Greetings from the country that gave us surf, volcanoes, coffee, peace, Bitcoin, and independence. When Nayib Bukele spoke at the annual United Nations General Assembly in New York, he opened his address with these words.
Bukele devoted his address to “freedom” and invoked the notion of a nation’s sovereignty while denouncing wealthy and powerful nations that intervene in the affairs of their smaller and weaker Neighbours.
Bukele illustrated his idea by comparing a poor nation to a homeowner trying to replace a leaky roof while being pushed by more powerful Neighbours to preserve it. This euphemism presumably refers to the International Monetary Fund (IMF) and the United States, as El Salvador struggles to pay its debt while negotiating for help.
Since the military regime took control in 1979, El Salvador’s government has amassed a debt of up to $24 billion, a figure that has grown dramatically. The IMF forecasts that the country’s debt would increase to $38 billion by 2027, and although it has welcomed El Salvador’s recent economic recovery after the Covid epidemic, it has harshly criticized Bukele’s Bitcoin policy.
El Salvador passed a law making bitcoin legal cash last year and has since spent $104 million purchasing 2,301 bitcoin at an average price of $45,100 per coin. The IMF has criticized these acquisitions, stating that “relying on leverage and thus increasing public debt to invest in bitcoin with the expectation that its price will continue to rise, while also timing the market to acquire bitcoin, is not a permanent solution to alleviate financing constraints.”
The nation has recently stated that it would use $360 million of its foreign-currency reserves to repurchase government bonds at a discount in an effort to quell default worries.
Following his UNGA address, Bukele appeared on Tucker Carlson’s Fox News program, where the presenter praised Bukele’s ostensibly successful fight against crime. El Salvador, with a population of about 6.5 million, was once regarded as one of the most dangerous countries in the world, with over 6,650 murders in 2015.
Since then, the murder rate has reduced significantly, with 1,140 individuals slain last year. San Salvador is now the 24th most dangerous city in the world, only behind Baltimore, United States.
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