By Antonio Saravia, Vision 360:

Rodrigo Paz must understand that his role is to go down in history as the president who did the dirty work so the country can have a future.

I have the impression that Rodrigo Paz and his government still haven’t understood their historical role. The mandate given to them by the citizens has been very clear: resolve the crisis and restore the republican institutional foundations that MAS destroyed. That is their enormous responsibility after 20 years of regression, abuse, and despair. It is, without a doubt, a very complicated reconstruction that requires enormous sacrifices. The role of the new government is to bear the political cost of carrying it out.

To resolve the crisis, the priority is to restore fiscal health. Since there isn’t a single peso left in the public coffers, it is important to understand that we cannot continue financing deficits. The only way to do so would be to ask the Central Bank to keep printing money, and we already know how that ends. The government cannot afford to move gradually; it must eliminate the fiscal deficit immediately and in one stroke. For this, it is essential—among other measures—to eliminate the fuel subsidy, eliminate state-owned companies (all inefficient and corrupt), and lay off a significant number of public employees (we can no longer sustain a state apparatus of more than one million people).

Does all this have a political cost? Of course. These adjustments are recessionary in the short term because the government stops injecting money into the economy. Eliminating the fuel subsidy will also increase prices and have a real impact on families’ purchasing power. These effects are harsh and equivalent to what alcoholics call withdrawal symptoms. But they must be done; there is no other way out. And in doing so, Rodrigo Paz and his government will not win any popularity contests. The new government must accept that its historical role, for the benefit of the country, may require committing political suicide.

The next task is equally complex. The government must establish the rules of the game necessary for the private sector to reactivate and thus revive the economy and bring in dollars in a sustained manner. This means deregulating and protecting private property. To achieve this, all price controls must be eliminated (yes, including on bread), along with export quotas, tariffs, and the many labor regulations that make it extremely expensive to hire in the formal market. They must also carry out a deep tax reform so that there are no more than ten taxes, all at low rates and easy to pay. In short, the State must ensure it steps aside and simply focuses on protecting the private property of economic actors. This will generate strong individual incentives to create wealth.

But of course, changing the rules of the game will also bring resistance from sectors that have benefited from them for many years. Removing the State from the middle means taking away politicians’ feeding bottle. Deregulating the labor market means earning the enmity of the COB and the unions; eliminating price controls will lead to protests from neighborhood councils; eliminating tariffs may provoke fierce opposition from local companies that see their protection dismantled. And again, Rodrigo Paz and his government will not be anyone’s saints of devotion, but their historical mandate requires them to be firm in these decisions and carry out these reforms with authority.

Finally, the new government must move the country toward a complete reform of the Constitution. We will have advanced very little if we do not put an end to the absurd Plurinational State and that Constitution tailor-made for 21st Century Socialism, which only imposes obstacles to development and promotes unequal treatment under the law. And once again, this may provoke strong opposition from many ex-MAS sectors (and from the Vice President himself), which the government must weather with authority and firmness at the cost of popularity.

The historical role of this government is to do what is right, not what is pleasant. And I fear, from what we have seen in these first weeks, that they still do not understand it that way. For now, they seem to be moving slowly—very slowly—as if trying not to anger anyone with their decisions. They are skirting the margins and probing without addressing the central problems. It gives the impression that they are still in campaign mode, trying to look good with the people when what is needed is authoritative leadership to cross the harsh desert of adjustment. The president’s interventions always include a complaint or denunciation about the mess MAS left behind, but they do very little to show the difficult road we must walk. For now, we only have announcements that more announcements are coming.

Rodrigo Paz must understand that his role is to go down in history as the president who did the dirty work so the country can have a future. Period—that is it and nothing more. Do not make the populist mistake of trying to please both God and the devil. Do not make the mistake of trying to project yourself and your party into the future. Do it without fear, Mr. President, because Bolivia is wise and, in the long run, will recognize your courage just as it did with another Paz, Dr. Víctor Paz Estenssoro.