Freeing fuel prices was an “inevitable” measure | Liberar precio de carburantes era una medida “inevitable”

By El Diario:

To break free from the economic fantasy

  • The measures adopted—especially regarding subsidies—were necessary and inevitable given the complexity of the current crisis, particularly considering that previous administrations had already identified the problem but chose not to take any action.
  • They argue that the country needs to move decisively toward a more drastic reduction in spending, fiscal discipline, and lower burdens on those who generate employment.
El asesor financiero, Jaime Dunn.

Following the government’s decision to lift fuel subsidies, along with issuing a series of measures to confront the crisis and stabilize the economy, financial advisor and former presidential pre-candidate Jaime Dunn said the move was “inevitable” and a decision that had been avoided for years.

The so-called “Decree for the Nation” establishes a set of economic measures regarding hydrocarbon prices, bonuses, the national minimum wage, and other determinations aimed at mitigating the impact generated by freeing fuel prices in the domestic market.

Along with the elimination of hydrocarbon subsidies and the removal of diesel from the list of controlled substances to facilitate its importation, the announcement also includes: repatriation of capital with zero tariffs, tax simplification, and the liberalization of exports.

As for the minimum wage, it will increase by 20%, rising to Bs 3,300. Meanwhile, the Renta Dignidad will increase by Bs 500, the Juancito Pinto bonus will reach Bs 300, and a new Bs 200 benefit will be created, paid in three installments, for parents and guardians without contributory benefits.

For Dunn, the measures adopted by the government—especially on the issue of subsidies—were necessary and inevitable given the complexity of the current crisis, particularly since previous administrations had already identified the problem but avoided taking an unpopular political stance.

“Adjusting fuel prices was inevitable. The government has taken an important first step by making decisions that were avoided for years,” he said.

However, he noted that raising wages in the midst of a recession, without a deep and real cut in public spending, can weaken any serious attempt at stabilization, as it would transfer higher costs to companies already suffocated by the crisis.

“When the deficit is not corrected, the pressure ends up falling on the Central Bank: monetary issuance and inflation. Nominal wages can rise by decree, but real wages fall when they are financed with inflation and when the private sector loses the capacity to sustain jobs,” he warned.

In his view, the country needs to move decisively toward a more drastic reduction in spending, fiscal discipline, and lower burdens on those who generate employment.

“Without that shift, the crisis is not resolved; it is postponed, made more expensive, and deepened. Let us be patient, but also demanding. Let’s wait to see what else comes,” he concluded.

Former legislators such as Cochabamba native Samantha Nogales rejected claims of a disproportionate fuel price increase, clarifying that the liberalization of prices for domestic sales merely reveals the real price of fuels, leaving behind the “economic fantasy sold as a political achievement” promoted by socialist-leaning governments over two decades.

“Reality is not ideological and always comes due. Sooner or later we were going to pay for the mistakes and horrors of others,” Nogales said on her social media.

Yesterday, in the face of speculative behavior and the threat of radical measures by sectors resisting the elimination of hydrocarbon subsidies, the president of the Chamber of Deputies, Roberto Castro, called for a broad national dialogue with all involved sectors to analyze the measures adopted and define the best path for the country.

“It is necessary for the government to listen to the voice of the people who are beginning to react to the measures taken by the Executive Branch; those concerns must be addressed with seriousness, sensitivity, and responsibility,” Castro said at a press conference.

According to the legislative authority, it cannot be ignored that some measures, despite being responsible, are having a negative impact on the Bolivian population, making dialogue necessary to establish actions that provide certainty about what lies ahead.

“For that reason, we urge the people, the Executive Branch, and the mobilized organizations to engage in a broad national dialogue in which measures are generated that guarantee peace, stability, and the economic recovery of the State,” the head of the Chamber of Deputies concluded, stressing that the call is directed to all sectors involved in the problem.

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