El Salvador: An American Colony?

…in all but name, at least for now.

By guest contributor Lonestar Republik.

In June, Nayib Bukele was sworn in for his second term as President of El Salvador. I remember the election day not because of any personal interest in that country, but because on Twitter, Bukele had posted videos of different polling stations, including one in Katy, Texas. Later that day, I passed another Salvadoran polling station at the Crowne Plaza off I-69 in Houston. I was surprised to learn that foreigners could vote on American soil for a foreign government, but what really shocked me was the turnout. The line was wrapped around the block, and videos circulating online show similar scenes at other polling stations around the U.S. Maybe I shouldn’t have been surprised, as El Salvador is an American colony in all but name, at least for now. Surprisingly, it’s not the far-left FMLN, but the right-leaning Bukele, who is doing the most to “decolonize” El Salvador.

For all the press coverage, El Salvador is a small country. At only 8,124 square miles, and with a 2022 population of 6.3 million, the whole country is smaller in size and in population than the Houston metro area, which spans 10,062 square miles and has 7.1 million people. But despite its small size, El Salvador ranks fifth in country of origin for foreigners living in the U.S. As of 2018, over 1.4 million Salvadorans live in the U.S. To put that into perspective, it’s more than 20% of the population of the whole country of El Salvador. If the Salvadoran-born population of Los Angeles alone (281,000 people) were a city, it would be the third largest in El Salvador. And that is just first-generation immigrants, not including children or grandchildren born in the U.S. When Bukele comes to speak in the U.S., as he did at CPAC earlier this year, he is visiting a large and powerful group of constituents, the ones who have chosen to be subject to American rule.

Like many other Central American immigrants, Salvadorans in the U.S. are primarily employed in low-paid blue-collar or service sector jobs. The median household income for foreign-born Salvadorans in the U.S. is $58,200, much lower than the U.S. median of $74,580, but still on par with the $55,000 for all foreign-born Hispanics in the U.S. Much of the money made, however, is shipped back to relatives in El Salvador. Remittances from Salvadorans living in the U.S. totaled $7.1 billion in 2021, which was a quarter of the entire country’s GDP. But, luckily for those sending money, there is no exchange rate to worry about, as the official tender in El Salvador since 2001 is the U.S. dollar.

This system effectively works as outsourcing for jobs that require a physical presence in America: agriculture, construction, retail, and low-skill service jobs. The wages for these jobs are already low, but Salvadorans often do them at a below-market rate because of their illegal status in the country. The Center for Migrant Studies in New York estimates that illegal Hispanic migrants make on average 70% of what legal Hispanic migrants make. Considering that the Migration Policy Institute estimated that in 2019, there were 741,000 illegal Salvadoran immigrants, that would mean that half of the 1.4 million Salvadorans in the U.S. are illegal. Foreigners doing jobs below minimum wage, with the money going to stimulate the economy of their home country — that sounds like outsourcing to me.

The economic ties run deeper than remittances and currency. The United States is El Salvador’s largest trading partner. Products imported into El Salvador from the U.S. in 2022 were worth $4.9 billion, 30% of El Salvador’s imports. And 39% of all exports from El Salvador went to the United States ($2.8 billion). El Salvador benefits from the Central American–Dominican Republic Free Trade Agreement (CAFTA-DR) which means that the duty on U.S. consumer and industrial goods is 0%.

The U.S. and El Salvador have a military relationship as well. During the Salvadoran Civil War from 1979 to 1992, the U.S. gave the Salvadoran government $6 billion to help secure their eventual victory over the communist FMLN rebel group. As in any good Patron-Client relationship, El Salvador supports the U.S. in its adventures abroad. They sent troops, 380 at its peak, to assist the U.S.-led invasion of Iraq. They sent troops into Afghanistan with the U.S.-led coalition as well, although I cannot find specific numbers.

El Salvador also supported the U.S. in its diplomatic efforts for a long time, especially by maintaining official relations with the Republic of China (ROC, i.e., Taiwan), something that the U.S. stopped doing in 1979 but would like other countries to continue doing. In 2018, only twenty countries, almost all very small, officially recognized the ROC as the official government of China. That same year, El Salvador officially stopped recognizing the ROC and instead recognized the People’s Republic of China. It was undoubtedly at the behest of the U.S. government that El Salvador waited so much longer to recognize the People’s Republic of China (PRC) as the legitimate government of China.

The next year, Nayib Bukele, a former member of the FMLN (which had long since become just another political party), was elected president. Although he had visited Taiwan while he was Mayor of San Salvador, he maintained El Salvador’s recognition of the PRC as China’s legitimate government. During Bukele’s first term, El Salvador accepted Chinese infrastructure and foreign aid.

And this wasn’t the only distancing from the U.S. government that Bukele has undertaken. In 2021, at an English-language conference in Miami (the unofficial capital of Latin America), he announced that Bitcoin would be legal tender in El Salvador. This plants the seeds to loosen El Salvador’s dependence on the U.S. dollar without the risk from a Salvadoran currency. So far, there has been little adoption within the country apart from the government’s purchases of the cryptocurrency.

Most notably, Bukele’s war on the gangs has been incredibly successful. El Salvador has gone from one of the most dangerous countries in the world to the safest in the Western Hemisphere. The hope is that, apart from protecting Salvadorans, this will create a stable system that will allow the economy to grow, stop outmigration, and maybe even draw Salvadorans back to their home country. It remains to be seen whether that will be successful. I wish Bukele the best of luck in that endeavor.