JICA Egovernment Final Report - Kamiya

REPUBLIC OF EL SALVADOR JAPAN INTERNATIONAL
PRESIDENTIAL HOUSE COOPERATION AGENCY

TECHNICAL SECRETARIAT (JICA)
THE FEASIBILITY STUDY ON ESTABLISHMENT OF THE

e-GOVERNMENT PLATFORM
IN THE REPUBLIC OF EL SALVADOR
FINAL REPORT
DECEMBER 2006
Municipal
Office
Technology Bank
•Disaster Info System.
Training •Citizens’ Master
VPN Center Database.
•Back up/Hosting.
Bad Guys
Data Center
Public
Public
Internet
Internet
Citizens Rural Area Connectivity
Municipal
Office
Portal
School
Network
Operation Center
PAT
Central Government WAN

REPUBLIC OF EL SALVADOR JAPAN INTERNATIONAL
PRESIDENTIAL HOUSE COOPERATION AGENCY
TECHNICAL SECRETARIAT (JICA)
THE FEASIBILITY STUDY ON ESTABLISHMENT OF

THE e-GOVERNMENT PLATFORM
IN THE REPUBLIC OF
EL SALVADOR
FINAL REPORT
DECEMBER 2006
THE FEASIBILITY STUDY ON ESTABLISHMENT OF THE e-GOVERNMENT PLATFORM IN EL SALVADOR
TABLE OF CONTENTS
CHAPTER 1 INTRODUCTION ................................................................................................................ 1-1

1.1 Study Background .............................................................................................................1-1
1.2 Objectives of the Study .....................................................................................................1-1
1.3 Study Organization and Schedule .....................................................................................1-2
CHAPTER 2 ECONOMY AND THE GOVERNMENT.......................................................................... 2-1
2.1 Socio-economic Profile .....................................................................................................2-1
2.1.1 Social Profile ..........................................................................................................2-1
2.1.2 Economic Profile....................................................................................................2-5
2.2 Socio-economic Framework .............................................................................................2-9
2.2.1 Government Plan for 2005-2009 ............................................................................2-9
2.2.2 Socio-economic Framework.................................................................................2-10
2.3 Government Structure and Legal Framework .................................................................2-11
2.3.1 Government Structure – Central and Local..........................................................2-11
2.3.2 Local Government Related Organizations ...........................................................2-16
CHAPTER 3 THE ICT SECTOR .............................................................................................................. 3-1
3.1 ICT Sector Policy ..............................................................................................................3-1
3.2 Institutional and Legal Framework ...................................................................................3-1
3.2.1 Central Body for ICT Promotion (National Commission for Information
Society, NCIS) .......................................................................................................3-1
3.2.2 Establishment Status of Subcommittees of NCIS ..................................................3-3
3.3 Industry Performance ........................................................................................................3-9
3.3.1 ICT Manufacturing.................................................................................................3-9
3.3.2 ICT Services...........................................................................................................3-9
3.4 ICT Penetration ...............................................................................................................3-13
3.4.1 Communication ....................................................................................................3-13
3.4.2 ICT Feasibilities ...................................................................................................3-20
CHAPTER 4 ICT USE IN THE GOVERNMENT ................................................................................... 4-1
4.1 ICT Use in the Government ..............................................................................................4-1
4.2 Connectivity ......................................................................................................................4-4
4.3 Equipment .........................................................................................................................4-7
4.3.1 Hardware ................................................................................................................4-7
4.3.2 Operations and Maintenance ................................................................................4-11
4.3.3 Software ...............................................................................................................4-11
4.3.4 Security.................................................................................................................4-11
4.4 Application Systems........................................................................................................4-13
4.5 Services under ICT..........................................................................................................4-19
4.6 Existing Conditions of ICT Facilities and Operation in the Government .......................4-25
4.6.1 Earthquakes in El Salvador ..................................................................................4-25
4.6.2 Current Situation of Servers of El Salvador Government ....................................4-27
4.6.3 Development of Applications...............................................................................4-31
4.6.4 Operation, Maintenance and Management...........................................................4-33
CHAPTER 5 POLICY ANALYSIS............................................................................................................ 5-1
5.1 Existing Plans and Reports................................................................................................5-1
5.1.1 JBIC Master Plan ...................................................................................................5-1
5.1.2 Government of El Salvador....................................................................................5-2
5.2 Objectives of e-Government .............................................................................................5-6
5.2.1 National Objectives ................................................................................................5-6
5.2.2 Objectives of e-Gov (local companies perspective) ...............................................5-7
5.2.3 Objectives of e-Gov (ministries officials’ perspective)..........................................5-8
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5.3 Policies for Promotion of ICT Industry by e-Government..............................................5-10

5.4 Policies for Social Development .....................................................................................5-13
5.4.1 The State of the Digital Divide.............................................................................5-13
5.4.2 Narrowing Digital Divide.....................................................................................5-17
5.4.3 Enhancing People’s ICT literacy..........................................................................5-17
5.5 Promotion of PPP and Regional Development ...............................................................5-20
5.5.1 The Plan Puebla Panama (PPP)............................................................................5-20
5.5.2 e-Gov Platform and PPP.......................................................................................5-22
CHAPTER 6 BASIC STRATEGY AND DESIGN STANDARDS FOR e-GOVERNMENT ...............6-1
6.1 Basic Strategy for e-Government Platform .......................................................................6-1
6.1.1 General Areas of e-Government Application.........................................................6-1
6.1.2 Issues in Establishing e-Government .....................................................................6-1
6.1.3 Requirements for e-Government Platform .............................................................6-2
6.1.4 Concepts of e-Government Platform......................................................................6-2
6.1.5 Contents of e-Government Platform ......................................................................6-3
6.1.6 Criteria to Select Priority Applications and Systems .............................................6-4
6.1.7 Selection of Priority Components ..........................................................................6-6
6.1.8 Effect on Promotion of IT Industry ........................................................................6-7
6.1.9 Effect on PPP Countries .........................................................................................6-8
6.1.10 Management of e-Government Platform..............................................................6-8
6.2 Basic Strategy and Design for e-Gov-WAN .....................................................................6-9
6.2.1 Issues ......................................................................................................................6-9
6.2.2 Network Design Concept .....................................................................................6-12
6.2.3 Network Design Outline.......................................................................................6-15
6.2.4 O&M Management Scheme (NOC Operation) ....................................................6-24
6.2.5 Proposals for Changes in Government Communication Rules ............................6-25
6.2.6 Business Model and Benefits ...............................................................................6-29
6.2.7 Comparison of Technical Options........................................................................6-32
6.3 e-Government Center ......................................................................................................6-32
6.3.1 Issues ....................................................................................................................6-32
6.3.2 Requirements to e-Government Center ................................................................6-34
6.3.3 Functions and Building Design ............................................................................6-37
6.4 Basic Strategy and Design for Citizens’ Master Database ..............................................6-40
6.4.1 Current Situation and Issues.................................................................................6-40
6.4.2 Expected System Functions..................................................................................6-41
6.4.3 Benefits.................................................................................................................6-42
6.4.4 Standardization.....................................................................................................6-42
6.4.5 Database and Data Exchange ...............................................................................6-43
6.4.6 Hardware and Software ........................................................................................6-43
6.4.7 Place of Installation and System Accommodation ...............................................6-43
6.4.8 Participating Organizations ..................................................................................6-44
6.4.9 Change of Business Operation .............................................................................6-44
6.4.10 O&M ..................................................................................................................6-44
6.4.11 Possible Expansion.............................................................................................6-45
6.4.12 Options ...............................................................................................................6-45
6.5 Basic Strategy and Design for Disaster Information System ..........................................6-45
6.5.1 Issues ....................................................................................................................6-45
6.5.2 Expected System Functions..................................................................................6-46
6.5.3 Benefits.................................................................................................................6-47
6.5.7 Operations and Maintenance (O&M)...................................................................6-48
6.5.8 Possible Expansion...............................................................................................6-48
6.5.9 Options .................................................................................................................6-48
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6.6 Basic Strategy and Design for Standards and Norms......................................................6-49

6.6.1 Objectives.............................................................................................................6-49
6.6.2 Issues and Necessity.............................................................................................6-49
6.6.3 Basic Concept of Standards and Norms ...............................................................6-50
6.6.4 Items for Standards and Norms ............................................................................6-51
6.6.5 Method of Establishment......................................................................................6-53
6.6.7 Options .................................................................................................................6-56
6.7 Basic Strategy and Design for Common Subsystems .....................................................6-56
6.7.1 Issues and Concepts..............................................................................................6-56
6.7.2 Types of Common Subsystems ............................................................................6-57
6.7.3 Method of Establishment......................................................................................6-61
6.7.6 Options .................................................................................................................6-62
6.8 Implementation Arrangements for e-Gov Organization..................................................6-62
6.8.1 Issues and Necessary Functions ...........................................................................6-62
CHAPTER 7 OVERALL PICTURE OF THE PROJECT NEEDS AND EFFECTS............................7-1
7.1 Project Needs, the Project, and Effects .............................................................................7-1
7.2 Project Logical Framework ...............................................................................................7-3
7.3 Overall Project Structure...................................................................................................7-3
CHAPTER 8 PRELIMINARY DESIGN AND SPECIFICATIONS.......................................................8-1
8.1 e-Government WAN .........................................................................................................8-1
8.1.1 System Configuration and Components.................................................................8-1
8.1.2 Interface and Data Exchange................................................................................8-11
8.1.3 Hardware and Software, Renewal ........................................................................8-11
8.1.4 Requirements for Applications.............................................................................8-12
8.1.5 Operation and Maintenance..................................................................................8-13
8.1.6 Cost Estimates: Facilities, O&M, and Renewal ...................................................8-14
8.1.7 Implementation Scheme .......................................................................................8-16
8.2 e-Government Center ......................................................................................................8-16
8.2.1 Building Design....................................................................................................8-16
8.2.2 e-Government Center Design ...............................................................................8-18
8.2.4 Operation and Maintenance of the Building ........................................................8-20
8.2.5 Cost Estimates ......................................................................................................8-21
8.2.6 e-Government Center Implementation Schedule .................................................8-26
8.2.7 Operation and Maintenance Costs of the e-Government Center (SNET, Civil
Protection, Ministries) .........................................................................................8-27
8.3 Citizens’ Mater Database ................................................................................................8-29
8.3.1 System Configuration and Components...............................................................8-29
8.3.2 Interface and Data Exchange................................................................................8-30
8.3.5 Cost Estimates: Development, Facilities, O&M, and Renewal............................8-31
8.4 Disaster Information System ...........................................................................................8-35
8.4.1 System Configuration and Components...............................................................8-35
8.4.4 Cost Estimates: Development, Facilities, O&M, and Renewal............................8-36
8.5 Standards and Norms ......................................................................................................8-39
8.5.1 Components..........................................................................................................8-39
iii
8.5.2 Development and Operation.................................................................................8-39

8.5.3 Cost Estimates ......................................................................................................8-40
8.6 Common Subsystems ......................................................................................................8-44
8.6.1 Components..........................................................................................................8-44
8.6.2 Development and Operation.................................................................................8-45
8.6.3 Cost Estimates ......................................................................................................8-46
CHAPTER 9 IMPLEMENTATION PROGRAM ....................................................................................9-1
9.1 Implementation Arrangements for e-Gov Organization....................................................9-1
9.1.1 The Organization in Charge ...................................................................................9-1
9.1.2 Legal Framework ...................................................................................................9-2
9.1.3 Managerial Sustainability of the e-Gov Organization ............................................9-5
9.1.4 Existing Efforts in Progress Supporting the e-Gov Center.....................................9-5
9.2 Overall Cost, Implementation Schedule, Financing and Packaging..................................9-7
CHAPTER 10 ASSESSMENT OF e-GOVERNMENT PLATFORM OPTIONS.......................... 10-1
10.1 Economic Analysis........................................................................................................10-1
10.1.1 Basic Assumptions .............................................................................................10-1
10.1.2 Economic Project Costs......................................................................................10-2
10.1.3 Quantitative Economic Benefits.........................................................................10-3
10.1.4 Conclusion..........................................................................................................10-9
10.2 Financial Evaluation....................................................................................................10-10
10.3 Assessment of Options ................................................................................................10-10
10.3.1 Option 0: Do-Nothing ......................................................................................10-10
10.3.2 Option 1: Full Implementation .........................................................................10-10
10.3.3 Option 2: Partial Implementation .....................................................................10-10
CHAPTER 11 RECOMENDATIONS ................................................................................................ 11-1
11.1 Prerequisites ..................................................................................................................11-1
11.2 Necessary Steps.............................................................................................................11-1
List of Boxes
Box 3.1 Extracts from El Salvador’s Constitutions on Local Governments ..........................................3-5

Box 3.2 El Salvador’s Municipal Code ..................................................................................................3-7
Box 6.1 Internal Legal Law fot the Executive Branch .........................................................................6-66
Box 9.1 Law, Formation, Promulgation and Application in El Slavador...............................................9-4
Box 9.2 Strategic Plan for e-Gov Organizaion.......................................................................................9-9
List of Figures
Figure 1.1 The Study Plan and Work Schedule .........................................................................................1-2

Figure 2.1 Literacy Rate in Urban and Rural Areas...................................................................................2-2
Figure 2.2 Families of Extreme and Relative Poverty ...............................................................................2-3
Figure 2.3 Share of Total Poor Families (Extreme and Relative Poverty) in Urban and Rural ..............2-4
Figure 2.4 GDP in Central American Countries ........................................................................................2-6
Figure 2.5 FDI Trend .................................................................................................................................2-8
Figure 2.6 FDI Balance by Sector as of 2004 ............................................................................................2-8
Figure 2.7 Government Organization - Ministries and Agencies.............................................................2-12
Figure 3.1 Telemovil Optical Fiber Network ...........................................................................................3-19
iv
Figure 4.1 Indicators in Government ICT Use...........................................................................................4-1

Figure 4.2 Typical Network Diagram of a Salvador Government Organization .......................................4-4
Figure 4.3 Tectonic Setting of Central America ......................................................................................4-25
Figure 4.4 Past Epicenters........................................................................................................................4-25
Figure 5.1 Fixed Telephone Lines............................................................................................................5-13
Figure 5.2 Mobile Telephone Subscription..............................................................................................5-14
Figure 5.3 Total Tele-density -Phone lines per 100 Inhabitants...............................................................5-14
Figure 5.4 Internet Users (2000 - 2005) ...................................................................................................5-15
Figure 5.5 Annual Growth of Internet Users in El Salvador ....................................................................5-15
Figure 5.6 El Salvador: Illiteracy Rates for Citizens 20 Years Older per Province .................................5-16
Figure 5.7 El Salvador: Unemployment Rates for Citizens 20 Years Older per Province.......................5-16
Figure 5.8 El Salvador: Population Share in Total Poverty per Province ................................................5-17
Figure 5.9 Organizational Chart, Plan Puebla Panama ............................................................................5-23
Figure 6.1 Platform and Applications ........................................................................................................6-4
Figure 6.2 Internet Services .....................................................................................................................6-10
Figure 6.3 Efficient Interoperability.........................................................................................................6-11
Figure 6.4 Communication Costs.............................................................................................................6-12
Figure 6.5 Internet Telephony..................................................................................................................6-16
Figure 6.6 Operations and Maintenance...................................................................................................6-20
Figure 6.7 Operation Functions................................................................................................................6-21
Figure 6.8 Subject Area............................................................................................................................6-22
Figure 6.9 Optical Fiber Cable Arrangement ...........................................................................................6-23
Figure 6.10 Operation Center.....................................................................................................................6-24
Figure 6.11 Causes of Slowdown...............................................................................................................6-25
Figure 6.12 Gov. WAN Business Model ...................................................................................................6-29
Figure 6.13 Money Flow............................................................................................................................6-30
Figure 6.14 Payment Option ......................................................................................................................6-30
Figure 6.15 Benefits ...................................................................................................................................6-31
Figure 6.16 e-Government Portal and Authentication ...............................................................................6-36
Figure 6.17 Trigger Application: Citizens’ Master Database.....................................................................6-41
Figure 6.18 Hardware and Software for Citizens Master Database ...........................................................6-43
Figure 6.19 Flow for Citizen’s Master Database........................................................................................6-44
Figure 6.20 Trigger Applications: Disaster Information System ...............................................................6-46
Figure 6.21 Hardware and Software for Disaster Information System ......................................................6-47
Figure 6.22 Structure of Standards and Norms ..........................................................................................6-51
Figure 6.23 Tentative Schedule of Establishing Standards and Norms .....................................................6-54
Figure 6.24 Structure of Establishing Standards and Norms Process ........................................................6-55
Figure 6.25 Composition of Common Subsystems....................................................................................6-56
Figure 6.26 Organization Structure for Functions, with Presidential House (Tentative) ...........................6-63
Figure 6.27 e-Gov Models and Place of El Salvador .................................................................................6-68
Figure 6.28 The Logical Management Structure........................................................................................6-69
Figure 6.29 Functions and Services of e-Government Data Center ...........................................................6-69
Figure 6.30 Structural Designs (Example) .................................................................................................6-70
Figure 7.1 Overall Project Structure...........................................................................................................7-3
Figure 8.1 Optical Fiber Links and Switches .............................................................................................8-4
Figure 8.2 Voice IP (VoIP) Network .........................................................................................................8-5
Figure 8.3 Network Operation Center (NOC) System ...............................................................................8-7
Figure 8.4 Network Application Servers....................................................................................................8-8
Figure 8.5 Municipal Connectivity ............................................................................................................8-9
Figure 8.6 Rural Wireless WAN ..............................................................................................................8-10
Figure 8.7 Public Access Terminal (PAT) Network ................................................................................8-11
Figure 8.8 Development & Implementation Schedule (e-Government Center Services) ........................8-26
Figure 8.9 System Configuration (Citizens Master DB) ..........................................................................8-29
Figure 8.10 Development & Implementation Schedule (Citizens’ Master Data Base)..............................8-33
Figure 8.11 Implementing Organization (Citizens Master Data Base) ......................................................8-34
Figure 8.12 System Configuration (Disaster Information System) ............................................................8-35
v
Figure 8.13 Implementing Organization (Disaster Information System)...................................................8-37

Figure 8.14 Implementation Schedule (Disaster Information System) ......................................................8-38
Figure 8.15 Relationship of Phase Ia and Ib ..............................................................................................8-40
Figure 8.16 Implementing Organization (Common Subsystem)................................................................8-47
Figure 8.17 Implementation Schedule (Common Subsystem)...................................................................8-47
Figure 9.1 Organization of the Ministry of Internal Affairs, Gobernacion ................................................9-3
Figure 9.2 Overall Project Schedule.........................................................................................................9-10
Figure 10.1 Mutual Relationship Between Components..........................................................................10-13
List of Tables
Table 2.1 Demographic Trend (Thousand) ...............................................................................................2-1

Table 2.2 Population by Department in 2005 (Estimate) ..........................................................................2-1
Table 2.3 Age Structure of El Salvador (2004 Estimate)..........................................................................2-2
Table 2.4 Life Expectancy at Birth (2003 Estimate).................................................................................2-2
Table 2.5 Combined Primary, Secondary and Tertiary Gross Enrollment Ratio (%) in 2002/2003 .........2-3
Table 2.6 Population below Poverty Line (%) ..........................................................................................2-3
Table 2.7 HDI of El Salvador by Province ...............................................................................................2-4
Table 2.8 Historical Trend of Gini Coefficient .........................................................................................2-5
Table 2.9 GDP and GDP per Capita .........................................................................................................2-5
Table 2.10 Savings and Investment Flow (% to GDP) ...............................................................................2-6
Table 2.11 Major Indicators of the External Sector (US$ Million).............................................................2-7
Table 2.12 GDP by Sector (2004)...............................................................................................................2-7
Table 2.13 CPI and Weighted Average Lending Rate ................................................................................2-8
Table 2.14 Unemployment and Underemployment Rate ............................................................................2-9
Table 2.15 Average Monthly Income per Capita and per Family ...............................................................2-9
Table 2.16 Socio-economic Framework (2005-2025) ..............................................................................2-10
Table 2.17 Number of Staff per Institution ...............................................................................................2-16
Table 2.18 Local Government Organization, Examples ...........................................................................2-16
Table 2.19 Number of Personnel per Institution, Examples .....................................................................2-17
Table 2.20 Responsible Organization on ICT/Responsible Person(s)/Number of Staff, Examples..........2-17
Table 3.1 NCIS Members and Authorities................................................................................................3-2
Table 3.2 Legal Framework to Support Information Society Proposed by NCIS.....................................3-8
Table 3.3 High-tech Exports per Capita (2001) ........................................................................................3-9
Table 3.4 Number of IT Enterprises, by Year of Start up .......................................................................3-10
Table 3.5 Number of IT Enterprises, by Commercial Status (more than one is possible) ......................3-10
Table 3.6 Percentage of IT Enterprises, by Funding Source...................................................................3-10
Table 3.7 Number of IT Enterprises, by Number of Employees.............................................................3-10
Table 3.8 Number of IT Enterprises, by Type of Internet Connection ...................................................3-10
Table 3.9 Average Monthly Salary, by Position .....................................................................................3-11
Table 3.10 Operating Systems Used by Customers, by Developer Enterprise .........................................3-11
Table 3.11 DBMS Used by Customers, by Developer Enterprise ............................................................3-11
Table 3.12 Main Services Offered, by Developer Enterprise ...................................................................3-11
Table 3.13 Percentage of Enterprises by Quantity of Products Sold in 2002 ...........................................3-12
Table 3.14 Number of IT Enterprises, by Sales Ranges............................................................................3-12
Table 3.15 Average Percentage of Sales by Customer Type ....................................................................3-12
Table 3.16 Exports by Destination, First 3 Places ....................................................................................3-12
Table 3.17 Fixed Telephone Line Users ...................................................................................................3-13
Table 3.18 Mobile Telephone Users by Operator .....................................................................................3-13
Table 3.19 Telecommunications operators in El Salvador........................................................................3-14
Table 3.20 Total Mobile Users in the Country..........................................................................................3-14
Table 3.21 Internet Users in Central America...........................................................................................3-15
Table 3.22 Comparison of Broadband Access Charge (monthly charge) .................................................3-16
Table 3.23 Internet Access Charge Rates in El Salvador..........................................................................3-16
Table 3.24 List of ISP Providers of Public Telephony..............................................................................3-17
vi
Table 3.25 El Salvador Public Access Points by Department and Type 2005 ..........................................3-19
Table 3.26 PC Penetration and Growth by Country..................................................................................3-20
Table 4.1 Number of Staff per Agency .....................................................................................................4-2
Table 4.2 Responsible Organization on ICT/Responsible Person(s)/Number of Staff .............................4-3
Table 4.3 Systems and Applications Development...................................................................................4-3
Table 4.4 Conditions, Configurations and Capacities of Network Connection with Local Branch
Office or Related Agency/Organization....................................................................................4-5
Table 4.5 Internet Connection Capacity (Bandwidth)...............................................................................4-6
Table 4.6 Number of PCs and Number of Servers (including Information on Individual OS).................4-7
Table 4.7 Utilization Objectives of Servers ..............................................................................................4-8
Table 4.8 Place or Location of Server: Earthquake-proof Condition for Servers ...................................4-10
Table 4.9 Backup Available for Operating Servers ................................................................................4-11
Table 4.10 Conditions on Security............................................................................................................4-12
Table 4.11 Existing Duties and Services (back-office and front-office) Utilizing ICT ............................4-14
Table 4.12 Planned Systems and Applications to be Developed and Sources of Funding .......................4-16
Table 4.13 Web Pages and/or Services Provided by Ministries and Agencies .........................................4-20
Table 4.14 Earthquakes in El Salvador .....................................................................................................4-26
Table 4.15 Government e-Services ...........................................................................................................4-32
Table 4.16 Information Technology Staff Government of El Salvador 2006 ...........................................4-34
Table 4.17 Active Hours of Equipment ....................................................................................................4-36
Table 4.18 Data Backup for Equipment....................................................................................................4-37
Table 4.19 System Backup........................................................................................................................4-38
Table 4.20 Outsourced Services of Equipment .........................................................................................4-38
Table 5.1 Project Prioritization (e-Government).......................................................................................5-1
Table 5.2 Amount of IT Enterprises, by Commercial Status (More than one is possible)......................5-10
Table 5.3 Percentage of IT Enterprises, by Funding Source...................................................................5-11
Table 5.4 Amount of IT Enterprises, by Number of Employees.............................................................5-11
Table 5.5 Average Monthly Salary, by Job Position...............................................................................5-11
Table 5.6 Percentage of Enterprises, by Quantity of Products Sold in 2002 ..........................................5-11
Table 5.7 Amount of IT Enterprises, by Sales Ranges............................................................................5-12
Table 5.8 Average Percentage of Sales by Destination...........................................................................5-12
Table 5.9 Exports by Destination, First 3 Places ....................................................................................5-12
Table 5.10 Internet Users in El Salvador ..................................................................................................5-15
Table 6.1 Criteria for Evaluation...............................................................................................................6-6
Table 6.2 Possible Distribution of Responsibilities between Public and Private Sector...........................6-9
Table 6.3 Gov-WAN Shortest Distance Between the Different Salvadoran Government Agencies
and the Centro de Gobierno ....................................................................................................6-21
Table 6.4 Server Room Spaces ...............................................................................................................6-33
Table 6.5 Summary of Problems of Existing Server Rooms ..................................................................6-33
Table 6.6 Requirements to e-Government Center...................................................................................6-34
Table 6.7 Current Situation of Standards and Norms .............................................................................6-49
Table 6.8 Standards & Norms.................................................................................................................6-52
Table 6.9 Functions of Common Subsystems.........................................................................................6-57
Table 6.10 Organization for e-Gov Center ...............................................................................................6-65
Table 7.1 Establishment of e-Government Platform for El Salvador .......................................................7-4
Table 8.1 Specification Items ...................................................................................................................8-1
Table 8.2 System Requirements ...............................................................................................................8-3
Table 8.3 VoIP Requirements...................................................................................................................8-5
Table 8.4 NOC Requirements...................................................................................................................8-6
Table 8.5 NOC Server Requirements .......................................................................................................8-8
Table 8.6 Municipal Connectivity Component Requirements..................................................................8-9
Table 8.7 Rural Wireless WAN Component Requirements ...................................................................8-10
Table 8.8 PAT Requirements..................................................................................................................8-11
Table 8.9 Requirements for Applications ...............................................................................................8-12
Table 8.10 Cost Estimates: Facilities, O&M, and Renewal......................................................................8-14
Table 8.11 Summary of Cost Estimates for Facilities, O&M, and Renewal ............................................8-15
vii
Table 8.12 Services and Possible Charging Schemes to users..................................................................8-18

Table 8.13 Assumptions for Hardware and Software ...............................................................................8-20
Table 8.14 e-Government Center Cost Estimates .....................................................................................8-21
Table 8.15 Cost of e-Government Center Services...................................................................................8-22
Table 8.16 Cost of Data Center Infrastructure ..........................................................................................8-22
Table 8.17 Investment Schedule ...............................................................................................................8-23
Table 8.18 Cost of Additional Elements...................................................................................................8-23
Table 8.19 Annual Building O&M Cost...................................................................................................8-24
Table 8.20 e-Government Center O&M Cost by Year .............................................................................8-24
Table 8.21 Salary Expense of e-Government Center................................................................................8-25
Table 8.22 Investment Cost of e-Government Center ..............................................................................8-25
Table 8.23 Annual OM Fee of e-Government Center...............................................................................8-25
Table 8.24 Building Construction Schedule 2006-2009 ...........................................................................8-26
Table 8.25 Components of Citizens Master DB .......................................................................................8-29
Table 8.26 Supposed System Interfaces ...................................................................................................8-30
Table 8.27 e-Government Center’s Rolls of Operation and Maintenance ................................................8-30
Table 8.28 Cost of Necessary Hardware for Citizens Master DB ............................................................8-31
Table 8.29 Summary of Cost Estimates for Citizens Master DB..............................................................8-31
Table 8.30 Components of Disaster Information System .........................................................................8-35
Table 8.31 Cost of Necessary Hardware for Disaster Information System ..............................................8-36
Table 8.32 Summary of Cost Estimates for Disaster Information Systems..............................................8-37
Table 8.33 Components of Standards and Norms.....................................................................................8-39
Table 8.34 Cost Estimates for Standards and Norms................................................................................8-40
Table 8.35 Phase-Ia Deliverables .............................................................................................................8-41
Table 8.36 Phase-Ib Deliverables .............................................................................................................8-42
Table 8.37 Components of Common Subsystem......................................................................................8-44
Table 8.38 Cost of Common Subsystems .................................................................................................8-46
Table 8.39 Cost Estimates for Common Subsystem.................................................................................8-46
Table 9.1 Overall Project Costs ................................................................................................................9-7
Table 9.2 Distribution by Financing Source .............................................................................................9-8
Table 9.3 Recommended Implementation Packages ................................................................................9-9
Table 9.4 Annual Fund Requirement (US$) ...........................................................................................9-11
Table 10.1 Economic Investment Costs....................................................................................................10-2
Table 10.2 Incremental Economic O&M Costs........................................................................................10-3
Table 10.3 Quantitative Economic Benefit Items by Component ............................................................10-3
Table 10.4 Telecommunication Service Costs Spent by the Central Government ...................................10-4
Table 10.5 Telecommunication Service Costs of the Central Government Under With and Without
the Project...............................................................................................................................10-4
Table 10.6 Telecommunication Service Costs of Municipalities Under With and Without the Project...10-5
Table 10.7 Earthquake Damage in El Salvador ........................................................................................10-8
Table 10.8 Sensitivity Analysis (EIRR)....................................................................................................10-9
Table 10.9 e-Government Target and Components ................................................................................10-11
Appendices
Appendix 1 Sample Design Drawings for e-Government Center Building ........................................... A1-1
Appendix 2 Time Value Saved of Citizens Applying for Birth Certificates and Cost Reduction of
Municipality Employees Attending the Citizens ................................................................ A2-1
Appendix 3 Incremental Economic Cash Flow of e-Government Platform........................................... A3-1
viii
Abbreviations
3G Third Generation (of mobile telephone system)
ADSL Asymmetric Digital Subscriber Line
AMI Autopista Mesoamericana de la Información
ATM Automatic Teller Machine
B2B Businesses to Businesses
B2C Businesses to Consumers
CRM Customer Relationship Management
G2B Government to Businesses
G2C Government to Citizens
GDP Gross Domestic Product
GIS Geographic Information System
GITR Global Information Technology Report
GNI Gross National Income
HIPCs Heavily Indebted Poor Countries
IC Integrated Circuit
ID Identity
IP Intellectual Property
ISP Internet Service Provider
IT Information Technology
LAN Local Area Network
MCT Multipurpose Community Telecenters
MRP Material Requirements Planning
NAP Neutral Access Point
NGO Non-Governmental Organization
O&M Operation and Maintenance
ODA Official Development Assistance
P2P Pier to Pier
POP Point Of Production
POS Point Of Sales
SME Small Medium Enterprise
SMS Short Message Services
Organizations
ANDA Administración Nacional de Acueductos y Alcantarillado
ASPROC Asociación Salvadoreña de Profesionales en Computación
ASIA Asociación Salvadoreña de Ingenieros y arquitectos
BCR Banco Central de Reserva
BFA Banco de Fomento Agropecuario
BMI Banco Multisectorial de Inversiones
BPO Business Process Outsourcing
C&W Cable and Wireless (corporate name)
CAFTA Central America Free Trade Agreement
CBTPA U.S. Caribbean Basin Trade Partnership Act
CIG Center of Geological Research in El Salvador
CITESD Centro de Investigación Tecnológica en Seguridad de Datos
CNR Centro Nacional de Registros
COMTRADE United Nations Commodity Trade Statistics Database
CONACYT Consejo Nacional de Ciencia y Tecnología
CONATO Council of Organized Workers
CORSATUR Salvadorian Corporation of Tourism
DIGESTYC General Direction of Statistics and Surveys
ERP Enterprise Resource Planning
ix
ESCCI Salvadorian Chamber of Commerce and industry

FISDL Fondo Nacional para el desarrollo local de El Salvador
FONAVIPO Fondo Nacional para la vivienda popular
FSV Fondo Social para la vivienda
FUSADES Salvadorian Foundation for the Social and Economic Development
ICT Information Communication Technology
IDA International Development Association
IDB Inter-American Development Bank
IIPA International Intellectual Property Alliance
IITT Institute of IT Training
INFOVED Information for Development Program (in World Bank)
INSAFORP Instituto Salvadoreño de Fortalecimiento Profesional
INTELCO International Telecommunications Ltd.
ISCED International Standard Classification of Education
ISIC International Standard Industrial Classification
ISSS Instituto Salvadoreño del Seguro Social
ISTU Instituto Salvadoreño de Turismo
ITCA Instituto Tecnológico Centroamericano
ITU International Telecommunication Union
MAG Ministerio de Agricultura y Ganadería de El Salvador
MH Ministerio de Hacienda (El Salvador)
MIF Multilateral Investment Fund
MINEC Ministerio de Economía
MINED Ministerio de Educación
MINTRA Ministerio de Trabajo
MOP Ministerio de Obras Públicas y Transporte
MRE Ministerio de Relaciones Exteriores (El Salvador)
NAFTA North American Free Trade Area
NCIS National Commission for Information Society
PMRTN Plan Maestro para la Reconstrucción y Transformación Nacional
PNUD Programa de las Naciones Unidas para el Desarrollo
PPP Plan Puebla Panama
PROCOMER Center for Export and Investment Promotion
SCM Supply Chain Management
SCT Secretariat of Communications and Transport
SEGEPLAN Secretariat of Planning and Programming
SIGET Superintendencia General de Electricidad y Telecomunicaciones
SNET Servicio Nacional de Estudios Territoriales
SSF Superintendencia del Sistema Financiero
UCA Universidad Centro Americana “Dr. José Simeón Cañas”
U.K. United Kingdom
UNDESA United Nations Department of Economic and Social Affairs
UNDP United Nations Development Programme
UNDPEPA United Nations Division for Public Economics and Public Administration
U.S.A United States of America
USGS U.S. Geological Survey
WB World Bank
x
Chapter 1 Introduction
1.1 Study Background
Seven Central American countries (Belize, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica
and Panama) plus Mexico are promoting the Plan Puebla Panama, PPP, a regional development plan with
eight main topics and one country in charge of each of the main topics. El Salvador is in charge of the
Electronic Government (e-Government) and is expected to play a major role in ICT development in Central
America.
The Japan Bank for International Cooperation (JBIC) carried out a Study for Project Formation for the
ICT sector in the PPP countries in 2003. The JBIC Study covered the IT sectors in the eight PPP
countries listing main issues and recommendations for each country. The subsequent Master Plan for El
Salvador proposed priority projects that are suitable for a yen loan. The current study is a feasibility
analysis of establishing an e-Government Platform recommended in the JBIC Study.
The JBIC study examined six categories in the eight PPP countries calculating a maturity index
composed of organization framework, government IT usage, economic sectors, human resources, citizens’
IT usage, and communication infrastructure.
The JBIC Study to provide the IT Master Plan was completed under the previous government.
However, the new government of El Salvador has continued dialogue with the government of Japan, and
the Ambassador of Japan, Mr. Akio Hosono made a presentation to the President of El Salvador, Mr.
Antonio Saca, on August 20th 2004.
In consideration of all the above the Government of El Salvador requested the Government of Japan to
carry out a feasibility study of establishing an e-Government platform in El Salvador. The Government of
Japan appointed the Japan International Cooperation Agency (JICA) to undertake the study. JICA in turn
engaged the consulting firm PADECO Co., Ltd. to implement the study (the Study Team). A JICA
mission was sent to El Salvador to determine the Scope of Work of the study from January 15th to 20th,
2006. An agreement was signed on January 20th, 2006 between the two parties, and the Study was
commenced immediately.
The Study Team started work on 4th of January 2006, and has worked in El Salvador in four separate
periods till November 21st, 2006. A final presentation in San Salvador was made in November 16th, 2006.
In addition, this Study Team also assisted the government in preparing a request for a grant for a new
office building, which is to house a new e-Government Center. A grant request has been submitted by
the authorities of El Salvador to the Embassy of Japan. The need for a building is evident from our
analysis, and a study was needed to support the request for safe and secure infrastructure. The team
assisted the local authorities in preparing the grant proposal.
1.2 Objectives of the Study
The objective of the Study is to prepare a concrete plan for establishing an e-Government platform in El
Salvador in consideration of subsequent plan implementation to be financed by some sources including a
JBIC loan.
1-1
1.3 Study Organization and Schedule
The Study was carried out by a team of 7 experts dispatched by PADECO Co., Ltd. of Japan under a
contract with JICA. The counterpart agency in El Salvador was the Technical Secretariat, the Presidential
House, the Republic of El Salvador. A progress report was submitted in March 2006, an Interim Report in
August 2006, a Draft Final Report in October 2006, and The Final Report (this report) in November 2006.
The composition of the Study Team and their work schedule are shown in Figure 1.1.
Year 2005 2006

1 2 3 4 5 6 7 8 9 10 11 12 13
Name Month Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Consultant
Field
Home
Team Leader / Yuichiro
1
General Planning Motomura
9 12 15 15 15
System/Information
2 Isao Takatori 22 12 22 22 23
Network Design
Legal System /
3 Marco Kamiya
Organization
29 71 23
Economic / Finacial
4 Kinuyo Fukuda
Analysis
14 22 23
Information Yoshinori
5
Network Design 2 Kurachi
14 29 29 23
6 Application Design Naoya Higashi 22 15 15
Equipment/Facility
7 Muneki Ikegami
Design
14 22 15
△ △ △
Workshop
W/S W/S Report
▲ ▲ ▲ ▲ ▲
Deliverables / Reports
IC/R P/R IT/R DF/R F/R
Source: JICA Study Team

Figure 1.1 The Study Plan and Work Schedule
1-2
Chapter 2 Economy and the Government
2.1 Socio-economic Profile
2.1.1 Social Profile
Reflecting increase in government spending for the social sector since the end of the 12-year war in 1991,
there has been improvement in literacy rate, life expectancy and poverty indicators although the
improvement rates have become slower after 2001. Although the literacy gap between the sexes and
between the urban and rural population has narrowed in the past decade, the poverty gap between the urban
and rural population and the income gap between the rich and poor have not improved over the period.
(1) Population
El Salvador has the population estimated at 6.9 million in 2005 with the population density of 326.7
people per km2, relatively high for Latin America. El Salvador is the smallest country in Central America
with 21,040km2 of land. According to National Agency of Statistics and Census, total population has
increased by 2.3% between 1992 and 2005. In addition to 6.9 million living in the country, it is estimated
that there are approximately 1.5 million Salvadorian emigrants living abroad, mostly in the United States.
Table 2.1 Demographic Trend (Thousand)

1950 1992 2005*
Population 1,951 5,119 6,875
Average Annual Growth Rate - 2.3% 2.3%
*Estimate
Source: National Agency for Statistics and Census
Some 32% of the total population is concentrated in the Department of El Salvador. Combined
population of the Departments of San Salvador and La Libertad accounts for 43.4% of the total. The
country’s population is very young with 34% having less than 15 years in 2004. UNDP expects the share
of the population under 15 years old to decrease to 29.8% in 2015. The urban population is estimated to
be 59.4% of the total in 2003 and projected to be 64.2% in 2015.
Table 2.2 Population by Department in 2005 (Estimate)

Department Population % to Total Y/Y Change
Ahuachapán 354,578 5.2% 2.1%
Santa Ana 606,773 8.8% 1.9%
Sonsonate 506,420 7.4% 2.4%
Chalatenango 203,035 3.0% 0.6%
La Libertad 784,478 11.4% 2.6%
San Salvador 2,198,193 32.0% 1.8%
Cuscatlán 212,501 3.1% 0.9%
La Paz 318,107 4.6% 1.7%
Cabañas 156,964 2.3% 0.5%
San Vicente 170,937 2.5% 1.2%
Usulután 347,855 5.1% 0.6%
San Miguel 533,738 7.8% 2.2%
Morazán 178,897 2.6% 0.6%
La Unión 302,450 4.4% 0.9%
Total 6,874,926 100% 1.7%
Source: National Direction for Statistics and Census
2-1
Table 2.3 Age Structure of El Salvador (2004 Estimate)

Age % Total
Up to 9 22.4%
10 to 14 11.6%
15 to 64 59.1%
Over 65 6.9%
Total 100%
According to UNDP, life expectancy at birth of Salvadorians has improved from 66.3 years in 1990, 69.4
years in 1998 to 70.9 years in 2003, ranking 82th out of 177 countries in the world.
Table 2.4 Life Expectancy at Birth (2003 Estimate)

Rank Country Years
1 Japan 82.0
2 Hong Kong 81.6
3 Iceland 80.7
82 El Salvador 70.9
177 Swaziland 32.5
Source: UNDP
(2) Literacy Rate and Education
The government budget for education to GDP has increased from 2.0% in 1990 to 3.2% in 2000, which
has been well reflected in improvement in literacy rate and school enrollment rate.
According to UNDP, overall adult literacy rate has improved from 72.4% in 1990 to 79.7% in 2003.
The literacy rate for the youth of 15-24 years old was 88.9% in 2003, indicating overall literacy figure will
improve further in the coming years. Female literacy rate was 77.1% for adults and 88.1% for the youth
in 2003, indicating the diminution of the gap between the sex. El Salvador targets at 100% literacy rate of
the youth by 2015, which is reported to be achievable.
The following figure contrasts the literacy rate of urban and rural areas. Literacy rate in urban and rural
areas increased by 1.6% point 7.1% point respectively in 1998-2004, diminishing the gap between the two.
100
80
60
Urban
(%)
Rural
40
20
0
1998 1999 2000 2001 2002 2003 2004
Figure 2.1 Literacy Rate in Urban and Rural Areas
According to UNDP data, net enrollment ratio of primary, secondary and tertiary schools was 90%, 49%
and 19% respectively in 2003. El Salvador had 68% of combined primary, secondary and tertiary gross
enrollment ratio in 2002/2003, ranking 113th out of 173 countries.
2-2
Table 2.5 Combined Primary, Secondary and

Tertiary Gross Enrollment Ratio (%) in 2002/2003
Rank Country %
1 United Kingdom 123%
2 Australia 116%
3 Belgium 114%
113 El Salvador 68%
173 Niger 21%
Source: UNDP
(3) Poverty
The government current budget for social sector relative to GDP has more than doubled from 4.1% in
1990 to 9.8% in 2003, which has been reflected in improvement in poverty alleviation. Despite overall
poverty improvement, however, there still exists a gap between the urban and rural.
According to the National Agency for Statistics and Census, the population below the poverty line fell to
38.9% in 2002 since the end of 12-year civil war in 1991, when it recorded 57.8%. As the table below
shows, however, it has not improved so much in the rural area as in the urban area. The government
intends to half the rate both in urban and rural areas in 1990-2015. It is estimated that the rural target may
not be achievable although the urban and overall targets will likely be met.
Table 2.6 Population below Poverty Line (%)

1991 2002 2015*
Total 57.8% 38.9% 28.9%
Urban 38.7% 22.5% 19.3%
Rural 75.2% 62.5% 37.6%
*Estimate
Families of ‘extreme’ and ‘relative’ poverty1, another indicator of poverty, have decreased remarkably
since 1991. Total families of extreme poverty decreased by 51% in 1991-2004. Improvement in this
indicator, however, has become slower since 2001 as shown in the table below.
100%
80%
60%
40%
20%
0%
1992 1994 1996 1998 2000 2002 2004
Families of Extreme Poverty Families of Relative Poverty Not Poor Families

Figure 2.2 Families of Extreme and Relative Poverty
1
A family of extreme poverty and relative poverty, by definition, is a family with average monthly income of less than
US$137.3 and less than US$274.6 respectively in 2005.
2-3
As the figure below shows, the share of poor families decreased by 32% both in urban and rural areas in
1994-2004. Nonetheless the share of poor families in rural areas stands high at 43.7% and there still
exists a gap between the urban and rural areas in terms of poverty.
% 70
64.6
60
50
43.8 43.7
40 1994
29.2 2004
30
20
10
0
Urban Rural

Figure 2.3 Share of Total Poor Families
(Extreme and Relative Poverty) in Urban and Rural
The following table summarizes UNDP’s Human Development Index (HDI)2 for El Salvador. The
country ranked 103th out of 177 developing countries with HPI value of 72.6% in 2002 and 104th out of 177
countries in 2003. The Department with the highest HDI is San Salvador and the lowest is Morazan in
2004. Though the indicator has been improving, the improvement rate has slowed down in recent years.
Table 2.7 HDI of El Salvador by Province

1996 1999 2002 2004
Total 0.688 0.704 0.726 0.732
Ahuachapán 0.648 0.626 0.652 0.682
Cabañas 0.575 0.609 0.637 0.656
Chalatenango 0.612 0.642 0.663 0.680
Cuscatlán 0.669 0.697 0.713 0.714
La Libertad 0.703 0.727 0.752 0.741
La Paz 0.656 0.668 0.687 0.701
La Unión 0.578 0.628 0.662 0.673
Morazán 0.562 0.619 0.646 0.624
San Miguel 0.671 0.689 0.704 0.709
San Salvador 0.757 0.765 0.783 0.788
San Vicente 0.626 0.647 0.669 0.683
Santa Ana 0.671 0.687 0.708 0.707
Sonsonate 0.665 0.669 0.696 0.716
Usulután 0.645 0.655 0.689 0.697
Ranking in the world - - 103/177 -
Source: UNDP
2
The human development index (HDI) focuses on three measurable dimensions of human development: living a long and
healthy life, being educated and having a decent standard of living. It combines measures of life expectancy, school
enrolment, literacy and income to allow a broader view of a country’s development than does income alone.
2-4
(4) Equity
According to 2005 UNDP Human Development Report, total Gini coefficient was 0.48 by family
income and 0.5 by income per capita in 2004. Gini coefficient of El Salvador has deteriorated in
1996-2002 but has improved in 2003 and 2004. Overall Gini coefficient for 2004 remains at almost the
same level as 1996 coefficient. It could be said that the gap between the rich and the poor has not
narrowed despite overall poverty improvement.
As for the household income/consumption share, the lowest 10% and lowest 20% had 0.9% and 2.9% of
the total while the highest 10% and 20% had 40.6% and 57.1% in 2000 according to UNDP.
Table 2.8 Historical Trend of Gini Coefficient

1996 1997 1998 1999 2000 2001 2002 2003 2004
Gini by Total 0.48 0.48 0.50 0.50 0.49 0.51 0.52 0.50 0.48
Family Urban 0.44 0.44 0.46 0.46 0.45 0.48 0.49 0.47 0.45
Income Rural 0.45 0.42 0.46 0.47 0.47 0.48 0.48 0.47 0.46
Gini by Total 0.51 0.51 0.52 0.52 0.52 0.53 0.54 0.51 0.50
Individua Urban 0.47 0.47 0.48 0.47 0.47 0.49 0.50 0.48 0.47
l Income Rural 0.45 0.44 0.46 0.47 0.47 0.49 0.49 0.48 0.47
Source: UNDP
(5) Ethnics and Religion
Ethnically, the overwhelming majority of people (90%) are classified as mestizos with 9% whites and
1% Amerindians according to the World Factbook (https://www.cia.gov/cia/publications/factbook/).
Some 83% of the total population is Catholic according to the same source.
2.1.2 Economic Profile
(1) Production (GDP)
GDP rebounded by 6% a year in early 1990s of post-war reconstruction period after being contracted by
2% a year in 1980s. It then slowed down again from mid-1990s, despite a wide range of reforms
including trade liberalization, privatization, increased labor market flexibility, strengthened banking system,
and fiscal reform, and slowed down further to 2% during 2001-2005. GDP per capita growth was even
worse at a mere 0.2% on average in 2001-2005.
According to the preliminary result, the performance of 2005 was relatively high with GDP growth of
2.8% and GDP per capita growth of 1.1%. However, the seemingly good performance of 2005 was
mainly due to the poor performance of 2004 caused by delay in parliament budget approval till the middle
of the year. GDP growth of El Salvador has been slower than other countries in the region in recent years.
Table 2.9 GDP and GDP per Capita

2001 2002 2003 2004 2005*
GDP (Current US$ Million) 13,813 14,312 14,940 15,824 17,017
Real GDP Change Y/Y 1.7% 2.2% 1.8% 1.5% 2.8%
GDP per Capita (Current US$) 2,149 2,198 2,250 2,342 2,475
Real GDP per Capita Change Y/Y -0.2% 0.3% 0% -0.2% 1.1%
Source: Central Bank of Reserve
El Salvador has the third largest GDP in Central America after Guatemala and Costa Rica. Real GDP
growth of El Salvador has been weaker than the other countries in the region.
2-5
30
（2.6％）
25
20 （3.8％）
(US$BN)
（5.3％）
15 （1.5％）
10
（3.8％）
（3.7％）
5
0
El Salvador Costa Rica Guatemala Honduras Nicaragua Panama
* Percentage figures inside the parentheses are 2004 real annual growth rate.
* Belize (GDP of US$1bn and +3%Y/Y) is excluded.
Source: Inter-American Development Bank
Figure 2.4 GDP in Central American Countries
(2) Consumption and Investment
Domestic consumption has been always high and finally exceeded GDP (101.3% of GDP) in 2004. As
a result, domestic savings turned negative, declining to an estimated minus 1.3% of GDP in 2004 (positive
5% in 1998). Despite rapid increase in family remittances, national savings have decreased, leading to
weak investment and fixed capital formation. Public sector savings have been negative for several years
but private savings also turned negative in 2004.
The following table summarizes the flow of consumption, savings and investment in El Salvador.
Table 2.10 Savings and Investment Flow (% to GDP)

2001 2002 2003 2004 2005*
Domestic Consumption 99.1% 98.6% 99.7% 101.3% -
Domestic Savings 0.9% 1.4% 0.3% -1.3% -
Private 1.4% 2.0% 1.0% -0.5% -
Public -0.5% -0.6% -0.7% -0.8% -
Family Remittances from
13.8% 13.5% 14.1% 16.1% 16.6%
Abroad
National Savings 15.6% 13.3% 11.7% 11.2% -
Domestic Investment 16.7% 16.2% 16.6% 15.8% -
Fixed Capital Formation 16.4% 16.4% 16.7% 15.6% -
*Estimate
(3) External Sector
Rising domestic consumption has put upward pressure on prices and wages and led to increase in
imports, worsening trade balance, which has not been totally offset even by rising family remittances from
abroad. As a result, the country’s current account balance and external debt have increased while net
international reserve has diminished. External debt to GDP has increased sharply from 22.8% in 2001 to
30.2% in 2004.
2-6
Table 2.11 Major Indicators of the External Sector (US$ Million)

% to % to % to % to % to
2001 2002 2003 2004 2005*
GDP GDP GDP GDP GDP*
Export (FOB) 2,892 20.9% 3,020 21.1% 3,153 21.1% 3,330 21.0% 3,485 20.5%
Import (CIF) 5,027 36.4% 5,185 36.2% 5,754 38.5% 6,269 39.6% 6,846 40.2%
Trade Good
Balance -2,135 -15.5% -2,165 -15.1% -2,601 -17.4% -2,939 -18.6% -3,361 -19.8%
Family
Remittances
from Abroad 1,911 13.8% 1,935 13.5% 2,105 14.1% 2,547 16.1% 2,828 16.6%
Current Account
Balance -150 -1.1% -405 -2.8% -764 -5.1% -612 -3.9% - -
Net International
Reserve 1,791 13.0% 1,589 11.1% 1,906 12.8% 1,888 11.9% 1,879 11.0%
External Debt 3,148 22.8% 3,987 27.9% 4,717 31.6% 4,778 30.2% - -
*Estimate
(4) GDP by Sector
The following table shows the breakdown of GDP by sector in 2004. Agriculture and finance/insurance
sectors have been the strongest while manufacturing has lost its momentum in recent years. The sharp
decline in the construction sector in 2004 was due to delay in passing the government budget in the
parliament until the middle of the year. Major industries of the country are food and processing,
beverages, petroleum, chemicals, fertilizers, textiles, furniture, and light metals.
Table 2.12 GDP by Sector (2004)

Average Growth
GDP by Sector % to Total 2004 Growth
in 2001-2004
Agriculture 11.5% 3.2% 0.2%
Manufacturing 23.6% 0.7% 2.5%
Construction 3.5% -13.6% 1.7%
Trade, Restaurants and 19.7% 1.4% 1.5%
Hotels
Finance and Insurance 3.9% 4.6% 2.2%
Others 37.8% 2.2% 2.0%
Total 100.0% 1.5% 1.8%
(5) Inflation and Exchange Rate
El Salvador adopted US dollar currency as its national currency in 2001 after 7 years’ fixed exchange
rate policy in order to reduce currency devaluation risk, promote foreign investment and to reduce interest
rates. After the Dollarization, the local interest rate has come down and FDI has increased. Though it
had abandoned the monetary policy in 1994 by fixing the exchange rate, the inflation rate had not been so
high since 1997. In recent years, however, the CPI has crawled up to the level of 4 to 5% but it is still the
lowest among the Central American countries.
2-7
Table 2.13 CPI and Weighted Average Lending Rate

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
CPI 9.8% 4.5% 2.6% 0.5% 2.3% 3.8% 1.9% 2.1% 4.5% 4.3%
Bank Lending Rate* - - 10.4% 10.7% 10.7% 10.8% 8.7% 8.0% 7.7% 8.2%
*Weighted average bank lending interest rate for over one year
(6) Foreign Direct Investment
Foreign direct new investment has been on the rise. Electricity and communication sectors together
account for 51.2% of the total FDI balance.
700
(4%) (3.7%) (3.5%)

600
500
(Current US$ Million)
400
300
(2.2%) (1.6%)
200
100
0
2001 2002 2003 2004 2005*
*Percentage figures inside the parentheses are annual growth rates.

Figure 2.5 FDI Trend

Agriculture &
Service Fishery
4% 2%
Construction
0%
Financial
6% Electricity
28%
Commercial
9%
Assembly
10%
Industry Communication
17% 24%

Figure 2.6 FDI Balance by Sector as of 2004
2-8
(7) Employment and Income
According to the World Factbook, labor force is estimated at 2.81 million in 2005, or 40.9% of the total
population. Labor force by occupation is agriculture (17.1%), industry (17.1%) and services (65.8%) in
2003.
According to the Central Bank of Reserve, unemployment rate has declined in urban area but has
increased in rural area in 1998-2004. The economy has much more underemployment as shown in the
table below and both visible and invisible underemployment have worsened in the period.
Table 2.14 Unemployment and Underemployment Rate

1998 1999 2000 2001 2002 2003 2004
Unemployment Rate
Total 7.3% 7.0% 7.0% 7.0% 6.2% 6.9% 6.8%
Urban 7.6% 6.9% 6.7% 7.0% 6.2% 6.2% 6.5%
Rural 6.8% 7.0% 7.5% 7.0% 6.3% 8.2% 7.2%
Underemployment Rate
Total 31.5% 31.9% 27.0% 28.1% 29.8% 36.4% 34.6%
Visible* 3.1% 3.1% 3.4% 3.5% 4.1% 4.4% 4.3%
Invisible** 28.4% 28.8% 23.6% 24.6% 25.7% 32.0% 30.3%
* Less than 40 hours of work per week
** More than 40 hours of work per week but at lower rate than the minimum salary
The following table summarizes average monthly income per capita (not per worker) and monthly
average income per family. Monthly income per capita averages at $100.5 in 2004. Average income has
shrunk by 2.3% per capita and 2.8% per family in real terms in 2001-2004.
Table 2.15 Average Monthly Income per Capita and per Family
2001 2002 2003 2004
Income per Capita
96.4 100.4 96.8 100.5
(Current US$)
Real Change Y/Y - 2.2% -5.6% -0.6%
Income per Family
420.8 429.2 404.3 417.8
(Current US$)
Real Change Y/Y - 0.1% -7.7% -1.1%
2.2 Socio-economic Framework
2.2.1 Government Plan for 2005-20093
According to the Government Plan for 2005-2009, the present government, hoping to stimulate the
sluggish economy, strives to open new export markets, encourage foreign investment, remove obstacles to
improve efficiency in the public sector and competitiveness in the private sector, and increase domestic
investment by redirecting foreign family remittances. Sectors with comparative advantage are expected to
be agriculture and fishery, textile, construction and tourism and other services.
Implementation in 2006 of CAFT (the Central American Free-Trade Agreement with the United States),
signed by Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua in 2004, is viewed as a key policy
to increase export and foreign investment. CAFTA is more comprehensive than the Caribbean Basin
Initiative (CBI) and changes the form of trade relations from the unilateral preferential arrangement to a
negotiated bilateral agreement. CAFTA will have important macroeconomic implications for El Salvador
as it provides enhanced and permanent access to its largest export market, i.e., the US. The agreement
3
Source: Ministry of Economy and IMF: El Salvador: Selected Issues – Background Notes (August 2005)
2-9
includes provisions on investment and financial services, antitrust, government purchases, protection of
intellectual property rights and labor. El Salvador will need to implement reforms to reduce barriers to
investment and growth in order to fully benefit from CAFTA. The main impact for the country is
expected from increased foreign investment as well as from the strengthening of domestic rules and
institutions.
As for the public sector, the government intends to maintain the prudent fiscal policy to restrain current
expenditure below current revenues and to maintain the debt level to the international level and capacity to
pay of Eｌ Salvador. With the adoption of the US dollar as its currency, the country has lost control over
monetary policy and thus must concentrate on maintaining a disciplined fiscal policy.
As for the private sector, the government intends to simplify and make efficient the business climate of
the industrial sector to establish competitiveness. Public infrastructure and services will be provided to
increase efficiency and effectiveness to support the industrial production by facilitating the effective use of
the commercial opportunities and investment in internal and external markets. One example of such
public infrastructure and services will be promotion of the use of information technology. The government
announced presidential program called ‘Connectivity Agenda’ to introduce electronic government, e-SME,
electronic commerce, the use of computers and internet in schools, establishment of INFOCENTROS, etc.
It targets at the access of the majority of the Salvadorians to the internet at the government, companies,
schools or municipalities.
2.2.2 Socio-economic Framework
The following table shows present and future projections of population, GDP and GDP per capita in
which framework the proposed project is expected to take place for the purposes of project evaluation.
The projection of GDP and GDP per capita is made in real terms at 2005 constant price. It is assumed,
conservatively, that GDP growth rate will increase slightly to 2.5% in comparison to average growth rate of
2.0% in 2001-2005 owing to CAFTA and the government’s policy to improve efficiency in the public
sector and competitiveness in the private sector. The population growth rate, following the present trend,
will continue to slow down in 2005-2025. As a result, GDP per capita is estimated to show a modest
growth of approximately 1% in 2005-2025.
Table 2.16 Socio-economic Framework (2005-2025)

2005 2010 2015 2025
GDP (US$ Million)* 17,017 19,253 21,783 27,884
Average Annual Change 2.0%** 2.5% 2.5% 2.5%
Population (Thousand) 6,875 7,441 7,977 9,062
GDP per Capita 2,475 2,587 2,731 3,077
* 2005 constant price
** 2001-2005 average annual rate
Source: JICA Study Team and National Agency for Statistics and Census
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2.3 Government Structure and Legal Framework
This chapter describes and analyzes the legal framework and the organization of the government of El
Salvador. This description is oriented to ICT aspects of the government.
2.3.1 Government Structure – Central and Local
(1) Description of Main Ministries, Organizations and Agencies of the Central Government
The government is divided into executive, legislative, and judicial branches. This is the presidential
system similar to the existent in other Latin American and Caribbean countries, and is based on a division
of powers, where the executive powers are finally relied upon Presidential decision. The following shows
the definition of roles of ministries and agencies.
Executive Branch
Central Reserve Bank

Regulate and modernize the financial system. Regulate, monitor and promote the efficiency of
payment systems. Generate and publish economic and financial information. Generate,
coordinate and publish macroeconomic statistics and projections. Make economic and financial
studies. Advise the Central Government in economic matters. Execute the function of state
financial agent. Provide integrated services and proceedings of export, preservation and liquidity of
international reserves. Fortify the monetary system.
General Superintendence of Electricity and Telecommunications

Apply treaties, laws and regulations that regulate the activities of the electricity and
telecommunications sectors. Dictate norms and technical standards applicable to the electricity and
telecommunications sectors. Establish, maintain and foment relations of cooperation with foreign
and multilateral institutions or tie organisms to the electricity and telecommunications sectors.
Ministry of Agriculture and Livestock

Formulate, direct and control the development policy of the farming sector, evaluate the impact of its
application, as well as the repercussion of the macroeconomic policies in the sector. Propose the
farming sectoral legislation and emit the necessary norms for the fulfillment of such policies
Ministry of Economy
Promote the economic and social development by way of the increase of production, productivity and
rational use of resources. Contribute to the development of the competition and competitiveness of
productive activities for the internal market as for the external one through the promotion of
investments and the growth of exports through a clear and transparent scheme of action that prevents
the existence of discretionary barriers to economic agents.
Define the commercial policy of the country. Pursuit and promote the Central American economic
integration. Fortify the flows of commerce and investment and the multilateral development of the
commercial negotiations with third countries and organizations.
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Source: http://www.casapres.gob.sv/gabinete/OrgGOES, Presidential House Web Page

Figure 2.7 Government Organization - Ministries and Agencies
Ministry of Education
Implement flexible modalities of secondary and basic education in order to cause that young people
and adults increase their schooling. Provide services of basic education, with special emphasis in
the poorest zones. Work towards making primary education universally accessible, giving priority
to 6 year old children. Alphabetize young people and adults, with special attention to the
municipalities of greater poverty, so that they complete the sixth degree and improve their options of
labor qualification.
Fortify the services supply to take care of diversity. Improve the physical environment, so they are
functional, safe and pleasant and they support the educative work. Improve with special attention,
the institutional climate of schools, in order to obtain a harmonious labor atmosphere, coherent and
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ordered that favors the tasks of teaching and learning. Promote good performance and high
motivation of teachers, since they are key players of the education-learning process.
Assure that the curriculum becomes a tool that clarifies the expected competitions among students
and that they are indeed implemented in the context of the classrooms. Develop processes of
certification and educative accreditation to know the competitions and the performance of persons, as
well as the educators and the institutions. Create oriented educative services so that a greater
number of Salvadorans command English as a second language, since that extends the sources of
learning and the cultural interchange.
Fortify the network of technological support and connectivity of the educative system so that more
young and adults have the opportunity to acquire technological competitions and can expand their
opportunities of communication and learning. Improve technical and technological education,
integrating the efforts of the average and superior education in coherence with the requirements of
the economic and social development of the country. Fortify the superior education in order that it
contributes to the scientific and technological development and the operation of a National System of
Innovation, to adapt and to generate technology and to improve productivity.
Foment the protagonist of the scholastic centers to fortify their capacity to make decisions and to
implement plans of continuous improvement in the educative services. Foment the effectiveness of
the public institutions, the coordination of the inter-institutional efforts, the public-private
collaboration and the coherence of international cooperation to obtain educative and social profits in
all and each one of the regions of the country.
Develop the information system, monitoring and evaluation, in order to know the educative
achievements of the population, to verify permanently the advancement towards established goals
and to feed back both the system and the educative institutions. Fortify the promotion and diffusion
of cultural knowledge. Work for the conservation and improvement of the cultural infrastructure of
the country.
Ministry of Environment and Natural Resources

Regulate the environmental management.
To manage effectively environmental management programs through policies and norms that are in
participative form and are transparent, and that facilitate the sustainable development.
Furthermore, Ministry of Environment and Natural Resources is responsible for facilitating a
sustainable action in the development of agro-business, agro-ecological and forest certification.
The Ministry is also responsible for education in prevention, control diagnosis and monitoring of
animal diseases, information on market and prices of agricultural products.
Ministry of Finance
Direct and coordinate the analysis, design, development and implantation of Human Resource and
Information systems related to the Financial Administration, in the institutions of the Public Sector.
Plan, direct and control the development and implantation of information systems projects and
telecommunications under the responsibility of the Ministry. Manage the policies of Information
Security and Quality of services and information systems products offered by the Ministry.
Other activities: tributary administration (VAT declaration, income tax); customs transactions
(declaration and payment of import and export merchandise); collection of taxes (electronic payment
of taxes and tariffs); national debt; and public investment.
Ministry of Foreign Affairs

Defend the national sovereignty in the diplomatic arena. Take care of Salvadorans abroad.
Position El Salvador at international level by way of the exercise of its foreign policy. Manage
international cooperation in order to contribute to the sustained development of the country.
Promote Central American integration in the human, economic, political social and cultural scopes.
Ministry of Internal Affairs

Develop, promote and harmonize the maximum effort of the government and society, for the
achievement of the national objectives in matters of public security, citizen security and participation,
legal security and solidarity, through the effective fulfillment of state policies.
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Ministry of Labor and Social Provision

It guarantees the fulfillment of the Labor Norm promotes and engages in the social dialog, the labor
intermediation, the security and occupational health, and the social welfare; trying a worthy and
sustainable development of the workers and employers.
The national labor laws that are in force in El Salvador are: a)the Constitution; b)International Labor
Conventions (most of them of the ILO) that have been signed and ratified by El Salvador; c)the
Labor Code; and d)laws regarding Social Security, protection and benefits for the employees, the
laws that regulate the organization of the administration within the public sector, and all the
regulations for the appliance of secondary laws.
Ministry of Public Health and Social Assistance

Provide health services to the population throughout the country.
Ministry of Public Works

Govern and facilitate the ordering and territorial development through the provision of basic services
of road infrastructure, transport systems and human gatherings to contribute to sustainable economic
and social development in benefit of the population.
National Registration Center

Registry services, Cartographic, Geographic and Cadastral Services
Superintendence of the Financial System

The aspects that are supervised with greater emphasis by this office are the following: Solvency,
Classification of Risk Assets, Constitution of Reserves, Concentration of Risks, Countable Principles
and Policies, Technical and Mathematical Reserves, Investments, Reinsurance, Financial Information,
Countable Registries, Operations with Parties.
Judicial Branch:
Supreme Court of Justice

To know about the proceedings for relief;
To settle the differences of any jurisdiction or nature, that could raise among the courts;
To know about the reason for seizure and about those that are not reserved to other authority; to order
the requests issued to practice proceedings out of the country and to perform the ones that come from
other countries, without violating the treaties; and to grant the extradition;
To grant the permit to execute judgments pronounced by foreign court, according to law and when it
is necessary;
To watch over the administration of a prompt and total justice, taking the necessary legal steps;
To know the responsibility of the public officials in the case determined by law; To know the reasons
of the cessation or loss of the citizens' rights in the cases comprised on the ordinals 2nd and 4th of
article 74 and in the ordinals 1st, 3rd, 4th and 5th of article 75 of this Constitution, likewise, the
corresponding rehabilitation;
To issue judgment in the application of exemption or commutation of a penalty;
To appoint the Justices of the Courts of Appeals, Judges of Courts and Judges of Peace Courts,
appointing them from the groups of three people proposed by the National Judicial Council; the
Coroners and the employees of different branches of it; remove them, know about their resignations
and grant them permissions;
To appoint the Associate Justices in the cases determined by law;
To receive on its own or through others, the swearing in of public officials;
To authorize and greet lawyers into the practice of law; suspend them for not complying with their
professional obligations, for negligence, for unprofessional behavior, or for immoral private affairs.
The same authorities will be exercised upon notaries;
To prepare a budget those includes the salaries and expenses of the administration of justice and
submit it to Executive Branch for its inclusion in the General Budget of the country. Any budgetary
adjustments that the Congress may deem necessary to the proposed budget will be done consulting
the Supreme Court.
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(2) Public Services Provided
Central Reserve Bank

Establish financial norms. Provide monetary species to banks. Provide financial services,
payments and treasury. Generate and publish economic and financial information (statistical,
publications). Provide technical advisory to the Central Government. Handle state funds and
other financial agent services. Perform export procedures.
General Superintendence of Electricity and Telecommunications

SIGET is a regulating entity, not a supplier of public services.
Ministry of Agriculture and Livestock

Orientation in the development of the agro-business; agro-ecological and forest certification;
permissions for irrigation purposes; education in prevention, control, diagnosis and monitoring of
animal diseases; diagnosis of parasites; fito and/or zoo sanitary import authorizations; information on
market and prices of agricultural products; Agricultural statistics; Geographic information;
authorizations for culture, production and export of fishing products.
Ministry of Economy
Provide services in the areas of: commercial policy; treaty administration; commerce and investment;
statistics and censuses; supervision of mercantile obligations; hydrocarbons and mines; national
office of investments; promotion of exports.
Ministry of Education
Provide education in all levels, from primary to high school to all of the population. Regulate
higher education.
Ministry of Environment and Natural Resources

Extend environmental permissions. Receive and process environmental denunciations. Manage
National Parks and Natural Protected Areas.
Ministry of Finance
Provide qualification in integrated financial administration system. Provide technical assistance in
integrated financial administration system. Manage the help desk system. Provide interconnection
services for data transmission between the Ministry and institutions in the public and financial sector.
Other integrated services: Integrated Financial System (SAFI); Human Resources Information
System (SIRH); Tributary Information Integrated System (SIIT, DET, Tax Return, etc.); Customs
Control System (SIDUNA); Tax Collections System (SITEP, FENIX); and Public Debt System
(SIGADE).
Ministry of Foreign Affairs

Provide passport issuance abroad; family registries abroad. Manage all matters related to repatriate
Salvadorans. execute visa issuance abroad.
Ministry of Internal Affairs

Provide services such as: authorization of cemeteries construction; commutation of penal sentences;
authorization of drawings, raffles and commercial promotions; inscription of non governmental
organizations; emission of criminal records (penitentiary system); authorization of transport of
dangerous materials (firearm); citizen denunciations (citizen security); passports issuance (migration
direction); authorization of public international spectacles and inscription of circuses (public
spectacles direction); transport and opportune delivery of mail, consultation of corporative shipments,
EMS (Post office direction); migratory control: emission of temporary and definitive residence
permits; Visa endorsement; and naturalizations.
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Ministry of Labor and Social Provision

Extension of permission of work to minors temporary
Inscriptions of Plaintiff of use
Granting of leave for use of working centers
Request of approval of constructive planes
Evaluation of degree and type of disability
Ministry of Public Health and Social Assistance

Provide health services.
Ministry of Public Works

Build and maintain the road infrastructure. Develop and manage transport regulation. Plan and
execute urban development.
National Registration Center

Provide services such as: registry of commerce; registry of intellectual property; Registry of the real
state and mortgages; and national cadastre;and cartography and national geography.
Superintendence of the Financial System

Attention to the public. Extend conciliations. Provide Library services.
Table 2.17 Number of Staff per Institution

Institution Number of Staff
Central Reserve Bank 436
General Superintendence of Electricity and Telecommunications 92
Legislative Assembly
Ministry of Agriculture and Livestock 1,500
Ministry of Economy 350
Ministry of Education 36,050
Ministry of Environment and Natural Resources 250
Ministry of Finance N.A.
Ministry of Foreign Affairs 798
Ministry of Internal Affairs N.A.
Ministry of Labor and Social Prevision
Ministry of National Defense
Ministry of Public Health and Social Assistance 18,000
Ministry of Public Works 1,000
National Registration Center 1,587
Superintendence of the Financial System 200
N.A.: Not Available
2.3.2 Local Government Related Organizations
(1) Overall Information
Table 2.18 Local Government Organization, Examples

Institution Authority / Regulating agency
Municipality of Antiguo Cuscatlán Autonomous
Municipality of Santa Tecla Autonomous
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(2) Information on Individual /Organization
1) General Information
- Major tasks
Municipality of Antiguo Cuscatlán
Services to the community; Development of the Municipality; Handling of Income
Municipality of Santa Tecla
Guarantee the generation of economic, social and political conditions that allow the improvement of the
local development, to offer better services and to impel the citizen participation in the municipality.
- Public services provided

Municipality of Antiguo Cuscatlán
Public lighting system
Cleanliness
Paving
Health
Education
Environment
Municipality of Santa Tecla

Participation and Solidarity
Security and balance with the environment
Sport, Culture and Recreation
Order and Modernity
Cleanliness and Health
Productiveness and Sustainability
Make the city a commercial and productive pole
Table 2.19 Number of Personnel per Institution, Examples

Institution Number of personnel
Municipality of Antiguo Cuscatlán 1,200
Municipality of Santa Tecla 750
Ministry of Economy 532
Table 2.20 Responsible Organization on ICT/Responsible Person(s)/Number of Staff, Examples

ICT
Institution ICT Organization Responsible
Personnel
Municipality of Antiguo Cuscatlán IT Division 5 Ing. Luis Escamilla
Municipality of Santa Tecla Municipal Information Lic. Israel Lone
9
Technology (TIM) Bonifacio
2-17
2-18
Chapter 3 The ICT Sector
3.1 ICT Sector Policy
A number of initiatives for the ICT sector have been launched in El Salvador, as well as in the region
involving El Salvador, for the purpose of making El Salvador a better place to live and work and more
competitive in the world market, by means of utilizing cutting edge technologies.
The most notable effort is the establishment of the National Commission for Information Society, NCIS,
directly under the President in December 2004. It is promoting e-País (e-Nations) with the following
objectives:
• To increase the digital connectivity for majority of the population in all country;
• To improve the information of the academic, productive and governmental sectors available
online;
• To promote the use of internet for all companies as a way to access local and world markets;
• To promote the education for ICT to increase access, collaboration and investigation; and
• To maximize the information levels and services offered by the Government online in order to
obtain greater access to the population, to increase efficiency, to facilitate citizen participation, and
to promote transparency.
Various efforts being made in individual ministries and agencies are being coordinated by NCIS. Its
structure is described in Section 3.1. NCIS was launched after two strategy statements, one issued in 1998
and another in 2004 that produced few actual results of substance.
The telecommunication sector in El Salvador has been completely privatized and between 2002 and
2004 the number of fixed line subscribers jumped by one third and the number of mobile users more than
doubled. It is estimated that at least one in three Salvadorians including children now use mobile phones.
This fact may provide a good ground to consider utilizing mobile phones for reaching citizens as part of the
e-Government effort, since such technology is already available and extensively used in certain countries
such as Japan.
No specific industrial policy specific to the ICT manufacturing and services industries exists at present or
in the past, except for the process of certifying 13 ICT service companies with CMMI (a certificate system
for software industry capability level).
El Salvador is in charge of e-Government among the eight countries participating in the Plan Puebla
Panama, PPP, a regional development plan organization as mentioned in Section 1.1. Current emphasis of
PPP in the field of ICT is placed on the installation of glass fiber line cross-regional communication
networks. Small-scale local IT pilot projects are being done, including one in El Salvador.
The promotion of e-Government is also in line with policies of the System for the Integration of Central
America, SICA, which holds periodic meetings of vice-presidents of member countries concerning
e-Government. It has been promoting common e-passport as a part of the e-Government concept.
Recently the Ministry of Governance of El Salvador issued a tender for a new e-Passport system.
3.2 Institutional and Legal Framework
3.2.1 Central Body for ICT Promotion (National Commission for Information Society, NCIS)
There is a presidential decree of December 23rd, 2004, that created the National Commission for
Information Society. Following is a list of some of the persons that were invited to constitute the NCIS.
This is not the definitive composition of the NCIS, since it is currently in the process of forming itself.
3-1
Table 3.1 NCIS Members and Authorities

Sector Institution Title Name
Government Secretario Técnico de la
TSP Eduardo Zablah Touché
Presidencia
Francisco Esteban
Foreign Affairs Min Ministro de RREE
Laínez
Foreign Affairs Min Vicemin. de RREE Eduardo Cálix
Dir. Asuntos
Foreign Affairs Min. Ricardo Flores
Económicos
Dir. Económicos para Jorge Adonay
Foreign Affairs Min.
Norte y Suramerica Santamaría
Maria Teresa de
Plan Puebla Panamá Directora Ejecutiva PPP
Rendón
Dir. Ejec.
Plan Puebla Panamá Telecomunicaciones Roberto Carlos Salazar
PPP
Min. of Economics Ministra de Economía Yolanda de Gavidia
Blanca Imelda de
Min. of Economics Vicemin. de Economía
Magaña
Min. of Economics Dir. Competividad Rafael Ruíz
CNR Director Ejecutivo Félix Garrid Safie
Min. of Education Ministra de Educación Darlyn Meza
Vicemin. de Tec. De
Min. of Education Rafael Salomé
Educacion
SIGET Superintendencee Jorge Nieto
Especialista en
SIGET Fernando Arguello
Normativas
Coord. de Iniciativas de Maria Isabel C. De
SIGET
Telecom del PPP Morataya
Encargado Relaciones
SIGET Otilio Rodríguez
Internacionales
CONACYT Director Ejecutivo Carlos Roberto Ochoa
BMI Presidente Nicola Angelucci
BMI Director de Negocios Roger Alfaro Araujo
CONADEI Directora Ejecutiva Patricia Figueroa
INSAFORP Presidente Mario Antonio Andino
Guillermo López
Min. of Finance Ministro de Hacienda
Suárez
Min. of Finance Coordinador de TI Alex Rivera
FISDL Presidente José Andrés Rovira
COMURES Presidente Marco Antonio Funes
Private FUSADES Presidente Antonio Cabrales
Gte. Sección
FUSADES Pedro Argumedo
Macroeconómica
Director Dpto. Asuntos
FUSADES Roberto Rivera
Económicos
Asoc. Infocentros Director Ejecutivo Sigfredo Figueroa
SVNet Presidente Rafael Ibarra
AMPS Presidente Pedro Leonel Moreno
ANEP Presidente Federico Colorado
Ana Maria Urrutia de
ASDER Directora Ejecutiva
Lara
Chamber of Commerce Presidenta Elena María de Alfaro
TI cluster
ASPROC President Rogelio Fonseca
ASOTEL/AORAES
NAP El Salvador
3-2
Sector Institution Title Name

Fundemas Directora Ejecutiva Rhina Reyes de Fuentes
ASI Presidente Napoleon Guerrero
American Chamber of
Presidente David Huezo
Commerce
Academic Univ. of El Salvador Rectora María Isabel Rodríguez
Joaquín Orlando
Univ. of El Salvador Vicerector Académico
Machuca
RAICES Presidente Rafael Ibarra
INCAE national
Presidente Rafael Castellanos
comitee
Futurekids Presidente Juan Valiente
FEPADE Presidente Ricardo Freund
Presidente Junta
FEPADE Carlos Cromeyer
Directiva
3.2.2 Establishment Status of Subcommittees of NCIS
The chairman of the NCIS is the Technical Secretary of the Presidency, Eduardo Zablah.
The first and immediate goal of the NCIS is to prepare a document that will contain a consensus of
vision, objectives and projects that need to be promoted within a period of several years in the future, in
order to take El Salvador into the path of the world of knowledge and information, and place the country
among the top in the world in this area.
There are six thematic committees and two coordinating committees under the National Commission for
the Information Society.
Thematic Committees
• Legal and Institutional Framework

- Chaired by Jorge Nieto, from SIGET
• Human Resources
- Chaired by Mario Andino, from Insaforp, and Juan Valiente, from Futurekids
• Information Technology Industry and e-Commerce
- Chaired by Pedro Argumedo, from FUSADES
• e-Government
- Chaired by Alex Rivera, from the Ministry of Finance
• National Connectivity
- Chaired by Rafael Ibarra, from SVNet
• Regional Connectivity
- Chaired by Eduardo Cálix, from the Ministry of Foreign Affairs and Plan Puebla Panamá
Coordinating Committees
Strategic Committee
Besides some local persons, it is expected to be assembled with some foreigners, like
ambassadors, international consultants, etc.
Executive Committee
It is assembled with all of the chairmen of the thematic committees, as well as the chairman
of the NCIS and some members of the Strategic committee.
Budget Allocation for the Committees

Currently, there is no budget allocation for the NCIS. Everything that is being carried out so far is
being sponsored by the Technical Secretariat of the Presidency of the Republic, under the presidential
program e-País.
3-3
(1) Additional Initiatives for Legal Framework
Preparation Status of Laws and Regulations for ICT

Besides some laws and regulations that are being developed because of the CAFTA and indirectly
affect ICT (such as Intellectual property matters), there are no current efforts in this area.
Laws and Regulations Concerning e-Government

There are no current efforts in this area.
Laws and Regulations for ICT Sector Promotion

Around 2000, there were some private and public efforts to develop, write and propose an
e-commerce law. This document was discussed by some law firms, some private enterprises and
some academic representatives. However, it was held in the Ministry of Economy, where still
remains. Other than that, there are no current efforts in this area.
Laws and Regulations on Human Resource Development

There are no current efforts in this area.
(2) Law Formation Process
According to the Salvadorian Constitution a bill can be drafted by:
• Member of Parliament;
• The Republic President through the Ministries;
• Supreme Court of Justice in matters relative to the judicial branch, notary, lawyers, Court’s
competence; and
• City council: about local taxes.
All bills that are approved will have to be signed by most of the members of the Board of Directors.
All bills, after being discussed and approved, will be transferred within ten working days to the President of
the Republic, and if the president will not have any objections, it will become into Law.
If the President of the Republic will not have any objections to the received project, then s/he will sign
both exemplary. One exemplary he will send back to the Assembly and will keep the other one in his file.
S/He will also publish the text like a law in the corresponding official organ.
When the President of the Republic will veto a law project, s/he must send it back to the Assembly
within eight working days to one of his receipts, stating the reasons for rejecting the law; if within the
expressed period of time s/he will not send it back, and then it will be published as a law.
In the case of veto, the Assembly will reconsider the project, and it will both ratify it with, at least, third
of votes of the elect Deputies, or it will be send back to the President of the Republic, who will have to
sanction it and to send it to for printing.
The term for the publication of the laws will be fifteen working days. If within that term the President
of the Republic will not publish them, the President of the Legislative Assembly will do it in the Official
Newspaper or any other newspaper of large circulation in the Republic.
A law that has not been promulgated or published the law of permanent character is obligatory and will
have to pass, at least, eight days after its publication. This term can be extended, and will not be
restricted.
(3) Relationship between Central and Local Governments
General Aspects
Concerning the use of public resources and the application of national policies there are a number of
organizations including ministries, agencies and semi-autonomous bodies dealing with ICT aspects or
3-4
related issues. For example, national connectivity for telephone is regulated by SIGET, the
Superintendence of Information and Telephony Resources. However, Internet providers are hardly
regulated, and this is so at national level as well as at municipal level. Public organizations, however,
have federal jurisdictions to apply national laws and enforce regulations through the ministries. And this
is also legal and financial framework for local municipalities, which finance their activities partly through
earmarked transfers from the central government, the use of which is not completely transparent.
Transfers are mainly channeled through the Economic and Social Development Fund (Fondo para el
Desarrollo Económico y Social de los Municipios (FODES)), which is dictated by a regulation that 7% of
the national budget must go to municipalities, as a way of guaranteeing financial autonomy of
municipalities. This practice creates two problems: 1) the central government has considerable control
over municipalities, in particular the poor ones, which have little access to financial resources; and 2)
municipal authorities are elected by popular votes, so in case the dominant political party is different form
the one in the central government, there can be problems in carrying out policies.
Information Society and Regulations

Regarding the legal aspects for information society, at present few laws exit in El Salvador as mentioned
before. Therefore, the legal framework to regulate such activities and the jurisdiction of local government
is not clear. Some of initiatives which require coordination with municipalities and local governments are
those involving schools (as focal points for connectivity), cabling and any kinds of construction work.
Administrative Aspects
The government of El Salvador is divided into executive: president and vice president, legislative, and
judicial (Supreme Court) branches.
The country is divided into 14 Departments in each of where there are a Governor and a Vice-Governor,
named by the Executive Branch, where the executive branch is composed of the president of the republic,
the vice president, ministers and vice ministers of state.
The powers of the president are circumscribed to some extent by the Constitution. The president
requires the approval of the Legislative Assembly in order to leave the country. S/He is required to report
to the assembly upon request on any subject except secret military strategy.
Box 3.1 Extracts from El Salvador’s Constitutions on Local Governments

SECCION PRIMERA
LAS GOBERNACIONES
CAPITULATE VI: LOCAL GOVERNMENT
SECTION: GOBERNACIONES
Art. 200. - For the political administration the territory of the Republic in Departments is divided whose
number and limits will fix the law. In each one of them there will be a proprietary Governor and a
substitute, named by the Executive Branch and whose attributions will determine the law.
SECTION SECOND
MUNICIPALITIES
Art. 202. - For the Local Government, the departments are divided in Municipalities that will be governed
by formed Councils of a Mayor, a Receiver and two or more Regidores whose number will be
proportional to the population. The members of the Municipal Councils will have to be greater of
twenty one original or neighboring years and of the municipality; they will be chosen for a period of three
years, could be reelected and their other requirements will be determined by the law.
Art. 203. - The Municipalities will be independent in the economic, the technician and the administrative
thing, and they will be governed by a Municipal Code, that will seat the general principles for its
organization and operation and exercise of its independent faculties. The Municipalities will be forced
to collaborate with other public institutions in the plans of national or regional development.
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Comes from previous page

Art. 204. - The autonomy of the Municipality includes/understands:
1. - To create, to modify and to suppress to rates and public contributions for the work accomplishment
determined within the limits that a general law establishes. Approved the rates or contributions by the
Municipal Council it will be sent to publish the respective agreement in the Official Newspaper, and
passed that is eight days after their publication, it will be obligatory his fulfillment;
2. - To decree to its Budget of Income and Debits;
3. - To manage freely in the matters of its competition;
4. - To name and to remove to the civil employees and employees of its dependencies;
5. - To decree to the decrees and local regulations; or
6. - To elaborate its tariffs of taxes and the reforms to the same ones, to propose them like law to the
Legislative Assembly.
Art. 205. - No law neither authority will be able neither to exempt nor to give the payment of the rates
and municipal contributions.
Art. 206. - The plans of local development will have to be approved by the respective Municipal Council;
and the institutions of the State will have to collaborate with the Municipality in the development of such.
Art. 207. - The municipal bottoms will not be able to be centralized at heart General of the State, nor to
be used but in services and for benefit of the Municipalities.
On Municipalities
For the local government, the departments are dividend into Municipalities managed by the mayor, one
syndicate and two or more regidores. Municipality is primary the political and administrative unit within
the Salvadorian state.
Unlike the Governors that depend on the executive branch; the municipalities count on autonomy to
occur their own government.
The Municipalities are autonomous in economic, technical and administrative sense and must follow the
Municipal Code. This Code establishes general principles for its organization, operation and exercise of
autonomous faculties.
The municipalities are autonomous, so that they have faculties to regulate, to direct and to administer
within his territory the subjects that are of their competition.
In spite of his autonomy must be fitted to the General Principles establish at the Municipal Code.
The autonomy of the municipality includes:
1. To create, modify, abolish and approve municipal taxes;

2. To prepare and approve their own budget;
3. To enact decrees for local regulations; and
4. To approve level of taxes.
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Box 3.2 El Salvador’s Municipal Code
MUNICIPAL CODE
Municipal Code intends to develop the referring constitutional principles to the organization, operation
and exercise of the independent faculties of the municipalities.
TITLE II
GENERAL CONCEPTS
Art. 2. - The Municipality constitutes the primary Administrative Political Unit within the state
organization, established in a certain territory that is to him own, organized under a legal ordering that
guarantees the popular participation in the formation and conduction of the local society, with autonomy
to occur its own government, who as s/he starts off instruments of the Municipality is the in charge of
rectories and management of communal property the premises, in coordination with the policies and
national performances oriented communal property general, enjoying to fulfill these functions of the
power, authority and sufficient autonomy. The Municipality has legal personality, with determined
territorial jurisdiction and their representation will exert the organs determined in this law. Main the
urban nucleus of the municipality will be the silk of the municipal Government.
Art. 3. - The autonomy of the Municipality extends a: 1) The creation, modification and suppression of
rates by services and public contributions, for the work accomplishment determined within the limits that
a general law establishes; 2) The Decree of its budget of income and debits; 3) The free management in
the matters of its competition; 4) The appointment and removal of the civil employees and employees of
its dependencies, conformity to Title VII of this Code; 5) The local decree and regulations; and 6) The
elaboration of its tariffs of taxes and reforms to the same ones to propose them like law to the Legislative
Assembly.
TITLE III
OF the MUNICIPAL COMPETITION
Art. 4. - It is incumbent on to the Municipalities:
1. The elaboration, approval and execution of plans of urban and rural development of the locality;
2. Supervision of prices, weights, measures and qualities;
3. The development and control of the nomenclature and public ornament;
4. The promotion and of the education, the culture, the sport, the recreation, sciences and the arts;
5. The promotion and development of health programs, like environmental cleaning, prevention and
combat of diseases;
6. The regulation and supervision of the spectacles public and commercial publicity, as soon as concern
the interests and municipal specific aims;
7. The impulse of the internal and external tourism and the regulation of the use and tourist and sport
operation of lakes, rivers, islands, bays, beaches and other own sites of the municipality;
8. The promotion of the participation citizen, responsible in the solution for the local problems in the
fortification of the civic and democratic conscience of the population;
9. The promotion of industrial, commercial and agricultural, artisan the development and of the
services;
10. The increase and protection of the renewable and nonrenewable resources;
11. The regulation of the local transport and the operation of terminals of transports of passengers and
load;
12. The regulation of the activity of the commercial, industrial establishments, on watch and other
similar;
13. The regulation of the obligatory extraordinary operation in similar benefit of the community of the
pharmacies and other businesses;
14. The regulation of the operation of restaurants, nocturnal bars, clubs and other similar
establishments;
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15. The formation of the Civil Registry of the people and any other public registry that will be entrusted
to him by Law;
16. The formation of Registry of Citizens according to the Law;
17. The creation, impulse and regulation of services that facilitate the trade and supplying of products
of consumption and first necessity like markets, and slaughter houses;
18. The promotion and popular organization of fairs and festivities;
19. The benefit of the service of cleanliness, sweeping of streets, harvesting and final disposition of
sweepings;
20. The funeral benefit of the service of cemeteries and services and control of the cemeteries and
funeral served by individuals;
21. The benefit of the service of Municipal Police;
22. The authorization and regulation of domestic and wild animal possession;
23. The regulation of the use of streets, sidewalks, parks and other sites public, policemen and the
premises; and
24. Authorization of operation of lotteries.
(4) Required Legal Framework
There are no legal framework for most of the connectivity issues related with Internet and
Telecommunications. SIGET as well as ASPROPC agrees with this situation.
ASPROC propose the following legal framework to be prepared for the period 2006-2009.
Formulation of Laws
Table 3.2 Legal Framework to Support Information Society Proposed by NCIS

No. Name Object Reference
1 General Law of Information Define the general Service Law of the Information
Society framework for the Society and Electronic Commerce of
development of the Spain
information society
2 Electronic Signature Law Regulate the use of the Model law of electronic signature of
electronic signature which UNCITRAL (United Nations
guarantees and promotes a Commission on International Trade
wide variety of commercial Law)
transactions and services of
the information society
3 Law of Protection of Protect the fundamental Law of Protection of Personal Data,
Personal Data rights of people, specially the Spain
right to honor and privacy,
with regards to the treatment
of personal data
4 Law of Transparency and Guarantee the right of the Law of Administrative Transparency
Access to Public citizens to access public and Access to Public Government
Government Information government information and Information, Mexico
foment transparency in the
administration of the central
government and
municipalities
Activities that must be developed for the formulation and approval of new norms:
• Identification of legal norms that should be developed;

• Elaboration of terms of reference for the hiring of consultancy services;
• Hiring and execution of the consultancy services;
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• Consult and disclosure of laws;

• Approval of executive decrees on behalf of the Presidency of the Republic; and
• Presentation to the Legislative Assembly for the approval of laws.
Reform of Current Laws

Identify the current norms that must be reformed: education laws, Civil Code, Mercantile Code, Civil
and Mercantile Legal Codes, Penal and Legal Penal Codes, Work Code.
Activities that must be developed for the reform of the current laws:
• Inventory of legal norms that must be reformed;

• Elaboration of terms of reference for the hiring of the consultancy services;
• Hiring and execution of the consultancy services;
• Consult and disclosure of laws;
• Approval of reforms of executive decrees on behalf of the Presidency of the Republic; and
• Presentation to the Legislative Assembly for the approval of law reforms.
Institutional Framework
In the short term it is fundamental to create an entity that:
• Assumes the responsibility of coordinating the execution of the action plans proposed by the
different work meetings of the CNSI;
• Possesses the sufficient level in the state organization structure;
• Is permanent; and
• Disposes of the budget for the execution of the action plans.
3.3 Industry Performance
3.3.1 ICT Manufacturing
After the TI’s (Texas Instrument) withdrawal of its plant from this country, no significant movements in
high-tech manufacturing took place. An indicator which shows high-tech product exports in dollars per
capita (albeit a little old) indicates that El Salvador exports goods more than Guatemala, Honduras,
Nicaragua and Panama, but far behind Mexico and Costa Rica. This suggests that ICT manufacturing in
El Salvador is very small.
Table 3.3 High-tech Exports per Capita (2001)

Value (US$) Rank
Costa Rica 255.00 29
El Salvador 7.90 64
Guatemala 5.90 68
Honduras 0.60 81
Mexico 292.30 27
Nicaragua 0.40 87
Panama 0.50 83
Chile 6.90 65
Vietnam 0.40 85
Source: The Global Information Technology Report 2003-2004
3.3.2 ICT Services
At the end of 2003, there was a private survey done by the IT Cluster Program that existed at that time.
Although it was not comprehensive (it did not include all of the country, and it covered 100 IT Salvadoran
enterprises), this can provide rough framework of the industry in El Salvador.
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Except the type of services as taken, there have been no significant movements in other types like data
center service, contents development, etc.
Table 3.4 Number of IT Enterprises, by Year of Start up

Start up year Enterprises
1992 or before 23
1993 to 1997 23
1998 13
1999 13
2000 10
2001 to 2003 18
Total 100
Source: CID / Gallup “Study of Software Developers”, December 2003.
Restricted use, authorized by the Ministry of Economy.
Table 3.5 Number of IT Enterprises, by Commercial Status (more than one is possible)
Commercial status Enterprises
Independent software applications developer 83
Representative of international enterprise 25
Authorized distributor of international enterprise 20
Distributor / importer 14
Subsidiary of international enterprise 14
Joint venture 13
Table 3.6 Percentage of IT Enterprises, by Funding Source

Funding Source Enterprises
Own resources 83%
Bank loan 14%
Joint venture 3%
Table 3.7 Number of IT Enterprises, by Number of Employees

Employees Enterprises
One person 15
Less than 10 54
Between 11 and 25 19
Between 26 and 49 7
50 and more 5
Table 3.8 Number of IT Enterprises, by Type of Internet Connection

Internet Connection Enterprises
Dedicated 83
Commuted 17
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Table 3.9 Average Monthly Salary, by Position

Position Avg Monthly Salary
Specialist $1,872
Manager $1,736
Process analyst $1,332
Graphics designer $1,100
Programmer analyst $1,080
Database administrator $1,061
Developer $878
Others $1,765
Table 3.10 Operating Systems Used by

Customers, by Developer Enterprise
Operating System Enterprises
Windows 97
Linux 43
Unix 36
MS-DOS 23
Apple 9
Open/VMS 6
OS2 6
Table 3.11 DBMS Used by

Customers, by Developer Enterprise
DBMS Enterprises
MS-SQL 74
Oracle 48
MySQL 25
Sybase 22
DB2 10
Informix 9
Interbase 8
Access 8
Postgre SQL 4
Visual Fox 4
Table 3.12 Main Services Offered, by Developer Enterprise

Services Offered Enterprises
System analysis 53
Web applications 51
Client-server applications 49
IT consulting 36
Business consulting 25
Post sale services 21
Support 21
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Table 3.13 Percentage of Enterprises by

Quantity of Products Sold in 2002
Products Sold in 2002 Enterprises
1 to 5 23%
6 to 10 21%
11 to 20 14%
21 to 50 12%
51 to 125 3%
126 to 200 3%
No answer 24%
Table 3.14 Number of IT Enterprises, by Sales Ranges

Years
Sales ranges
2001 2002 2003
$1 to $50,000 33 33 33
$50,001 to $100,000 12 16 18
$100,001 to $200,000 10 12 10
$200,001 to $300,000 8 4 2
$300,001 to $500,000 6 10 7
$500,001 and more 9 11 17
Table 3.15 Average Percentage of Sales by Customer Type

% of Sales by destination Years
2001 2002 2003
Commercial 49 45 44
Government 54 40 35
Telecommunications 48 35 34
Services 36 34 30
Export 28 27 27
Industry 40 29 26
Finance 24 27 25
Others 19 28 37
Table 3.16 Exports by Destination, First 3 Places

Percentage
Export Destination
First Second Third
Central America (as region) 28 7 4
United States 24 9 2
Guatemala 17 4 7
México 9 4 7
Honduras 7 7 4
Panama 0 0 7
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As a whole, the industry in El Salvador is quite small. There are a few companies which are said to be
large, ie, Consisa, Datum, etc. Each of them has employees close to 100.
Assuming that major companies are included in this survey, it can be summarized as below:
• Total number of employees in the whole industry is between 2,000 and 3,000.
(In addition to this number, there are ICT engineers in ICT division of private companies and
government institutes);
• The biggest number of employees in a company is around 100;
• Annual revenue of 70% of the companies is less than US$200,000. Only 20% sell over
US$500,000 annually;
• Total industry size is US$30 to 40 million in annual sales; and
• One third of the companies have experienced business (service/product export) with USA.
Because of small size of enterprises, it may be difficult for them to bid for big projects like some
government projects. And also, according to an owner of IT SME, joint venture for this kind of projects is
not the culture of El Salvador. For these, in order to grow local IT companies by e-Government
development, it may be necessary to divide them into smaller components.
3.4 ICT Penetration
3.4.1 Communication
(1) Telephone
As shown in Table 3.17 and Table 3.18, after the number of mobile phone users exceeded fixed line
users in 1999, the number of mobile phone users is growing rapidly.
Currently around 900,000 fixed line users and more than double number of mobile phone uses subscribe
at telecommunication operators shown in Table 3.19.
Table 3.17 Fixed Telephone Line Users

Total Fixed lines in the Country
Year
Number of Users Number of Waiters
1997 360,410 N.A.
1998 386,659 174,163
1999 495,340 103,617
2000 625,785 72,566
2001 649,879 37,991
2002 667,699 35,243
2003 752,645 N.A.
2004 887,816 N.A.
2005 971,455 N.A.
2006* 985,047 N.A.
Source: SIGET
*: For the First Semester
Table 3.18 Mobile Telephone Users by Operator

Name of Mobile Telephone Operators System Number of Users (2002)
Telemóvil AMPS/TDMA 800MHz A-band 415,000
Telefónica El Salvador CDMA 800MHz B-band 239,100
CTE - Telecom Personal TDMA 1900 MHz B Block 0
CTE - Telecom Personal GSM 900 188,000
Digicel GSM 140,000
Country Total 982,100
Source: Telecommunications and Information Highways in Latin America, México, Central America and the Caribbean,
2002, Paul Budde Communcation Pty Ltd, citing Global Mobile, September 2001.
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Table 3.19 Telecommunications operators in El Salvador

El Salvador 2005
Telecommunications operators
Long distance carriers 11
Mobile telephony 5
Fixed telephony 12
Satellite telephony 2
Trunking 4
Paging 3
Internet 11
AM Radio 52
FM Radio 144
TV 30
Cable TV 72
Satellite TV 1
Source: SIGET
Table 3.20 Total Mobile Users in the Country

Year Total mobile Users
1997 35,7004
1998 137,114
1999 511,365
2000 743,628
2001 857,782
2002 888,818
2003 1,149,790
2004 1,832,579
2005 2,411,753
2006* 3,120,165
Source: SIGET and JICA Study Team
*: For the First Semester
(2) Current Status of Internet in El Salvador
1) Internet User Population

According to the information of Central America Internet Population Survey as of November 2005, the
internet user population in El Salvador is estimated at 587,000 users. A rapid expansion has been
achieved from 40,000 users in year 2000.
4
In 1997 only the company Telemóvil was operating, so this figure was taken from Paul Budde Communication document
cited before as the total for the country.
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Table 3.21 Internet Users in Central America

Current Users
Central Users most Population % of Growth
Population Year
America recent data (penetration) users (2000-2005)
(2005) 2000
Belize 291,904 15,000 35,000 12.0% 0.2% 133.3%
Costa Rica 4,301,172 250,000 1,000,000 23.2% 5.0% 300.0%
El Salvador 6,467,548 40,000 587,500 9.1% 2.9% 1,368.8%
Guatemala 12,328,453 65,000 756,000 6.1% 3.8% 1,063.1%
Honduras 6,569,026 40,000 223,000 3.4% 1.1% 457.5%
Mexico 103,872,328 2,712,400 16,995,400 16.4% 84.9% 526.6%
Nicaragua 5,766,497 50,000 125,000 2.2% 0.6% 150.0%
Panama 3,074,146 45,000 300,000 9.8% 1.5% 566.7%
Total C.A. 142,671,074 3,217,400 20,021,900 14.0% 100.0% 522.3%
Source: www.exitoexportador.com
However our investigation came to a conclusion that these numbers seem exaggerated. Following our
request, the Siget (Superintendencia de Electriciad y Telecomuniciones) inquired nine major ISP (Internet
Service Provider) companies concerning the various internet business data such as, service menu, numbers
of customers, tariff, network configuration and usage. Only 4 responded, all of them are major operators.
The largest operator, Telecom, has 44,165 users at the end of December 2005. Telefonica 19,412 users
and GCA Telecom 313 users respectively. Americatel reported only the number of connections (numbers
of users seem to be small).
Internet business grew dramatically after telecommunication privatization took place in 1997. Since
then, large private ISP companies started to install various network equipment and new communication
lines, including fiber optic trunk cables along the Pan American Highway. Unique in the world standard
communication policy, the central government of El Salvador never asked ISP’s to open their business
information to the public. No authorization from the government is needed to do any telecommunication
business in terms of domestic telecommunication business activity.
Definition of the internet population is important. Siget explains that it is calculated as follows:
• A number of internet user contract times a number of average number of family members.
This method seems not right. Japanese method is the following:
• Counting one who uses internet regardless of multiple service contract nor multiple access device,
such as PC, mobile phone, game equipment, Web TV.
2) Internet Tariff
Basic internet monthly charge for residential customers (Telecom, ADSL, 512kbps, 30 hours/month) is
35 US$. It is extremely expensive comparing to Yahoo BB service charge in Japan, 3,366 yen (about US
29$), ADSL, unlimited connection time use, 8Mbps. Telecom tariff table (see below table) show that a
charge price of unlimited connection time is extremely expensive. This fact is important for internet users.
In Japan, when Yahoo BB introduced a unlimited connection time ADSL service with world class low
price, the residential internet market was enormously stimulated, because tireless net surfing people no
longer cared about how long on the net.
Conditions of Internet services in El Salvador are changing. As of November 2006, monthly charges of
ADSL 512 kbps unlimited time services are $35 by Telecom and $44 by Telfonica respectively.
In February 2006, SIGET sent a questionnaire to major ISPs requesting the disclosure of their Internet
businesses. Only Telecom complied. However, this information can be considered as benchmark of the
market in general as Telecom takes some 55% of the market, leaving the remaining 45% to the 17 other
ISPs.
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Table 3.22 Comparison of

Broadband Access Charge (monthly charge)
Country Monthly charge @ 100kbps (US$)
Japan 0.07
Korea 0.08
USA 0.49
Hong Kong 0.83
Canada 1.05
Singapore 1.59
El Salvador 6.84
Source : ITU Internet Reports 2003
El Salvador; Calculated from the tariff of Telecom
The following table details the public rates for the different accesses and modalities of the related
service.
Table 3.23 Internet Access Charge Rates in El Salvador

Type Service Access Rate (w/o IVA) Speed Connection
Residential Turbonett ADSL $35.00/month 512 kbps Unlimited
Residential Turbonett ADSL $245.00/month 1024 kbps Unlimited
Residential Navigator Packs Dial Up $5.00/month up to 56 kbps 5 hours/ month
Residential Navigator Packs Dial Up $10.00/month up to 56 kbps 10 h/ month
Residential Free Navigator Dial Up $1.59 up to 56 kbps Time of
$1.17 navigation
$2.68
$1.93
Turbospott Wi fi $6.00 N.A. Time of
navigation
Corporate Dedicated $199.00/ month 128 kbps Unlimited
Corporate Dedicated $350.00 / month 384 kbps Unlimited
Corporate Dedicated $400.00 / month 512 kbps Unlimited
Corporate Dedicated $1,000.00/ month 2048 kbps Unlimited
Pymes Dedicated $79.00/ month 256 kbps Unlimited
Turbomóvil free Gprs $0.01 N.A. by kbps
Turbomóvil Gprs $35.00/ month N.A. Unlimited
Source : Telecom report letter to SIGET (2006)
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The following table shows the current ISP list.
Table 3.24 List of ISP Providers of Public Telephony

No. Sociedad
1 ALPRE, S.A.de C.V.
2 AMERICANA DE TELECOMUNICACIONES, S.A. DE C.V.
3 Americatel El Salvador, S.A. de C.V.
4 AMNET TEL Y COMPAÑIA, SOCIEDAD EN COMANDITA DE CAPITAL VARIABLE
5 BELLSOUTH VOLCAN - BSC DE EL SALVADOR Y CIA,S. EN C. DE C.V.
6 BLUE COMM, S.A. DE C.V.
7 CATELCO, S.A.DE C.V.
8 CENTRAL AMERICAN COMMUNICATIONS, S.A. DE C.V. (CACOM, S.A. DE C.V.)
9 COMUNICACIONES DE BANDA ANCHA, S.A. DE C.V. (CBA, S.A. DE C.V.)
10 CONVERGIA EL SALVADOR, S.A. DE C.V.
11 CTE TELECOM PERSONAL, S.A. de C.V.
12 CTE, S.A. de C.V.
13 CUNDIS TELECOMUNICACIONES, S.A.
14 Charter Comunicaciones de El Salvador, S.A. de C.V
15 DIGICEL, S.A. DE C.V.
16 EDIFICIOS Y CARRIERS, S.A. DE C.V. (EDIFICAR, S.A. de C.,V.)
17 EL SALVADOR NETWORK, S.A. (SALNET)
18 El Salvador Telecom, S.A. de C.V. (SALTEL)
19 EMPRESA DE COMERCIO EXTERIOR, S.A. DE C.V. (E. C.O.E., S.A. DE C.V.)
20 EMPRESA METAPANECA DE TELECOMUNICACIONES, S.A. DE C.V. (EMETEL, S.A. DE C.V.)
21 EQUANT EL SALVADOR, S.A. de C.V.
22 EQUIPOS Y MATERIALES, S.A. DE C.V.
23 FONOMED, S.A. DE C.V.
24 G.C.M. CONTACT CENTER, S.A. DE C.V.
25 GBNET, S.A. DE C.V.
26 GENESIS TECHNOLOGIES, S.A. DE C.V.
27 GLOBALSTAR EL SALVADOR, S.A. de C.V.
GRUPO CENTROAMERICANO DE TELECOMUNICACIONES,S.A. DE C.V./GCA TELECOM,S.A.
28
de C.V
29 GSK HOLDINGS, S.A. DE C.V.
30 I.P. COMMUNICATIONS, S.A. DE C.V.
31 IANNUZZELLI Y CIA.
32 IFX NETWORKS EL SALVADOR, LTDA. DE C.V.
33 INFRAESTRUCTURA UNIVERSAL DE TELECOMUNICACIONES, S.A. DE C.V.
34 INTERNATIONAL TELEPHONE AND SATELLITE CENTROAMÉRICA EL SALVADOR,S.A.
35 ISTMANIA COMUNICACIONES, S.A. DE C.V.
36 LATICOM, S.A. DE C.V.
37 MAYACOM, S.A. de C.V.
38 MUNDIAL DE TELECOMUNICACIONES EL SALVADOR, S.A. DE C.V.
39 MZ COMMUNICATIONS DE EL SALVADOR, S.A. DE C.V.
40 NEW ORBIT TELECOMMUNICATIONS, S.A. DE C.V.
41 NEWCOM EL SALVADOR, S.A. DE C.V.
42 NZT DE EL SALVADOR, S.A. DE C.V.
43 Operadora Protel de El Salvador, S.A. de C.V.
44 ORION TELECOMMUNICATIONS CORPORATION, S.A. DE C.V. (OTC, S.A. DE C.V.)
45 REDES Y SISTEMAS TELEFONICOS Y ELECTRICOS, S.A. DE C.V. (RESISTEL, S.A. DE C.V.)
46 SALCOM, S.A. DE C.V.
47 SAN JUDAS SALVADOR, S.A. DE C.V. (SANJUSAL, S.A. de C.V.)
48 SIPROSAT, SA. de C.V. (SISTEMAS Y PROYECTOS SATELITALES, S.A. DE C.V.)
49 SISTEMAS DE INTERACCION GLOBAL, S.A. DE C.V. (SING, S.A. DE C.V.)
50 Telecomunicaciones de América, S.A. de C.V. (TELECAM, S.A. DE C.V.)
51 TELEFONICA MOVILES EL SALVADOR, S.A. DE C.V.
52 TELEFONICA MULTISERVICIOS, S.A. DE C.V.
53 TELEFONOS CELULARES DE EL SALVADOR, S.A. DE C.V.
54 TELEFONOS DE CENTROAMERICA, S.A. DE C.V. (TELECASA, S.A. DE C.V.)
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No. Sociedad
55 TELEGLOUSA, INC. SUCURSAL EL SALVADOR
56 TELEMOVIL EL SALVADOR, S.A.
57 TELERED DE EL SALVADOR, S.A. DE C.V.
58 TELPRO, S.A. de C.V.
59 TRICOM, S.A. DE C.V.
60 UNILINK, S.A. DE C.V.
61 UNITELCO, S.A. DE C.V.
62 UNIVERSAL TELECOM, S.A. DE C.V.
VASQUEZ BONILLA TELECOMUNICACIONES,S.A. DE C.V/VB TELECOMUNICACIONES,S.A.
63
DE C.V
64 WORLDXCHANGE COMMUNICATIONS, S.A. de C.V.
Source: SIGET and JICA Study Team
3) Access Points and Trunk Lines

According to ISP’s report, more than half of employed access point technology is analogue modem (dial
up or dedicated line). There are other technologies employed as well, such as ADSL (15,000), DSL (few),
ISDN (1,500), wireless LAN (unknown). It is advised that high speed, inexpensive, unlimited connection
time digital internet service, ADSL, is the best technology to be promoted.
Trunk lines of internet connecting major cities are required to be high speed and high volume digital line.
A fiber optical cable is the best technology now. The Siget does not have a nationwide digital network
diagram. Several trunk line network diagrams have been reported by Sip’s. However they do not have
enough information for analyzing how much additional investment needed to expand the nationwide
internet population up to the planned level.
Speaking of efficiency, fiber optical cable networks have not been designed and built effectively, as they
have been independently planned by each large ISP companies. It is observed that multiple electric polls are
built on the both sides of highways running only a fiber optical cable on it. Siget explained that ISP
companies are free to build electric poles, no application is required to be submitted. Therefore there is no
collaboration made among ISP companies in order to minimize the total investment cost. Siget commented
that the situation is the same in San Salvador. Strong regulation and planning share needed to realize fast
and effective network expansion. The following diagram is a trunk line network of Telefonica.
3-18
Source: Prepared by SIGET for JICA Study Team

Figure 3.1 Telemovil Optical Fiber Network
4) Public Access Points

Table 3.25 El Salvador Public Access Points by Department and Type 2005
Internet Cafés
Department Infocentros ** CRA *** Other **** Total
Internet *
Ahuachapán 24 1 21 1 47
Santa Ana 114 3 26 1 144
Sonsonate 55 2 39 1 97
Chalatenango 20 2 38 2 62
La Libertad 118 5 32 1 156
San Salvador 413 14 75 1 503
Cuscatlán 21 2 15 - 38
La Paz 33 1 29 - 63
Cabañas 7 2 17 - 26
San Vicente 16 1 24 1 42
Usulután 40 2 46 1 89
San Miguel 102 2 50 1 155
Morazán 11 1 24 1 37
La Unión 39 3 25 - 67
1,013 41 461 11 1,526
*Source: Ministry of Economy, DIGESTYC, VII Economic Surveys 2005, preliminary figures.
** Source: Asociación Infocentros.
*** Source: Ministry of Education, Educational Technologies Direction.
**** Source: Telecentres PPP and Agronegocios (Ministry of Agriculture and Livestock)
3-19
3.4.2 ICT Feasibilities
Statistics for 2001 and 2004, showing the penetration of PCs, the growth of this, and comparisons with
other Central American countries are in the table below.
Though the penetration of PCs in El Salvador is much below that of Mexico, Costa Rica or Chile, as well
as the global average, the growth is significant, as is the rapid expansion of internet users. During the past 3
years, penetration has overcome Nicaragua and Panama, and its growth rate is much above the global
average.
However the penetration of PCs is only half that of for the internet. The global averages are 13.62%
(internet) and 12.89% (PC); both figures are almost the same. From this, it seems the economic situation
in El Salvador does not allow people to buy PCs, though they are more interested in the internet. Also it
may suggest the necessity of public access terminals.
Table 3.26 PC Penetration and Growth by Country

Number of % of Number of % of Growth
Country
PC(2001) Population PC(2004) Population 02-04(%)
El Salvador 140,000 2.5 297,000 4.49 28.5
Mexico 6,900,000 6.7 11,210,000 10.68 17.6
Guatemala 150,000 1.2 231,000 1.82 15.5
Honduras 80,000 1.3 110,000 1.57 11.3
Nicaragua 150,000 2.8 200,000 3.52 10.1
Costa Rica 700,000 16.6 930,000 21.89 9.9
Panama 110,000 3.7 130,000 4.1 5.7
Chile 1,795,814 12 2,138,000 13.87 5.8
World Total 550,000,000 9.0 772,357,000 12.89 12.0
Source: The Global Information Technology Report ITU
3-20

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REPUBLIC OF EL SALVADOR JAPAN INTERNATIONAL

PRESIDENTIAL HOUSE COOPERATION AGENCY

THE FEASIBILITY STUDY ON ESTABLISHMENT OF THE

Central Government WAN

THE FEASIBILITY STUDY ON ESTABLISHMENT OF

CHAPTER 1 INTRODUCTION ................................................................................................................ 1-1

5.3 Policies for Promotion of ICT Industry by e-Government..............................................5-10

6.6 Basic Strategy and Design for Standards and Norms......................................................6-49

8.5.2 Development and Operation.................................................................................8-39

Box 3.1 Extracts from El Salvador’s Constitutions on Local Governments ..........................................3-5

Figure 1.1 The Study Plan and Work Schedule .........................................................................................1-2

Figure 4.1 Indicators in Government ICT Use...........................................................................................4-1

Figure 8.13 Implementing Organization (Disaster Information System)...................................................8-37

Table 2.1 Demographic Trend (Thousand) ...............................................................................................2-1

Table 8.12 Services and Possible Charging Schemes to users..................................................................8-18

ESCCI Salvadorian Chamber of Commerce and industry

1.1 Study Background

1.2 Objectives of the Study

1.3 Study Organization and Schedule

Year 2005 2006

6 Application Design Naoya Higashi 22 15 15

Source: JICA Study Team

Chapter 2 Economy and the Government

2.1 Socio-economic Profile

2.1.1 Social Profile

Table 2.1 Demographic Trend (Thousand)

Table 2.2 Population by Department in 2005 (Estimate)

Table 2.3 Age Structure of El Salvador (2004 Estimate)

Table 2.4 Life Expectancy at Birth (2003 Estimate)

(2) Literacy Rate and Education

Source: National Agency for Statistics and Census

Figure 2.1 Literacy Rate in Urban and Rural Areas

Table 2.5 Combined Primary, Secondary and

Table 2.6 Population below Poverty Line (%)

Families of Extreme Poverty Families of Relative Poverty Not Poor Families

Source: National Agency for Statistics and Census

Source: National Agency for Statistics and Census

Table 2.7 HDI of El Salvador by Province

Table 2.8 Historical Trend of Gini Coefficient

(5) Ethnics and Religion

2.1.2 Economic Profile

(1) Production (GDP)

Table 2.9 GDP and GDP per Capita

(2) Consumption and Investment

Table 2.10 Savings and Investment Flow (% to GDP)

(3) External Sector

Table 2.11 Major Indicators of the External Sector (US$ Million)

(4) GDP by Sector

Table 2.12 GDP by Sector (2004)

(5) Inflation and Exchange Rate

Table 2.13 CPI and Weighted Average Lending Rate

(6) Foreign Direct Investment

(4%) (3.7%) (3.5%)

*Percentage figures inside the parentheses are annual growth rates.

Figure 2.5 FDI Trend

Source: Central Bank of Reserve

(7) Employment and Income

Table 2.14 Unemployment and Underemployment Rate

2.2 Socio-economic Framework