By Germán Huanca, Urgente.bo:

Bolivia’s Juancito Pinto Bonus is one of the cash transfer programs that has generated significant praise and expectations, not only nationally but also internationally. United Nations organizations such as UNESCO, UNICEF, and ECLAC, among others, have highlighted its importance. As always, the governments of Evo Morales and Luis Arce proudly showcased these recognitions without revealing the true financial architecture behind the program, which we now lay bare.

A first element worth highlighting is the establishment of a supreme decree to define the financing structure of the Juancito Pinto Bonus. In other words, each year, politicians arbitrarily determined the diversion of profits from state-owned enterprises, revealing how this cash transfer has operated throughout its existence. The proper approach would have been to establish distribution parameters based on the profitability of public enterprises, cash flow, planned investments, and similar criteria. Over the last 20 years, Supreme Decrees 29321, 29652, 0309, 0648, 1016, 1372, 1748, 2141, 2506, 2899, 3331, 3685, 4050, 4336, 4606, 4807, 5031, 5230, and 5454 were issued—one each year—to discretionarily capture resources from public enterprises.

A second element is the financing source of the Juancito Pinto Bonus, which came directly from companies created by governments prior to 2006. For example, 48% of all contributions to the Juancito Pinto Bonus came from YPFB, 10% from ENTEL, 6% from ENDE, 4.6% from COMIBOL, and 16% from the General Treasury of the Nation (TGN). Other enterprises established earlier contributed smaller amounts, along with carryover balances from previous fiscal years. Only 8.66% of the funding originated from state-owned companies created by the MAS during its 20 years in government.

A third element of the transfer model is that the bonus depends heavily on gas revenues, specifically those generated by YPFB. When the Juancito Pinto Bonus began in 2007, YPFB was required to contribute 157 million bolivianos. As gas sales reached their peak, this amount climbed to 376 million bolivianos in 2009. As gas revenues declined, YPFB’s contribution fell to 158 million bolivianos in 2025. Nearly half of the Juancito Pinto Bonus funding came from YPFB. Now that gas revenues have dropped dramatically, will YPFB continue making these contributions, or will the government resort to international borrowing?

A fourth element involves Central Bank of Bolivia (BCB) loans to public enterprises. Through the supreme decrees mentioned above, the government discretionarily transferred these resources to the Juancito Pinto Bonus under the label of profits generated by public enterprises, even though some of these companies reported negative balances in their financial statements. The public enterprises created by Evo Morales and Luis Arce contributed only 8.66% of the Juancito Pinto Bonus budget over the past 20 years. Their contributions were as follows: BOA (0.98%), DAB (0.94%), EMV (0.31%), EBA (0.12%), Mi Teleférico (0.24%), ABE (3.46%), Lácteosbol (0.01%), EBC (0.09%), EMAPA (1.96%), ECEBOL (0.07%), ENVIBOL (0.07%), Editorial del Estado (0.21%), SEDEM (0.31%), Cartonbol (0.01%), EEPAF (0.01%), Papelbol (0.01%), BDP (0.10%), NAABOL (0.09%), UNIVIDA S.A. (0.08%), UNIBIENES S.A. (0.01%), SAFI-Unión S.A. (0.00%), B-Agro (0.01%), ADSIB (0.05%), and EBIH (0.01%).

A fifth element is the assessment of the program’s sustainability. While the BCB’s international reserves were being depleted after 2014, eventually reaching levels never before seen in macroeconomic records relative to GDP, lending to public enterprises continued. Even when the transitional government in 2020 exposed the losses of state-owned enterprises, the Juancito Pinto Bonus continued without any modification.

A sixth element to consider is its direct relationship with the Human Development Index (HDI). Those who designed this program knew exactly that a conditional cash transfer would improve student retention within the school system and therefore directly support improvements in the educational component of the HDI over time. This, in turn, allowed the government to claim internationally that its model was highly successful, without taking educational quality into account. The educational component of the HDI became particularly significant after 2008, helping Bolivia move from a medium to a high HDI category in 2014. The educational component rose from 0.66 in 2006 to 0.745 in 2025, helping maintain Bolivia’s overall HDI at 0.737 and placing the country 107th out of 193 nations evaluated. What will happen when that transfer is interrupted?

Finally, after analyzing a financial architecture built upon international reserves that are now nearly exhausted, Central Bank loans that can no longer continue, and the profits and/or losses of public enterprises that are more accounting entries than anything else, the question is no longer rhetorical: Will the Paz Pereira government continue financing the bonus using the same financial architecture? Will it resort to international loans to finance the Juancito Pinto Bonus? What is the future of the bonus under the new economic circumstances?

The time has come to make decisions. The bonus itself is beneficial—no one denies that. But when public finances are broken, the worst thing that can be done to a country is to mislead its citizens and maintain an unsustainable structure while disguising the performance of inefficient state-owned enterprises with calculations designed merely to preserve political support. The financial architecture exposed here can no longer be concealed with cosmetic adjustments: either it is restructured transparently, or it will continue to rest, as it has until now, on a foundation that no longer exists.

(*) Economist and former Vice Minister of Strategic State Planning