In recent years most of Latin America has been having a love affair with the People’s Republic of China (PRC) at the expense of the United States, a lover from the past, no longer as charming and sexy as Beijing.
Indeed, there was a time when relations between El Salvador and Washington were better. In 2019, when Nayib Bukele won the presidential elections in the Central American country and was sworn on June 1, in August he visited the US where Donald Trump was his counterpart at the White House.
The empathy between the two was evident and Bukele made clear at that time that America was El Salvador’s most important friend and ally. After all, both characters are charismatic, controversial, change their points of view in seconds and are highly unpredictable. The two are businessmen and came to power as a result of a perceived “business as usual” by the electorate in their respective home countries.
Yet after Biden’s inauguration, US relations with El Salvador turned tense. Biden, very much committed to democracy and institutions, disliked Bukele’s strategy to strengthen his power at the expense of the legislative and judiciary branches.
On July 19, 2023, the US Department of State published the “Section 353 Corrupt and Undemocratic Actors Report” also known as the Engel List where 39 Central Americans are mentioned, among them Mauricio Funes and Salvador Sánchez Cerén, both former presidents of El Salvador. Even though they are members of the Frente Farabundo Martí de Liberación Nacional (FMLN), a former guerrilla that was very active during the 1979-1992 civil war and later turned into a political party, the message of the Biden Administration to Nayib Bukele was clear. When the legislative elections took place in El Salvador in 2021 and Bukele’s party New Ideas secured control of the Congress, Bukele travelled to Washington hoping to talk to governmental authorities, but no one met with him.
Thus, Bukele knows that the US will not applaud nor recognize his security strategy of putting in jail 72,000 members of Mara Salvatrucha and other gangs even though to many inside and outside El Salvador the end justifies any means.
In this respect, the PRC seems to be the answer since Beijing does not judge other countries and does not seem to care if they are democratic or not. Whether leaders are authoritarian or not, respectful of human rights or not, above the law or not, Beijing is more interested in doing business with a region traditionally considered the backyard of the United States, and not long ago, a bastion of Taiwan’s foreign relations.
One should not forget that in Central American only two countries maintain diplomatic relations with Taipei: Guatemala and Belize. Costa Rica established diplomatic relations with the PRC on June 7, 2007; Nicaragua had initially diplomatic ties in 1985, then they were suspended in 1990, then reestablished in December 2021; and Honduras followed on March 26, 2023. Normally the announcement of the establishment of diplomatic relations with the PRC is accompanied by a checkbook diplomacy where Beijing grants debt relief programs and finances ambitious infrastructure projects for the benefit of the concerned country.
El Salvador recognized the PRC on August 21, 2018. Then, in 2019, four months after meeting with Trump, Bukele travelled for a six-day official visit to Beijing. There, Bukele was awarded an honoris causa Doctorate by the University of Beijing and had an encounter with the Chinese leader Xi Jinping. Later, Bukele announced that the PRC would award El Salvador an unconditioned and non-refundable grant of around $500 million. This money, Bukele said, would be used on infrastructure projects and related initiatives. For instance, on November 14, 2023, the President inaugurated a spectacular public library in downtown San Salvador, a seventh-floor high-tech building symbolizing prosperity and the relevance of culture and education, and presented to the public as a new page for a better and more secure and prosperous future, with the contribution, of course, of Beijing. The library would host 360,000 books, internet facilities, and will be open 24/7 all the year.
Bukele’s re-election puts him in a very privileged position to consolidate his power and the relations with the PRC seem of special relevance for this purpose. The President can focus now during his second term more on a legacy and huge mega projects such as ports, a drinking water plant and a new national stadium (scheduled for 2027) that will be the most modern and biggest in Central America. All these projects are expected to be financed by the PRC.
That said, what if Donald Trump is elected one more time as President of the United States? As mentioned, Bukele has had tensions with the Biden administration, contrary to the clear empathy between he and Trump.
Neither Biden nor Trump seem to care much about Latin America though. During Trump’s term, the Summit of the Americas held in Peru in 2018 was attended by then Vice President Mike Pence. Indeed, Trump did not even care. Even though El Salvador is part of the Central American and Dominican Republic Free Trade Agreement (CAFTA-DR), Trump declared a war against the US trade deficit caused - according to him - by its major trade partners. He dismantled the North American Free Trade Agreement (NAFTA) to sign a new and revised version (the USMCA with Mexico and Canada), and certainly this put some stress to relations with Latin American countries with which Washington has free trade deals.
It should not be forgotten the US is El Salvador’s most important trade partner. In 2023, US exports to El Salvador totaled $383 billion whereas imported goods value was $208 billion. Thus, the trade balance favors Washington. Bilateral trade is composed of oil and gas on the American side and Knit t-shirts, socks and sweaters on the Salvadorian side. In 2021, remittances from Salvadoreans working in the US totaled 7. 1 billion US dollars, representing 24. 7 percent of El Salvador’s GDP. The US also cooperates with El Salvador in investment promotion, job training and partnerships with business.
Instead, trade relations between El Salvador and PRC are highly unequal since, for instance, between January and September 2022 Beijing exported $2 billion of products to El Salvador whereas Salvadoreans sold barely $4 million in products to the Asian giant. El Salvador has not been able to equal the 2018 trade figures, when it exported goods for a total value of $84 million. After that, sales to the PRC have dropped in 2019 and 2020. In 2021 it was reported that El Salvador sold products for a total of $49 million, mostly sugar, electrical capacitors, and coffee.
Despite this asymmetry it was announced in 2022 that El Salvador and the PRC would negotiate a free trade agreement. Beijing already has free trade deals with several Latin American countries including Costa Rica, Chile, Nicaragua, Peru, and Ecuador. Also, Bukele has expressed his interest in joining the “new silk road,” to which already 21 Latin American countries belong.
China is very much interested in buying property and land at the Salvadorean coast to develop tourist infrastructure close to the Ajacutla port, including hotels and related facilities that would become more attractive as the area grows. Telecommunications is another zone of interest to Chinese investors since companies such as Huawei and ZTE have an important presence in the market and keep expanding. To foster a better understanding with El Salvador’s academic and student communities, the PRC opened a Confucius Institute at the University of El Salvador, to support the development of language skills in the Central American country. There is no Chinatown in El Salvador and the Chinese-Salvadorean are not fluent in Mandarin.
The slowdown of the Chinese economy may interrupt or postpone some of the financial contributions to El Salvador and other countries belonging to the so called “new silk road.” Back in January 2023, El Salvador disbursed $800 million as a contribution to sovereign debt amortization inherited from previous administrations. At that time, the International Monetary Fund denied any possible loan negotiation with El Salvador. That said, in 2027, the country will have to pay another $2,700 million due to the maturity of the debt. Will the PRC come to the rescue? Or, if Donald Trump returns to the White House, will the US lend a hand to Bukele?
The fact that the Salvadorean president travelled to Washington in August 2019 to meet with Trump, and four months later decided to go to Beijing, reveals that despite the empathy of Bukele-Trump, the US did not do much for El Salvador at that time. Beijing knows this and has taken advantage of a country in need of investment and trade and with more than half of its population living in poverty. Now that Bukele has reaffirmed its leadership in El Salvador, he may reconsider how to navigate between the US and the PRC without ending up downplayed.
Editor’s Note: The above guest column was penned by María Cristina Rosas, a professor and researcher at the Faculty of Political and Social Sciences of the National Autonomous University of Mexico in Mexico City. The column appears in The Rio Grande Guardian International News Service with the permission of the author. Rosas can be reached via email at: mcrosas@prodigy.net.mx
