By German Huanca, Publico.bo:
President Arce finally came clean before the country, first acknowledging that Bolivia is in an economic crisis, identifying the causes we all already knew, and offering solutions. Unfortunately, the identification of the causes and the proposed solutions do not resolve the economic crisis, will not bring dollars, nor will they resolve the fuel supply issue. The report also includes some biased statements and omissions that do not reflect prudent economic management.
One biased assertion was attributing the dollar shortage to the private sector by presenting a chart that breaks down the trade balance of the public and private sectors. On one hand, gold was tendentiously excluded, and clearly, the goal was to show that the private sector withdrew dollars through product imports, while the state was the dollar generator during the entire period. This novel division presented by Arce only further highlights the manipulative handling of information, trying to place blame.
A second assertion made by Arce claimed that, worldwide, disbursements exceed capital and interest payments. This is also biased and false. With this statement, he would be confirming that the Central Bank of Bolivia, throughout Evo Morales’ administration, except for the last two years, repaid debt with new debt—a practice known in economic jargon as “bicicleteo” (debt rolling over). Prudent economic management seeks to reduce and eliminate external debt.
One of the report’s key omissions, and the most important, was the failure to mention public spending, the fiscal deficit, or subsidies, which are ultimately the main causes of the economic deterioration and the primary reason Bolivia has entered a downward spiral. The dollar shortage stems from these economic variables, as dollars from international reserves were consumed by heavy public spending, particularly fuel subsidies, which year after year drained Bolivia’s financial cushion. As a result, the diagnosis is incomplete.
Apart from these biased assertions and omissions, President Arce explained to the country why there are no dollars, blaming others—the previous government, which he headed in the economic sector, the private sector, climate change, international prices, and the El Niño and La Niña phenomena. Yet, as in every other instance, there was not a trace of responsibility, no admission that he, along with Evo Morales, made mistakes in failing to safeguard gas investments.
Finally, the country heard from the president’s own mouth what economic analysts had been warning, and it is now confirmed: Bolivia is in a severe economic crisis, unable to find a solution to the provision of dollars for fuel purchases and to meet product import needs. The solutions presented by President Arce do not provide short-term relief. International loans are only a temporary fix, making it urgently necessary to provide clear signs of a way out of the crisis. A new economic model and a paradigm shift should be considered.
Por German Huanca, Publico.bo:
El presidente Arce finalmente se sincera ante el país primero aceptando que Bolivia se encuentra en crisis económica, identifica las causas que todos ya conocíamos y hace un ejercicio de soluciones. Lamentablemente, la identificación de las causas y las propuestas planteadas no resuelven la crisis económica, no traerán dólares, ni resolverá el suministro de combustible. El informe también presenta algunas afirmaciones tendenciosas y algunas omisiones que no corresponden a un prudente manejo económico.
Una de las aseveraciones tendenciosas fue el atribuir la escasez de dólares al sector privado al presentar un gráfico que desglosa el saldo comercial del sector público y el saldo comercial del sector privado. Por un lado, de manera tendenciosa se excluye el oro y claramente el objetivo es mostrar que el sector privado es el que sacó los dólares con la importación de productos, y el estado fue el que durante todo el periodo fue el generador de dólares. Esta división novedosa presentada por Arce no hace más evidenciar el manejo tendencioso de la información tratando de buscar un culpable.
Una segunda aseveración de Arce puntualizaba que en todo el mundo los desembolsos son mayores a los pagos de capital e interés. Esta es también tendenciosa y falsa, con esta afirmación, estaría confirmando que el Banco Central de Bolivia durante toda la gestión de Evo Morales y exceptuando los dos últimos años ha realizado un pago de deuda con nueva deuda, lo que se conoce en la jerga económica como bicicleteo, cuando un prudente manejo económico lo que busca es disminuir y eliminar la deuda externa.
Una de las omisiones del informe, y la más importante, fue no hablar nada del gasto público ni del déficit fiscal, menos aun de las subvenciones, que al final son la causa principal para el deterioro de la economía, y la razón principal por el Bolivia ha ingresado a un espiral sin salida. La carencia de dólares se origina en estas variables económicas, ya que los dólares de las reservas internacionales fueron consumidos por el pesado gasto público, especialmente por las subvenciones al combustible que año tras año fueron mermando el colchón financiero de los bolivianos, por lo que se ha realizado un diagnóstico incompleto.
A parte de estas tendenciosas aseveraciones y omisiones, el presidente Arce dio a conocer al país las razones por las que no hay dólares, echando la culpa a los demás, al gobierno anterior del que fue la cabeza del área económica, al sector privado, al cambio climático, a los precios internacionales, al fenómeno Niño y Niña, pero como todas las ocasiones, no hubo un ápice de asumir la responsabilidad, de decirle al país, que se equivocó él junto con Evo Morales en no cuidar la inversión del gas.
Finalmente, el país conoció de boca del presidente algo que los analistas en economía fuimos advirtiendo y queda confirmado, Bolivia está en una crisis económica severa, no encuentra una salida a la provisión de dólares para la compra de combustible y hacer frente a la importación de productos y las soluciones planteadas por el presidente Arce no resuelven en el corto plazo. Los créditos internacionales son solo una salida coyuntural, por lo que amerita de manera urgente dar señales de salida a la crisis, se debe considerar dar paso a un nuevo modelo económico con el consiguiente cambio de paradigma.
https://publico.bo/opinion/arce-sin-propuestas-de-salida-a-la-crisis-economica/
Bolivian Thoughts | Pensamientos Bolivianos (Bilingual/Bilingüe) 
What are the implication for the bolivian exchange rate over the next 2 years or so? As a cattle producer I am wondering if cattle prices should keep pace with inflation or not, or how quickly. As it stands currently one might be best of selling ones heard and hedging in dollars.?
If the economic model is not replaced, if the gov continues to have almost 600K public employees and too many state-owned-companies that are simply useless, the problem will continue. This “gov” needs to make changes or step out like when UDP promoted hyperinflation. The masismo needs to be prosecuted, how can we see the former coca grower continue to insist to run for presidential election?! If you cope with inflation by rising prices, you contribute to the economic crisis. What can we do? push for a new electoral register, we need clean presidential elections, we need an urban vote to be equal to a rural one, we need to stop all that corrupt electoral system. I f we don’t change the above, nothing will improve, but worsen tenfold.
How might this affect the bolivian currency vs the dollar over the next 2 years or so? is it best to just sell what ever one can and buy dollars? Being a cattle producer I am thinking livestock in particular.
Let’s take a quick look at how Asoban is operating regarding debit and credit cards, or withdraw dollars or euros from your savings accounts in those currencies … you cannot use your money, and the banks continue to charge you for those “services.” Bolivia had never before experienced such nightmare. You are now forced to use Bolivian currency to purchase your inputs for your cattle business and most of those inputs have increasing prices and sometimes they are not even available, whereas you need them locally or with some imports on the final product or the inputs needed for what you need. You need to press your cattle sector, like Fegasacruz, Fegabeni, Asocebu et al, and put real pressure on the government. Fexpo is to start this Friday and the “president” is invited?! You need to start making hard decisions as the gov is not willing to do anything for you as a sector.