Debt Is Not the Solution | La deuda no es la solución

By ANF, Eju.tv:

Dunn: We cannot repeat the mistake of replacing income with debt; that was already done and led us to this crisis

The analyst and financial expert Jaime Dunn indicated that the Government cannot repeat the same mistake that led the country to the current crisis: resorting to external debt to cover State spending. For that reason, he called on authorities to adopt serious measures to reduce the “obese State.”

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“Some important measures have already been taken by the government, but let’s be honest with Bolivia: the problem is not that money is lacking, the problem is that there is too much State and too much public spending. For years, the State payroll was inflated, positions multiplied, salaries, trips, per diems, vehicles, offices, state ceremonies, expenses that generate no value for the people,” Dunn said in a video on his social media.

The analyst highlighted that in these three months of the government of Rodrigo Paz the hydrocarbon subsidy was eliminated; however, the cost of the measure is being paid only by the population and not by the Government.

“So, the people already did their part, now it is the State’s turn. It is not fair that the weight of the adjustment falls only on families, transport workers, small businesses, and workers. If the subsidy fell on the people, now the cut that is still needed must fall on the obese State, the true culprit of the crisis,” he questioned.

In terms of adjustment, Dunn proposed a 30% reduction in the State payroll, which would allow savings of more than 2.2 billion dollars. He also proposed suspending transfers to deficit-ridden public companies to save 1.4 billion dollars annually, cutting 20% of unproductive public investment with estimated savings of 800 million, and closing the Centro de Desarrollo Empresarial (Cedem), which would represent an additional 670 million.

“With what I just told you, we save more than 5 billion dollars. With that, we not only eliminate the fiscal deficit, but we generate a surplus,” he maintained.

He also expressed concern that the way out of the crisis is taking refuge in more international loans. He warned that going into debt to cover current expenses or to “cover waste” does not constitute a coherent or social policy, but rather a way of postponing the problem.

“We cannot repeat the mistake of the past, replacing income with debt, that was already done, that led us to this crisis. Going into debt to cover waste is not coherent policy, much less social policy; it is simply prolonging the problem,” he argued.

So far, Paz’s government has committed loans with the Banco Interamericano de Desarrollo, the Corporación Andina de Fomento, the Fondo Monetario Internacional, and the Banco Mundial.

Economists estimate that the external debt left by this administration could exceed 20 billion dollars. The nearly 20 years of government by the Movimiento Al Socialismo left the country with a commitment of 13 billion dollars to be paid in international loans.

//FPF//

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