Bolivia and the 2013 Index of Economic Freedom

Current Bolivian central government’s policies/actions/uncertainties have an impact regarding our ability to compete in the international economic market.

The following charts reveal how we continue to fall and lose competitiveness, despite “successful accomplishments…” governmental propaganda…

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Bolivia’s economic freedom score is 47.9, making its economy the 156th freest in the 2013 Index. Its overall score is 2.3 points worse than last year, reflecting a significant erosion of investment freedom, labor freedom, and monetary freedom. Bolivia is ranked 25th out of 29 countries in the South and Central America/Caribbean region, and its overall score is far below the world and regional averages.

Bolivians continue to suffer in a climate of economic repression. High commodity prices have contributed to recent strong economic growth, but long-term economic development remains constrained by institutional shortcomings. Severely hampered by state interference, the formal economy is increasingly stagnant, and informal economic activity is expanding. Stringent rules on foreign ownership and profit repatriation continue to suppress engagement with the global economy.

With rampant corruption and deficiencies in the legal framework, the rule of law remains fragile and uneven across the Bolivian economy. Contracts and property rights are not well respected, and the threat of government expropriation remains high, constraining private-sector growth.

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2013-01-11 08.33.20 amIn 2005, populist Evo Morales, campaigning against what he termed “savage capitalism,” won the presidency with nearly 54 percent of the vote. Both as a candidate and as president, Morales has employed violence and intimidation to impose his will. Since taking office, he has justified property confiscation and nationalization as a means to increase “fairness.” A new constitution has expanded executive power and given the state greater control of key natural resources and industries, including gas and electricity. Re-elected in December 2009 with 64 percent of the vote, Morales promised to move Bolivia toward “communitarian socialism.” Under Morales, Bolivia associates closely with Cuba and Venezuela [I say: do not forget alliances with former Lybia, current Iran and precarious Syria…]. Low levels of foreign investment are but one example of the negative long-term effects of the government’s economic policies. Approximately one-third of Bolivia’s people live in poverty. Agriculture, mining, and services provide most employment.

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El Diario reports on above’s index results, excerpts of said article follow:

According to the index of economic freedom 2013

Falls the image of Bolivia by ‘hostile’ attitude towards foreign investment

Severely hampered by the interference of the State, the formal economy is increasingly more stagnant. There is a climate of economic repression.

2013-01-11 08.54.09 amBolivia fell 10 posts in the index of economic freedom 2013, elaborated by the Heritage Foundation, by “their hostile attitude to foreign investment” and is among the worst countries in the region together with Cuba and Venezuela.

“Specifically prioritizes national investment on foreign investment. The financial sector is still vulnerable to State interference, but is growing”, indicates the document.

Bolivia ranks 25 of the 29 countries of South and Central America and Caribbean region, and its overall score is well below world and regional averages.

Worst ratings in the region are to Haiti, Bolivia, Ecuador, Argentina, Venezuela and Cuba. The Government of Hugo Chavez and Raúl Castro’s remain down by the bottom, mainly because of corruption and political interference in the judicial system, although North Korea is at the bottom of the index.

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