Daily Archives: February 20, 2018

Bolivian economy, in a difficult 2018

An important editorial from El Deber:

The economy, in a difficult year

The beginning of 2018 has been very complicated for productive activities. Natural disasters have caused significant losses, especially to farmers in the east, and costly damage to the infrastructure of several municipalities. On the political and social level we have had an unstable start to the year, with work stoppage and strikes that sought the repeal of the Penal Code and, now, respect for the 21-February referendum. To these great difficulties are added the cases of citizen insecurity, such as the tragic explosions in Oruro, which break the calm and scare off investors.

The economy is always the biggest affected by this set of problems, if not also urgent decisions are faced. In his message of January 22, Evo Morales was optimistic about the economic indicators and projections, despite the slowdown felt by two or three years ago due to the collapse of gas exports and the fall in gas prices. raw materials. One reason for presidential optimism is the slight rise in the price of oil, which can help improve gas revenues, but not as in the good years. Morales said he was even sure that the double bonus would be paid again, since the GDP would grow above 4.5 percent.

However, former finance minister Luis Arce himself doubts the fulfillment of the growth target due to the losses caused by the floods. According to estimates from the CAO, until last week there were 50,000 hectares of soybeans, corn and rice affected by the rains, which do not stop. The oleaginous producers have already lost 120 million dollars. Before these economic damages occurred, there was uncertainty among businessmen due to social unrest. Several expect the outcome of the growing confrontation to face their projects, as it happens in times of electoral definitions. Consequently, as the economy moves with expectations, the caution and concern of producers and consumers are felt at this beginning of the year.

In this context, the Government tries measures such as the liberation of exports, but with difficulties, since only the sugar producers made sales. It also insists on the public and private alliance and on accelerating the employment plan for young people, which is a palliative. However, the advances in the diversification of the productive matrix are irrelevant, since it is still too dependent on gas. Nor are state expenditures adjusted and there are few results in attracting foreign investment and opening new markets. As a result, the economy will again depend on the increase and execution of public investment this year, amid the urgent need to renegotiate gas contracts and to avoid social and political instability due to the pre-election struggle.