Alberto Bonadona writes in Pagina Siete:
Between what is said and what you want to hear
Last week I witnessed an excellent exhibition by Enrique Velazco in the Central Bank, in which he addressed a group mostly composed of economists. The clarity with which exposed the data and the explanation made by were, as always, masterful. The central ideas, on the basis of empirical evidence of economies Bolivian and American, are running an oversized importance given to investment in fixed capital against the real need to redistribute income more equitably among the population. According to the data displayed, this is true for both societies: those of the United States and Bolivia. Of course, what aims Velazco, is not to give money but generate employment that allow both to create more economic value within national borders as a better pay to the work of the Bolivian people.
They are simple ideas supported, I insist, in empirical evidence. Of course Velazco is not aiming to return to the stone age and renounce the use of sophisticated machinery that calls attention to the use of the financial resources that Bolivia possesses or can attract. Addressing them preferentially to the investment in the exploitation of natural resources, be them hydrocarbons or mining, the impact on the national economy is greatly less than if the same would provide investment to develop the production of articles for which Bolivia has almost exclusive natural endowments. For example, in the production of certain cereals or fruit that by linking with added value-generating activities enjoy the relevant feature of favouring the creation of more jobs. Aspect that clearly exceeds those allowed by mining and hydrocarbons.
An example that Velazco uses in his exhibitions part wonder how much dollars of the purchase of any equipment, which is not produced in Bolivia, stays in the country and how much goes to the supplier country. Obviously the answer is that there are more dollars leaving the country than those who remain. Of course that one could question to Velazco the enormous difficulty of creating productive activities that chaining themselves successfully for the creation of value and sources of employment in the current conditions presenting the national productive base. But what is more difficult to put in doubt is the huge flight of dollars by maintaining the current pattern of investment in fixed capital. The guidelines suggested by Velazco refer more to ways to modify the paths traversed in the pursuit of development that if what he says in accordance with theories that are beloved by economists to address the issue then that so far do not give the results of effective development. By the clarity of the Velazco arguments in the above talk and other opportunities, I was impressed with respect to the questions made by the professional economists. It seemed that, for these, the speaker spoke in Sanskrit.
They referred to neoclassical economic theories, concerned that if it is valid to use the data of USA, if Velazco wanted to modify national accounts and for this it was necessary to modify the same conception made by the UN. There were many questions and, in general, I can say, the essential aspects of what was explained were not touched.
I can imagine that Enrique Velazco felt very frustrated at the end of the event. I know that this will not reflect upon his attempt to reorient the Bolivian State investment policy. His conviction about what was has found is larger than the deaf ear already posed for a long time in many of the economists to whom, he exposes his intuitions, suggestions for new research, renewed ways of analyzing a stubborn reality to the transformation. In short, ideas that walk away, fortunately from the rigid frames that control the minds of many economists.
The ideal would be to try, with a more open mind, economists, particularly young people, to understand what Enrique Velazco said and not what they believe to hear. Many distribution and redistribution of income immediately react as if they were talking about something forbidden or measures that this Government is already running. Velazco, I believe, gives us the opportunity to check out what has been repeated here and elsewhere without further questioning and, of course, without a better orientation of Bolivian economy and society development with new approaches and methods.
Alberto Bonadona is an economist.
One of my professor the KSG in Harvard, use dot say “sit and reflect” and think outside the box… Bolivian professionals need to be more alert and envision new development ways, out of the “usual” way of thinking… Having studied in Bolivia and abroad I ‘d say Bolivian education forms people in a very theoretical way, static and most times embracing more the “socialist” theories that lead to nowhere in the world of today. We need to change that!