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What’s New? El Salvador Competitiveness Project

ESCP will create a significant number of jobs in El Salvador, giving its citizens new opportunities to earn a living at home, stemming the pressures to emigrate.

What’s new?

Over five years the El Salvador Competitiveness Project (ESCP) will generate economic growth, create jobs, and catalyze policy reform in El Salvador by addressing the private and public sector constraints to business competitiveness. By encouraging private sector investment, innovation, and business expansion, ESCP will create a significant number of jobs in El Salvador, giving its citizens new opportunities to earn a living at home, stemming the pressures to emigrate.

Where will you be based?

The project is headquartered in the capital, San Salvador but will work in any of the 50 municipalities prioritised by the Government of El Salvador, assisting at least 20 municipalities over the life of project.

Who are you working with?

We are working with the private and public sectors of El Salvador. Policy reform and initiatives ti streamline business registration will take place at both the national and subnational level. We will strengthen institutional capacity in ministries, agencies, and associations involved in export and investment promotion, as well as providing support for micro, small, and medium enterprises (MSMEs). We will be working with literally thousands of MSMEs, entrepreneurs, and business development services (BDS) consultants.

Our implementing partners include the International City/County Management Association (ICMA) and U.S. small business Economic Development Advisors (EDA), both of which have worked extensively in the country. ICMA will work to improve municipal services to businesses, and EDA will work with us to build the capacity of local businesses, foster linkages between producers and potential buyers, and improve the availability of BDS and finance to MSMEs.

What’s your goal?

Our goal is to greatly expand the productive capacity of El Salvador’s business sector and the ability of public and private institutions to facilitate business competitiveness. Improved market access and business competitiveness will stimulate economic growth and create jobs, improving security and economic conditions within El Salvador and stemming outward migration.

How will you deliver Positive Impact?

We firmly believe that the key to unlocking business competitiveness in El Salvador lies in the creation of collaborative alliances across the public and private sectors. We are harnessing government reach and insight, private sector investment and commercial smarts, and our own deep understanding of inclusive economic growth to design and deliver a strategy for lasting improvements to El Salvador’s economy.

By the end of this five-year project, Palladium will have supported achievement of the following results:

1. $315 million in new sales achieved by MSMEs.
2. 42,000 new jobs created.
3. 100 viable start-ups established.
4. 3,700 MSMEs integrated innovative products and processes.
5. $45 million in private capital leveraged for MSME investment (with $1.75 million coming from equity investors).
6. 20 proposals drafted to support policy reform for the business sector (with a particular focus on barriers to commerce faced by women and gender minorities).

How will you make sure Positive Impact is enduring?

Our focus is on project activities that have replicability and institutions who are committed to systemic change.

We achieve sustainability by facilitating the development of a local, organic market system of organisations and professionals able to provide business services related to expansion (e.g., consultants who help producers to access financing by improving their ability to provide the sort of business planning and documentation financial institutions require in order to make loans). We build the capacity of such services providers to focus on what is most effective (highest impact), efficient (greatest return on investment) and sustainable (enduring beyond the five-year project), using pay-for-performance incentives with the BDS providers.

The ultimate goal is for El Salvador’s business services sector and competitive environment to reach systemic sustainability. BDS providers will learn to identify service opportunities and clients on their own, determine a fee-based business model, and/or work with the government to identify support that may be available for strategic common goods. Producers will learn the value of the assistance provided by BDS providers and see a return on investment for what they pay for such services. The end result is that market factors take over and an ecosystem of producers and business service providers is in place after USAID funding ends.

If we want more info, who should we contact?

Please get in touch with Katie Paguaga, Palladium’s Project Director Katie.Paguaga@thepalladiumgroup.com.