El Salvador - Country history and economic development

1524. The Spanish first attempt to subjugate the territory of what is now El Salvador.

1821. El Salvador gains independence.

1822. El Salvador refuses to join union with Mexico, insists on maintaining its independence.

1823. The country joins the Central American Federation under General Manuel Jose Arce.

1838. The Central American Federation collapses. El Salvador becomes an independent republic.

1850s. El Salvador begins large-scale production of coffee after the discovery of synthetic dyes renders indigo production unprofitable.

1972. Jose Napoleon Duarte, leader of the Christian Democratic Party, wins the presidential election. The election is overturned by the military. Guerilla groups are formed in opposition to military rule.

1977. Right-wing government of General Carlos Humberto Romero comes to power.

1979. Leftist guerilla warfare breaks out in the cities and in the countryside and results in a 12-year civil war. Reform-minded military officers and civilian leaders unite and oust Romero, forming a revolutionary junta.

1980. Duarte, who has returned after being tortured and exiled in 1972, joins the junta.

1982. Salvadorans elect a new constituent assembly.

1983. The assembly drafts a new constitution strengthening individual rights.

1984. Duarte, head of the Nationalist Republican Alliance (Arena), becomes the first freely-elected president in over 50 years.

1989. Arena's Alfredo Cristiani wins the presidency. Talks are initiated in September between government and the Farabundo Marti National Liberation Front (FMLN). Talks break down in November when FMLN guerillas launch a nationwide offensive.

1990. The UN steps in to mediate the conflict. El Salvador allows its exchange rate to float.

1991. The New York accord is signed by both sides, setting up a framework for peace. The banking system is re-privatized.

1992. A final peace agreement is signed. The FMLN lays down its arms, transforming itself into a mainstream political party. A value-added tax is instituted at 10 percent.

1994. Armando Calderon Sol of the Arena party takes over the presidency. He introduces reforms aimed at liberalizing the economy, including the privatization of state assets. He also institutes monetary stability.

1995. A plan to dollarize the economy fails. The VAT is increased to 13 percent. The economy starts to slow.

1996. Laws to facilitate privatization of state assets are passed.

1998. State sells 4 of its regional electricity distributors. The state telecoms are broken up. Social security privatization begins.

1999. Francisco Flores of the Arena party becomes president.

2001. Earthquakes hit, damaging homes and infrastructure, killing many people. The government dollarizes the economy.