El Salvador and The Seventh Seal

SAN SALVADOR, EL SALVADOR – Barely a month after taking office, Salvadoran President Nayib Bukele declared a state of emergency in the nation’s prisons, halting visitations and imposing severe restrictions on the movement of inmates within the country’s correctional facilities, as well as cutting off electronic communications. It was the first of a seven-phase “Territorial Control Plan” launched in the name of reducing gang violence and a skyrocketing homicide rate, which was one of the highest in the world leading up to his election.

Murders are down considerably since the initiative was undertaken, but whether this was due to Bukele’s plan or his government’s backdoor negotiations with MS-13 and other organized crime networks is still up for debate. Three weeks into his presidency, Bukele took to social media to announce the arrest of 1,487 individuals as proof that his policy was working. However, the local press immediately pulled the curtain back on the publicity stunt when it revealed that most of the detained were never charged and released. 

Critics also point to convenient omissions in the data, such as eliminating deaths resulting from confrontations with security forces – gang related or not – from the official homicide numbers. Given that Bukele’s multi-phase plan seems to be little more than the naked expansion of the police state in El Salvador, seeking millions in central bank loans to procure “surveillance cameras, drones, helicopters, patrol cars, uniforms and bullet-proof vests among other things”, the exclusion seems egregious. 

In fact, lawmakers in the Central American nation have tried to resist Bukele’s lurch into authoritarianism. Presented with a proposal for a $109 million loan from the Central American Bank for Economic Integration (CABEI) for the militarization of police (part of phase three), legislators demanded that Bukele provide detailed plan of expenses, which led to an impasse. In response to the legislative assembly’s delays, Bukele called an extraordinary session on a Sunday and stormed the building with armed police officers and the military.

Sitting in the assembly president’s chair, Bukele implied that the corrupt “good for nothing” legislators were preventing the advancement of his security plan, and proceeded to cup his hands in performative prayer. Outside, he addressed the thousands of bussed-in supporters, exhorting them to “ask God to grant us patience”, while threatening to repeat the scene if the “scoundrels” hadn’t approved the loans in a week.

Bukele’s populist conservative rhetoric mirrors that of the Trump administration, which financed the creation of a 400-man border security unit in El Salvador in 2019. Despite not complying with El Salvador’s own legal codes dealing with the establishment of federal agencies, the new unit nevertheless falls squarely inside US goals in the region of the expanding America’s border patrol through the “hiring of new countries”, rather than new agents. 

The Seventh Seal

Only four of the Territorial Control Plan’s seven phases have so far been disclosed. Each branded with their own name, the latest iteration called for the deployment of the military throughout the country, doubling their presence in the streets of El Salvador from 20,000 to 40,000. Phases five and six are yet to be revealed as the policy implementation strategy includes not disclosing a phase’s particular details until its inception. Concerning in itself, the secrecy is made even more ominous by the fact that the last and final phase is being reserved as a wild card to be activated only in the case that phases one through six fail to produce the desired results.

Details of what may be included in the seventh radical phase of Bukele’s plan is unknown to anyone outside of the president and his inner circle. But, an inkling that we may be getting closer to finding out occurred in March, when 87 Salvadorans were murdered in the span of two days, making it the deadliest day in the past 20 years. An emergency session convened by the legislative assembly, now controlled by Bukele, enacted a 30-day state of exception, suspending public gatherings and the right to legal defense, giving authorities the ability to carry out warrantless communications intercepts and detain people without cause for up to 15 days.

Weeks before the surprise resurgence of violence, a joint investigation by Alharaca and La Prensa Gráfica revealed that Bukele’s so-called Territorial Control Plan (PCT for its initials in Spanish) has at least two versions. One for public consumption, written by foreign consultants, which promises justice, dignity and better opportunities for the people, and a second confidential version that rehashes plans to implement repressive policies and measures attempted by previous Salvadoran governments. In addition, the investigative series alleges that the government has not only failed to carry out the policies delineated in the public version, but that it has actively sabotaged it.

In the fall of 2019, months after Bukele had already been promoting the PCT on the radio and social media, his administration hired Santiago Rosas – a Spanish-born economist with links to Venezuelan opposition leader Leopoldo Lopez – and his Venezuelan colleague, Ernesto Herrera, to draft the public version of the PCT, which was only released in January of 2021. Just prior to the release, Rosas established a subsidiary of Lab-Co in El Salvador, a Mexico-based public policy think tank co-founded by Rosas and a French national, and financed by USAID.

Volcanic Deceit 

Garnering most of the attention outside of El Salvador is, of course, Bukele’s embrace of Bitcoin as an official currency, which is also wrapped around the national security narrative and promoted by the cryptocurrency’s power couple, Max Keiser and Stacy Herbert, who tweets copiously about the ostensible reduction in gang violence and snapshots of her fine-dining experiences in El Salvador like a latter-day Marie Antoinette.

Driven by an army of US ex-pats and other foreign crypto speculators, the roll out of Bitcoin in the Central American country was already an unmitigated disaster before the recent crash of the cryptocurrency market. The much heralded Chivo wallet, that was supposed to be the backbone of mass adoption has not only been a nightmare on purely technical terms, but has also devolved into a legal battle between its developers. Plagued by fraud and disappearing funds, the $30 incentive to download the app was seen by most Salvadorans as a way to make a quick buck, with only 20% actually using the app after downloading it.

Sensational claims about Volcano bonds and Bitcoin City helped to boost the rise of the speculative asset, which topped out at around $67,000 in the first months of 2021, and has now lost more than 50% of that mark as early adopters of the “self-assembled” Ponzi scheme cashed out in the last week. In line with the smoke and mirrors of the PCT, Salvadorans who think they’re using Bitcoin to pay for goods and services are doing no such thing. Instead, as computer scientist Nicholas Weaver explained to Current Affairs, they are accessing a “centralized database in an app”, which simply updates your balance.

Adding insult to injury, FTX founder Sam Bankman-Fried – whose Alameda Research trading firm has been implicated in the manipulation of Bitcoin prices, opined that Bitcoin “has no future as a payments network”. Bankman-Fried, who recently sat on a panel alongside Bill Clinton and Tony Blair at a cryptocurrency conference in the Bahamas, is an influential voice in the crypto community writ-large, and any such declaration is bound to have repercussions in the space.

Bukele, who conspicuously removed the “laser eyes” from his Twitter profile picture after the value of his country’s Bitcoin holdings plummeted, nonetheless maintains the cult-like freedom money narrative espoused by the most ardent proponents of the cryptocurrency. Opposition legislator Claudia Ortiz is under no illusions and recognizes that this narrative is simply a cover for the expansion of Bukele’s authoritarian powers. However, it is not a phenomenon limited to the tiny Central American country, nor is it just about totalitarianism creep. 

Bankman-Fried, a transhumanist, has been very active in developing the political backbone for the mass adoption of blockchain-based cybernetic systems from Ukraine to Oregon. He has set a record in the Democratic primary of that state as the biggest backer of Carrick Flynn, who is running on a platform heavy on introducing cryptocurrency regulation. 

The implementation of digital currency systems is occurring at practically every level. El Salvador appears to be a pop-up shop for one of the most popular versions, which nevertheless seems to be on the verge of being phased out as it outlives its purpose of onboarding the Internet generation. The chaos being sown under the surface by Bukele and his secret phase seven of the PCT may provide the excuse for the final transition.