Bolivian economics 101; August 18, 2011

Budget Execution for the nine departments was analyzed by Pagina Siete, August 18, 2011. The following chart shows all nine departments with their budget execution as of August 8, 2011. La Paz has the “best” and Tarija the “worst” execution. Pagina Siete reports that the lower ones: Tarija and Pando are departments that have replaced the elected Governors by political members of the ruling party in central government. The chart shows the departments, budget for the year and execution. Please beware of the figures as some carry decimals and others do not, at simple sight could be misleading.

La Razon, August 18, 2011 reports that a billion dollars are not being executed by all the departments. The chart shows the composition of those fundings in Bolivianos. Since 2005 until now, budget grew by 100%, the Stacked Vertical Columns are: dark blue for shared taxes with the national government; light blue for hydrocarbon royalties; cream for tax on hydrocarbons; and dark olive-green for others. Note 1: Figures do not include forest royalties for any year. Note 2: 30% of the cream-colored portion, tax on hydrocarbons, was taken out as it goes to pay a bonus to the elderly people.

La Prensa reports today that textile exports dropped by 85%. The US Government took Bolivia out of the ATPDEA because of its coca/cocaine performance. Venezuela was identified by current government as a “savior” for those exports and did not comply yet.

Today, El Dia reports on food insecurity for Bolivia. In the last few years, Santa Cruz agriculture sector lost 178 million dollars for 352 thousand tons not exported as a result of central government ban on exports. We are currently importing wheat, corn, sugar and potatoes. Those government disincentives are illustrated by one example: corn, a key product in Bolivia, corn harvest of a million tons back in 2008, went down to only 482 thousand in 2010, less than half.

The Bolivian Business Climate as reported by Los Tiempos, quotes the Getulio Vargas Foundation report which shows a slight improvement since April 2011. However we remain second to Venezuela, down at the bottom of the Latin American countries. Chile, Uruguay and Paraguay are on the top.

Published by Bolivian Thoughts

Senior managerial experience on sustainable development projects.

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