REPORT TO USAID EL SALVADOR ON STATUS OF MUNICIPAL DEVELOPMENT IN EL SALVADOR

It is suggested that much could be done to assist the municipalities with their major administrative difficulties in such areas as tax collection. The office of Municipal Assistance has a small professional staff and limited working capacity. It should focus its efforts on a small group of selected municipalities and establish a solid, salable record of assistance. The Treasury serves 10% of the municipalities of El Salvador and needs to improve its coverage or be replaced by a more development-oriented organization. A true municipal credit function would promote its credit to as many municipalities as possible, tie its loans to needed changes in recipient municipality administrative practices, vary interest rates depending on project type and relate its lending program to municipal development tactics established by El Salvador. The organization should be an integral part of the administrative entity charged with carrying out the totality of municipal development including training and technical assistance. The Government of El Salvador has a permanent commitment to provide the municipalities enough funds to keep them alive but has not made the next step of showing them how to do it for themselves. Neither has the government begun to view the municipalities as a partner in the development of the country. Steps need to be undertaken now to expose the central government and the municipal governments to the concepts and practice of local government participation in the development of their countries.