In the 1980s, the destroying civil war harmed infrastructure and negatively affected industrial growth and export of manufactures. In addition, the considerable sums of foreign outside help to support the government of El Salvador in the civil war brought about the exchange rate happen to be overvalued and it also hampered the growth. The mentioned difficulties were echoed in a collective Gross Domestic Product growth rate of 0.2 per cent as well; nevertheless the new peacetime reforms in the 1990s caused an average growth rate of 4.7per cent with potential increase for 2000-2004 expected at 4.3 per cent. Besides El Salvador has the potential to rise above the price increase, which happened all the way through the 1980s to the lowest rate of inflation amongst developing nations. Modernizationists repeatedly stress the significance of developing states to form an "export-based" economy so as to bring in hard currency into their economy.
The number of $861 million in 1990 demonstrates the results of the civil war on the Salvadoran economy. Still, by the year 1999, exports boosted to more than 3 billion dollars and just twelve months later raised by one more half billion dollars. It is understandable that the EPFZ program was successful in attracting foreign assets into El Salvador. Professor Michael Porter of the Harvard Business School summarized the modernization perspective quite well when he said at a latest World Bank/IMF forum that there were a very small amount of places in the world as thrilling as El Salvador in terms of economic progress. And surely in terms of modernization's description of progress, he's completely correct. El Salvador witnessed colossal developmental increase form their viewpoint. On the other hand other prospects may be not somewhat so fast to worship the Salvadoran government.
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