Evaluates program (comprising Project 5190394 and nine others) to support USAID”s special strategic objective (SSO) of helping El Salvador make the transition from civil war to peace and national recovery. The evaluation covers the period 5/92-3/96. USAID has been very successful in addressing this SSO and has achieved or exceeded most of its targets; it has supported virtually every facet of the Government of El Salvador”s National Reconstruction Plan (NRP). USAID assistance has been effectively managed, and a concurrent audit program conducted by Price Waterhouse has assured financial integrity. However, despite the Agency”s substantial investment to repair infrastructure, finance land for ex-combatants and civilian refugees, provide vocational training and agricultural and microenterprise credit to civilians and ex-combatants, increase civic participation and build local democratic institutions, broaden the role of NGOs in delivering social services to rural communities, and address the special medical needs of the war-disabled, the economic potential of those most affected by the war remains tenuous. The NRP region includes the least developed portion of El Salvador; even if the massive investment through the NRP met all of its objectives, it would take years to overcome the economic and social damage incurred during the war. Several factors facilitated the transition to peace: USAID/ES” experience in carrying out large projects in a variety of substantive areas; war-weariness on both sides of the conflict; the UN”s monitoring of compliance with the Peace Accords; the well-organized structure of the guerrilla forces, which facilitated demobilization; the Municipalities In Action (MEA) program, which provided a mechanism for transferring resources to the local level and promoting citizen participation; competent local professionals and local NGOs with experience in the most affected zones; and the massive remittances to those back home from Salvadorans who had fled the country. After recapping the lessons learned during the first 3 years of Project 5190394 (see abstract of PN-ABT-659), the evaluation cites lessons from the last 2 years. (1) Reconstruction efforts may sow the seeds for social and economic recovery, but should not be expected to accomplish development results. (2) It is not always prudent to treat the needs of demobilized ex-combatants within the context of the communities to which they return without providing special assistance. Re-establishing social services is key to reintegrating ex-combatants and those displaced by the war. If resource transfers to the war-affected are needed, they should be made via grants rather than credit in order to maintain the integrity of the credit system. (3) Indicators are needed for tracking the peace process as it moves through demobilization, reintegration, reconciliation, and the beginning of long-term development. (4) It is important to clearly define: demobilization objectives and procedures, the meaning and scope of reintegration, the baseline data to be used, time frames for all activities, resource levels (human and fiscal), implementation channels, and criteria for success. USAID”s attempt to measure success via reductions in the differentials between the rates of relative poverty and extreme poverty in the NRP compared to the rest of the country was unrealistic; basic needs satisfaction is a better indicator. (5) Mechanisms for participation by all parties in design, execution, and monitoring of all phases of activities should be created as quickly as possible. Citizens should be induced to participate through incentives that are positive and that preclude a dependency syndrome by inculcating citizen rights and responsibilities. (6) Citizens should have a voice in infrastructure repair and replacement. Priority infrastructure activities are those most critical for economic recovery, and those congruent with local development planning and having local support. Nor should social and organizational infrastructure be neglected. (7) If group titles are used for land transfers, the process for breaking them up should be clarified at the outset. (8) To ensure sustainability, program design should include the organizational development of local agencies, especially private organizations, that serve as implementors and customers. U.S. PVOs should be required to strengthen their partner NGOs if the latter are expected to continue functioning. (9) Since the number of female heads of household generally increases dramatically as a result of civil conflict, especially where there are female ex-combatants, special provisions should be made for women and children. (10) A clear, realistic definition of obligations to war-wounded and dependent survivors is needed, as this issue has a high potential for arousing public sympathy and disturbing the peace process.

