The new Salvadoran president promised to reassess relations with China.
The secretary general of President-elect Nayib Bukele’s New Ideas party told his countrymen that their new leader will reconsider his government’s relations with China, which it surprisingly recognized last August after breaking relations with long-term ally Taiwan in exchange for what was later revealed to have been $150 million of aid from Beijing. Reuters quoted the official as saying that “With the issue of China, China-Taiwan relations, we have to study them and put them in the balance – what is best for the nation, not what is best for a political party, as the (outgoing administration) did. We were not consulted, nor did they give us the reasons (for establishing) relations with China. Now we have to investigate in detail.”
Observers predicted that something of the sort might happen considering that the political outsider vowed to radically change his country’s traditional two-party system in every way possible, which would naturally include reevaluating the previous government’s foreign policy and possibly changing some of it on the pretext that some decisions might have been conducted for corrupt reasons like Bukele’s close advisor hinted. Everything should be put into its proper domestic and international context, however, because things aren’t as clear-cut as they might appear.
While outsiders might somewhat rightly suspect that Bukele is doing the US’ bidding after Washington fearmongered about the game-changing consequences of El Salvador’s so-called “defection” last year, the country’s new leader was nevertheless democratically elected in a landslide after winning the first round of voting earlier this month, shattering the Central American state’s two-party system with his populist promises to go after corruption and restore his nation’s dignity. That said, Salvadorans are largely concerned with their many domestic problems that have pushed over a quarter of the population into mostly illegally migrating to the US, suggesting that they’ll go along with their new leader’s foreign policy as long as it brings economic dividends to the country.
While anything can happen in the less than four months before Bukele takes office on the first of June, it’s very possible that he might be approached by the US with an “offer that he can’t refuse” to reverse the current government’s decision in exchange for hefty amounts of economic aid that could be touted as proof of him delivering on his promise to improve his people’s livelihoods. Of course, he’ll probably only do this if the sum that’s offered is more than China’s promised $150 million, though the US could match or even go below that amount by threatening to massively deport the many illegal Salvadorans on its territory if he refuses on the pretext that they’re linked to the infamous MS-13 drug gang.
That possibly being the case, China might realistically lose its Central American foothold later this year.
The post presented is the partial transcript of the CONTEXT COUNTDOWN radio program on Sputnik News, aired on Friday Feb 15, 2019:
DISCLAIMER: The author writes for this publication in a private capacity which is unrepresentative of anyone or any organization except for his own personal views. Nothing written by the author should ever be conflated with the editorial views or official positions of any other media outlet or institution.
Reposts are welcomed with the reference to ORIENTAL REVIEW.
Nayib Bukele’s New Ideas party has the LATEST NEW IDEA – HE HAS ADOPTED BITCOIN IN ARTICLE 7 OF THE CONSTITUTION
Salvador has a debt burden and a bad economy”.What should the govtt do ? Print more currency and move into hyper inflation,and civil war ?
Or adopt the US Dollar – which is like outsouring the treasury and monetary policy of Salvador,to the US Fed
The people with money need a currency to part their assets,from the point of safety and risk.If they pile into USD,the local currency will crash.If they exit Salvador,business and employment will collapse.
SOLUTION = ALT CURRENCY,which will keep the rich in Salvador,and give options to locals,to use USD or local exhange,or Alt-currency.
WHAT IS THE OPTION ?
CHINESE YUAN ?
EURO ?
OR BTC ?
EVEN THE PBOC CANNOT CONTROL FAKE YUAN/REMIMBI IN CHINA.
Only way is BTC.
Y not use the BTC to aid Salvadoreans,in inward and outward remittances ?
It can also be used to settle import and export payments ,especially since bulk of the imports,are from the USA,and BTC is freely used in USA.
Transfers of funds from 1 BTC to the other,is in less than 1 second,and this is a legit transfer.Even if the transfer is to a money changer in Salvador,he can sell the BTC,and pay the recipient in cash with a cash receipt.
In 1 second,the price will not vary much,and the money changer has to have standing nstructions,to sell all BTC inward remittances – in 3 second tranches. BTC or some other currency,can have an option to block the price for 3 seconds, and that quantity of BTC,will NOT BE traded for 3 seconds,and disclosed on the Crypto Exhange.Or in the alternative,some large BTC trader can offer a Put option for 3 seconds – which will be the cost for the remittance.
The savings in time and cost,will far exceed any disadvantage,and Salvadoreans will get more cash in hand,to spend and save.They could cash out in USD,or any other currency,at premium rates.
Salvadorean Money Changers and ADs,will become OBSOLETE soon. Salvadorean bankers,have to make profits from efficiencies, and NOT by gouging money from locals.
With BTC as the EXCHANGE,the nation should invite PRC and others,to tap into Peak load power plants like Hydel and Geothermal,and invite miners into Salvador,into SEZs with nil Taxes for 10 years,and guaranteed power supply. The Govtt will earn from power tarriffs,power wheeling,tax on power profits and lease charges,on the Miners
Salvador has 23 ACTIVE VOLCANOS AND SITS ON THE RING OF FIRE.THE POWER CANNOT BE USED IN SALVADOR,TO MAKE OR EXPORT ANYTHING.THE ONLY THING THAT CAN BE EXPORTED IS BTC,AND MADE BY FOREIGNERS IN SALVADOR !
IT IS A WIN-WIN !
This can be a new economic model for the nation.
ALSO SALVADOR HAS MANY PORTS WITH GOOD DRAFTS WHICH ARE VIABLE FOR RPP – ON RFO OR HSD – WHICH IS A SHIP WITH A POWER GENERATOR, WHICH WILL DROP ANCHOR AT THE PORT,AND GENERATE PEAK LOAD POWER !dindooohindoo
WITH LOW COST POWER SERVER FARMS CAN ALSO BE HOSTED IN SALVADOR!
If Salvadoreans have been stashing USD as a risk hedge – it is not good for the state – as this stash is in cash – and pressures the local exchange and has no productive use
With BTC and the circulation of USD,if the USD cash starts circulating,it is good for the nation and the banks,and some of the USD will find its way into the banks,and be used for economic activity.
People will take out their hidden USD,buy BTC and SPEND THE MONEY or SPEND THE APPRECIATION IN THE BTC OR THE PROFIT – and that is a gain for the nation.If the banks sell the BTC,then the PHYSICAL DOLLARS,WILL MOVE INTO THE BANK – AND THE NATION CAN USE THE USD,NOT TAKE IMF LOANS,AND THE PEOPLE WILL HAVE DIGITAL DOLLARS WHICH CANNOT BE STOLEN,BURNT,TORN,COUNTERFEITED OR DAMAGED.
Boosting demand for a DIGITAL DOLLAR (BTC),is better than the PHYSICAL USD.
Money laundering cannot happen with the BTC,as the person WHO SELLS THE BTC TO THE STATE,AND RECEIVES USD IN HIS BANK – will have a name and identity,and will need to explain the proceeds,as the date of his acquisition of the BTC,is known.
Even if such a fool exists,he would be trapped by the state,with the BTC.
THE ADVANTAGE TO THE PEOPLE, IS THAT ALL BTC TRADES FOR BUYING BEER OR FOOD ETC.IS OUT OF THE TAX NET, FOR THE SHOPKEEPER , AS THE STATE WILL NEVER KNOW THE SALES MADE IN BTC – UNLESS THE SHOPKEEPER DISCLOSES IT TO THE STATE.
SO THE SHOPKEEPER MAY OFFER LOWER PRICES AND ALSO IF BTC FALLS,HE MAY NOT HIKE HIS RATES AS HE BOUGHT THE GOODS WHEN BTC WAS HIGHER – AND HE EXPECTS IT TO GO STILL HIGHER ! dindooo hindoo
The Govtt of Salvador,should commit that every Salavadorean,can surrender his BTC to the bank,and get USD,at any time. dindooo hindoo