Alberto Bonadona has written an excellent article regarding interest rates. He concludes that the government should not impose interest rates. Rather, should place bonds at attractive rates for those who save, which would force private banks to raise their savings interest rates as well. And to create lines of credit at reasonable rates, using the private banking system, which in turn will make the latter also to lower their rates. Any government, anywhere uses this type of “incentives” to boost production and to encourage savings. There is no secret to manage imperfect markets like the Bolivian banking system. No need to “accuse” anybody, recipes are there to use, by populist, communist or liberal economies. So, Bolivians should expect and demand this type of actions to current government.

http://www.eldeber.com.bo/2011/2011-05-14/vernotacolumnistas.php?id=110513192408

An incredible fall of 639% in the investment of oil prospecting (exploration) took place in 2010 ($23MM) as compared to 2009 ($147MM). The government said is willing to work with private companies and assured that they could recover its capital in five to ten years. An executive who wanted to remain anonymous stated that companies do not only want to recover their capital but to obtain a reasonable profit on their investment. Here and abroad, according to analyst Berbardo Prado mentioned that companies will come provided they are paid well, an adequate tax system, solid legal framework and guaranteed market for their production.

So, and again there is nothing new under the sun, it only takes a government to implement these rules of the game that function under populist, communist or liberal economies elsewhere but Bolivia.

http://www.paginasiete.bo/2011-05-14/Economia/NoticiaPrincipal/8Eco01140511.aspx