[{"bbox": [97, 154, 1133, 212], "category": "Text", "text": "a US$ 1.3 billion extended fund facility (EFF) credit arrangement, which would cover budget shortfalls over the coming years and reducing the possibility of a default, is a viable option but it is still in the negotiation stage"}, {"bbox": [97, 226, 1133, 376], "category": "Text", "text": "El Salvador is currently the country in the Central American region with the highest emerging markets bond index (EMBI), reaching 7.14% in June 2024, and well above the Latin American region mean (4.57%). This significant increase results from the political situation, the adoption of Bitcoin as legal tender, and the risks that El Salvador will not be able to meet its payments. Having such a high EMBI will make it difficult for the Government to access debt and to have sufficient resources to implement their national budget."}, {"bbox": [97, 392, 1133, 633], "category": "Text", "text": "According to a study of the World Bank, “the poverty rate in El Salvador remains one of the highest in Latin America (28.4% in 2021), 1.8 million Salvadorans are living in poverty, without access to basic food requirements. It is noteworthy that the extreme poverty rate in El Salvador increased during Covid-19 and has failed to reduce ever since. Furthermore, 40% of the Salvadoran population (2.5 million people) is in a situation of vulnerability, with many of them earning between US$ 6.85 and US$14 per day. Unexpected economic shocks such as losing one’s job, suffering an accident or illness, or even a climatic or other natural event, could trigger a person’s swift decline into poverty. This reality applies to four out of ten Salvadorans, demonstrating the fragile nature of the progress being made in the struggle against poverty”⁵."}, {"bbox": [97, 648, 1133, 768], "category": "Text", "text": "President Bukele’s authoritarian drift, coupled with the current uncertain macroeconomic perspectives and worsening PFM results and fiscal transparency⁶, have hampered the Delegation’s options to continue engaging with the Government through Budget Support, which was the preferred modality employed during the previous budgetary period. Budget support is no longer an option."}, {"bbox": [97, 783, 1133, 1175], "category": "Text", "text": "In March 2022, an exceptional surge in homicides led Congress to vote for a state of emergency temporarily restricting constitutional guarantees such as defense rights or inviolability of communications, which it is still in force. The President led a virulent tweet campaign against gang members. This situation has also had a negative impact on women. Therefore, women who are family members of incarcerated people now face pressure to support their families financially. Previously, many women who lived with gang members relied on them—or fellow gang members, if their partner was in jail—for income. Not only are thousands of these women newly in charge of single-headed households, but they also need to deliver money to their incarcerated family members. Food, uniforms, and essential hygiene supplies such as soap, toilet paper, and toothpaste are not provided by the prisons, and the expenses—including transportation, sometimes far from their homes—impose a heavy economic cost on poor households⁷. Notwithstanding, President Bukele continues to enjoy strong popular support, largely because of the huge decline in murder rates since August 2019. The homicide rate dropped from 7.8 per 100,000 inhabitants in 2022 to 2.4 in 2023. In February 2024, Bukele was triumphantly re-elected with 84% of the votes, and his party “Nuevas Ideas” obtained 54 seats out of 60 in Congress."}, {"bbox": [97, 1191, 1133, 1310], "category": "Text", "text": "Another significant change occurred at the territorial level. In June 2023, the Special Law for Municipal Restructuring was approved, which reduced the number of municipalities from 262 to 44 and renamed the municipalities as municipal districts. This new national map reconfigured the March 2024 elections by reducing the number of local governments in contention from 262 to 44."}, {"bbox": [97, 1326, 1133, 1476], "category": "Text", "text": "Therefore, it is crucial to renovate, align and promote communication channels of local actors with national institutions. After the elections, El Salvador has entered a new governmental cycle, encompassing the presidency, the legislature, and the municipal level, making citizen engagement and local policy enhancement even more critical. The country's political-institutional structures are undergoing transformation, benefiting from reduced public insecurity, restored state control over territories once dominated by organised crime, and a generally positive"}, {"bbox": [86, 1572, 715, 1598], "category": "Footnote", "text": "⁵ Boosting poverty eradication in El Salvador, World Bank, October 2023"}, {"bbox": [86, 1598, 1000, 1623], "category": "Footnote", "text": "⁶ Open Budget Index, OBI, down from 41 in 2021 to 24 in 2023; the worse performance in Central America"}, {"bbox": [86, 1622, 1006, 1646], "category": "Footnote", "text": "⁷ El Salvador’s ‘State of Exception’ Makes Women Collateral Damage, Carnegie Endowment, October 2023"}, {"bbox": [1038, 1655, 1143, 1679], "category": "Page-footer", "text": "Page 5 of 22"}]