How the "Coolest Dictator in the World" Changed a Nation
With his slicked-back hair and love of Twitter, Nayib Bukele might not fit the mould of a typical Central American politician, but his unorthodox approach to governing has made waves in El Salvador and beyond.
From using memes to communicate with young voters to deploying the military to fight gang violence, Bukele's unconventional tactics have improved the country's infrastructure and economy and won him legions of fans both at home and abroad.
President of El Salvador since June 2019, Bukele is the first leader in over two decades who is not a member of either of the country's two traditional parties.
Perhaps this, along with his youthful appeal to a new generation of voters, gave him the leverage required to take his small nation to the big leagues by tackling gang violence unlike any leader in the nation's history and laughing in the faces of the IMF and the traditional fiat currency system by making Bitcoin legal tender back in June 2021.
A legendary move that put El Salvador ahead of most other first-world nations in terms of acceptance and adoption of cryptocurrencies, and one that paved the way for its own independence and standing as a force to be reckoned with on the global economic stage.
It's Time for Something Different
Currency devaluation, which has been a significant problem in the past in El Salvador, could now be eradicated with Bitcoin on the scene.
As the world watches the U.S. Dollar take a dive, major central banks go belly up on the daily and yet another nation-state declaring that it would prefer to use the Chinese Yuan over the Dollar or Euro for international trade, one begins to wonder if President Bukele had laser-eyed plans for El Salvador long before he became a politician, especially when you hear statements like this, straight from the horse's mouth:
"The IMF has been a part of the problem, not the solution. They have pushed austerity measures on countries like El Salvador for decades, and it hasn't worked. We need to try something different."
Whilst it's still too early to measure the long-term positive impacts of Bukele's Bitcoin adoption, already we can see signs of economic growth and innovation at the state level and financial inclusion and prosperity at the local level.
According to the World Bank's Global Findex Database, in 2017, only 36% of adults in El Salvador had a bank account, which is significantly lower than the Latin America and Caribbean regional average of 49%. This suggests that a large portion of the Salvadorian population was unbanked or underbanked prior to the adoption of Bitcoin.
Looking at the data issued by the Central Bank of El Salvador, even as early as August 2021, Bitcoin transactions represented nearly 3% of the total amount of remittances received in the country. Given that remittances from Salvadorians living abroad are a significant source of income for many families in El Salvador, this statistic alone should be a sign of the resulting increase in economic prosperity and innovation brewing in the region since the formal adoption of the King Coin.
"We are building a new El Salvador, one that is free from the chains of debt and foreign influence. We are charting our own course and we will not be deterred." - Nayib Bukele, in a tweet from September 2021.
If You Wanna Get Ahead, You've Gotta First Take Care of the Basics
Bukele has also made great strides to increase the nation's prosperity by implementing social reforms, such as:
School Uniforms and Shoes Program: This program provides free school uniforms and shoes to over 1.6 million public school students. This program has helped to reduce the financial burden on families who struggle to afford school supplies and has ensured that all students have access to quality education;
Community Kitchens: Bukele's administration has established community kitchens in various parts of the country, which provide free hot meals to vulnerable communities. This program has helped to alleviate hunger among low-income families, particularly during the COVID-19 pandemic;
Housing Projects: Bukele's government has constructed thousands of homes for low-income families, providing them with a safe and secure place to live. These housing projects have helped to reduce homelessness and improve the living conditions of many Salvadorans;
Zero Hunger Plan: This program aims to reduce hunger and malnutrition in El Salvador by providing food assistance to vulnerable communities. Under this program, Bukele's government has distributed food packages to over 500,000 families across the country;
Pensions for the Elderly: Bukele's administration has increased the pensions for the elderly, ensuring that they have a decent standard of living. This program has helped to improve the quality of life for many senior citizens who struggle to make ends meet.
And now, where United States Senators like Elizabeth Warren are doing everything they can to stop the growing trend towards freedom and advancement, Bukele's administration recently approved a bill to ensure progress and innovation aren't stifled in his great nation:
Next Up: Bitcoin City
Now, I know what you're thinking, because at this point I'm thinking the same thing: How do we become citizens of El Salvador and residents of its "Bitcoin City"?!
That's right, Nayib Bukele has announced plans to build a "Bitcoin City" in El Salvador that will be powered by geothermal energy from the country's volcanoes and will run on Bitcoin as its primary currency. The city is intended to be a hub for tech and innovation, and Bukele has said that it will attract investors and create jobs in the country.
The Bitcoin City will reportedly be built on a swath of land located near the Gulf of Fonseca in southern El Salvador, close to the border with Honduras. Bukele has stated that the city will be built from scratch and will feature modern infrastructure, including high-speed rail connections to other parts of the country and the rest of Central America. He has also indicated that the city will have a tax-free zone to attract businesses and investment.
The Bitcoin City is still in the planning stages and many details have yet to be announced. However, Bukele has expressed his enthusiasm for the project and his belief that it will help to boost economic growth and development in El Salvador.
Lastly, Do What Others Couldn't
El Salvador has long been plagued by high levels of serious crime and crippling gang violence. So, to end it once and for all, and hopefully attract investors and improve tourism in the region, Bukele's administration has implemented severe control measures that are actually taking effect.
One of the most significant and controversial initiatives has been the "Territorial Control Plan," which involves deploying security forces to high-crime areas and cracking down on gang activity. Whilst they've not been without their critics, these tactics have been more effective than any others employed in El Salvador's history. Here's a closer look at the impact of these measures:
Homicide Rate: El Salvador had a homicide rate of over 50 per 100,000 people in 2018. However, since Bukele took office, the homicide rate has decreased significantly. More recently, the country reported a homicide rate of 7.8 per 100,000, the lowest in more than a decade and now they are even recording days where there were zero homicides, which was previously unheard of;
Gang Activity: El Salvador has several powerful gangs, including the MS-13 and Barrio 18. These gangs have been responsible for much of the violent crime in the country. Bukele's government has implemented a tough stance on gangs, cracking down on their activities and arresting their leaders. As a result, the number of homicides linked to gangs has decreased by more than 60% since 2018;
Police Reform: Bukele's administration has also implemented police reform, including the creation of specialized units to investigate and prosecute organized crime. This has led to an increase in the number of arrests and convictions of gang members and other criminals;
Public Trust: Bukele's efforts to reduce crime and gang violence have also led to an increase in public trust in the police and government. In a 2021 poll, 64% of Salvadorans said they trusted the police, up from 47% in 2018.
Incidentally, with the lower crime rate, increase in innovation and novel attraction of using Bitcoin to buy your cup of coffee, El Salvador is now rated as one of Lonely Planet's top tourist destinations, with several million visitors entering the country annually since 2019.
Closing Thoughts
Since Nayib Bukele came into power in El Salvador in 2019, the country has undergone significant changes, particularly in areas such as security, the economy, and international relations.
Under Bukele's leadership, the government has taken a more than tough stance on crime and gang violence, resulting in a significant reduction in crime rates. Additionally, the revolutionary adoption of Bitcoin as legal tender in El Salvador has been a controversial but transformative move that has put the country at the forefront of the global crypto landscape.
Bukele's efforts to improve the country's infrastructure, particularly in rural areas, and his plans for the development of the "Bitcoin City," have been welcomed by many Salvadorans as signs of progress and hope for the future.
Whatever you think of him or his methods, Nayib Bukele's El Salvador is definitely one worth watching.