US Continues Ransoming Development Aid, Now Using CAFTA to Threaten Social Programs


The US’s ransoming of development aid has entered a new phase in El Salvador. Not content with the passage of the controversial Public-Private Partnership (P3) Law, nor with its modification by way of various reforms, the US government has now unleashed a new series of conditions it claims necessary for the disbursement of nearly $300 million in Millennium Challenge Corporation (MCC) development funding. This time, it’s the groundbreaking social programs and reforms initiated by the nation’s first progressive government in the crosshairs.

On Tuesday, April 8, John Barrett, economic advisor at the US Embassy in San Salvador, revealed "concerns" the US Trade Representative has about El Salvador’s compliance with the Central American Free Trade Agreement (CAFTA), referring specifically to the FMLN-Funes administration’s family farming program, which provides domestic, non-genetically modified (GMO) seeds to small scale farmers to promote local production and food sovereignty. In fact, the US government’s concerns go beyond just subsidized sustainable agriculture. The US Trade Representative’s 2014 report on El Salvador also includes anxieties about the National Healthcare Reform’s measure to allow the Ministry of Health to purchase pharmaceuticals without an open bidding process (allowing them to buy cheaper medicines from Venezuela and Cuba) and the 2012 Medications Law, which regulates El Salvador’s notoriously extortionate medicine prices. In effect, the US government is holding the MCC funds hostage in order to advocate for the interests of Monsanto and Big Pharma at the expense of the vast majority of the Salvadoran people.

El Salvador has already met the conditions established by the MCC board required to qualify for the funding. Nevertheless, the US continues to surprise the country with ever-more conditions.  The US’s unending demands on El Salvador’s policy makers exposes the MCC funds as a mere mechanism for the imposition of US commercial interests. With a new FMLN administration  poised to assume power on June 1st, the United States appears intent on undermining further attempts to build sustainable, equitable, alternative development initiatives and rolling back existing ones. The invocation of CAFTA against the pioneering actions of the country’s first FMLN government lays bare a struggle between two opposing models of governance, one that protects the interests of a small, corporate elite, and one that serves the popular majority.

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Salvadorans, solidarity groups and faith partners gather in September 2023 to decry human rights abuses in El Salvador and continued U.S. support (photo: CISPES)