Can Anything Stop El Salvador’s Bitcoin-Loving, Backsliding Leader?

Salvadoran President Nayib Bukele was elected in 2019 as a political disruptor. The grandson of Palestinian immigrants and former mayor of the country’s capital, San Salvador, Bukele promised an end to the divisions that had plagued El Salvador since its 1979-92 civil war. His youth helped market his presidency as an opportunity for a fresh start: At 37, he became the youngest head of state in Latin America and the region’s first millennial leader. His freshly founded New Ideas party ended 30 years of two-party control in the country, which had previously alternated between the right-wing Nationalist Republican Alliance (ARENA) and leftist former guerilla group Farabundo Martí National Liberation Front (FMLN), the latter of which Bukele was once a member.

Elections to Watch in 2024: This story is part of a package on 15 key elections this year (besides the United States). Read the full analysis here. 

El Salvador once held the unsavory title of having the highest per capita murder rate in the world. Bukele has brought that figure down precipitously—but not without controversy. The president is thought to have inked a deal with the country’s two biggest gangs, MS-13 and Barrio 18, shortly after taking office in 2019, FP’s Catherine Osborn reported in Latin America Brief in April 2022. (Such government-gang negotiations are not uncommon in the region.) Yet after El Salvador experienced a bloody three-day period that March, most observers assumed the Bukele-gang agreement had crumbled.

In the almost two years since, Bukele has instituted a zero-tolerance policy toward crime that has seen his popularity soar and El Salvador’s human rights indicators plummet. Homicides in the country are down 92 percent from 2015, the Wall Street Journal reported last July, and flows of Salvadoran migrants headed to the United States have dropped. Even Bukele’s political opponents admit they feel objectively far safer in the country.

But civil society organizations and democracy watchdogs warn this safety has come at a steep cost. To bring down El Salvador’s murder rate, Bukele’s government instituted a continually extended state of emergency that allowed it to arrest suspected gang members arbitrarily and without due process. More than 1 percent of the country’s population is incarcerated in a prison system Bukele boasts about on X, the platform formerly known as Twitter. Last year, Bukele opened a new mega facility he called the “Terrorism Confinement Center,” with capacity for 40,000 inmates. In a December 2023 report, Amnesty International warned of a “deepening punitive and repressive focus in the area of public security” and the “systematic use of torture and other abuse against prisoners in penal centers” in El Salvador.

Alarm bells from watchdogs have not dented Bukele’s popularity at all. As of May 2023, his approval rating stood at 91 percent. Politicians across Latin America are taking note, and some have vowed to emulate his policies—calling the Salvadoran president a “model” who “has accomplished a miracle.” Last October, Bukele suggested dealing with Hamas militants by adopting his zero-tolerance approach to MS-13.

Bukele has taken criticisms of his approach in stride, with mocking responses that include changing his bio on X to “world’s coolest dictator” for a period. The Salvadoran president’s internet presence may border on meme-like, but experts say it is a critical arm of his government’s media and public relations machine. X and TikTok don’t just help Bukele to whitewash contentious policies with sleek videos and provocative posts. The platforms also allow him to cultivate a distinctive persona where “light authoritarianism is built on a sense of coolness,” Broderick explained in 2021, likening Bukele’s X profile to that of Elon Musk.

Perhaps nothing encapsulates Bukele’s attempt at suave internet bro-ness more than his decision to institute bitcoin as legal tender in El Salvador, an otherwise dollarized economy where most of the population does not have bank accounts and many lack internet access. The project was greeted with skepticism by the public and started failing within hours of its introduction, cryptocurrency expert David Gerard wrote in Foreign Policy in September 2021. The Bitcoin Law “frightened the bond markets,” Gerard added. “The World Bank and the International Monetary Fund are already reluctant to supply further funding.”

Though Bukele won’t admit it, El Salvador needs that funding. With many creditors concerned about the bitcoin gamble, San Salvador has moved to play geopolitical games with its billions of dollars in sovereign debt. As journalist Danielle Mackey revealed in a November 2023 investigation for Foreign Policy, Bukele has instrumentalized the Central American Bank for Economic Integration (CABEI), which receives U.S. funding, to provide hundreds of millions of dollars in loans to the Salvadoran government to buy back its own debt.

In another instance, Bukele used CABEI money earmarked for COVID-19 pandemic relief to purchase bitcoin, which Mackey called a “vanity project.” Bukele’s administration also has sought to sway U.S.-backed lenders by publicizing overtures to Chinese investors. Bukele said he anticipated El Salvador would sign a new deal with the IMF after this year’s elections.

Mackey’s reporting last year also showed how Bukele has eroded El Salvador’s democratic institutions. After his New Ideas party earned a supermajority in the country’s unicameral Legislative Assembly, Bukele was able to swiftly pass his agenda. He “deconstructed El Salvador’s justice system to make it friendly to him,” Mackey wrote, stacking its top body, the Constitutional Court, with loyalists and forcing scores of judges into retirement. All the while, a “growing cohort of Salvadoran jurists, journalists, and democracy and human rights activists have been forced into exile.”

The Bukele-friendly court is central to El Salvador’s Feb. 4 vote. Officially, the country’s constitution prohibits sitting presidents from running for reelection, but justices in 2021 issued a ruling allowing a second consecutive term. The Due Process of Law Foundation said the decision was part of El Salvador’s “rapid regression towards authoritarianism” and urged the Bukele administration to backtrack. But last October, Bukele and his Vice President Félix Ulloa registered their ticket to seek another five-year term.

On Nov. 30, 2023, Bukele formally stepped down from his post to hit the campaign trail. Though he is officially running for the presidency against a wide field of rival candidates, Bukele is all but guaranteed an absolute majority on Feb. 4, foregoing the need for a runoff. The Economist cited an August 2023 poll indicating that about 70 percent of Salvadorans intend to vote for Bukele. A November 2023 Gallup survey published in El Mundo was even more decisive: 93 percent of respondents said they would cast their ballots for Bukele, while his next-closest competitor—ARENA’s Joel Sánchez—followed at 3 percent. FMLN’s Manuel Flores registered just 2 percent.

All seats in the Legislative Assembly will also be up for grabs on Feb. 4, and most are likely to be won by New Ideas. A month later, on March 3, all of El Salvador’s municipalities will elect new mayors and councils. Throughout his term, Bukele has strengthened his control over both the legislature and municipalities, cutting the number of seats in the Legislative Assembly from 84 to 60 and reducing through mergers what was previously 262 municipalities—and mayors—to just 44.

At 42 years old, the self-proclaimed “CEO of El Salvador” already has a fraught legacy. In just one term, Bukele has amassed a genuine support base by measurably improving the lives of many Salvadorans. But to get there, his government has committed grave alleged human rights abuses and shown a disdain for democracy and the rule of law. He is on his way to at least five more years in power—and it doesn’t seem like anything can stop him.