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El Salvador’s Neoliberal Populism Runs Into Coronavirus

El Salvador’s president, Nayib Bukele, is enforcing one of the strictest social distancing orders in the world, subjecting thousands to arrest and expanding an already ravenous and bloated prison system. With millions facing destitution and abuse, coronavirus is laying bare the instability that has always been at the core of neoliberalism in countries like El Salvador.

El Salvador president Nayib Bukele talks at the Great Hall of the People on December 3, 2019 in Beijing, China. Noel Celis - Pool / Getty

For a few brief moments in March, it looked like El Salvador might be stumbling towards a relatively orderly period of mandatory self-isolation. 

President Nayib Bukele, an aspiring autocrat, gambled on an absurd display of political theater in February, weeks before the first cases of COVID-19 were reported in Central America. During a budget dispute that hinged on security funding, he mobilized soldiers to encircle the legislative chamber prior to his entrance, evoking El Salvador’s history of military dictatorship. 

But he paid a high political price for those antics: social organizations around the country condemned the “Bukelazo,” and opposition parties like the FMLN took legal action against his administration. Going into the coronavirus crisis, Bukele’s authoritarian tendencies appeared limited, to an extent, by popular pressure and political opposition. 

Facing the pandemic, Bukele chose a different tack than demagogues like Brazil’s Jair Bolsonaro, Nicaragua’s Daniel Ortega, and US president Donald Trump, who have so far denied the severity of the disease while encouraging their supporters to flout public health guidelines. Perhaps trying to shore up some legitimacy among national elites, Bukele chose to dazzle his constituents with competency, not dull them with denial. Soon after the first cases of COVID-19 were confirmed in Central America, he closed El Salvador’s borders and announced stringent social distancing guidelines, winning accolades in the international press. 

Of course, El Salvador faced difficulties from the beginning, in part due to the United States’ insistence on maintaining deportations to the Northern Triangle, spurring the spread of contagion in the region. But the country’s most formidable barrier to effective crisis mitigation stemmed from a deeper structural problem — one that is not one unique to El Salvador.

In the country of about six and a half million, about 70 percent of the working-age population is excluded from the formal labor market, leaving an estimated 2–3 million households reliant on informal employment or involvement in illicit commerce (or both) to compensate for inadequate wages. This scale of labor market exclusion is typical of poor countries that have been subject to neoliberal structural adjustment. And long-term extreme unemployment (or “labor market flexibility,” in the neoclassical parlance) is perhaps most insidious because it amplifies the effects of any macroeconomic disruption, while also greatly restricting the state’s ability to organize a response. 

Still, about a week into El Salvador’s national shutdown in March, two things occurred nearly simultaneously to inspire some hope. First, Bukele’s government responded to informal workers’ cries for relief by announcing a national subsidy program that would launch by immediately dispensing $300 vouchers to the country’s 1.5 million neediest households. Then, a few days later on March 30, several major criminal organizations came to an agreement similar to a ceasefire in support of the government’s emergency social distancing measures, including curfews.

But today, those hopeful days in March feel almost too surreal to recollect.

After some predictable setbacks in his crisis mitigation strategy, Bukele has by now cut a new posture as an uncompromising law-and-order despot. A rash of murders between April 27 and 30 prompted a severe state backlash: Bukele instructed the police and armed forces to maintain order in the streets by shooting to kill. 

Then, in a move that horrified (or maybe titillated) the international news media, El Salvador’s presidential press office circulated images of the apparently widespread humiliation and abuse of prisoners by prison officials. The Miami Herald recently warned that Bukele’s crisis policies “threaten democracy” in the country. 

To understand what has happened in El Salvador under coronavirus, we need to reckon not only with Bukele’s slippery brand of neoliberal populism, but also with the existential precarity of the Salvadoran state, which is forced to manage the intractable (and potentially explosive) problem of long-term extreme unemployment with severely limited resources and from a compromised position relative to private corporations. 

States that have endured neoliberal transitions, like El Salvador’s, are greatly constrained by their structural weakness relative to capital. They are generally debt-burdened and import-reliant, and because they’re unable to raise adequate revenue for fear of prompting capital flight, their social policies tend to be tethered to the trends and funding cycles of international development institutions. The only apparently viable crisis-mitigation strategy available to states in this position is to manage extreme poverty through means-tested cash assistance programs, which have proliferated globally in the past few decades. But such programs can easily become untenable when a crisis suddenly swells the number of citizens requiring cash relief, as occurred worldwide during the coronavirus pandemic.

Since the peace accords in 1992 (and especially in more recent years), El Salvador has pursued apparently contradictory, yet mutually reinforcing, strategies for containing the problem of mass labor market exclusion, both of which are now straining under the burden of the coronavirus crisis. 

The left hand of the state extends targeted social grants, which effectively subsidize low wages and underdevelopment in the formal sector while also, to some extent, diffusing the social tension that generally results from extreme long-term unemployment. Meanwhile, the state’s right hand suppresses the formal labor market’s unruliest overflows, in part by applying the mano dura security policies that have, in the past ten or fifteen years, delivered to El Salvador the second-most comprehensive prison system in the world. 

Between the Left Hand of the State and la Mano Dura

El Salvador’s national quarantine was first ruptured in spectacular fashion on March 30, less than two weeks after it began, when thousands of welfare beneficiaries crowded the streets of multiple cities in an attempt to collect their emergency subsidies. 

Bukele had announced the targeted cash assistance program just three days earlier, saying it would insulate the 1.5 million lowest-income households in El Salvador from the income-chilling effects of enforced social isolation during the pandemic. Following Bukele’s instructions, El Salvador’s national welfare ministry launched a website to facilitate the cash transfer. In theory, this should have allowed a representative from each of the 1.5 million needy households to claim their subsidy via a computer or mobile phone.

To make a long story short, claims overwhelmed the system in a single day. The website crashed without fully processing even a single subsidy. Then came the weekend, when welfare offices are not normally open in El Salvador, but which in this desperate context lead some prospective beneficiaries to gather outside, hoping for answers. Desperation turned quickly to outrage, and after a few days of uncertainty, frustrated beneficiaries finally exploded the country’s forced quarantine by taking to the streets. 

The protests were eventually dispersed, after limited confrontations with police. The welfare ministry, CENADE, finally got the cash assistance program off the ground, diffusing tension that might have spurred future protests. But as of mid-April, only about two-thirds of the $400 million set aside for the program had been disbursed. (El Salvador, perpetually cash-strapped, recently took out a $389 million loan from the International Monetary Fund.)

On March 30, the same day as the cash-relief protests, the Mara Salvatrucha (MS-13) criminal organization apparently reached a ceasefire-like agreement with factions of its rival organization, Barrio 18. Members of those organizations even began assisting state authorities in enforcing social distancing measures, including curfews — an uneasy arrangement through which the already porous boundary between state and criminal authorities likely became even more uncertain for many Salvadorans.

Some may have hoped that the agreement would mean a reprieve for the many thousands of ordinary people ensnared by extortion rackets, which in El Salvador’s working-class districts operate like a form of parallel taxation. As many as 70 percent of all businesses in El Salvador are affected by extortion, according to a widely cited report from the Central Reserve Bank. Many of the enterprises the report catalogues are household units pursuing informal livelihood strategies, like selling pupusas from a front window or small bags of cooking oil in a market —“businesses” only in a very loose sense of the word. 

An estimated $4 billion, or 15 percent of El Salvador’s GDP, is funneled into criminal organizations annually through extortion. Criminal organizations generally collect a renta payment of $5–20 each week from individual household units. 

Bukele’s time in office has been associated with an unusual decrease in gang murders, but the number of people paying renta actually increased by 30 percent last year. For people accustomed to using a portion of their weekly earnings to pay a fee for their own survival, the loss of income associated with the state-mandated business shutdown had a particularly ominous character. 

Aside from government assistance, another source of cash relief for working-class Salvadorans could come in the form of remittances from associates in the United States (whose annual contribution to the national economy, $4.5 billion, is roughly the same as the amount diverted through extortion each year). But remittance levels, which normally fall sharply right after Christmas but then climb steadily during the first months of the year, have recently begun to trend down. 

Speaking to reporters at El Faro in April, an anonymous gang leader acknowledged that, despite widespread shortfalls, gang racketeers were still attempting to collect renta. But workers like market-vendors and taxi drivers said that, in many cases, gang members had not arrived to collect payment in weeks, likely because of the heightened presence of police and military in the city. 

“There are many desperate gang members because they have no income,” a police commissioner told El Faro. “And not only because of the extortions, but because their families’ incomes depend on selling in the market. They’re suffering a double impact from the pandemic: no rent, and no sales.” 

Predictably, with Salvadoran society straining under almost two months without income, the gangs’ ceasefire-like agreement didn’t hold: between April 24 and 27, there were fifty murders in cities across El Salvador, credibly attributed to MS-13. 

Bukele responded by authorizing the police and military to use lethal force to enforce quarantine measures and restore order. Prison authorities abruptly ended policies enacted over a decade ago that segregated prisons according to gang affiliation, in apparent retaliation for the murders. That’s when the presidential press office released the now-infamous photographs of stripped and restrained men cramped together by the hundreds on cell block floors, perhaps intending to send a message. 

Detaining the Virus

With the realities of El Salvador’s political economy in mind, we can begin to see Bukele’s disastrous attempt to disburse emergency subsidies, on the one hand, and his turn towards extreme law-and-order policies, on the other, as part of the same unstable program — elements of two mutually reinforcing strategies through which the Salvadoran state habitually attempts to manage (though not resolve) the instability created by long term extreme unemployment. 

The horrifying reality of quarantine containment centers — hurriedly established to detain people returning from overseas, as well as some workers who violate the mandatory domestic quarantine — further shows that what is unstable in normal times may well prove disastrous in times of crisis. 

Without the state infrastructure to facilitate a program of contact tracing (despite some early attempts to do so, when the illness was still largely concentrated in a few rural areas), Bukele has chosen to deploy elements of the state’s security apparatus in a clumsy attempt to regulate public health. 

Containment centers have swelled in size over the past several months, and reports of staff carelessness and overcrowded conditions are widespread. People held in these containment centers have claimed on several occasions that security guards often mix populations arriving from different parts of the world upon arrival and, even more recklessly, sometimes co-house people who test positive for the disease with untested or uninfected detainees. 

On March 13, sixty-seven-year-old Carlos Henríquez Cortez, who showed no symptoms of the virus, was mistakenly intercepted at the airport while returning from a short trip to Guatemala (people over the age of sixty are to be quarantined at home, not in containment centers). He contracted COVID-19 after being housed with detainees who had tested positive and died five weeks later, becoming the eighth person in El Salvador to die from the novel coronavirus. 

Bukele’s government has also turned to the state’s coercive institutions to enforce the country’s mandatory stay-at-home order, which was intensified on May 7 with the announcement of new rules regulating out-of-home tasks like grocery shopping. As of May 11, 2,424 people had been arrested for violating the stay-at-home order, more than double the total number of positive cases in the country (998).

In Central America, as in so much of the world, things will likely get worse before they get better. The region is historically tied to the United States through an elaborate circuitry of migration, travel, and exchange. In the context of this pandemic, the relative density of those transnational connections indexes darkly to the extent of contagion in each country. Panama is still the worst-hit country in the isthmus, with 9,867 positive cases as of May 20, with Honduras (2,955), Guatemala (2,133), and El Salvador (1,571) also experiencing significant outbreaks. 

By extending meager cash relief with one hand and imposing mass imprisonment with the other, Bukele embodies the two souls of neoliberal populism in the context of mass labor market exclusion. But the global coronavirus pandemic now presents a crisis that cannot be postponed or papered over. The structural barriers inhibiting humane and effective crisis-mitigation, in El Salvador and across the former Third World, can no longer be ignored.