On 1 June 2019, Nayib Bukele shook up El Salvador’s political scene, stepping into the presidency with a bold promise to revolutionise the nation. Five years later, Bukele secured a resounding re-election victory, winning over 85% of the vote in a landslide that reaffirmed his overwhelming popularity with the nation.
At just 37, Bukele became the youngest leader in modern Salvadoran history, captivating a country eager for fresh ideas and a break from the status quo. His rise signalled the dawn of a new era, and while his leadership style and policies have drawn both praise and criticism, everyone can agree that the results have been dramatic.
Since Bukele took office, the homicide rate in El Salvador has dropped by over 70%, transforming what once was a “murder capital” into a country safer than Canada.
His administration's "Territorial Control Plan" has been credited with helping to reduce gang violence, bringing relief to communities long plagued by insecurity. Additionally, Bukele’s ambitious economic reforms have attracted over $1 billion in foreign investments, while the country’s GDP growth reached 10.3% in 2021, one of the highest in Latin America at the time.
Bukele, formerly the mayor of San Salvador, campaigned as an anti-corruption outsider. He used social media to connect with younger voters and disrupt the long-standing two-party dominance with his New Ideas party.
Since taking office, his policies have been bold and often controversial, with a focus on tough crime measures, economic reforms, and unconventional solutions to persistent issues.
Key policies of the Bukele administration include:
- The adoption of Bitcoin as legal tender in September 2021, making El Salvador the first country in the world to do so.
- Implementation of the "Territorial Control Plan," a stringent security strategy aimed at reducing gang violence.
- Large-scale infrastructure projects and efforts to attract foreign investment.
- A push for technological modernisation, including plans for a "Bitcoin City."
- Social welfare programs aimed at improving education, healthcare, and reducing poverty.
While Bukele’s policies have earned praise for boosting public safety and economic growth, critics worry about democratic erosion, human rights concerns, and the sustainability of his economic strategies. As El Salvador navigates this transformative era, Bukele’s legacy continues to fuel intense debate both domestically and globally.
The Bitcoin Revolution
El Salvador made global headlines on 7 September 2021, as the first country to adopt Bitcoin as legal tender alongside the US dollar. This bold move aimed to enhance financial inclusion, attract foreign investment, and cut remittance costs. To promote adoption, the government launched the Chivo wallet app and installed over 200 Bitcoin ATMs across the country, offering citizens a $30 Bitcoin bonus for downloading the app.
The adoption of Bitcoin has also drawn foreign investment, with companies like Strike and Athena Bitcoin establishing operations in El Salvador. This has led to job creation and helped boost economic growth. Additionally, the government created a $150 million Bitcoin Trust to offer loans to entrepreneurs and small businesses, further supporting local economic development.
Bukele now admits that Bitcoin “hasn’t been adopted as widely as we had hoped” by the average Salvadoran, with less than 12% of the population making even a single transaction. However, he notes that the decision still achieved a key goal—shifting El Salvador’s global image. “It gave us branding, brought in investments, and boosted tourism,” Bukele says, pointing to the broader benefits the move has had for the country.
The move also sparked international concern. The IMF urged El Salvador to reverse Bitcoin’s legal tender status, warning of risks to financial stability and consumer protection, which has complicated the country’s bid for a $1.3 billion loan from the IMF.
Supporters of the initiative, however, see potential long-term gains. The government claims that Bitcoin could significantly lower remittance costs—crucial in a country where remittances make up 24% of the GDP. Additionally, Bitcoin has drawn crypto-tourism, with a 30% boost in tourism reported by the Tourism Ministry since the Bitcoin Law.
At the time of writing, the country owned 5,748.76 BTC, worth roughly $334 million. Adopting a dollar-cost averaging approach, the country buys one Bitcoin every day, an initiative that has taken place since 18 November 2022.
https://x.com/Coachkcrypto/status/1830582119493701637?t=1C6AJiBw83Wux8pn3dKeBg&s=19
As El Salvador continues its Bitcoin experiment, the world watches closely, as its outcome may shape future decisions on cryptocurrency adoption in other countries.
Cracking Down on Crime
President Nayib Bukele’s approach to tackling gang violence in El Salvador has sparked both praise for its results and criticism over human rights concerns. His administration's "Territorial Control Plan" aimed to dismantle gang structures and take back control of gang-dominated areas and the results have been striking.
Once one of the most violent countries in the world, El Salvador saw its homicide rate drop dramatically—from 103 per 100,000 people in 2015 to just 2.4 per 100,000 by 2023. This shift has allowed the country to promote itself as a safer tourist destination, highlighting its surf beaches, volcanoes, and coffee plantations.
Bukele’s methods, however, have been tough and controversial. A state of emergency declared in March 2022 led to the arrest of around 81,000 suspected gang members, giving El Salvador the highest incarceration rate in the world. With one in every 57 Salvadorans behind bars (three times the rate of the U.S.) his crackdown has been aggressive.
Many Salvadorans say they feel safer, able to move freely through areas once controlled by gangs. But human rights groups have raised alarms about the impact on civil liberties. Reports have surfaced of arbitrary arrests, forced disappearances, and even torture. Legal experts argue that thousands of innocent people have been caught up in the sweep with little access to justice.
Critics say Bukele’s strategy has eroded civil liberties and weakened democratic institutions. Salvadoran human rights activist Celia Medrano claims the country’s institutions have been "co-opted" and made subservient to the presidency. There are also reports of intimidation and surveillance targeting lawyers, journalists, and NGO workers, some of whom have fled the country.
Despite the controversy, Bukele’s approach has drawn interest from other nations dealing with crime. Ecuador and Honduras are reportedly building mass prisons modelled after El Salvador’s. Even Bukele’s harshest critics, including members of the Biden Administration, acknowledge the improvements in public safety.
The long-term effects of Bukele’s crime-fighting strategy remain to be seen, as El Salvador navigates the delicate balance between security and human rights.
Economic Transformation
When Nayib Bukele took office in 2019, El Salvador faced significant economic challenges, including high debt, low foreign investment, and a struggling textile industry. Gangs were also a heavy burden, costing the country an estimated 3% of GDP annually in extortion payments. Since then, Bukele has pushed ambitious initiatives to attract foreign investment, boost tourism, and develop infrastructure, with mixed results.
On the positive side, unemployment has dropped by about one percentage point, and Foreign Direct Investment (FDI) has improved. FDI inflows reached $487 million in 2023, though still below the $826 million recorded in 2018 before he took office.
Bukele’s government has focused on sectors like technology and renewable energy, while tourism has seen a boost, particularly through "crypto-tourism," with a goal of attracting 3.2 million tourists by 2024. Major infrastructure projects, including the Pacific Airport, Surf City, and Bitcoin City, have also been launched, with $1.2 billion allocated for infrastructure in 2023.
However, challenges remain. GDP growth slowed to 2.6% in 2022 and is projected to dip further to 1.9% in 2024. Inflation, while relatively contained, was at 7.2% in 2022, and the cost of living has increased, with essential goods now making up three-quarters of the monthly minimum wage. Additionally, the country’s debt-to-GDP ratio remains high at 82.6%, raising concerns about fiscal sustainability.
Overall, while Bukele’s efforts have shown promise in some areas, El Salvador still faces significant economic hurdles as it moves forward. Vice President Félix Ulloa stated that “We have the war against the gangs nearly won, now it’s on us to construct.”
Technological Modernization
In 2019, an anonymous American donor sent over $100,000 in cryptocurrency to an NGO in El Zonte to fund social programs. As the team encouraged locals to use Bitcoin, many residents, most without bank accounts, began saving in the currency, benefiting as its value rose.
Tourists flocked to the town, and foreign businesses followed. This project earned El Zonte the nickname "Bitcoin Beach," blending philanthropy with one of the largest global experiments in cryptocurrency.
This project aligned perfectly with Bukele's vision for modernising El Salvador, aiming to create a tax-free crypto hub powered by geothermal energy from nearby volcanoes. This bold initiative fits into Bukele’s broader goal to transform El Salvador into a leading tech hub in Central America, and was the precursor to Bitcoin’s legalisation two years later.
Understanding the influence of digital platforms, Bukele has strategically used social media, especially Twitter (now X), to reach a global audience. By tweeting primarily in English, he has opened direct communication with international investors, financial institutions, and key figures, effectively turning the country's controversial Bitcoin adoption into a marketing tool. This approach has highlighted El Salvador’s progressive stance on cryptocurrency and tech innovation.
Beyond Bitcoin, Bukele has prioritised investments in digital infrastructure and launched tech education programs targeting youth, aiming to build a skilled workforce. This strategy not only supports the country’s tech ambitions but also attracts international investment, paving the way for new opportunities.
Social Programs and Welfare
Under President Bukele’s administration, El Salvador has rolled out several social programs aimed at improving living standards. The "Plan Control Territorial" includes projects like "Surf City," in which his government has invested $359 million to develop coastal communities to boost tourism and local economies.
In education, the "One Child, One Computer" initiative has distributed over 1.2 million devices to students by 2022, expanding access to digital learning.
In healthcare, the government built Hospital El Salvador, a new facility with 1,000 ICU beds, to strengthen the country’s medical infrastructure. Public health spending also increased, rising from 8% of GDP in 2018 to 10% in 2021, according to Statista.
Efforts to reduce poverty have had mixed outcomes. The poverty rate dropped from 30.4% in 2017 to 22.8% in 2019, but the COVID-19 pandemic caused a setback, pushing poverty back up to 26.2% in 2020.
Conclusion
President Nayib Bukele has led El Salvador through a period of bold changes, focusing on cryptocurrency, crime reduction, economic growth, and technology. While these efforts have shown quick results, concerns remain about their long-term effects and how they might impact democracy and human rights.
As the world closely watches El Salvador’s unique approach, the outcomes could influence policies in other countries. Ultimately, Bukele’s legacy will be shaped by how well these changes foster progress while protecting democratic values and social fairness.
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