Bolivia: In free fall in economic freedom | En caída libre en libertad económica

El Diario:

  • The blockades create a negative image of the country abroad, in addition to causing economic losses, and it ranks 165th, according to the Heritage Foundation.

According to the Economic Freedom Index, Bolivia continues its “free fall,” ranking 165th out of 176 evaluated countries, with Singapore at the top and North Korea at the bottom.

Although the Heritage Foundation’s data was published in June of this year, it should be noted that given the current situation in the country, the indicator would likely be worse, with the lowest rating.

In recent years, Bolivia’s position in Economic Freedom has not seen positive changes; rather, it has continued to decline, and its inclusion as a BRICS member will not alter this trend.

“Downward trend,” says Fernando Romero, president of the Departmental College of Economists of Tarija, regarding Bolivia’s ranking in economic freedom, attributing it to the country’s economic and political situation, which has caused the loss of this indicator.

He anticipates that in the next measurement in 2025, the decline in economic freedom will likely be more pronounced, as the country’s ongoing conflicts do not help improve the situation of the Bolivian economy.

He also recalled that, unlike in the past, when blockades were due to economic demands like fuel price hikes and rising household costs, the recent protests have shifted dramatically towards personal issues.

Such measures restrict economic freedom, as they hinder travel, goods transportation, and only result in the loss of agricultural products, Romero reflected. On social media, producers lamented the government’s inaction, blaming them for the loss of their products on the roads.

The lack of governance creates uncertainty among citizens, as they cannot predict whether they will be able to transport products to markets or harvest crops a month from now, Romero emphasized, noting the significant impact blockades have on economic activity.

The projected 2025 rating will be more negative due to ongoing issues in the national economy, and suggests that surpassing Venezuela and Cuba in economic freedom will be challenging.

BRICS
On the other hand, last Monday, Bolivia was admitted as a member of BRICS, an acronym for the founding countries (Brazil, Russia, China, India, and South Africa), along with 12 other populist and socialist-leaning nations.

Financial consultant Jaime Dunn stated in an interview with digital media that Bolivia’s inclusion in the economic bloc is driven more by political considerations than economic ones, bolstered by President Luis Arce’s offer of cheap raw materials.

Meanwhile, Romero argues that joining BRICS is unlikely to significantly benefit the national economy, noting that Bolivia will only be a member and never a full partner of the bloc, as the leadership remains with China, Russia, and Brazil, who make unilateral decisions.

The acceptance aims to expand political influence to challenge capitalism and advance a new world order, including a financial system independent of the dollar.

“Keep in mind, Bolivia will never be a full BRICS partner. We will supply cheap raw materials and incur debt, fostering political and economic dependence,” he warned.

If one observes, all current member countries are populist, leftist, socialist, or communist, and mostly poor.

Economist Gonzalo Chávez Álvarez tweeted from his account @GonzaloCHavezA that “although Bolivia has not yet joined BRICS, Arce is offering our natural resources on a silver platter. The foreign policy remains ideological, marked by improvisation and desperation.”

Indicators
Heritage Foundation published the Economic Freedom Index in June, evaluating 176 countries. Singapore ranks first with 83.5 points, and North Korea last with 2.9 points.

Bolivia scored 43.5 points, 0.1 points higher than in 2023, placing it 165th worldwide and 30th in the Americas, ahead of Venezuela and Cuba.

Among the evaluated aspects, the Tax Burden received the highest score (86.9), while Fiscal Health received the lowest (7.2). “Analyzing the period from 1995 to 2024, we achieved the highest index in 1998 with 68.6 points. Since then, it has dropped by 37%,” Romero recounted.

The trend over nearly 30 years has been a decline in the index. Less freedom, less investment, and economic growth, compounded by limited governance and ongoing political conflicts, he concluded.

BRICS represents almost 50% of the world’s population, around 3 billion people, a significant market; it has resources to lend money to poor countries and can provide scientific and technical advice.

However, Bolivia may face a trade deficit, offering only raw materials, while China exports manufactured goods, leading to economic and political dependence.

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