El Salvador Perspectives

Here is a summary of some of what has been happening in El Salvador in the first half of May. World bond markets fear El Salvador will default on its debt. The discount on El Salvador’s foreign debt surged to record levels in recent days as world investors see it as increasingly likely that El Salvador will default in the near future. The risk component of a bond discount reflects the willingness of a bond investor to sell the bond on the secondary market for a discount from its face value because of a concern the government issuer will not honor its promise to pay the face value. With respect to El Salvador, investors see that risk as one of the highest in the world currently. As each week passes without El Salvador reaching agreements with international lending institutions to refinance its debt, that risk increases. As Bitcoin price swoons, Bukele keeps doubling down with country’s cash. The price of Bitcoin dropped below $30,000 USD this week, having dropped 50% in the

May 1 marked the one year anniversary of Nayib Bukele’s Nuevas Ideas party taking control of the legislative branch of El Salvador’s government with a super majority, earned by sweeping national elections on February 28, 2021. That date also marked the end of decades of multi-party democracy in El Salvador. Until this past year, no party in the Assembly could pass measures without the support of one or more other parties. In practice, this meant that legislation passed slowly, and frequently as the result of political deal-making. But for the past year, Nuevas Ideas can pass legislation on its own, meaning that what Nayib Bukele wants, Nayib Bukele gets. The very first act of Nuevas Ideas last May 1 was to take control of the judicial branch and the Attorney General’s office. The new Legislative Assembly began by sacking the five magistrates of the Constitutional Chamber of El Salvador’s Supreme Judicial Court, and replaced them with hand-picked loyal judges. Those new judges wo

Nayib Bukele is an unapologetic proponent of Bitcoin, who has made the crypto-currency legal tender in El Salvador, proposes to build a tax haven city named for Bitcoin, and has invested more than $85 million of the country's tax dollars in Bitcoin purchases.  He promotes Bitcoin in English from his Twitter account, predicting a rosy crypto-future for El Salvador.  Today we look at how some of Bukele's predictions are faring. Adoption of Bitcoin by Salvadorans -- not so much . Bitcoin became legal tender in El Salvador on September 6, 2021 and in December, the Salvadoran president tweeted: The "mass adoption" of Bitcoin referred to by Bukele in this tweet has not happened in El Salvador despite the president's immense popularity.  Outside of crypto-tourists who arrive in search of Bitcoin Beach and someone who will sell them coffee and a pupusa paid for with Bitcoin, El Salvador remains overwhelmingly a country with a cash economy operating with US dollars.   Ther

Tonight, with little discussion of whether conditions still merited an emergency decree and whether mistakes or abuses had taken place, El Salvador's Legislative Assembly passed an extension of the "State of Exception" for another period of thirty days.   According to the PNC, more than 16,000 persons alleged to be gang members have been detained during the first four weeks of the State of Exception. Here is a set of articles in the English language press about the past four weeks in El Salvador under the State of Exception.    As El Salvador arrests thousands, families search for the missing  -- Washington Post -- "The other women in line at El Penalito told stories of how their sons were arrested — in raids on their homes, while selling fruit in downtown San Salvador or working on construction sites, while walking home from the bus.  In a country where thousands disappeared during the civil war of the 1980s, and thousands more vanished during a surge in gang viol

Let me start this post by saying that gangs have been a terrible scourge in El Salvador.  I have known too many men and boys gunned down by their obscene violence over the past two decades.  I have heard the stories of too many individuals and families who have fled their homes for fear of being the next victim.   They don't always succeed.  El Salvador will never have peace until the root causes of gang violence are addressed.   At the same time, I also know the stories of police abuses of people living in the marginalized communities throughout El Salvador, including those who spent days. months or years in prison before charges were found to be unsubstantiated.  We have seen  cases of the army disappearing youth from marginalized communities.  Nayib Bukele has tweeted orders to send suspects to solitary confinement in maximum security prisons, only to have them exonerated.       So confronting gang violence in El Salvador is important and necessary.   Those who murder and rape

Originally published with the title  El Salvador Shifts Mano Dura Security Policies into Overdrive on April 12, 2022 at the website of InsightCrime. With a near unprecedented wave of arrests, the El Salvador government is doubling down and expanding on heavy-handed security policies, known as mano dura, that have consistently failed to yield long-term results. On April 12, El Salvador President Nayib Bukele claimed his government had arrested more than 10,000 gang members in 17 days as part of a nationwide crackdown on street gangs, following an unprecedented killing spree linked to the MS13 and Barrio 18 gangs in late March. The mass detentions come after the El Salvador legislative assembly enacted a month-long state of exception on March 27 in response to the killings, loosening rules on making arrests. Under the measures, the country's security forces have reportedly encircled neighborhoods , conducted house-by-house searches and mounted military roadblocks in an attempt t

This is Semana Santa (Holy Week) in El Salvador, a week of vacations leading up to the Christian holidays of Good Friday and Easter.  After a complete pandemic lockdown in 2020 and a partial restoration in 2021, Semana Santa 2022 will feel much closer to normal in the country.   El Salvador's tourism authorities say they  expect 170 thousand visitors during the week, including 35,000 who will arrive by air through the country's international airport. Visitors to tourist sites are likely to see a heavy presence of security forces as the country moves into a third week under the State of Exception.   The National Civilian Police have reported that more than 9100 persons have been arrested and accused of being gang members.   Human rights advocates and the international community continue to express their concerns about arbitrary detentions of those who are not in the gangs and conditions rising to the level of torture within the country's prisons, as I have detailed previo