interesting to see just how much of an increase there actually was. Maybe that as well is more of a perception than a reality. It would seem that by solving the perceived problems it could possibly have no impact on the increasing cost of living because they weren´t the root cause in the first place. But maybe what can be learned from a poll such as this is that someone needs to do a better job of informing the public of what problems they really are facing. And if there needs to be a new left or center left party maybe they will step into that void and offer solutions that deal with the realities that the people of El Salvador face. One can only hope.
Anonymous said…
As a Salvadoran, I can testify that over my visits there for the past 15 years, people have ALWAYS said the economy is doing badly and people are falling behind - despite the incredible postive difference I've seen happen in that same period. Pessimism seems to be a flaw in our national character...
vee said…
While there is a lot of sex appeal in eco-tourism, I would disagree that it is El Salvador's best bet to improve the quality of life of its citizens. I am not an economist and can not claim to understand how business and industry works nor am I an expert on ES, but I believe that El Salvador should market its strengths like agriculture, arts and textiles.