This is the third chapter in a series of articles on El Salvador by Honduran writer Gustavo Peña Flores.

Today, El Salvador’s passage from chaos to order relies on a modernization process that weaves a social and productive straw tapestry among Salvadorans as never before—such a tapestry is called “petate” in Central America. This is a replacement for the fabric torn in the civil war of the 1980s. The “crazy town” of El Zonte offers a viewing window into its current existence. 

There, the world-famous economic jumpstart attempts of Bitcoin and Surfcity by the Bukele government converge with common Salvadoran’s lives—the available human capital.

A mural in El Zonte.

“Chiltiupán, the town hall where El Zonte was—it changed in 2023—was the second or third poorest county nationwide. We hire people who are not from the area or do not come from the industry, when there are a lot of needs here. One of the limitations at this point is something as basic as English,” laments Rodrigo Larios, administrative manager of the hotel and surf academy Puro Surf, which trains the Salvadoran champion, Bryan Pérez.

View of El Zonte from the Puro Surf Hotel.

 The low employability of the ill-prepared population spoils the picture-perfect aspirations of this global and digital era. “These guys dream of owning a $1,500 iPhone like the clients and forget that they live in a tin house,” scolds ‘Niño Rata’, renowned souvenir seller at El Zonte, known for his raw honesty, to the depressed brother of a successful Puro Surf scholarship holder.

View of the Puro Surf Hotel from El Zonte.

“Don’t get depressed. You’d better listen to heavy rock,” Marciano’s mentor, Arcángel, settles the spat between the two. This picture is unflattering, compared to the big media hits the rest of the world reads about. There is great need for an economic plan that matches the current humble level of human development of the Salvadoran people, if only as a starting point, to reach their full potential as a society and territory.

It is not easy. The population’s average age today is twenty-seven years old, and the average level of schooling is a mere seven grades. El Salvador’s transformation becomes caged, then, when change does not depend on immediate political will. It loses traction when it builds on the absence of results—incidentally, results can only surface after decades of implementing a clear-cut and successful development plan.

 In Costa Rica, a regional leader in tourism, the sector contributed to 8.2% of GDP in 2023—in El Salvador, 11%. In the Salvadoran case, however, it was largely nourished by its ‘distant siblings’—Salvadorans living in the United States who return to visit.

But in Costa Rica it was, above all, its calling card to the world, a representation of the consistent values with which the country establishes itself as a tourist and investment destination: environmental sustainability, social democracy and a good educational system for an upper-middle-income country.

Although tourism as a sector is smaller in percentage in Costa Rica, its GDP in 2023 was $86.5 million, while El Salvador’s was $34.02 million, according to their respective Central Banks. While being smaller in percentage, its tourism, thus, more than doubled El Salvador’s in net worth, while being a flagship of its diversified economy too. Moreover, Costa Rica has one million fewer citizens.

“The type of society you have is a consequence of the development plan you choose. Agribusiness employs a lot of poor people, but it doesn’t need a lot of educated employees. Industry does need technically trained people. But without production, a country becomes distorted,” says Salvadoran historian Adolfo Bonilla, a specialist in the evolution of Central American political projects—failed or not—for their countries’ modernization.

“Since the 1960s, Costa Rica has committed to nature as a magnet for its tourism sector. They developed their economy around this value. But they did not eliminate their agro-industry, such as banana plantations. They educated their people and opened up sectors at the same time. They evolved. Today they have clean energy, well-paid industry, a large middle class and lots of forests,” says the historian. 

For Ian Walker, a development economist who has worked in the region since 1988, “Costa Rica has achieved a very positive branding as a social democratic and environmentalist country in a continent of brutal and corrupt dictatorships (¡Pura Vida!). As always, there is an element of deceit in this, but it is true enough to be plausible and sustainable.”

“It was key for them that their bourgeoisie invested their accumulated capital in this national development plan. They can always derail, but today they reap the exponential success of many linked reforms sustained over time, where their investment in education stands out,” Bonilla says.  

 Central America, four decades after Henry Kissinger

Something different happened in El Salvador, a country which opted for revolution rather than reform. Its agro-industrialization process, built on a “latifundista” basis—large landed estates—did not survive the collapse of the Central American common market in the 1970s.

Salvadoran inequality was a ticking bomb, as well as a geopolitical risk. According to the 1984 US Congressional Report on Central America, led by Henry Kissinger, “in 1980, 66% of national income went to the richest 20%, and 2% to the poorest 20%.”

Mural of Monseñor Oscar Arnulfo Romero, a national hero from the Civil War, in the town of Chirilagua.

“The nexus between economic decline and insecurity is clearest in El Salvador, perhaps the main beneficiary of the Central American common market. Today it faces violence and destruction that threaten economic collapse,” Kissinger argued in 1984.

The report notes that while that common market grew from $33 million in 1960 to $1 billion in 1980, the Salvadoran economy declined 75% between 1978 and 1984. Thus, when the war broke out, the baby was thrown out with the bathwater. Many, rich and poor alike, came to the conclusion that leaving the country was the best option. It was illusory to invest capital, life or long-term effort in that land.

The economy collapsed. An era of remittances would take over. In 2025, the dust from yesteryear explains the mud of the present. As in surfing, adjustments are made when you see the wave coming, not when it’s on top of you.

Oysters, tides and remittances

Before reaching El Zonte from La Libertad, at the bend before the bridge over the small river that ebbs out in the cove of El Palmarcito, the famous “Chepe Aleta” sells his oysters. He has long tables and chairs set out for his customers on the gentle riverbed. 

Customers enjoying themselves at the tables of the Chepe Aleta restaurant.

As a youngster, Chepe Aleta used to ‘oyster’ the coastline from El Palmarcito to the wrecks of Acajutla. Today he buys the largest hand-picked conches in El Salvador. “I’ve liked the sea for diving,” says the most prosperous and famous salvadoran oysterman. “I only went to the army from 13 to 21.”

Before surfing, the oystercatcher was the most traditional sea explorer in El Salvador.

Early on most weekday mornings, truckloads of people, standing on their feet, come down in front of Chepe Aleta. They are the villagers who roll over the dirt track from inland hamlets. Anthropologist Norbert Ross calls them “the expendable” for the failed post-war economic model. They are the demographic surplus that has always migrated.

Residents of the El Palmar basin ride down to work in the morning.

They are also the relatives and prey of the maras—gangs. Formerly, civil war soldiers and combatants. “The Guanacos sons of bitches,” in the words of Poema de amor, by the widely-recognized Salvadoran poet, Roque Dalton. “My brothers.” Today they work in Surf City, mostly relegated to unskilled tasks. Whether peace will last depends on whether their life projects find a realistic way.

 During the violence era, El Salvador consolidated itself as a land from which people of working age leave, and to which most of the day-to-day food comes from abroad. “El Salvador imports almost 65 per cent of its food, fruits, vegetables and dairy products from its neighbor countries,” states a July 2024 editorial in La Prensa Gráfica, citing official figures.

President Nayib Bukele’s promised economic reform faces a major problem in the form of Dutch disease—the pernicious effects of a high percentage of foreign income entering one’s economy. In 2024, El Salvador was the second largest recipient of remittances in Latin America in relation to its GDP—23 per cent—only behind Honduras—25 per cent—according to the Economic Commission of the Community of Latin American States.

 A black hole’s gravitational pull

Remittances for northern Central America are like a hard vice. If you depend on them, abstinence leads to shock. But they artificially raise the price of goods and labor. Reducing dependency involves an arduous process of transformation.

“They are a form of palliative income for the population left behind. It is one thing to point out that remittances have a downside—it is another to suggest that on the whole we would be better off without them. We would not [in northern Central America]. The loss of any major source of income, including remittances, would depress the economy,” Walker explains. 

El Salvador is deeply strapped. It has no currency of its own and dollarization prevents currency depreciation. Heavy dependence on external factors, in streets half-emptied by emigration, alters the economic and living logic.

“The laziest guy has a thousand-dollar phone, and I have a 180-dollar one. Most of them have a house and a big Tacoma, the tires are that high. The people who work in the United States send them the money, and these sluggards don’t want to do anything,” this oysterman remarks. “We are lost with remittances.”

It is a crossroads. Even the increase in visits from “distant siblings” and their interest in investing adds to price distortion. “Now that there is no violence, who doesn’t want to set up a business? They all come from the United States to set one up. You can’t buy land anymore. Everything is so expensive,” says this entrepreneur who crawled his way up from the lowest tides.

What he describes, without technical words to do so, is the brutal gravitational force exerted by the geopolitical and economic superpower of the United States on the satellite nations that orbit around it, such as El Salvador, Honduras and Guatemala. It is not intentional. It just is, much like the deaf force of a black hole. Not even Mexico, Colombia or Canada can escape it. 

Captured oysters for sale.

Salex

Whether an inhospitable asteroid becomes a world of its own depends on making sense internally. For El Salvador, remittances are not new. Already, in 1991, they were equivalent to 16% of GDP, according to its Central Bank. Since then, a lot of money has flowed in without transforming the country’s socio-economic structure into a more developed and stable one.

In 2024, according to the Central Bank, of the more than 8 trillion dollars, equivalent to 23% of GDP, 98.6% went to consumption, and only 1.7% ($97.5 million) to investment.  This makes the country hostage to the mood and policy changes of the government in office in Washington DC.

An example of this is the current proposal to impose a 5% tax on outgoing remittances—a reminder of the lack of economic sovereignty that comes with feeding the economy through the emigration of one’s own working-age population, without simultaneously building an economic structure for the future. 

For reference, Norway’s hydrocarbon revenues, from which the Norwegian Investment Fund draws, accounted for 21% of its GDP in 2024, according to Norsk Petroleum, 2% less than remittances in El Salvador. In their own way, the poor who emigrated, and those who take local jobs and stay, can be the “petrol” with which to fuel development.

The Salvadoran government has taken a lead over other regional governments by opening a specific investment office for Salvadorans abroad—Salex. It is intended to serve as a broker between migrants interested in investing in the country and a portfolio of private and public-private projects whose development the office considers to be in the national interest.

“Today, with Nayib Bukele’s New Ideas [political party] the ruling class has changed. They are also ‘petit bourgeoisie,’ just like the guerrillas, but entrepreneurial. They are businessmen. Traders. They do things differently,” said “Dago” Gutiérrez—Commander Logan—who signed the peace agreement for the guerrillas in 1992, to the LA Times in 2023 about this new Salvadoran political leadership which is so atypical for the region.  

It remains to be seen whether the new government also designs and implements a national development plan, as an overall strategy map, or if their pattern consists of significant but unconnected tactical wins.