Freeing the dollar or distributing state resources | Liberar el dólar o repartir los recursos del Estado

By Marco Antonio Belmonte, Vision 360:

Strengths and weaknesses of Quiroga and Paz’s economic proposals analyzed

The analysis was conducted by former Tierra Foundation director Gonzalo Colque, who points out that the Achilles’ heel of Paz and Lara is promising the impossible: spending more while collecting less, whereas Quiroga advocates for belt-tightening.

Jorge Quiroga y Rodrigo Paz competirán por la presidencia en una segunda vuelta electoral. Foto Quiroga / Paz

Jorge Quiroga and Rodrigo Paz will compete for the presidency in a second-round election. Photo Quiroga / Paz

An evaluation of the economic proposals of the Christian Democratic Party (PDC) and the Alianza Libre, the political forces heading to the runoff, highlights the strengths and weaknesses of the plans put forward by presidential candidates Rodrigo Paz and Jorge Quiroga. The assessment was made by former Tierra Foundation director Gonzalo Colque after reviewing the programs of both candidates for the next five years of government.

He noted that Rodrigo Paz and Edman Lara get one key point right: supporting what feeds the population, i.e., the popular or informal economy, which employs 70% of people. “Two out of three Bolivians are transporters, self-employed, or merchants. This is the gremial family most protesting the shortage of dollars and fuels,” he said.

On the other hand, Tuto Quiroga and his running mate Juan Pablo Velasco also merit recognition for addressing an uncomfortable but urgent issue: tackling the economic crisis affecting everyone. “The national currency has lost its purchasing power, now worth half of what it was a year and a half ago. Alianza Libre loudly warns what will happen if adjustment measures continue to be postponed,” Colque emphasized.

He added that the Achilles’ heel of Paz and Lara is that they promise the impossible: spend more while collecting less, lower taxes, reduce tariffs, and implement 50/50 decentralization.

All this comes with numbers in the red, the central government lacking funds to transfer to subnational entities, which in turn owe salaries and have stalled projects. “Their proposals, besides being contradictory and inconsistent, have shifted from moderate offers to increasingly inflated, demagogic, and populist promises,” he pointed out.

Alianza Libre, on the other hand, does not promise sweets but intensive care. Tuto Quiroga proposes belt-tightening, a tough economy, and radical break with statism. “The sacrifice would be shared by all, but the benefits would mostly go to the private sector. Trickle-down economics offers no guaranteed success for everyone. His plan, more than guided by economic rationality, shows partiality toward agro-exporters and some anti-MAS resentment,” Colque observed.

According to the former Tierra Foundation director, between PDC and Libre proposals, one side shows demagogy and the other ideological fundamentalism. “To face the crisis and stabilize the economy, what’s needed are concrete, pragmatic, and flexible measures, the kind that doesn’t care about the color of the cat as long as it catches mice. But to avoid a patchwork of isolated measures, a unifying and realistic direction must be outlined,” he stressed.

Thus, Colque raises the question: Will PDC and Libre be willing to review what they propose?

Libre Proposals

  1. Obtain freely available dollars – Seek credits from the IMF and FLAR; distribute dollars to the population through the financial system at a defined equilibrium exchange rate; repayment in dollars goes back to banks to reimburse savers.
  2. Reduce fiscal deficit – Cut unnecessary institutions, reduce ministries to no more than 12, eliminate some vice ministries and decentralized entities that serve no purpose. Review unprofitable state companies to make them profitable, sell, transfer to workers, or close them. Reduce unnecessary public staff and spending, targeting a deficit of 3% of GDP.
  3. Establish a single, real, and flexible exchange rate – Measures include a “Bolsín” and an independent Central Bank.
  4. Attract investment – Ensure legal security, economic stability, and a simple, clear tax system.
  5. Strengthen the financial system – Create a “business hospital,” promote exports with tax neutrality.
  6. Hydrocarbons – Increase domestic oil prices to make currently unprofitable reserves viable, refine domestically, improve fuel import logistics, ensure transparency, fully liberalize fuel imports, and target fuel subsidies.
  7. Mining – Guarantee legal security, investment protection agreements, and allow the concession system, which provides more certainty than the current system.

PDC Proposals

1. Implement a new economic model (50/50) – Fiscal redistribution between central government, subnational entities, and public universities.

2. Institutionalize the public sector – Reinstate professionalization and career paths in public service.

3. Promote sustainable tourism development.

4. Reactivate hydrocarbons – Encourage renewable energy use to ensure energy supply.

5. Sustainable mining development – Protect indigenous and community rights, and the environment; rationalize, order, and ensure transparency in public spending; freeze deficit-running state enterprises.

6. Hydrocarbons sector – Provide legal and fiscal incentives for investment; develop new strategic fields; promote renewable energies; modernize the hydrocarbon and energy regulatory framework.

7. Reduce subsidies – Restructure YPFB, YLB, and the National Electricity Company (Ende) to ensure economic viability.

8. Strengthen mining framework – Ensure legal security for investment, promote responsible mining, formalize cooperatives, and enhance governance and transparency in the production chain.

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