Luis Arce, President of Bolivia

Like a divine punishment, the terrible management of the economy under the government of Evo Morales is now exploding in a uncontrollable crisis when he is president who was economy minister at the time.

Without realizing that he is criticizing himself, because he kept Luis Arce as minister for thirteen years, The coca farmer now criticizes him harshly, calls him a bad economist and advises him to take suicidal measures.

He handed him a rope to hang himself by offering to remove subsidies on fuel prices, which he himself tried to do in his government in 2010, but a gigantic challenge made him back down.

And it reached irony: On the radio Because of Coke He said President Arce “is known as the economic ideologue”, but “now he cannot solve the problems of the economy”.

In fact, Arce came to promote, when he was Minister of Economy, an initiative to receive the Nobel Prize in Economics, precisely because export revenues had increased fivefold thanks, exclusively, to the global materials boom. raw. materials.

Morales’ criticisms have ideological implications: He says that now 80% of exports are in the hands of private companies and only the rest are state companies, the opposite of what would have happened under his government.

Evo Morales marches with MAS supporters, workers and cocaleros (Reuters)
Evo Morales marches with MAS supporters, workers and cocaleros (Reuters)

With these data, he says that Luis Arce “has returned to the neoliberal economic model”, which the president denies with the facts, maintaining the ban on the export of certain agricultural products, even when he desperately needs to encourage the entry of dollars into the country. .

Contrary to what Morales and businessmen say, Arce sends optimistic messageswhich include his prediction that the US dollar, which is now in short supply in Bolivia and causing problems for foreign trade and internal operations, is a currency that will soon lose its importance in the world, as happened in the era with the pound sterling.

makes sure that the dollarnow used for 88% of global economic operations, will be replaced by the lowered yuanwhich currently serves barely 7% of businesses, according to figures manipulated by Tyler Cowen, columnist for Bloomberg.

He says he has managed to grow exports over the past two years, but in reality the only thing that has increased among overseas shipments, other than drugs, is gold, a trade led by Chinese businessmen.

He proclaims himself a socialist, pays homage to Carlos Marx, Vladimir Putin, Fidel Castro and Hugo Chávez, and assures that the Bolivian economy will not need dollars when its import substitution policy.

Economist Gonzalo Chávez reminds President Arce in a press gallery that these ECLAC recipes have not worked for many reasons, starting with the fact that it is very difficult to produce locally when there are many cheaper to import, especially if the exchange rate favors imports.

Remember that Arce, when he was Minister of Economy, coined the expression that the Bolivian economy was “shielded” against external problems. And he concludes that, apparently, “the president is shielded from the reality of economic facts”.

In addition, the President claims that imports of gasoline and diesel fuel will be unnecessary when the country produces biodieselsomething that experts do not recommend because in its preparation it consumes more energy than it can replace.

Private businessmen must have told him that if he wanted more dollars, he should have started by lifting the bans on agricultural exports, not increasing them, as his government has done.

During, the IMF says that GDP growth in 2023 will be only 1.8% and not 4.8% as the government expectsAlthough Arce responds by saying that he is very sorry to disappoint the international organizations again, but the growth of the economy will be higher this year than they expected.

Additionally, JP Morgan reports that Bolivia’s country risk has risen this year from 564 to over 1,000, while Venezuela is at 332,000, Argentina at 2,383 and Ecuador at 1,933.

In the midst of this crisis, Arce knows that he must ask for help from the IMF, in addition to reiterating for the fifth time his request for cancellation of the foreign debt. He knows that the international organization will repeat that he must reduce public spending, while the salary budget of the public administration is double that of ten years ago because in the government of the MAS, the masses salary of state employees rose from 200,000 to 530,000. , a coincidence when Arce was Minister of the Economy.

A perfect storm is breaking out in the Bolivian economy, with a lack of dollars, the creation of a parallel market that the government wants to stop with the police, fuel shortages, a drop in natural gas exports, a real estate bubble created by government government and the dominance of the drug economy.

Continue reading:

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