Mihaela writes*
For thirty years El Salvador has been under the control of two gangs, MS-13 and Barrio 18. Leaders had tried to dismantle the gangs and put an end to their reign of terror over the general public. However, only one leader has been successful so far in bringing safety to the country, President Nayib Bukele who has been in power since 2019.
It all began in March of 2022, when Bukele declared a national state of emergency sending the military to the streets, suspending constitutional rights, and most notably, carrying out mass imprisonments of anyone who even seemed to be affiliated with a gang, which brought the incarceration numbers to eighty thousand. He embraced mano dura (iron fist) crime policies that were aggressive — even overwhelming. While considered a dictator, his approval rating from locals stands at 91%.
Other Latin American leaders hope to adopt similar policies and have said that ‘he has accomplished a miracle’. Furthermore, crime rates have dramatically decreased from 51 per 100,000 in 2018 to 2.4 in 2022 since he adopted his new policies. This makes El Salvador the safest and most rapidly developing country in Latin America, as of today.

The country’s GDP per capita has also shown a promising increase between 2020, when it stood at US$4000, and 2023 ($5,400). A reason for the GDP increase can be explained by The Economist’s findings on how much gangs actually cost the economy of El Salvador. The total cost was said to be around 16% of the nation’s GDP, and it included the extra spending on security per household, bribes, and the loss of those who were deterred from working.
At first glance, this all seems to be a huge turnaround for the living standards in the country as well as its overall development. However, keeping 1% of the population imprisoned is bound to come with adverse and hidden costs to the country. Firstly, this came at a high cost for human rights. There were reports of the wrongful arrests of minors and adults alike, as well as reports of mistreatment and unexplained deaths of prisoners in the custody of the mass prisons.
Furthermore, there have been concerns about the country’s democratic backsliding and the lack of protection against the government’s abuse of power over its people. It’s also important to note that under Bukele’s economy, the country is experiencing higher levels of extreme poverty and increased inflation. The president inherited a weak economy and a state controlled by gangs. It’s expected that growth won’t be linear due to uneven development, but what is the right price for safety?
Bottom Line: El Salvador has become far safer and the economy has grown under Bukele, but that progress is undermined by weakening human rights and a lack of fundamental economic reforms. How long will the Bukele boom last?
* Please help my Real Donut Economics** students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice 🙂
** Why “Real”? In short, because (a) Raworth’s claims to being a “21st century economist” denies that all of her ideas were presented by others in the 20th century and (b) she presents no viable mechanisms (besides “be nice”) for achieving equality and sustainability. My students are more realistic. In long? Read this.