Daily Archives: June 17, 2019

It is vital to rethink the economic model

A most needed Editorial from El Deber, photos from the internet:

A nine-day blockade on the road to Trinidad and Brazil is just a sign of an economic model that should be reviewed as soon as possible.

The soy producers (the first link in the productive chain of the so-called “gold grain”) demand that they be paid a fair price for each ton harvested. They are hostages of the industrialists, because they could not export freely for a decade and until the problem began.

The Government had prohibited the export of grain and had allocated quotas to the industrialists who process it. The decision emerged after a period of shortage of some products, which the Government considered a political war on the part of agricultural entrepreneurs. Since then, the intervention of the State in the private sector was a deterrent to expand production and to develop a vital sector for the economy. Now the problem is between growers and industrialists, but it was caused by the state hand, which is now called to solve it, under threat of restarting the blockade.

Another sign that it is necessary to review the economic model has to do with state companies. While there are some that make profit, it is evident that the majority is absorbing resources from the TGN and does not generate profits that compensate for such investment. What has been said is confirmed in the memoirs of the Ministry of Economy, published a month ago in El Deber. If up to 2014 they generated more than US $7,000 million, in 2018 that figure fell by half. It can not be understood then that the budgetary allocations destined to these companies rise every year, since the deficit has been growing from 2012 to 2018 in more than 300%.

The alert was already detected from outside the country. The International Monetary Fund issued a final report on Bolivia and although it maintains this country with the greatest projection of growth in the continent, it warns: “The model of past success was based on factors that are no longer sustainable. The dependence of income on natural resources to fund social programs must be reconsidered.”

While there is a slowdown in the economy, opportunities open for soy in Asian markets. But for that, it is necessary to encourage the private sector instead of putting a brake on its possibilities for expansion. Producers should be free to export, to use technology in their crops and also be forced to make a qualitative leap in the way they work.

There is no denying the success achieved by a model that left good results in times of high international prices for raw materials. However, another moment is lived and a good statesman is the one who can lead his country in the best possible way in any circumstance. It is time to rethink the economy, to save at all levels (especially in the State) and to reinvent strategies to avoid unemployment, greater fiscal and commercial deficits, and not allow Bolivians who have improved their standard of living to return to the poverty of other years.

http://www.eldeber.com.bo/opinion/Es-vital-repensar-el-modelo-economico-20190614-9222.html