Chapter 160: That Time I Created an Economic Bloc in South America (4)

TL: Skye

Yu-jin's enthusiasm for the Caribbean Belt was positively overflowing.

Convening a cabinet meeting was not enough; he continued researching and debating policies late into the night in search of ways to make it succeed faster.

He and Isabella put their heads together to discuss effective approaches, and he called the senior secretaries at all hours to ask them questions.

What official could leave on time when a president with a current approval rating of 99.999 percent was working late into the night?

Naturally, the senior secretaries worked late every day as well, and since the heads of the government ministries were not going home, the civil servants naturally kept working late too.

Publica Street, where the government ministries were clustered, began to glow as brightly as a furnace.

The problem was that the intensity of the work was also furnace-like and was quite literally melting the civil servants, but the important thing was that the organization was running extremely well.

In any event, as those efforts piled up, the Caribbean Belt project began to gather momentum. Before long, the plan was complete, and Sophia, the senior secretary for foreign affairs, flew to El Salvador.

The first working-level negotiations for the Caribbean Belt had begun.

And so the two teams sat facing each other in the grand conference room of El Salvador's Ministry of Foreign Affairs.

A thick draft agreement on economic cooperation lay on the table.

Castillo, El Salvador's foreign minister, broke into a cold sweat as he looked down at it.

‘It's only been ten days since the president returned...’

The fact that such a thick draft agreement was already complete left him flustered.

‘Just how many people did they work to the bone?’

Even the appearance of Sophia, who held a position equivalent to his own, lent credence to his suspicion.

“I'm Sophia, senior secretary for foreign affairs of San Marcos.”

A career woman in her early forties.

Since this was a diplomatic occasion concerning economic cooperation between the two countries, her attire was neat enough to give no offense. The problem was the air about her.

Dark circles reaching down to her cheeks.

Bloodshot eyes.

And blemishes all over her skin.

Then there were her eyes, somehow brimming with madness.

Had he encountered her on the street, he would undoubtedly have thought she had escaped from a psychiatric hospital.

“...You must have had a difficult journey. I'm Castillo, the foreign minister of El Salvador.”

Of course, given the occasion, Castillo showed none of that and let it pass.

“I didn't expect us to meet so soon.”

“Really? If the calculations hadn't gotten tangled up, I would have arrived three days ago.”

“......”

“Shall we begin by reviewing the agreement?”

“Yes, let's.”

After that brief exchange of greetings,

Castillo skimmed the agreement and made the first move to lay the groundwork.

“Ahem, there are a few matters for which I must first ask your understanding.”

“Of course. Please go ahead.”

“First, I'm sure you know that we greatly welcome economic cooperation between our countries. However, we also have laws and institutions that we must uphold.”

Castillo continued.

“First, regarding Tortilla Farm... our investment law requires foreign companies to establish a local subsidiary.”

“Naturally. That poses no problem whatsoever.”

“As for financial cooperation... I apologize, but our Financial Supervision Act is rather stringent. It would take a considerable amount of time for a San Marcos bank to enter our market. To be frank... depending on the circumstances, it could take years.”

That effectively meant it would not be permitted, but Castillo softened the refusal by blaming the law.

Sophia nodded.

“Naturally, we respect the laws of El Salvador.”

“Thank you. And lastly, regarding food cooperation. Does San Marcos intend to handle distribution directly?”

“Naturally, Tortilla Farm intends to produce and distribute the food itself.”

“Hmm...”

“Is there another issue?”

“Production is no problem, but under our commercial law, foreign companies are restricted from operating independently in food distribution. It is permitted only as a joint venture with a local company. I ask for your understanding on this matter as well.”

This, too, effectively meant no.

“Ah, I see. Understood. Then Tortilla Farm will limit itself to production.”

It was even a regulation they had hastily created with San Marcos in mind, yet Sophia smiled faintly as if she understood.

Castillo exchanged a glance with the minister of economy seated beside him.

They had laid out every restriction, yet the San Marcos delegation had not objected to a single one.

‘This is easier than I expected.’

El Salvador was the one apologizing, yet somehow it felt as though Sophia was the one graciously accommodating them.

“Then regarding the abolition of tariffs–”

When Sophia brought up the key issue, Castillo cut her off.

“We will take our time reviewing the remaining provisions. I believe we will need a thorough review. And coordination.”

“Ah... understood. Since our two countries are only just beginning, nothing good would come of rushing.”

Sophia smiled as she lifted her teacup.

“In return, may I ask a favor?”

“Go ahead.”

“While we coordinate the detailed provisions, may we conduct design surveys of the prospective Farm sites in parallel? The design process takes quite some time. If we wait until the negotiations are complete to begin, construction could be delayed by several months.”

It was a reasonable request.

Since it was exactly what El Salvador wanted, Castillo brightened and nodded.

“Of course. We would be nothing but grateful if you did.”

“Heh heh heh. Thank you.”

Sophia gave him a warm smile that seemed entirely sincere.

***

Bukele was highly satisfied when he heard the outcome of the first round of economic cooperation talks between San Marcos and El Salvador.

“So they're saying they'll build Tortilla Farm right away and even invest exactly the way we want.”

“That is an accurate summary.”

“Heh heh heh. Well done.”

“We will take our time coordinating the detailed provisions.”

“There's no need to rush. Proceed at our pace.”

Bukele was completely at ease.

He was certain that the speed bumps meant to prevent San Marcos from taking control of El Salvador's economy were working.

But Bukele had overlooked one thing.

The fundamental nature of El Salvador.

El Salvador had one of the most open economic systems in Latin America.

A country that had abandoned its own currency and adopted the dollar as legal tender in 2001.

A country that had even adopted Bitcoin as legal tender in 2021.

A country with almost no restrictions on foreign investment, extremely low trade barriers, and guaranteed freedom of capital movement.

El Salvador ranked near the top of Latin America in the Heritage Foundation's Index of Economic Freedom and scored especially highly by global standards in trade freedom.

Simply put, no matter how many regulations Bukele put forward, El Salvador's legal system itself had not been designed to block the inflow of foreign capital.

In other words, Bukele himself had thrown the door wide open.

And San Marcos was walking through that open door.

One week after the negotiations ended,

Foreign Minister Castillo came rushing into Bukele's presidential office in a panic.

“Mr. President, a thirty-member design team from Tortilla Farm has arrived from San Marcos.”

“...What?”

Bukele set down his coffee cup.

“That quickly? We haven't even finalized the detailed provisions yet.”

“Senior Secretary Sophia said they could build first and fill later...”

She had a point. Castillo himself had approved it at the negotiating table.

“They are already surveying three prospective sites, and a geological survey team has reportedly been deployed as well.”

Bukele frowned.

‘They certainly are fast.’

But it was fine.

Tortilla Farm was something El Salvador wanted.

The sooner it was built, the sooner this magical venture would not only reduce the government's expenses but fill its coffers as well.

“Tell them they have permission. And let's also prepare to send people when it's complete.”

“...Yes, sir.”

Then, two weeks later,

Bukele received a troubling report.

“Mr. President, I have something to report.”

“What now?”

“Tortilla Foods has opened a trade office in San Salvador.”

“What? Didn't we tell them that independent operation in food distribution wasn't permitted?”

“We did, but... they say they won't distribute the food directly. They're going to export it. Local companies will handle the distribution.”

“...Export?”

Bukele clenched his teeth.

They had not entered El Salvador's distribution market. They were exporting from San Marcos. The restrictions on distribution did not apply.

“Their prices are half the market rate or less. President Yu-jin Choi reportedly issued special instructions to supply the goods at near-cost prices.”

“......”

“According to our findings, four local distributors have already signed exclusive supply contracts. The day after tomorrow, food products from San Marcos are scheduled to appear in retail stores nationwide.”

Bukele covered his forehead with one hand.

Could he stop it?

El Salvador was a member of CAFTA-DR.

Under the Central America Free Trade Agreement, most tariffs on agricultural imports within the region had been abolished.

Even if San Marcos was not a member of CAFTA-DR, El Salvador's average tariff rate was only around five percent.

Moreover, Bukele himself had pursued policies encouraging foreign investment and trade since taking office.

Strengthening import restrictions would directly contradict his own policy of economic liberalization.

Most importantly, what would happen if he blocked imports of inexpensive food while a substantial portion of the population was going hungry?

Or if he suddenly raised tariffs?

[The president is trying to starve the people.]

The moment that sentiment took hold, his sixty-two percent approval rating would hit rock bottom.

The problem was that food from San Marcos was simply too cheap.

El Salvador already had an abysmal food self-sufficiency rate.

And now it was going to depend on another country for food?

Its domestic agriculture and livestock industries would plainly be devastated.

The only way to compete would be to build large-scale farms and stabilize food prices, but...

The problem was that even Tortilla Farm belonged to San Marcos.

‘They struck precisely at our weakness...!’

Another week later, yet another problem arose.

“Mr. President, Benjamin Smith, the president of Tortilla Bank, has submitted a request for authorization.”

Bukele's expression changed.

Whatever else happened, he could not allow them into the financial sector.

El Salvador's financial industry was currently in ruins.

If they seized control of finance, the entire industrial ecosystem would fall into their hands.

“We blocked banks from entering under the Financial Supervision Act.”

“It isn't a bank.”

“What?”

“They say they intend to launch a mobile payment app and cryptocurrency trading service.”

The minister of economy handed him the documents.

The service was called Tortilla Pay.

It was a mobile payment and remittance app linking cryptocurrency to the dollar.

Bukele read the documents. The more he read, the more conflicted he looked.

It was not subject to the Financial Supervision Act.

But that was not the only problem.

When El Salvador enacted its Bitcoin Law in 2021, it substantially relaxed regulations on cryptocurrency-related businesses.

Bukele himself had declared that he would make El Salvador the cryptocurrency hub of the world and pursued policies welcoming fintech companies.

Tortilla Pay was poised to become a beneficiary of those policies.

A dollar payment system linked to a Bitcoin wallet.

Its fees for remittances from the United States to El Salvador were only a tenth of the existing rates.

Overseas remittances accounted for approximately twenty-four percent of El Salvador's GDP.

More than seven billion dollars flowed in annually, primarily from the United States.

If remittance fees fell to a tenth of their current rates, the people would save more than six hundred million dollars a year.

Could he stop this?

‘No.’

Blocking it would mean repudiating his own Bitcoin policy.

“The app has already been downloaded more than one hundred thousand times.”

The minister of economy added one final remark.

Bukele stared at the ceiling.

Four weeks.

In just four weeks since the negotiations, every speed bump they had hastily erected had been rendered useless.

No, to be precise, they had not been rendered useless. The speed bumps were still standing. San Marcos had not gone over them, either.

It had entered where there were no speed bumps at all.

And through a door Bukele himself had opened, no less.

That was when

his aide entered carrying a tablet.

“Mr. President, you need to see this as well.”

A social media advertisement was displayed on the screen.

[Taeyang Apparel Hiring Workers. Salary: $500 per month.]

[Tortilla Foods Hiring Office Staff. No Experience Required. Salary: $400 per month.]

[Tortilla Pay Customer Service Center Hiring Agents. Spanish Speakers. Salary: $450 per month.]

Every one of them was a job advertisement from a San Marcos company preparing to enter the free trade zone.

Hundreds of comments had been posted beneath them.

— Five hundred dollars a month?! That's twice what I make now!

— Where do I apply?! Send me the link!

— I want to work for a San Marcos company!

Bukele's hand trembled faintly.

‘They're targeting the people directly...!’

More desperately desired than food, finance, or energy: jobs.

San Marcos had showered the people of El Salvador with them.

If he blocked this, his approval rating would plummet.

Bukele set down the tablet and let out a long groan.

“Ahhh...”

Something... something was going terribly wrong.

*****

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