PUBLIC FINANCE AND SOCIAL PROGRESS DPL

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The objectives of the Public Finance and Social Progress Development Policy Loan Program for El Salvador are creating fiscal space for needed social expenditure by supporting actions to increase tax revenues and to improve efficiency and transparency in the allocation of public resources; Protecting and including vulnerable segments of the population by allocating additional public resources towards social programs targeting vulnerable groups such as the elderly, women, and children in poor areas. This program document describes a Development Policy Loan (DPL) in the amount of US$100 million to the republic of El Salvador. The operation is the first in a series of two loans. The series builds on the progress achieved under the Public Finance and Social Sector (PFSS) DPL (January, 2009) and Sustaining Social Gains for Economic Recovery Program (SSGER) DPL (November, 2009). It reflects the government's priority of achieving fiscally and economically sustainable social progress. The operation is rooted in the Country Partnership Strategy (CPS) for El Salvador. The DPL series has been identified in the 2009 CPS as an instrument for providing continued support to the policy areas covered by the previous DPLs, such as fiscal reform, public sector management, and the protection of vulnerable populations. The operation is fully consistent with the CPS's guiding principle of supporting government efforts to mitigate the fiscal impact of the crisis while addressing longer-term development challenges.