In January 2001, severe earthquakes struck parts of El Salvador, causing substantial damage in the affected areas. With almost 7,000 people killed or injured, and more than 400,000 buildings and houses damaged or destroyed, the natural disaster physically and economically devastated parts of the country. By November 2001, major efforts to rebuild the infrastructure and economy of these areas were underway, but were not proving sufficient enough to reactivate the various local economies throughout the country. Thus, in order to stimulate the El Salvadoran economy, USAID and the El Salvadoran government joined forces with DevTech to identify priority needs and actions to reactivate the economic activity of small and micro enterprises in the earthquake damaged regions as quickly as possible.
DevTech employed our monitoring and evaluation (M&E) expertise to assess the problems and constraints and to identify programs, mechanisms, and strategies that could serve to stimulate economic growth and generate more employment.
Through robust qualitative and quantitative research, we found that:
- The primary constraint impeding growth of small business in El Salvador was simply the lack of economic growth for the country as a whole. Thus, rather than focus economic restructuring efforts on stimulating micro enterprises, there was a greater need for measures aimed at alleviating the significant poverty in El Salvador.
- Economic opportunity existed in the rebuilding of infrastructure destroyed by the earthquakes. Public funding for infrastructure development could be channeled through local, small, and micro enterprises which would generate employment, but more importantly improve the quality of life in the areas concerned.
- Overall, greater government support for small and micro enterprises would help to reduce high poverty levels by providing business owners with consulting and enterprise development services on a demand-driven basis through the establishment of the Technical Assistance Fund for the Development of Micro and Small Enterprise (TAF).
DevTech was founded on the premise that quality research can impact social change and lead to more effective development assistance. We pair strong methodological capabilities in economics, data analytics, finance, and social sciences with the most current technological solutions in developing and designing projects, implementing, and carrying out performance monitoring and evaluation to create sustainable and lasting solutions to the policy challenges. As such, when USAID and the El Salvadoran government partnered with DevTech to identify and evaluate potential solutions to El Salvador’s earthquake and subsequent economic crisis, our M&E experts dug deep to find the root of the problem and provided recommendations for long term, multi-sector development. To learn more about this project and DevTech’s capabilities, please visit the page for this project.