Daily Archives: January 24, 2014

Bolivian middle class spends more on cars, technology and travel

Ivone Juarez reports for Pagina Siete:


The middle class spends more on cars, technology and travel

A low dollar, bonus policy, the increase in per capita income and the attractions of the technology encourage the demand for goods and services in the country.

2014-01-23 08.19.10 am

The middle class, which now has more income, spends more and more in the purchase of vehicles, technology, travel and recreation and considered luxury services, say business leaders of the country, and economists.

Jaime Pedreros Fitzgerald, business development consultant, said that the spending power of the middle class in Bolivia, as in other countries of the world, determines the supply in terms of products and luxury services.

“The importance of the middle class with regard to consumption, because they spend between 70% and 80% of their income, to buy a wide range of items and any increase in their income, such as the second [Christmas] bonus, will be spend it in non-durable consumer goods (cars and artifacts) or wasteful spending (fun and entertainment)”, he says.

The Government maintains that the engine of the economy is the growth of the domestic demand, has been strengthened with greater income of Bolivians, especially the middle class, and the distribution of the so-called social bonuses, such as the dignity or the Juancito Pinto, among others. This greater capacity for consumption stimulates economic activity and also imports.

“There is a greater consumption, they show that almost $400 million dollars in the economic movement of the restaurants. Also advanced the consumption of imported goods, such as vehicles, cell phones and electric appliances,” says the President of Businessmen in Santa Cruz, Gabriel Dabdoub.

The President of the Chamber of Industries of Cochabamba, Federico Díez de Medina, agrees with Dabdoub and added that the supply is geared to meet this new demand for products and services that are not essential to meet the basic needs of human beings, such as food, clothing, housing, transport and education.

Between 2006 and mid-2013, the automobile market grew by more than 125%.

That growth raised the amount of vehicles – and for the public service – from 300,670 units to more than 1.2 million, according to the Bolivian automotive Chamber. [although we have to understand that used/polluting vehicles were smuggled in the country and later “legalized” by current government, as a retribution to its acolytes or for electoral reasons]

In terms of technology, until mid-2013, 27.41% of the population used smart phones, tablets and modems to connect to the internet, while active lines of mobile phones reached 9.72 million, according to the telecommunications and transport authority, for a total population of 10 million inhabitants according to the 2012 Census.

In the case of services of recreation, Finance Minister Luis Arce said that until October 2013, restaurants billed about $416 million, while in 2005 they obtained $67 million dollars.

In addition, the Bolivian middle class travels increasingly more, both at home and abroad for tourism. According to the travel agencies and tour operators, last year these services grew 50%.

Dabdoub says that this new consumption boom is due to the increase in income of Bolivians, who today not only consume what they need, but what is offered to them, because they have a greater capacity for buying and borrowing.

Economist Hugo Siles Espada, expresses that this momentum in consumption is due to the increase of per capita income (median income of each person per year) and the distribution of the so-called social bonuses.

“In the last 10 years, per capita income increased from $1,000 to about $3,000.” Bonuses injected annually into the economy around $500 million,” he says.

Consumed more

Market. The 10 million inhabitants that live in Bolivia, are an attractive market for investment in services like restaurants, said Gabriel Dabdoub.

Consumption. Consumption was modified and diversified, even in the food industry, because now is not acquired only one type of bread, but choose among the special bread and the integral, indicates Hugo Siles.

Education.  Bolivia should educate “smart investment”, in products to improve the quality of life, said Dabdoub.


Maslow’s hierarchy of needs in the works!