Bolivians are we equal?

Ivan Finot writes in Pagina Siete:

Bolivians are we equal?

Ivan FinotThe foundation of equality is the respect for human rights, among these, political rights. In this all must be equal and the answer to the question is clearly: No.

We have recently seen how the electoral courts have decided to provide citizens unequally vote. This has already been analyzed and we expect quite an early reform by independent experts who know the national reality.

This time we will refer to two fundamental rights to legal equality: 1) democratic power must be distributed in principle equally to all citizens; 2) accordingly, everyone should have an equal right to public goods. And public goods are not only physical goods but also, and mainly services provided by the state.

Of course, we not all exert the same power. Just look at the composition of the new departmental assemblies: the vote of the citizens living in rural areas have much more weight than urban. Why? Because half of the assembly is elected under the “population” principle or, rather, of the number of voting citizens, and the other half with strict territorial criterion, ie, making the “territories” are represented on an equal footing, with little or no regard to the number of voters.

The error here is that equal prominence is given to equality between citizens and “equality” between territories, and in democracy must prevail the first and only from this primacy, some weight should be given to the territorial.

As for the latter, we all have an equal right to public services, the situation is so uneven that already bordered on the outrageous. This is because the resources available to sub-national governments to provide goods as important as transportation infrastructure and public safety, health and education, are highly unequal.

Now, virtually all municipal autonomous governments depend on financial transfers from the central government, only to those with the largest population, tax collection and municipal taxes is important. And regarding departmental autonomous governments these depend entirely on royalties’ transfers.

Inequality becomes apparent when it is found that, regarding transfers to the municipalities of La Paz, in 2012, only was budgeted (on average) Bs146 Bolivians per habitant and for Santa Cruz only Bs167. In contrast to the Bs1,191 for those of Pando!

And the situation is even more unequal in the case of governments: according to the 2014 budget, Tarija corresponded to Bs5,158, royalties and transfers, while Santa Cruz got, Bs424 (12 times less!), and La Paz, Bs294 (18 times less).

What is the cause of these huge inequalities? In the case of today’s governors were originally royalties: 11% of the value of production, the government decided in Busch (1939) administration to benefit the then deserted eastern Bolivia. Compared to other countries, 11% of regional royalties is a very high fortuitous chance to rely on hydrocarbon resources that exist in the respective underground.

Currently they are very important to Tarija, but not for Santa Cruz. But in today’s decentralized countries such as Bolivia, to reduce inequalities exist transfers. The creation of the special tax on hydrocarbons, in 1994, had this end, as it did, for municipalities, the establishment of the municipal share over 20% of national taxes are distributed according to population size.

But this healthy redistributive trend was truncated when Congress 2005 defined distribution important Direct Tax on Hydrocarbons. Their inequitable distribution is currently the primary cause of huge inequalities observed, both between governments and between municipalities. It is a compensation system in reverse, then, rather than reduce, increase inequalities. Aptly it is not allowing this huge source of inequalities to remain in departmental statutes.

Ivan Finot is MSc in Economics, specializing in development and decentralization.

Published by Bolivian Thoughts

Senior managerial experience on sustainable development projects.

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