{"code":"27160","sect":"Opinion","sect_slug":"opinion","hits":"694","link":"https:\/\/elfaro.net\/en\/202311\/opinion\/27160","link_edit":"","name":"Washington Is Driving Bukele to Change His (Digital) Course","slug":"washington-is-driving-bukele-to-change-his-digital-course","info":"The open door to digital regulation once seemed profane in Nayib Bukele's crypto creed. It indicates that he is looking for a more conventional path to pay the growing foreign debt.","mtag":"Politics","noun":{"html":"Ricardo Valencia","data":{"ricardo-valencia":{"sort":"","slug":"ricardo-valencia","path":"ricardo_valencia","name":"Ricardo Valencia","edge":"0","init":"0"}}},"view":"694","pict":{"cms-image-000037511-jpg":{"feat":"1","sort":"37511","name":"cms-image-000037511.jpg","link":"https:\/\/elfaro.net\/images\/cms-image-000037511.jpg","path":"https:\/\/elfaro.net\/images\/cms-image-000037511.jpg","back":"","slug":"cms-image-000037511-jpg","text":"<p><em>Ricardo Valencia is an assistant professor of communications at California State University, Fullerton. Find him on Twitter: <a href=\"https:\/\/twitter.com\/ricardovalp\/\">@ricardovalp<\/a><\/em><\/p>","capt":"\u003Cp\u003E\u003Cem\u003ERicardo Valencia is an assistant professor of communications at California State University, Fullerton. Find him on Twitter: \u003Ca href=\"https:\/\/twitter.com\/ricardovalp\/\"\u003E@ricardovalp\u003C\/a\u003E\u003C\/em\u003E\u003C\/p\u003E"}},"pict_main__sort":37511,"date":{"live":"2023\/11\/22"},"data_post_dateLive_YY":"2023","data_post_dateLive_MM":"11","data_post_dateLive_DD":"22","text":"\u003Cp dir=\"ltr\"\u003E\u003Cem\u003E\u003Ca href=\"\/es\/202311\/columnas\/27151\/estados-unidos-obliga-bukele-a-retroceder-y-lo-seduce-con-mejorar-su-economia\"\u003ELeer en espa\u00f1ol\u003C\/a\u003E\u003C\/em\u003E\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003ELike a good autocrat, President Nayib Bukele rarely reverses course.\u00a0He has no need to do so: He controls every branch of government and has sown fear among unions, businessmen, and critics.\u00a0But a tiny act both illustrates the president\u2019s almost unlimited power and suggests that he is seeking a way out of an economic labyrinth by kissing the hand \u003Ca href=\"\/en\/202109\/el_salvador\/25747\/The-%E2%80%9CWorld%E2%80%99s-Coolest-Dictator%E2%80%9D-is-Breaking-with-the-US.htm\"\u003Ehe has often bitten\u003C\/a\u003E: Washington\u2019s hand.\u00a0The Bukele-controlled Legislative Assembly recently modified what was widely denounced as a \u201c\u003Ca href=\"\/en\/202204\/el_salvador\/26120\/Gag-Order-for-Journalism-on-Gangs.htm\"\u003Egag law\u003C\/a\u003E\u201d upon its passage in April 2022, threatening imprisonment for journalists publishing about gangs.\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003EThe loosening of the legal noose that Bukele placed around the necks of independent and dissident journalists, and the president\u2019s openness to negotiate with Washington to \u003Ca href=\"https:\/\/sv.usembassy.gov\/joint-statement-on-shared-digital-policy-priorities\/\"\u003Eregulate the Salvadoran digital environment\u003C\/a\u003E \u2014the latter seemed profane in Nayib Bukele's crypto creed\u2014, appear to indicate he will seek a more conventional path to pay the growing foreign debt.\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003EThe American back-patting quickly followed the striking-down of the gag law in the form of a\u00a0\u003Ca href=\"https:\/\/www.elsalvador.com\/noticias\/nacional\/ley-mordaza-embajadas-asamblea-christian-guevara\/1101020\/2023\/\"\u003Estatement\u003C\/a\u003E\u00a0from the U.S. Embassy congratulating the Bukele government for \u201ca positive step.\u201d\u00a0All of this occurred days after what appears to have marked a truce between the Bukele and Biden administrations: a\u00a0\u003Ca href=\"https:\/\/diarioelsalvador.com\/tuve-una-excelente-reunion-con-nayib-bukele-hablamos-sobre-promover-la-inversion-extranjera-en-el-salvador-secretario-de-estado-adjunto-brian-nichols\/420472\/\"\u003Epersonal visit\u003C\/a\u003E on October 26\u00a0in San Salvador from U.S. Assistant Secretary of State Brian Nichols. And whereas two years ago interim ambassador Jean Manes compared the Salvadoran head of state to \u003Ca href=\"\/en\/202109\/el_salvador\/25694\/Ruling-on-Bukele-Reelection-Prompts-US-Comparisons-to-Venezuela.htm\"\u003EHugo Ch\u00e1vez\u003C\/a\u003E for his intention to seek unconstitutional reelection, Nichols made a 180-degree turn by declaring that the legality of Bukele\u2019s February electoral ambitions was up for\u00a0\u003Ca href=\"https:\/\/www.youtube.com\/watch?v=T_Pm22ox-8g&themeRefresh=1\"\u003E\u201cdebate\u201d\u003C\/a\u003E.\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003EBukele, too, turned toward the Americans while the Salvadoran legislature was reforming the \u201cgag law\u201d, with the notable absence of Bukele loyalist congressman Christian Guevara, who was \u003Ca href=\"\/en\/202207\/centroamerica\/26278\/US-Shows-Its-Teeth-on-Engel-List.htm\"\u003Esanctioned last year\u003C\/a\u003E by the U.S. State Department for his leading role in crafting that bill.\u00a0On November 10, Washington and San Salvador signed an\u00a0\u003Ca href=\"https:\/\/translate.google.com\/website?sl=es&tl=en&hl=en&client=webapp&u=https:\/\/sv.usembassy.gov\/es\/declaracion-conjunta-sobre-prioridades-compartidas-en-politica-digital\/\"\u003Eagreement\u003C\/a\u003E\u00a0allowing Washington to enter Bukele\u2019s sacred realm, the digital one.\u00a0Both nations signed a pact to turn El Salvador into a \u201cregional technology center\u201d with a \u201csolid digital regulatory environment.\u201d\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003EWashington looks at El Salvador as a piece of its regional agenda for two main reasons: immigration and the construction of a digital wall against the influence of China and Russia. In my \u003Ca href=\"\/es\/202209\/columnas\/26371\/Washington-r%C3%ADe-en-silencio-ante-el-fracaso-del-Bitcoin-en-El-Salvador.htm\"\u003Econversations with U.S.\u00a0officials\u003C\/a\u003E, they see the Salvadoran economy \u2014currently in mediocre condition at best, with\u00a0the \u003Ca href=\"https:\/\/www.laprensagrafica.com\/economia\/El-Salvador-quedaria-a-la-zaga-del-crecimiento-economico-en-Centroamerica-con-2.1-20230905-0019.html\"\u003Elowest\u00a0growth and foreign investment\u003C\/a\u003E in Central America\u2014 as the regime's Achilles heel.\u00a0Bukele has sent Salvadoran\u00a0\u003Ca href=\"https:\/\/www.elsalvador.com\/noticias\/negocios\/departamento-estado-eeuu-deuda-el-salvador-insostenible\/1086358\/2023\/\"\u003Eexternal debt\u003C\/a\u003E\u00a0to levels unseen since the peace agreements in 1992, and has cut as much\u00a0\u003Ca href=\"https:\/\/www.laprensagrafica.com\/elsalvador\/Con-el-recorte-presupuestario-salimos-perjudicados-vicerrectora-de-la-UES-20231026-0089.html\"\u003Esocial spending\u003C\/a\u003E\u00a0as possible.\u00a0The only budget items that continue to grow are\u00a0\u003Ca href=\"https:\/\/www.elsalvador.com\/noticias\/nacional\/asamblea-aprueba-15-millones-presidencia\/1060466\/2023\/\"\u003Eadvertising\u003C\/a\u003E and propaganda.\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003EEl Salvador remains the same impoverished country that Bukele received in 2019: Only\u00a0\u003Ca href=\"https:\/\/www.cepal.org\/sites\/default\/files\/news\/files\/diagnostico_de_la_prestacion_de_los_servicios_de_agua_potable_y_alcantarillado_en_el_salvador.pdf\"\u003E42 percent\u003C\/a\u003E\u00a0of its citizens have access to a sewage system, and in rural areas the vast majority do not have a potable water system.\u00a0The\u00a0U.N.\u00a0has \u003Ca href=\"https:\/\/www.laprensagrafica.com\/economia\/Agencias-de-la-ONU-advierten-sobre-riesgo-de-que-hambre-aumente-en-El-Salvador-20230720-0111.html\"\u003Eexpressed concern\u003C\/a\u003E that the country will not have enough food to nourish its population in the coming years.\u00a0The Salvadoran president is not the only one to blame for a small and unequal economy, but he has exacerbated it with the use of public finances for capricious projects.\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003EFor Bukele, softening his position against Washington seems to be one of his only alternatives.\u00a0He already \u003Ca href=\"\/en\/202304\/opinion\/26829\/Marco-Rubio%E2%80%99s-Applause-Is-Not-Enough-to-Solve-Bukele%E2%80%99s-Problems.htm\"\u003Edealt with\u00a0China\u003C\/a\u003E,\u00a0dreaming of a flood of money and investment from the Asian giant.\u00a0He tried the adoption of bitcoin, with which it is estimated he spent close to\u00a0\u003Ca href=\"https:\/\/www.cnbc.com\/2022\/06\/25\/el-salvador-bitcoin-experiment-not-saving-countrys-finances.html\"\u003E$425 million\u003C\/a\u003E, equal to half the budget allocated for public health.\u00a0Both lavish projects failed.\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003EThe failed bitcoin adoption not only sucked up a good part of public money, but also ushered in an uncomfortable relationship with the crypto company Bitfinex, barred in 2021 from \u003Ca href=\"https:\/\/ag.ny.gov\/press-release\/2021\/attorney-general-james-ends-virtual-currency-trading-platform-bitfinexs-illegal\"\u003Edoing business in New York State\u003C\/a\u003E and accused by members of the \u003Ca href=\"https:\/\/www.coindesk.com\/policy\/2023\/10\/26\/lawmakers-lummis-and-hill-urge-doj-decision-on-charging-binance-and-tether-for-aiding-hamas\/\"\u003EU.S. Congress\u003C\/a\u003E of helping to launder money from the terrorist organization Hamas.\u00a0Bukele gave political power within his administration to Bitfinex after appointing U.S. citizens Stacy Herbert and Max Keiser \u2014investors in the company\u2014 as \u003Ca href=\"https:\/\/www.coindesk.com\/policy\/2023\/10\/26\/lawmakers-lummis-and-hill-urge-doj-decision-on-charging-binance-and-tether-for-aiding-hamas\/\"\u003Egovernment\u00a0representatives\u003C\/a\u003E, and by planning in early 2022 to have the firm \u003Ca href=\"\/en\/202203\/el_salvador\/26058\/%E2%80%9CMerlin-the-Magician%E2%80%9D-The-Crypto-Kingpin-That-Will-Issue-El-Salvador%E2%80%99s-Bitcoin-Bonds.htm\"\u003Eissue bitcoin-denominated government bonds\u003C\/a\u003E on its platform.\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003EBut the plans to launch those sovereign bonds \u2014nicknamed \u201c\u003Ca href=\"https:\/\/www.elsalvador.com\/noticias\/negocios\/bitcoin-emision-de-bonos-el-salvador-nayib-bukele-\/1093093\/2023\/\"\u003Evolcano bonds\u003C\/a\u003E\u201d\u2014 and \u003Ca href=\"https:\/\/x.com\/nayibbukele\/status\/1523869787365027841?s=20\"\u003Ebuild a\u00a0city\u003C\/a\u003E\u00a0for bitcoiners along the eastern coast have been buried.\u00a0The Salvadoran government has problems as basic as\u00a0\u003Ca href=\"https:\/\/www.laprensagrafica.com\/elsalvador\/Empleados-con-salario-de-FOSALEX-se-encuentran-en-impago-20230127-0076.html\"\u003Epaying public sector salaries\u003C\/a\u003E\u00a0and providing medicine\u00a0\u003Ca href=\"https:\/\/www.elsalvador.com\/noticias\/nacional\/gobierno-hospital-rosales-nayib-bukele-cuarto-ano\/1065393\/2023\/\"\u003Eto public hospitals\u003C\/a\u003E.\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003EThe truce between Bukele and Washington suggests that the Salvadoran president will bet on an economic elixir from institutions in which the United States has influence, such as the International Monetary Fund (IMF).\u00a0The government has \u003Ca href=\"https:\/\/www.eleconomista.net\/economia\/FMI-Es-dificil-decir-cuando-se-llegara-a-un-acuerdo-con-El-Salvador-20231013-0007.html\"\u003Erestarted negotiations with the IMF\u003C\/a\u003E for a $1.3 billion\u00a0loan that stalled in 2021, after the Bukele-controlled legislature \u003Ca href=\"\/en\/202105\/el_salvador\/25452\/New-Legislative-Assembly-Ousts-Supreme-Court-Magistrates-and-Attorney-General.htm\"\u003Eillegally\u00a0removed and replaced\u003C\/a\u003E\u00a0the attorney general and Constitutional Chamber magistrates.\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003EOn the verge of a reluctant economic shift toward Washington, the IMF solution would almost certainly imply that he implement unpopular policies and political and tax conditions.\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003EThe cruel reality of El Salvador is that Bukele has deployed propaganda and communication mercenaries to project a country that exists only in his propaganda.\u00a0Bukele is a paper tiger.\u00a0Washington knows this, and has offered him an American Dream off-ramp tailored to his needs. This could entail limited political concessions in return, such as sacrificing the influence of the crypto-influencers in his government, curbing the persecution of journalists and dissidents, toughening his efforts to stop immigration to the U.S., and leaving behind his flirtation with China.\u00a0Bukele has few options, but something is better than nothing.\u003C\/p\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Chr \/\u003E\u003Cbr\/\u003E\u003Cbr\/\u003E\u003Cp dir=\"ltr\"\u003E\u003Cem\u003ERicardo Valencia is an assistant professor of communications at California State University, Fullerton. Find him on X\/Twitter at\u00a0\u003Ca href=\"https:\/\/twitter.com\/ricardovalp\" target=\"_blank\"\u003E@ricardovalp\u003C\/a\u003E.\u003C\/em\u003E\u003C\/p\u003E"}