Government bets on “gradualism,” but the economy requires shock measures | Gobierno apuesta por el “gradualismo”, pero economía requiere medidas de shock

By El Diario:

“Gradualism” is part of the economic management of Rodrigo Paz’s government, in a political, economic, and financial scenario that is not the most favorable for implementing shock measures, but it must be reversed or readjusted as soon as possible, and a concrete and feasible economic plan must be presented, according to economic analyst Fernando Romero.

The government of Rodrigo Paz, in general terms, has given positive signals of change in the economy, which has translated into the improvement of some of the country’s indicators. However, much is still missing, with a 65% approval rating for Paz but a 52% rejection for Lara, Romero’s analysis points out.

“Although the government is moving in the right direction, or at least intends to, the issue is the pace and timing of the economic measures that Bolivia requires to stabilize and emerge from the crisis. The time for complaints, speeches, or presentations must be limited and give way to concrete actions. A country cannot be led by looking in the rearview mirror; let’s not repeat past mistakes,” the economist states.

One month after his inauguration, Romero recalls that in his inauguration speech he referred to the critical economic situation he inherited from Luis Arce Catacora, and that rebuilding the country was going to be very costly, requiring effort and sacrifice from everyone.

The reorganization of the State and reactivation of the economy was the message of the President at the time of his inauguration, and Romero highlights the good, the bad, and offers a suggestion.

He acknowledges the severity of the crisis and the need for changes, sends signals to the market and the population that reforms are coming, among the positive aspects, but these were not accompanied by immediate concrete measures and only generate expectation without any guarantee of real execution.

For this reason, he suggests that a realistic and measurable economic plan (dates, targets) should be published and weekly progress reports provided to generate confidence.

General conclusion

The government recognizes the economic crisis, but it has not yet changed the real structures of the economic model.

Romero assures that Bolivia will not recover without: reducing public spending, reforming the fuel subsidy, adjusting the exchange rate, stopping the reliance on indebtedness, and restructuring the State.

Other measures that should accompany these include: gradually eliminating the subsidy and returning it through targeted vouchers for the poor; moving toward a more realistic exchange rate, preventing (moderating) the black market, reducing ministries, eliminating useless state-owned companies, yes to investment, no to waste, and a full audit of the State.

Leave a comment