Glossary -- El Salvador

Central America: Region between Mexico and Panama including present-day Belize, Guatemala, Honduras, El Salvador, Nicaragua, and Costa Rica.
Central American Common Market (CACM): The CACM was established by the Organization of Central American States under the General Treaty of Central American Economic Integration signed in Managua, Nicaragua, on December 15, 1960. Its members include Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. Its original goals included the establishment of a Central American regional free-trade area, a customs union, and the integration of the industrialization efforts of its member countries. Its efforts were curtailed following the 1969 war between El Salvador and Honduras, when the Hondurans reestablished import duties on CACM products. Despite the continued existence of the organization, most intraregional economic relations have been handled on a bilateral basis since 1970.
colon: El Salvador's monetary unit, divided into 100 centavos. The colon was pegged by the government at US$1=C2.50 until November 1986, when it was officially devalued to US$1=C5 as part of an overall economic austerity package. As of late 1988, there was no parallel exchange market, but dollars could be traded at a higher rate on the black market.
Constituent Assembly: A deliberative body made up of elected delegates who are charged with the responsibility of drafting a new constitution and, in some instances, electing a new president. Traditionally, after it has completed its work a Constituent Assembly reverts to a Legislative Assembly (traditional title of Salvadoran legislatures), which then serves as the country's legislative body until the next scheduled elections.
encomienda: A fiduciary grant of tribute collection rights over Indians conferred by the Spanish crown on individual colonists, who in turn undertook to maintain order and propagate Christianity.
fiscal year (FY): El Salvador's fiscal year is the calendar year. Where reference is made to United States aid appropriations or disbursements, the United States government's fiscal year is used, which runs from October 1 to September 30, with the date of reference drawn from the year in which the period ends. For example, FY 1987 began on October 1, 1986, and ended on September 30, 1987.
gross domestic product (GDP): A measure of the total value of goods and services produced by the domestic economy during a given period, usually one year. Obtained by adding the value contributed by each sector of the economy in the form of profits, compensation to employees, and depreciation (consumption of capital). Only domestic production is included, not income arising from investments and possessions owned abroad, hence the use of the word domestic to distinguish GDP from gross national product (q.v.).
gross national product (GNP): The total market value of all final goods and services produced by an economy during a year. Obtained by adding the gross domestic product (q.v.) and the income received from abroad by residents and subtracting payments remitted abroad to nonresidents.
import substitution industrialization: An economic development strategy that emphasizes the growth of domestic industries, often by import protection using tariff and nontariff measures. Proponents favor the export of industrial goods over primary products.
International Monetary Fund (IMF): Established along with the World Bank (q.v.) in 1945, the IMF is a specialized agency affiliated with the United Nations that takes responsibility for stabilizing international exchange rates and payments. The main business of the IMF is the provision of loans to its members when they experience balance of payments difficulties. These loans often carry conditions that require substantial internal economic adjustments by the recipients.
Legislative Assembly: See Constituent Assembly.
liberation theology: An activist movement led by Roman Catholic clergy who trace their inspiration to Vatican Council II (1965), where some church procedures were liberalized, and the Second Latin American Bishops' Conference in Medellin, Colombia (1968), which endorsed greater direct efforts to improve the lot of the poor. Advocates of liberation theology--sometimes referred to as "liberationists"--work mainly through Christian Base Communities (Comunidades Eclesiasticas de Base--CEBs). Members of CEBs meet in small groups to reflect on scripture and discuss its meaning in their lives. They are introduced to a radical interpretation of the Bible, one that employs Marxist terminology to analyze and condemn the wide disparities between the wealthy elite and the impoverished masses in most underdeveloped countries. This reflection often leads members to organize to improve their living standards through cooperatives and civic improvement projects.
repartimiento: Derived from Spanish verb repartir (to divide up); a loosely regulated system under which Spanish colonial authorities were empowered to impose and regulate the labor of Indians.
terms of trade: Number of units that must be given up for one unit of goods received by each party, e.g., nation, to a transaction. The terms of trade are said to move in favor of the party that gives up fewer units of goods than it did previously for one unit of goods received, and against the party that gives up more units of goods for one unit of goods received. In international economics, the concept plays an important role in evaluating exchange relationships between nations.
World Bank: Informal name used to designate a group of three affiliated international institutions: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), and the International Finance Corporation (IFC). The IBRD, established in 1945, has the primary purpose of providing loans to developing countries for productive projects. The IDA, a legally separate loan fund administered by the staff of the IBRD, was set up in 1960 to furnish credits to the poorest developing countries on much easier terms than those of conventional IBRD loans. The IFC, founded in 1956, supplements the activities of the IBRD through loans and assistance designed specifically to encourage the growth of productive private enterprises in less-developed countries. The president and certain senior officers of the IBRD hold the same positions in the IFC. The three institutions are owned by the governments of the countries that subscribe their capital. To participate in the World Bank group, member states must first belong to the IMF (q.v.).