LA PAZ, Bolivia (AP) — Troubled by falling dollar revenues and reserves, the Bolivian government is seeking to take advantage of the gold rush in the Amazon region to balance public finances.
As of 2021, gold has taken the top spot in Bolivian exports due to declining revenues from the sale of gas and traditional mining. But the state benefits little from this boom which is destroying the tropical forest because of deforestation and the use of mercury, according to experts. Of the $2.3 billion earned in 2021 from gold exports, the state collected only $59 million in taxes. In 2022, the value of exports reached 2,732 million, according to the Central Bank.
For this reason, the Legislative Assembly has begun debating a law which authorizes the Central Bank to buy gold at international prices and the government is seeking, with another regulation, to double the tax on the sale of gold. at 4.8%.
If the law had been approved a year ago, international reserves would have increased by $1.2 billion, said Central Bank President Edwin Rojas. “In the whole matter of gold, this buying law is a small part of building reserves,” he told The Associated Press on Thursday.
“This is not a measure taken out of the blue because we are desperate, it is a preventive measure”, justified the Minister of Economy, Marcelo Montenegro, and qualified the initial rejection of the miners as “excessive distrust “.
The miners objected to the rule. “We have agreed on a single tax on gold mining and this does not take into account this law which has not been agreed with us. The government intends to seek environmental certification and does not detail a mechanism for the purchase of gold,” mining cooperatives president Ramiro Balmaceda said.
The lack of jobs and the economic crisis have pushed thousands of people to join the gold mining in precarious and small businesses called cooperatives which are managed by the miners themselves. 94% of gold is produced by cooperatives, which has a serious environmental impact even in natural reserves in the Amazon, according to researcher Alfredo Zaconeta of the Center for Labor and Agricultural Studies (CEDLA).
The United Nations Special Rapporteur on toxic substances has drawn attention to the Bolivian government for its lack of control over the use of mercury and the smuggling of this product to neighboring countries where gold mining is also booming.
Under pressure from environmental groups, authorities announced an action plan late last year to control mercury use seven years after the ratification of the Minimata Convention, an international environmental treaty on mercury emissions. .
Despite one of the lowest inflation rates on the continent -3.12% in 2022 compared to the previous year-, Bolivia’s international reserves have been drastically reduced, mainly due to the strong price subsidy fuel. The state subsidizes half the price of petrol and diesel, which are largely imported.
“If you don’t tackle this black hole of subsidies and the public deficit which is at 7.5% of GDP (Gross Domestic Product), buying gold and other measures are palliatives”, economics professor Gonzalo told AP Chavez.