Monthly Archives: April 2014

Chances are that Bolivian State-capitalism will fail, big time!

An Editorial from El Diario:

State Capitalism in danger of failure

El Diario logoSpecific indications reveal that the economic system of state capitalism which is systematically applied in Bolivia under the current regime, is on an accelerated path of decline and failure. In particular the so-called public enterprises, are incurring in significant deficits and may even fall into a state of bankruptcy.

The news was known by the report of an expert from the Millennium Foundation, it does know that ten public companies are suffering considerable deficits, including even YPFB, despite having high prices of gas that have high average per million BTU.

Millennium information adds a fact that confirms the deficit facing state enterprises, data indicating that, possibly, to balance the economic status of these public entities, the Central Bank of Bolivia must lend a total of over five billion dollars. Specifically, the Central Bank granted to these companies $5,345 million dollars.

The case, however, is not only to have the information of the deficit from such government enterprises, but especially should ask what are the causes of this state of affairs affecting the national economy and shows a very little optimistic view of the future.

This situation could be attributed to corruption, bad government information, price volatility of raw materials, the fact that the “state is a bad manager” and other causes. The truth is that a major aspect is that state capitalism can not succeed because it would be a “socialist” economic view that attempted on the basis of populist ideology, whose failure has had and is global for over a century, from being both practical and theoretical. Likewise, the failure would be the result of attempts to apply other system of reality, or more properly to try to go against the grain of history, especially in regards to the Bolivian reality that is usually not taken into theoretical account and do not totally remove the head of the clouds and put our feet on the ground.

The attempt to develop state capitalism without any minimum conditions, is even more apparent in the current economic policy practiced in Bolivia, because it is state-run companies amid the largest anti-social forces, to it also gives all kinds of aid to progress and oppose that state capitalism with all its might, minute by minute and in all ways imaginable. Moreover, it is left to drift or public enterprises are forced to suffer deficits such as those alleged goals.

State capitalism gave a momentary result when that system was applied exclusively and fighting to kill their enemies and it was still very difficult to develop, as the social issue was very difficult to control and even impossible to remove it and make it serve the “new cause”. More properly, it was never possible.

In this way, in general it can be seen that state capitalism in Bolivia offers no positive result because it will against arrow, and, instead of being supported by the same state, mishandling, and at the same time encourages the development of their enemies, facts proved by the references to the existence of high deficits in public companies.

I say, what could else could have been expected from a coca-grower union leader? from an illegal crop, someone who made his name by blockading the roads, inspiring hatred over everything that was our history, our heritage as Bolivians? Populism, socialism, communism proven to be the ideal mechanism to offer dreams, to offer bonuses, jobs to those people who couldn’t succeed on their own work. And obviously, as those political trends never triumphed around the world, they will not succeed here. It is a shame that billions of OUR dollars are thrown away, our best economic time ever, is wasted!