Five providential causes that support the economy

Luis Antezana writes wonderfully for El Diario:

Five providential causes that support the economy

2012-11-16 08.32.02 amThere are two ways to learn about the status and the development of a country: if wealth occurs from the inside or if prosperity is caused by external factors. In the first case, the development is originated in domestic production and in the second case in imports and trade with abroad.

The current Bolivian economic reality can be considered under those two lenses and, in that way, check whether it is really in development or are stagnant or in decline, without reference to the political aspect. In that sense, the Bolivian economy (in prosperous appearance) is based on five external causes in the following order:

(1) The significant amount of money that comes from remittances of Bolivians living abroad, reaching an average of one billion dollars a year, amount that it is a great relief for the economy.

(2) High quote of commodity exporting Bolivia and who had never met before (at least ten times more that of ten years ago). The export of gas is the most considerable and is followed by ores and soybeans.

(3) Those two factors of external origin allow the State to have important resources for public spending, causing some stability and some development of the economy, but, in any case, that prosperity is of external origin. In this regard, there are pharaonic works (satellite, museums, aircraft), large percentage of food for domestic consumption originates in State import or smuggling. We eat Argentine bread, Chilean fruit, Peruvian vegetables, etc.

(4) Other cause for economic activity is smuggling, which has high proportions and largely caters the needs of the population, in particular food.

(5) A fifth factor that mobilizes the economy is coca production and drug trafficking.

These five accidental factors are moving the current Bolivian economy, i.e. that this activity originates due to external causes, as if there were no remittances, high price of raw materials, public expenditure, smuggling and drug trafficking, the country’s economy would be in one of the worst crises in its history. What’s more, thanks to which those lucky five factors arise altogether, the apparent bonanza is more visible.

While those providential external factors have paramount importance in economic activity, internal factors are insignificant and also rely heavily on the external. Indeed, industrial production is languishing, mining low production despite high international prices [and the forced and violent take overs], there would be no public spending and smuggling and drug trafficking would have no relevance as are now presenting. Factors such as the construction, trade, and others would only have minimal significance.

Finally, the fact that the Bolivian economy is dependent on very high percentage of external factors, has political projection and the country becomes dependent and acquires the status of colony, despite the preaching to the contrary.

Crystal clear, and I only hear from current’s central government acolytes the contrary and what is more frightening is the fact that a majority of the Bolivian population still believe [or are misled] that this government deserves re-election!

Published by Bolivian Thoughts

Senior managerial experience on sustainable development projects.

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