2012 Bolivian salary increase will not go over 7%

Current Bolivian president said that this year’s salary increase will not go over 7%, ANF news agency reports for Los Tiempos:

President Evo Morales said yesterday [April 12, 2012] that the increase in wages for this year will not exceed the percentage of inflation registered at the end of the year 2011 – 6.9 per cent – considering that the State has to make a large financial investment in the industrialization process of hydrocarbons, as carried out in the ‘separating fluid’ plant in Rio Grande, Santa Cruz.

Food and wages do not rise [in the same proportion]

During the administration of Evo Morales (2006-2011), the cost of food rose 65 percent in contrast to the wage increased by 52 percent, according to economic experts and institutions, who, moreover, warned that poor households spend up to 70 percent of their income on the purchase of the basic family basket products.

According to a report by Erbol, inflation exceeded wage increases decreed by the Government, situation that created a gap of loss of the purchasing power of workers by 13 percentage points. Wage policy fails to replenish what was lost by inflation.

The salary increase accumulated 52 percent, used [spent], corresponds to the sum of the assigned increases for the health and education sectors. With regard to the national minimum wage, up by 65.6 percent, grew up in the last five years.

The Executive Director of the Jubileo Foundation, Juan Carlos Núñez, stated that according to studies, the inflation hit more Bolivians who are on the fringe of poverty. In this sector, inflation meant five percentage points more than [those] registered by the National Institute of statistics (INE).

“general Inflation accumulated from 2006 to 2011 was of 49 per cent for the poorest, and their impact on food came to 70 percent, they are the hardest hit by the variation in prices”, said Núñez


So, chances are that strikes and blockades will continue… as some Bolivians do not find other alternatives to negotiate with the government; the latter was a successful ‘blockader’ before assuming office… so… there we go… down the inefficiency, anarchical chaos and loss of competitiveness. On top of that, current government’s figures try to distort gal inflation impact on the household.

Published by Bolivian Thoughts

Senior managerial experience on sustainable development projects.

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