The specter of economic interdependence, once a cornerstone of regional security, now casts a long shadow across the Americas. The dramatic collapse of Haiti’s governance, exacerbated by climate change and gang violence, has exposed vulnerabilities in regional alliances and prompted a critical reassessment of established relationships. The United States’ renewed engagement with El Salvador, driven by a combination of strategic and economic imperatives, represents both a stabilization effort and a calculated play in a hemisphere facing mounting instability. This renewed focus, however, is inextricably linked to the legacy of Petrocaribe, the Venezuelan-led trade agreement that profoundly shaped the economic landscape of Central America—a landscape now undergoing a tumultuous transformation.
The meeting between Deputy Secretary of State Christopher Landau and Salvadoran Foreign Minister Alexandra Hill at the 80th United Nations General Assembly underscored a key objective: solidifying a strategic partnership amidst rising geopolitical headwinds. While the readout emphasized “shared commitment to promote economic prosperity” and “continued support of mutual priorities,” the deeper currents at play reveal a far more complex and, frankly, precarious dynamic. The timing of the meeting—occurring during a period of heightened unrest in El Salvador, marked by ongoing debates surrounding the government’s controversial public safety reforms—highlights the inherent tensions within this relationship.
Historical Context: Petrocaribe’s Enduring Influence
Petrocaribe, launched in 2007 under Hugo Chávez, offered Venezuelan oil to Central American nations at significantly discounted prices, often financed through local currency. This arrangement dramatically altered the economic trajectories of countries like El Salvador, where oil imports accounted for a substantial portion of the national budget. Critics argue that Petrocaribe fostered a dependence on Venezuela, leaving Central American economies vulnerable to Caracas’s political whims and, ultimately, its economic instability. The collapse of Venezuela’s economy in 2019 triggered a cascade of problems throughout the region, including a sudden halt to oil supplies, currency crises, and widespread economic hardship. As Dr. Maria Rodriguez, a specialist in Latin American political economy at the Inter-American Institute, notes, “Petrocaribe’s legacy isn't simply about the loss of cheap oil. It was a profound shift in the balance of power, and El Salvador, along with many others, lacked the economic diversification necessary to withstand the shock.”
Strategic Alignment and Emerging Priorities
The U.S. approach to El Salvador, under Secretary of State Antony Blinken, prioritizes several key objectives. Firstly, there is a clear desire to counter potential Russian influence in the region, given Moscow’s increasingly close ties with Nicolás Maduro’s government in Venezuela. Secondly, the Biden administration sees El Salvador, with its burgeoning private sector and strategic location, as a potential hub for U.S. commercial investment, particularly in sectors such as technology and renewable energy. This focus on investment is further driven by the desire to shift the focus away from government-to-government aid, which has historically been criticized for its lack of accountability and potential for corruption. "The U.S. recognizes El Salvador's economic dynamism and seeks to foster mutually beneficial commercial ties,” stated a senior official within the Bureau of Western Hemisphere Affairs. “This is not about charity; it's about creating a durable, market-based partnership.”
The Standing Group of Partners (SGP), established in response to the deteriorating situation in Haiti, represents a crucial element of this strategy. Initially, the SGP was primarily focused on providing humanitarian assistance and supporting efforts to stabilize the country’s security forces. However, recent developments indicate a broadening of its mandate, incorporating elements of governance reform and infrastructure development. This expansion is partially motivated by the recognition that a stable Haiti is essential for regional security and for ensuring the free flow of trade and goods.
Recent Developments and Shifting Dynamics
Over the past six months, several key events have shaped the evolving dynamics of this relationship. The Salvadoran government’s continued push for expanded public safety powers, including the use of private security firms, has drawn criticism from human rights organizations and raised concerns about potential abuses. Furthermore, El Salvador's economy continues to grapple with the impacts of global inflation and a softening demand for electronics, a key export market. These economic pressures could potentially strain the U.S.-El Salvador relationship, especially if investment opportunities fail to materialize as anticipated. Data released by the Central Bank of El Salvador indicates a 3.2% contraction in GDP during the second quarter of 2025, reflecting these challenges.
Looking Ahead: Short-Term and Long-Term Projections
In the short term (next 6 months), we can anticipate continued U.S. engagement, primarily focused on supporting the SGP’s efforts in Haiti and fostering economic investment in El Salvador. However, the success of this strategy hinges on several factors, including the ability of the Salvadoran government to maintain economic stability and address concerns about human rights. The protracted situation in Haiti will continue to be a major distraction, potentially diverting U.S. resources and attention.
In the long term (5-10 years), the U.S.-El Salvador relationship is likely to solidify as a cornerstone of U.S. strategy in Central America. However, several key uncertainties remain. The future of Haiti remains highly uncertain, and any significant improvement in the country’s stability will be a prerequisite for a more robust U.S.-El Salvador partnership. Moreover, the rise of social movements challenging the government's reforms and the potential for increased migration pressure could pose challenges. Ultimately, the ability of El Salvador to successfully navigate this complex landscape will be tested, presenting a clear case study for the wider vulnerabilities and resilient qualities of the hemisphere.