El Deber had the great initiative to interview one of the most influential, successful and able Bolivian professional, Enrique Garcia. His assessment on our economic and political reality deserves to be heard and adjustments to be made:

Enrique Garcia: «you don’t live only with the ‘macro’»

Garcia sees a pending economic development agenda in countries of the region and Bolivia

From his Presidential Office, located on the 14 floor (penthouse) of the building of the CAF, Development Bank of Latin America, in the residential area of Chacao, Caracas, Bolivian Enrique Garcia launched the challenge to the countries of the region to be more demanding in the construction of a development of their economies from long-term agenda and… sustainable. On Bolivia, he noted that not everything is a cup of milk.

– The study presented by Centennial, raised many challenges. Is it really Latin America prepared to achieve the dream of Asia?

– One of the virtues of the work of the Centennial group – which we promoted and with which we largely share – is that to look at us as a region we must always do so in comparison to other emerging regions. If we only compare ourselves among ourselves, we fall into complacency. Of course, to grow, in recent years, to an average of 4.5% and 5%, when there have been seven or eight countries which have been growing at an average of 7 – 8%. 4.5% is the average because of the weight of Mexico and Brazil. But are are satisfied with this growth? No! If we want to converge with industrialized countries in income per capita the next 20 and 25 years, we have to have a pattern of growth of at least higher than 6%. Then, to see Asia is very important, because if you compare what was Korea, Singapore, China 30 years ago with what they are now, we see they made a huge leap. China has become the second largest economy in the world; Korea, that was nothing, is at the level it is.

– And why is that?

– Because they saved more, they invested twice of what Latin America did. Then they placed emphasis on the critical issues for the development which are education, technology, in short.

– Isn’t it a signal, so that the alert light turns on the slowdown in the economy of Brazil?

– It is a clear signal. That is why it is important that countries are aware of that part of the success is due to the actions that have been taken in the rest of the world, not necessarily within the region.

– In the case of Bolivia, there are good notes in macroeconomics, but that has not been enough with microeconomics. Why do you think that this equation has not been achieved?

– I believe that at the end of the day that is not only the case of Bolivia, is in several countries. The problem ultimately is political. I think development is not an exclusive task of the Government, is everyone’s job, and to do that is to find consensus mechanisms. Because education does not change overnight, the infrastructure also. I think the challenge that has Bolivia, and not only Bolivia, but several of the other countries, is precisely to create awareness that development is the obligation of all and put in people’s minds that macroeconomics is a necessary but not sufficient condition. You don’t live with only the macroeconomics. You have to combine a good macroeconomics with a good microeconomics, with investment, productivity, with institutions, rules of the game, with a vision of the world, if one wants the world to see you.

– In Bolivia, with the intend of giving a boost to microeconomics, the Government seeks to use part of the net international reserves (RIN) to promote state-owned productive projects.

– Definitely a model, but the productive sectors are more than the private sector. But for that you have to establish appropriate mechanisms like financing, promotion and innovation. There are certain areas where the catalytic factor of the State is definitely important. But I think that it is also giving a stimulation so that private initiative can venture into all these areas.

– In an economy such as the Bolivian, with optimal international reserves, with good indicators and macroeconomic management what should the settings be?

– What happens with the international reserves is to see them very carefully. To use them, should do so with great caution. And I think that, in this regard, by what I have seen, the Government is certainly being careful to be able to use a relatively lesser portion of the reserves.

– You mentioned that Latin America should aim to grow 6%, Bolivia provides 5.5% by 2012…

– Of course, unfortunately, this year, Latin America is not going to be able to go to 6% and I think that the goal of 5.5% Bolivia is relatively high for the average of the region, which will be around 4%.

– Why?

– They are projections that we have for the fall in prices. Now, as a medium-term measure, you have to find a growth of 6 – 7%. If we compare ourselves with the world, one can say that we are growing well because European economies decreases and Latin America grows to 4.5 and 5%. But if we look at the long-term structural perspective, it is insufficient. The worst risk that exists is complacency.

– Is it enough with the existing indicators to be shielded to the Europe crisis?

– We are reasonably well armored if this will not be one major crisis, I think that there will not be. But that means that there will be an adjustment. These next two years, Latin America will not be able to continue at the pace that was and less to achieve what would be ideal for long-term sustainability. But you do not have to be pessimistic, should continue working on a structural issue, not to stay with macroeconomics.

http://www.eldeber.com.bo/enrique-garcia-con-solo-la-macro-no-se-vive/120717192009

So, it is time now that Bolivia make the needed economic and political adjustments…