By Alejandra Garcia on September 16, 2025
Nayib Bukele
On July 31, 2025, El Salvador’s ruling-party-dominated Legislative Assembly approved a constitutional reform allowing for indefinite presidential reelection and extending the term of office to six years. The measure, promoted by president Nayib Bukele, marks an authoritarian shift reminiscent of disastrous precedents in Latin American history, such as the dictatorships of Augusto Pinochet in Chile and Alberto Fujimori in Peru.
Unlike other countries that have gone through similar models, El Salvador lacks strategic resources such as oil, minerals, or a privileged geopolitical position. This concentration of power could discourage international investors due to the structural fragility of the Salvadoran economy that has a high dependence on remittances, external debt close to 90% of GDP, low foreign investment, and growth lagging behind other Central American countries.
Although Bukele claims to have made progress on security, this is refuted by human rights organizations, and social indicators show setbacks. According to a report by local newspaper El Faro, poverty is on the rise, health and education systems remain underfunded, and the country has one of the lowest growth rates in the region.
Experts warn that Bukele’s strategy of offering “authoritarian stability” as an attraction to the market faces clear limits. International companies could perceive reputational risks in associating with a regime singled out by human rights organizations for arbitrary detentions, torture, and repression of dissent.
Citi Research, the research arm of the financial firm Citigroup, warned that this perpetuation of power could scare away investors. “This is probably because Bukele’s authoritarian project is not supported by a strong state or a solid economy, but rather by a country with constant public disinvestment, an elite that is not interested in development for all, and a heavy dependence on remittances,” researcher Ricardo Valencia pointed out to El Faro.
El Salvador, a small and impoverished country, faces growing damage to its reputation. And that reputational cost is no longer abstract.
“For many companies, investing in El Salvador may cease to be a purely economic decision and become an ethical dilemma. Doing business with a regime accused of systematic human rights violations, including kidnappings and torture of migrants, carries concrete risks for corporate brand and legitimacy,” Valencia added.
With the constitutional reform now in force, the country’s future seems tied to the personalist course of a president who, despite promising order, keeps El Salvador in a scenario of growing political and economic uncertainty.
Bukele’s new step towards a dictatorship is not discouraged by the Trump Administration that looks at El Salvador as not just as a puppet ally but also as a prison warehouse system for immigrants deported from the US whether they are documented or not.
Source: Resumen Latinoamericano – English