Guatemala Will Not Follow Bukele’s Model | Milei’s First Great Triumph

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We welcome you to the Greater Caribbean Monitor (GCaM). In this issue, you will find:

•Guatemala Will Not Follow Bukele’s Model

•Omnibus Bill: Milei’s First Great Triumph

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•Guatemala Will Not Follow Bukele’s Model
493 words | 2 minutes reading time

The world views El Salvador’s situation as a miracle. President Nayib Bukele is inclined to agree, attributing his success to divine providence. In Guatemala, however, President Bernardo Arévalo’s government is markedly skeptical of the “Bukele model,” which offends its ideological sensibilities. 

Between the Lines. Gangs like the Mara Salvatrucha (MS-13) and Mara 18 are transnational organizations with a regionwide presence. The Guatemalan government argues their activities in El Salvador are not comparable to those in Guatemala, where drug trafficking is much more deeply embedded and criminal groups, frequently tied to Mexican and South American groups, are more sophisticated.

• Cartels have historically been relatively inactive in El Salvador. Its small size and geography makes it an avoidable pitstop along the drug route from South America to the United States. 

• Guatemala, on the other hand, is large and unavoidable. Save for tiny Belize, it is the only option for drugs to make their way to Mexico—and thence to the United States—by land.  

• Salvadoran-style gang activity is undoubtedly widespread in Guatemala’s cities, especially in the capital, but the government has continuously shown that gangs are not its priority. It prefers to focus on rooting out drug traffickers via “territorial control” in the country’s interior. 

Yes, But. El Salvador has gone from being the country with the highest homicide rate in the world in 2015 (106 homicides per 100,000 inhabitants) to having Latin America’s lowest murder rate in 2023 (2.4, a decimal point higher than Canada). Guatemala has experienced a modest reduction, with the 2023 homicide rate standing at 16.7 per 100,000 inhabitants.

• El Salvador has relied on mass arrests. The Legislative Assembly regularly extends Bukele’s state of exception, which has now entered its second year. This has undoubtedly been effective, although it has earned Bukele ample international criticism.

• More than 70,000 suspected gang members have been arrested in the past two years, with the prison population reaching almost 110,000, that is, more than 2.5% of the country’s population.

• Bukele also built Latin America’s largest prison, capable of housing up to 40,000 inmates. For Salvadoran authorities, “It’s impossible to escape. These psychopaths will spend their entire lives behind these bars.”

On the Radar. The Guatemalan government has dismissed the possibility of applying the “Bukele method.” According to the Interior Minister Francisco Jiménez, the current government will prioritize the dismantling of gang activity within prisons. High-security prisons like “El Infiernito” (Little Hell) have grown into operational bases for the gangs, mimicking similar developments in pre-Bukele El Salvador.

• In El Salvador, the governments of Francisco Flores (1999-2004) and Elías Antonio Saca (2004-2009) implemented iron-first policies, resulting in mass arrests and a spike in the prison population. 

• Overcrowding in prisons allowed gangs to restructure and organize from within, which served to strengthen them. 

The Balance. Guatemala lacks Bukele’s willingness to militarize and increase the size of the security forces. Bukele has doubled the size of the Salvadoran Army, whilst Arévalo has declared that his security strategy must be respectful of human rights. The “Bukele model” is simply incompatible with his sensibilities.

• Guatemala’s strategy may enjoy long-term success, but the clock is ticking for its government, which will find it difficult to achieve anything of note in its remaining three-and-a-half years in power without considerably strengthening the security forces.

• Bukele, for his part, has managed to halt gang operations. The danger posed by gangs has been eradicated, and his greatest challenge is now El Salvador’s mediocre economy.

•Omnibus Bill: Milei’s First Great Triumph
505 words | 2 minutes reading time

After months of back-and-forth, President Javier Milei achieved the first prong of his structural reform program. 

In the news. Following an intense day of debate—and anti-government protests—the Argentine Senate approved Milei’s omnibus law, formally and unwieldily referred to as the Law for the Bases and Starting Points for Argentines’ Freedom. The vote ended with 36 votes in favor and 36 against, with Vice President Victoria Villarruel casting the tiebreaking vote.

• Prior to the debate, Milei postponed his trip to the G7 Summit in Italy, since Villarruel would have taken over as acting president in his absence, preventing her from participating in the debate and breaking the tie in her ex officio role of President of the Senate.

• The law has 238 articles, earning it the popular nickname Ley Bases XS, since its initial draft contained 644 articles. 

• Milei had to give in on almost two-thirds of his original proposal, which was too broad and exacting to secure the much-divided Senate’s approval.

Why It Matters. The omnibus law is vital to Milei’s political program. Notably, it declares a one-year-long public emergency, granting Milei considerable power over economic policy; permits the privatization of state-owned enterprises; establishes the Incentive Regime for Large Investments (RIGI), which aims to attract foreign investment; and provides for labor reforms.

• Together with the Urgency and Necessity Decree, known in Argentine legalese as “DNU 70/2023,” and the government’s far-reaching budget cuts, the omnibus law serves as the third pillar of Milei’s grand plans for “state reform.”

• As previously mentioned, Milei’s reforms have been diluted by concessions to pivotal parties like Republican Proposal (PRO, center-right) and the Radical Civic Union (UCR, catch-all). 

• For example, the president was forced to agree not to privatize certain state-owned firms: Aerolíneas Argentinas, the country’s flag carrier; the Official Post Service; and the country’s public broadcaster. He also agreed to raise pensions and not dissolve independent agencies like the Atomic Energy Commission.

Yes, But. The law bars unions from charging non-affiliated workers dues, allows wage deductions for hours not worked by striking employees, extends the probationary employment period, and creates an optional severance fund. With RIGI, the law incentivises investments over $200 million in strategic sectors, introducing reforms to the tax, customs, and exchange codes. 

• Opposition figures have criticized RIGI for requiring investors to use Argentine suppliers, which they have criticized as needlessly expensive and protectionist.

To Close. The streamlining and approval of the omnibus law demonstrates Milei’s flexibility. Far from being a rigid ideologue, he has shown a remarkable knack for negotiation. Thus far, this has not cost him popular support, even when it has meant sacrificing, or at least delaying, campaign promises.

• Milei’s case parallels that of Guatemalan President Bernardo Arévalo, albeit with diametrically opposed outcomes. Milei and Arévalo are unlikely winners lacking both administrative experience and a congressional majority.

• Nonetheless, where Milei has succeeded, Arévalo’s legislative agenda has floundered. He has not found a Guatemalan answer to the politically savvy Guillermo Francos, Milei’s cabinet chief and lead negotiator.

• Six months into his administration, amid budget cuts, expansive decrees, and drastic reforms, Milei has surprised the world with his political dexterity.