During the election campaign Flores stressed issues of poverty and crime, however, his administration continues to face some major challenges. First, Flores wants to raise the standard of living in a country where 48% of the population live below the poverty line and where unemployment officially stands at 10% (2000 est.), with underemployment estimated at 31%. He also promised to expand access to health, housing, and educational services and find ways to protect the environment, since both air and water pollution levels are alarmingly high in El Salvador. Flores has worked to continue the privatization program of public services begun during Calderon Sol's administration. He was also able to improve the tax collection system to increase revenues. However, the economy still relies on the inflow of dollars from family remittances of Salvadorans working in the United States. In 2000, these remittances offered an estimated US $1.6 billion to offset the trade deficit and support the exchange rate. With massive reconstruction projects still needed to recover from the 1998 Hurricane Mitch and devastating earthquakes in 2001, even large amounts of foreign aid have not been able to significantly boost the economy. Flores boasted that his government would rebuild all 243,000 houses (20% of the country's housing) destroyed by the earthquake, and rebuild the schools within a year. However, thousands of earthquake survivors were still living in tin shacks one year after the disasters, With funds from international donors for disaster relief drying up, El Salvador was being forced to take on more debt.
In January 2001, just days before the beginning of the January and February earthquakes, Flores's government undertook a "monetary integration plan," through which the U.S. dollar became legal tender alongside the colón. Though the natural emergency briefly suspended the program, the economy is expected to be fully dollarized, and the Central Reserve Bank dissolved, by late 2003. By 2002, dollarization had advanced enough to bring down interest rates; however, one poll showed that 60% of citizens believed dollarization to be harmful. The FMLN is strongly opposed to the plan, which they call unconstitutional, and planned to make it an issue in the 2003 legislative elections.
The Flores's government has been struggling with gaining confidence from and inspiring hope in the general population. By 2002, record numbers of Salvadorans had left the country or were seeking ways to emigrate, by both legal and illegal means. A survey indicated that one out of three citizens would leave the country if given the opportunity. An unfortunate proof of this came early in 2002, with a rumor that the Swedish government was offering housing and funds within Sweden for Salvadoran earthquake victims. Over 600 Salvadorans reportedly quit their jobs, sold their homes and headed off to Stockholm, only to be sent home with nothing when Swedish authorities corrected the rumor.
Poverty has further fueled an already rampant crime rate in El Salvador. In 2000, the murder rate in El Salvador was nearly 200 per 100,000 residents. In comparison, the U.S. murder rate for 2000 was 5.5. murders per 100,000 people. Most of the killings are attributed to the estimated 20,000 gang members in El Salvador. Flores has promised to crack down on organized crime, toughen penalties, and improve the prison system. He appointed Mauricio Sandoval, the former head of intelligence, to be his new national police chief. But not much has changed the situation.