It was already shaping up to be a tough year for the legacy of Ronald Reagan. Big government is back and faith in the power of the market is deeply shaken. But now, to make matters worse, the Central American nation of El Salvador will be governed by the FMLN, the left-wing guerrillas that fought US-backed military governments in a brutal civil war there from 1980-1992.

They have come to power under quite changed circumstances, of course. Long ago they transformed into a political party, and Mauricio Funes, who won the presidency in Sunday’s vote, was the first candidate they had put forward who didn’t fight in the war.

Funes, a former journalist, has indicated he intends to govern more like the moderate left-of-centre leaders in Latin America, such as like Brazil’s Luiz Inacio Lula da Silva or Chile’s Michelle Bachelet, than Venezula’s Hugo Chavez.

If so it's a far cry from what the Cuban-trained Marxist guerrillas of his own party fought for in the 80s.

But his win, though by a slim margin of around three percentage points, is another chapter in the seemingly unending tale of leftward movements in Latin America in recent years.

In Central America, the Sandinistas (who also fought the Reagan-backed Contras in the 80s) now govern nearby Nicaragua. Last year Honduras chose to join them in a regional left-wing development alliance with Venezuela, Cuba, and Bolivia. In South America, only Peru and Colombia remain right of centre.

What Funes’s role would be in the context of the new constellation of left governments in the hemisphere loomed large in the campaign.

The ruling right-wing ARENA party repeatedly linked Funes to Hugo Chavez, to the point that he had to deny that he’d have any influence in El Salvador. “I will not lay a finger on Venezuela, just as Venezuela won’t lay a finger on El Salvador,” he said in one TV ad. They also tried to link him to radical leftism and the violence of the '80s and early '90s, a task made more difficult since he himself was never a guerrilla.

When Funes takes office, it will be the first time there has been a peaceful transfer of power since civil conflict ended in 1992. Spanning 12 years, that brutal war took the lives of 75,000 Salvadorans and prominently featured right-wing death squads peddling widespread murder and terror.

These groups were not above assassinating the country’s archbishop as he celebrated Mass after he asked the US to halt massive military aid to the country’s government.

It was a particularly horrific chapter in the closing days of the Cold War and after twenty years of rule by ARENA, a right-wing party founded by a man a former US ambassador called a “pathological killer,” the old divisions are now being played out peacefully at the ballot-box.

For better or worse, El Salvador remains closely tied to the United States. Millions of Salvadorans emigrated to the US during and after the civil war, and there are now three million of them reside there compared to seven million in El Salvador. Last year, remittances from the US to the poor country made up 17 per cent of the country’s GDP.

Some US politicians tried to use that dependence as leverage to exert influence over the outcome of the election. Despite pleas to respect neutrality, some Republican congressmen indicated that flows of remittances or the immigration status of Salvadorans in the US would be in jeopardy if the FMLN were to win.

Such threats were never really credible — the Obama administration eventually rejected them and nothing similar ever happened with Nicaragua — but they were widely reported in El Salvador.

That may have been part of the reason, combined with the constant campaign attempt to link Funes to Chavez or communism, that his lead in the polls shrunk from previous double-digit numbers to the final three per cent margin of victory.

Whoever won Sunday was going to inherit an extremely difficult position. Those remittances are already shrinking as the recession in the US hits vulnerable immigrant workers especially hard. And El Salvador is one of the most dangerous countries in the world, plagued by violent and powerful gangs.

Ironically, many of these gangs formed on the streets of Los Angeles, California and brought their criminal know-how home after being deported.

Funes campaigned as a figure who would transform the country and rise above old divisions. In a move that seems quite popular these days, he framed the issues in the language of Barack Obama. “We Salvadorans voted for change, and change will come,” he said in his victory speech.

It’s not clear exactly how leftist Funes’s government will be; he is not a career politician and doesn’t have a history of policy decisions. Nobody knows if he will be a moderate centrist or end up pursuing policies closer to the core of his party’s history or his more radical ex-guerrilla vice-president.

There are a lot of serious problems confronting him and only time will tell what exactly his victory will mean. One thing is clear, however: disciples of Reagan in the US government are not very happy about it.