On 9 August El Salvador’s President Nayib Bukele announced that the first phase of economic reopening would be extended until 23 August.
Analysis:
Bukele’s announcement follows a ruling two days earlier by the constitutional chamber of the supreme court (SC), which declared unconstitutional an executive decree (32) aimed at regulating the reopening of the economy, shut down as part of efforts to stop the spread of coronavirus (Covid-19). The SC, which has previously ruled against other executive decrees relating to the government’s pandemic response, argued the decree should have been approved by the legislature as it limits citizens’ rights such as freedom of movement and economic freedoms. The latest setback to efforts to reopen the economy, which the United Nations Economic Commission for Latin America and the Caribbean (Eclac) forecasts will shrink by 8.6% in 2020, the largest predicted contraction in Central America, reflects the ongoing stand-off between the opposition-controlled legislature and the executive over government transparency.
- Issued on 29 July, the executive decree had set out a new calendar for the country’s gradual economic reopening. The first phase had already begun on 16 June, with sectors considered key to the economy such as textiles, manufacturing, and construction able to return to work. The second phase was due to begin on 20 August, and involved reopening public transport among other sectors. The third, fourth, and fifth phases were due to begin on 4 September, 19 September, and 4 October.
- The SC ruling also urges the executive and the legislature, which is controlled by the opposition Frente Farabundo Martí para la Liberación Nacional (FMLN) and Alianza Republicana Nacionalista (Arena), to reach an agreement regarding legal norms which would permit the government to better address the health emergency.
Looking Ahead: With uncertainty as to whether the executive and legislature will reach an agreement before 23 August, private sector representatives such as Silvia Cuéllar, the executive director of export lobby Corporación de Exportadores de El Salvador (Coexport), continue to raise concerns about the lack of a clear framework for economic reactivation and its impact on sectors such as trade. The latest central bank (BCR) figures show El Salvador’s exports in the first half of 2020 totalled US$2.2bn, down 27.6% on the same period in 2019.