El Salvador’s Parliament approves controversial loan for security plan

RIO DE JANEIRO, BRAZIL – The Congress of El Salvador, with a large pro-government majority, approved and ratified this Tuesday, May 11, loans for US$730 million, including US$109 million to finance the third phase of the government security plan that confronted the last legislature and the Executive.

The loans were voted without further discussion in the Treasury and Special Budget Committee and the plenary of the Legislative body.

Among these loans, there is one for US$109 million for which President Nayib Bukele lobbied in February 2020, as he acknowledged, with the entry into the Legislative Assembly of military and police armed with assault rifles.

The money was granted in October 2019 by the Central American Bank for Economic Integration (CABEI). Still, it should have been endorsed with the votes of at least 56 deputies, the qualified majority, which did not happen.

The loan was approved less than a month before the new Legislative Assembly will take office with a large pro-government majority.

The other loans approved are for US$250 million to complete the state budget, US$91 million for the social component of the security plans, US$109 million for the “modernization” of the Police and Army, and US$200 million for local economic development.

In addition, US$45 million will be earmarked for “climate resilience” for coffee producers, $15 million for the response to the Covid-19 pandemic, and US$20 million for micro and small businesses.

Congresswoman Dina Argueta, of the opposition Farabundo Marti National Liberation Front (FMLN), pointed out in the plenary session that “some observations on the distribution of funds made in the previous legislature have not been corrected”.

The Minister of Finance, Alejandro Zelaya, presented four new loan requests for US$800 million for the repair of educational infrastructure, an early childhood project, credit funds, and a maternal health network. However, these requests were not incorporated to be voted on.

According to figures from the Central Reserve Bank, the total public debt until March 2021 was US$22.9 billion, 11.9% more than the US$20.5 billion computed in March 2020.

The Government of El Salvador is in talks with the International Monetary Fund (IMF) for an economic agreement for up to US$1.4 billion, despite the international controversy caused by the recent dismissal of Supreme Court judges and the Attorney General by the Parliament.