Speaking to thousands of soldiers in formation on El Salvador’s Independence Day on September 15, Nayib Bukele announced that he would present a budget proposal on September 30 that would not require any outside financing. While government-owned media praised the move, social movement groups fear that it means a doubling down on austerity that has already resulted in the elimination of 22,500 public sector jobs, the closure of 15 government institutions, and the country’s only public university drowning in debt.

Below, we share a translation of popular education organization Equipo Maíz’s weekly newsletter, which points out that government debt and poverty have both ballooned under Bukele’s government. Our translation of the Popular Resistance and Rebellion Bloc's (BRP) response to the budget follows the Equipo Maiz newsletter.

September 20, 2024

The Country is Overburdened with Debt from the Last Five Years

The public debt has skyrocketed during Bukele's administration like never before in the history of El Salvador. And the worst thing is that while the government loads itself with money, the economic and social problems of the country worsen.

What is the public debt?

It is the amount of money that the State has borrowed and has to repay. The Salvadoran state owes money to the country's financial institutions, such as banks and AFP. It also holds debt with some governments, foreign businessmen, and international organizations, such as the World Bank and others.

States incur debt when the money they receive from taxes and other sources is not enough to finance their expenditures. Debt can be useful if it is not excessive and if the resources are invested in health, education, infrastructure, and other areas that improve the people's living conditions. But it is bad if it increases too much and the money is wasted or stolen by public officials.

Debt in the Funes and Ceren governments

The Funes government inherited a debt of $10.387 billion left by the last ARENA government and a poverty rate of 37.8% of households.

Under Funes the debt increased by $4.664 billion and reached $15.51 billion, but because it was invested in social programs and infrastructure works, poverty dropped to 31.8%. In Ceren's government the debt increased by $4.190 billion and reached $19.241 billion, but since a good part of those resources were invested in benefiting the people, poverty dropped to 22.8%.

Debt and poverty in the Bukele government

In his first administration, Bukele increased the debt by $11.604 billion, more than that of the Funes and Ceren governments combined. By May 2024, when Bukele's first government ended, the debt was $30.845 billion. But the most important thing is that the debt did not serve to improve life for the population, as poverty increased from 22.8%, the level at the close of the Ceren government, to 27.2% in 2024. About 130,000 people have fallen into extreme poverty and hunger.

In his second government, which is illegal, Bukele continues to increase the debt, which has already exceeded $31 billion. Meanwhile everything is expensive, there are no jobs, health and education are deteriorating and 382 people leave the country every day. Bukele says that he will not use more loans, which is a lie, because there are already approved loans that will be disbursed next year and in the following years.

His speech is deceitful. He tries to hide issues such as corruption, the settling of scores within the ruling elite, and the “bitter medicine” against the population from the people; but the people will know how to put an end to all the lies and manipulation.

Following Bukele's presentation of the 2025 budget bill on September 30, The Popular Rebellion and Resistance Bloc (BRP), a coalition of social movement organizations, has responded by decrying the devastating effects that the buget would have on public services and an economy that is already in crisis. S

ee below for our translation of their October 9 statement.

The population's living conditions will deteriorate as a result of the 2025 budget

1. The Popular Resistance and Rebellion Bloc rejects the 2025 budget bill, which will have very negative impacts on the population and the nation's economy. The major impacts are:

a) Increased unemployment: 11,000 public employees will be laid off.
b) Wage freeze in the Ministries of Health and Education, in violation of the pay scale laws, which mandate an increase in said salaries.
c) Further deterioration of the health sector, as $156 million will be cut from the Ministry of Health, including $54 million from hospitals, and more than a thousand people will be laid off.
d) More losses for the education sector, since the Ministry will face a $34 million cut. There will be fewer resources for preschool, elementary, and middle school education, as well as for school infrastructure. The University of El Salvador will see no budget increase and will continue to be suffocated with a debt of more than $45 million.
e) More damage to the agricultural sector, since 43% of the Ministry of Agriculture's budget will be cut. With this, Bukele is harming peasant families and benefiting importers.
f) More deterioration of the streets and highways as the Ministry of Public Works will be stripped of funding. Municipalities and unfinished works such as parks, markets, the Rosales and Nejapa hospitals will remain in a state of abandonment.
g) Drastic cuts to the ministries of Culture, Local Development, and the Environment, as well as social programs.

2.  Bukele lied when he promised to halt the debt, since the proposed budget lacks $1.226 billion which will be drawn from the disbursement of 37 loans.
3. This harmful budget will be more bitter medicine for the population. There will be more unemployment, health and education services will deteriorate, the cost of living, poverty, and emigration will increase, and the economy will continue to stagnate.
4. While the unconstitutional ruling clan and their allies punish the population by cutting social spending and plunging the country into misery, at the same time they increase military spending by 20% and propaganda spending by 43% to continue terrorizing the population, and at the same time, increasing their wealth through public purchases, dirty business, and corruption.
5. We call on the population, victims of this unconstitutional regime, to denounce and reject the 2025 budget bill. We also call on them to stand up for their rightful demands with dignity and to fight for a budget that meets our most profound needs.

El Salvador, October 9, 2024