By Erbol:

URGENT CALL FOR MAJOR REFORM

IMF Agreement: Dunn Says Adjustment Should Start with the State, Not Citizens

Photo: FB / Jaime Dunn

After the agreement with the International Monetary Fund (IMF) became known, including measures to reduce spending and subsidies, politician and financial analyst Jaime Dunn argued that any adjustment process should begin with the State rather than shifting the cost onto citizens.

Dunn warned that Bolivian families have already endured losses in wages, savings, and purchasing power. “Citizens have already done their part; now it is the State’s turn,” he stated on social media.

He argued that the IMF arrives when the State “has already created the crisis and run out of money to hide it,” and outlined three warnings regarding the stabilization process.

First, he stressed that “the adjustment must begin with the State, not the citizen.” According to Dunn, excessive government spending should not be corrected by imposing greater burdens on those who already finance it.

Second, Dunn maintained that borrowing should be tied to the implementation of reforms. He said that taking on debt to carry out reforms may be reasonable, but questioned seeking financing without changing the structures that, in his view, caused the problems in the first place.

Third, he stated that an agreement with the IMF may help restore macroeconomic order, but it cannot replace a “major institutional reform” involving the justice system, investment, deregulation, private property, economic openness, and limits on political power.

“Reforms should not be implemented because the IMF demands them, but because Bolivia needs them,” he said.

Finally, Dunn argued that the international organization can help organize the country’s finances, but that building a new economic and institutional model is Bolivia’s responsibility.

“Let’s not use new dollars to finance the same old State,” he concluded.

For its part, the Government has already announced adjustment measures, including a 30% reduction in bureaucracy and cuts in other expenditures, such as those related to state-owned companies. It emphasized that the economic program includes stabilization measures and inflation management through mechanisms such as controlling the money supply. Among its goals are the gradual reduction of the fiscal deficit and the accumulation of reserves.

The Executive Branch also stressed that the program does not rule out social measures such as cash-transfer bonuses to mitigate the effects of the economic transition.