Bolivian government expenditures and investment priorities

This pie chart is from a very interesting paper made by the Jubileo Foundation, based on 2011 figures which certainly reflects prior years’ priorities and also where this government is leading us…

Total budget is distributed as follows: Central government takes 53%; municipalities 19%; decentralized institutions take 12%; Department Governments 9% and state universities 7%. [we can certainly see a centralized government: if we add 53+12 = 65% under direct control of the State, the new one…; we have also seen how averse is this central government with decentralization, vis-a-vis autonomies, and Governor’s offices only get 9%; and at times Governors are blamed for not doing what they are blamed usually for: health, education, infrastructure and public safety. Universities are pretty much on their own, because they claim “self-regulation.” Municipalities hold 19% but are more visible and that is why we see from time to time, mayors been thrown out and replaced, during the last six years, more mayors’ replacement were made for those opposed to central government, interesting coincidence, don’t you think?]

These two charts represent a Bolivian government expending (left chart) more than investing(right):

Among the main conclusions:

• At present, only 48 per cent of the General Government resources come from tax revenues and resources of public administrations. This shows a high dependency on public resources to other sources of funding and external factors, such as the extractive income of non-renewable resources, balances of previous efforts, borrowing and donations.
• Only 26 per cent of the resources which it manages the General Government are aimed at investment and the vast majority, 74% go to current expenditure and others.
• Given the composition of income, many of the current expenditures of general government would be financed by sources that possibly aren’t common or recurrent over the long-term, which in the future could lead to problems of sustainability.
• Given that the majority of the expenses of the Central level correspond to current expenditures; and in turn, most of these are inflexible State obligations, such as salaries of different sectors, retirements and pensions, bonuses and others (added to this is the debt service, which is mostly assumed by the Central level). This implies that much of the spending is up to commitments that cannot be evaded.
• If we consider the rulings of article 321 of the political Constitution of the State, in respect of a prioritisation of expenditures and investment towards education, health, food, housing and productive development (5 sectors), [we can] see that this is failing in its entirety.
In practice, resources are intended primarily for education, roads, retirement/pension, administrative expenses, universities and health. While food, housing and productive development are not being prioritized.
• The resources allocated to productive sectors (alternative to the extractive of hydrocarbon and minerals), such as the agricultural (3%) and economic development / productive (2%) are only 5% of the total budget of the General Government.
• The allocation of resources from the municipal level towards the productive sectors is only 6%, despite the fact that one of its main functions is to promote local economic development; and municipalities are the main beneficiaries of the direct tax to hydrocarbons (receive 35% of the total of this tax).
• Draws attention the level reached by the administrative expenses of the General Government, representing 7% of the total with the amount of Bs 4,081 million, ahead of sectors such as health, agriculture and livestock (and the productive sectors as a whole) and several others.
• Even if there are limits of the cost of operation for certain sources of the municipal governments, so we would expect that most of their resources goes to the investment, the data show that most,  51 per cent of its resources are directed to regular expenses and others.
• On the other hand, is significant the amount of resources allocated to public universities with a total amount of Bs 3,798 million (7% of the total), well above many sectors, such as the productive sectors, which could mean an inconsistency between expenditure on the training of professionals and sources of employment that are generated in the country for these professionals.
• Finally, it is important to incorporate criteria for planning the allocation of public resources, that articulates the different levels of Government, so that the great opportunity which is still currently the availability of substantial resources from non-renewable sources, such as hydrocarbons, is not missed.

One response to “Bolivian government expenditures and investment priorities

  1. Tend not to trust people. They are competent at greatness.
    Concise explaination Statistics: The science of producing unreliable facts from reliable figures.

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