14% Inflation = Bad Health? - Highest In Years

Situation in El Salvador  El Salvador has had a relatively stable economy since changing its currency to the US dollar. The country had never experienced hyperinflation, as other Latin American countries have, until recently. However, in 2021, El Salvador reported the highest inflation in Central America (close to 7%), only second to Nicaragua. In 2022, […]
14% Inflation = Bad Health?  - Highest In Years

Situation in El Salvador 

El Salvador has had a relatively stable economy since changing its currency to the US dollar. The country had never experienced hyperinflation, as other Latin American countries have, until recently. However, in 2021, El Salvador reported the highest inflation in Central America (close to 7%), only second to Nicaragua.

In 2022, inflation is increasing rapidly and is affecting families. In August, official statistics showed internal inflation of 7.7%, the country's highest in 25 years. The significant effects of inflation have primarily been felt in the price of food. Internal inflation of 14% is reported only in food alone. According to the World Food Program projections in El Salvador, over 900,000 people will suffer food insecurity in 2022, especially in rural areas.

Inflation = Bad Health 

Most of the communities that FUSAL serves live in rural areas in poverty conditions. These families were already living under the poverty line before the pandemic. Still, their access to food and opportunity to have dietary diversity has worsened due to the loss of jobs -especially in the informal sector. Weather-driven events such as tropical storms have affected farmland and reduced food availability. More recently, the war in Ukraine has led to a price increase in critical supplies such as fertilizers. SAHF and FUSAL are witnessing first-hand the lack of access to food experienced by families living in poverty. 

- Families struggle to get food for their households and meet their medical appointments. Since many must travel to the cities due to the increasing gasoline prices, it is becoming more difficult financially to an already challenging and time-consuming situation. This is a troubling situation experienced in El Salvador after many reports showing improvement in maternal health in the last decade. In 2021 and 2022, mortal maternity rates have increased. The pandemic can account for some increased mortality, and others must also be attributed to the challenges of people in rural communities in getting access to healthcare. In 2021, the Salvadoran Ministry of Health registered that maternal mortality increased by 37% compared to 2020.

- Additionally, many organizations that provide medical services to rural and urban communities were severely affected by the pandemic, and many were forced to close their operations in 2020 and 2021. This has made the access and quality of health services even more scarce for already vulnerable communities. Many chronic patients are not receiving the necessary treatments, so their conditions continue to worsen. 

- In 2022, donations of medical supplies and medicines from SAHF and its partners will continue to help FUSAL launch services for vulnerable communities.

- Some articles and websites with information on the inflation and food insecurity situation in El Salvador:

-         Inflación de El Salvador es la más alta de los últimos 25 años (laprensagrafica.com)

-          El Salvador: Acute Food Insecurity Situation July - August 2021 and Projections for September 2021 - February 2022 and March to May 2022 | IPC Global Platform (ipcinfo.org)

What SAHF and FUSAL are working together on 

FUSAL's Early Childhood Program, active in several municipalities in Usulutan, a department of El Salvador, is regularly affected by climatic events, and several communities live far from the markets. People who live in these areas experience more difficulties in accessing healthy food at affordable prices.

The Early Childhood Program seeks to promote child development among impoverished children through nutrition and early stimulation teachings. FUSAL's team in the field helps deliver health and education services to over 1,000 pregnant women and children ages 0 to 4 years old every year. They promote breastfeeding and best care practices for newborns, provide counseling on nutrition for the family and play as development and positive parenting. All this in coordination is done with local health authorities. The team refers families to medical doctors when they identify malnourished children that need urgent attention and, whenever possible, provide micronutrients and other supplements.

In 2022*, FUSAL has identified over 100 malnourished children due to the lack of access to food. Over half of the children in this vulnerable condition are at risk of severely malnourished. To respond to these problems and prevent malnutrition and stunting growth among children, FUSAL, with the help of SAHF and its partners, is distributing nutritionally fortified food. In some cases, they have been able to deliver water purifiers –to prevent diarrheic diseases-but this is not enough to recover children under four years old, who have been malnourished or have experience stunt growth for a significant time. 

- SAHF and FUSAL are working on project proposals to provide micronutrients and other treatments as we know that local health providers are not fully equipped to help children recover from severe malnutrition independently.

- FUSAL, with the help of a network of 300+ health community workers that volunteer their time to counsel women throughout the country, provides support specifically for families that need support for healthy nutritional eating. Getting to know these communities not only help them with the day-to-day needs of the community and allows SAHF and FUSAL to give these communities what they need in the long term from the information they provide us. Every day our teams learn more about what can be done to help stop malnutrition and get these communities better access to food, water, and other supplies, which are currently becoming a challenge due to inflation and other side effects of the pandemic.

 How has inflation affected SAHF and FUSAL's operations?

SAHF and FUSAL have faced approximately 16 to 20% increase in operational costs related to logistics. High oil prices have led to increasing rates and new charges made by shipping companies. 

Inflation has affected SAHF and FUSAL's ability to accept several donations as we manage within an approved budget this year and have low possibilities to increase the funding, as fundraising opportunities to generate donations are limited. Due to the economic situation in the United States and El Salvador, fundraising has become a challenge.

Inflation has also affected active projects in El Salvador. For example, a program building a health unit in Usulutan has had to sacrifice some sections of the building design due to the rising cost. Likewise, the Early Childhood Program has seen an increase in the price of supplies, supplements, and materials. This then becomes limiting as the buying power to purchase devices to monitor children's health is not only for FUSAL workers but also volunteers in the field.

Inflation = Bad Health - FUSAL warehouse
Inflation = Bad Health - FUSAL giving food
Inflation = Bad Health - Little Julio

Despite Inflation, we keep going...

SAHF and FUSAL have implemented new strategies to ensure continuity of services without lowering quality and reach. 

The basis of the team's actions is to focus on the demand and understand communities' most urgent needs. We do this by constantly communicating with our beneficiaries, the organizations that help us in the distribution of donations, and also our beneficiaries, mainly through our volunteers to whom we speak frequently.

All donations accepted by SAHF and FUSAL are based on the needs identified by our distribution allies and people in need in the field. We work together with FUSAL to make requests for scarcer medicines and supplies. 

We prioritize higher impact donation according to the population we are serving, the scope of our help, and the capacity of our beneficiary to distribute the donation and make sure the ultimate beneficiary, the person in need, receives the goods.

Second, we have implemented different strategies to mitigate the increasing operational costs. These strategies include: 

Prioritizing logistics costs and applying alternative strategies to avoid charges from shipping companies such as delays and others that can be prevented should FUSAL have access to the information on the conditions of the shipment made by the donor.  Making trade-offs in planned investments.

Third, we are constantly negotiating with logistics suppliers to review the local fees and try to cut some of them to save resources and get more donations.

Finally, SAHF and FUSAL have worked together to identify the critical routes in the logistics value chain and continue identifying improvement areas. Together we can coordinate with our donors so that they can help us reduce the impact of rising logistics costs on our aggregate budget. 

To learn more about the work that we have done recently with FUSAL, please visit our 2021 annual report here.

Guide Start 2021
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