After three and a half years of negotiations, the International Monetary Fund (IMF) endorsed a $1.4 billion credit for El Salvador, a country without a separation of powers and which has imposed a rule of declaring much of what was once accessible public information as confidential or secret. The negotiations focused on three key points: The IMF opposed bitcoin being used as legal tender; it demanded clear indicators of transparency and real efforts to combat corruption; and pointed to the weakening of the rule of law in El Salvador.
The conditions that accelerated the approval of the disbursement, and with which the IMF was satisfied, occurred in the last month: El Salvador reversed course and revoked the recognition of bitcoin as legal tender on Feb. 6, 2025, after a quick approval by the Legislative Assembly. The Assembly also approved an Anti-Corruption Law that establishes the creation of the National Integrated Anti-Corruption System (Sinac) and the National Anti-Corruption Center (CNA). According to the law, officials must file their wealth and tax returns once a year.
The IMF's communiqué does not offer other details and therefore does not mention whether the country will be required to declare the officials’ returns anew as public information. Since January 2023, the Bukele-controlled Supreme Court has sealed off the asset declarations of officials, information that had been used by the press and civil society to denounce acts of corruption during the administrations prior to Nayib Bukele’s ascent to power in 2019.
The IMF statement says that the new funds will boost El Salvador’s growth and resilience “by strengthening public finances, accumulating external and financial reserves, and improving governance and transparency.” There is no reference to the separation of powers or judicial independence and there is a history of these not being enforceable. For example, the IMF works with governments regardless of political regime and has previously supported dictatorships such as Nicaragua, with the approval of $185 million on Nov. 20, 2020. The IMF’s policy emphasizes that it promotes fiscal governance, fiscal regulation, support for central bank governance, market regulation, the rule of law, and regulation to prevent money laundering and the financing of terrorism among its members.
The IMF statement makes no reference to how the $1.4 billion will be accounted for in El Salvador, as the government dismantled the national transparency system since coming to power in 2019. In its early years, Bukele appointed loyal bureaucrats as directors of the Institute for Access to Public Information, and they have reinterpreted the law to keep declarations of assets, records of how public money is spent, and basic information such as the names of legislative advisors secret once again.
According to an analysis by the Cristosal Anti-Corruption Unit, rather than new legislation, what is needed is the will to fight corruption. “The [Anti-Corruption] bill, in general terms, contributes nothing new or extraordinary. Currently, ant-corruption institutions have sufficient powers to combat corrupt practices; the problem is that they have not done so. For example, there are legal provisions in force and case law on the declarations of assets of public officials, but they have been gradually annulled by the Supreme Court of Justice,” the analysis reads.
In light of this endorsement and various IMF communiqués, what seems to have been the sticking point in the negotiations is bitcoin. The agreement addresses the risks of bitcoin more precisely: “The program also addresses risks arising from the Bitcoin project, including by making acceptance of Bitcoin voluntary and by confining public sector engagement in Bitcoin-related activities and transactions in and purchases of Bitcoins,” wrote the Fund, adding, “Transparency of the public crypto e-wallet has been strengthened, and the government plans to gradually unwind its participation in the e-wallet.”
For the International Monetary Fund, this loan will bring about improvements in governance and transparency. “Early steps have been taken through the enactment of a new Anti-Corruption legislation, and publication by the Court of Accounts of audits of financial statements of government agencies and COVID audits,” says the IMF statement, also highlighting that the government agreed to publish audits by the Court of Accounts of pandemic spending.
The IMF made no mention of the dismantling of the rule of law in El Salvador. On May 1, 2021, the Salvadoran government illegally dismissed the judges of the Constitutional Chamber. The government also attacked the institutions fighting corruption by dismissing the attorney general, Raúl Melara, and imposing another, Rodolfo Delgado, who dismantled the units investigating corruption in pandemic procurement and the government's negotiations with criminal groups. In June 2024, Bukele was sworn-in to a second presidential term with the total loyalty of the Salvadoran state, despite an explicit constitutional prohibition on reelection.
Between March and December 2020, the Bukele administration received more than $3 billion in loans to mitigate the effects of the pandemic and in March of that year it agreed to create a committee to oversee how these funds were spent. The government boycotted the committee's work and blocked information from civil society representatives, who ended up resigning.
Before the dismantling of the Special Anti-Mafia Unit in the Attorney General’s Office in 2021 and the forced exile of the prosecutors leading those investigations, they had opened an investigation into the Ministry of Agriculture (MAG) for contracts under suspicion of corruption for $71 million in food basket purchases, and included in the file the contractor who obtained the most contracts and who around that time bought a $1 million-dollar apartment in Miami. An audit by the Court of Accounts identified MAG payments of $133 million for food for which there was no documentation proving that the products had been received, making up 51 percent of the budget for a pandemic-era food basket delivery program. This audit became known in a trial, the draft sentence of which only ordered the repayment of $60 million to the lowest-ranking MAG employees and exonerated then-Minister of Agriculture Pablo Anliker from responsibility, despite the fact that the testimonies and documents indicated that he selected the suppliers and gave the orders to make the payments for the products not received.
The IMF says it will promote other measures to combat corruption, although it is not clear whether this has to do with the efficient functioning of the institutions providing oversight.
“These [measures] will be followed by upgrades to procurement and accountability processes, as well as the strengthening of AML/CFT [anti-money laundering and countering the financing of terrorism] frameworks,” the organization's statement said.
On June 4, 2021, Bukele expelled the OAS-backed International Commission Against Impunity in El Salvador (CICIES) when it presented the first notices to the Attorney General’s Office for corruption cases involving officials from Nayib Bukele's cabinet.
The funds arrive as the government has closed 30 public schools and has implemented a policy of “voluntary retirement” decrees, a tool that uses the age of public employees as an argument to purge public institutions. In 2025, the payment of principal and interest on the debt represents 13 percent of the Salvadoran government’s Expenditure Budget for this year: $1.261 billion, greater than the budget of the Ministry of Health, $1.117 billion, and almost equaling the budget of the Ministry of Education of $1.540 billion.
