By Oscar A. Heredia, El Diario:

What Bolivia Does with Its Booms and Learns from Its Crises

There are countries that possess resources yet fail to transform them into development. There are others that go through crises and emerge from them with a different economy. The difference lies not only in how much they have, but in what they do when they have it and what they decide when they no longer do.

Bolivia knows both scenarios. It has experienced periods of abundance and periods of scarcity, times of expansion and times of adjustment. But economic cycles should not be measured solely by what happened while they lasted. They should also be measured by what they left behind when they ended.

That is why there is a question worth asking without seeking culprits, but also without avoiding responsibility:

How much of each economic cycle was transformed into the capacity to produce, innovate, and grow once the boom ended, and how much was lost because the decisions required by each moment were not made in time?

During the hydrocarbon boom, Bolivia received an extraordinary opportunity. High commodity prices and gas exports generated fiscal revenues, economic growth, and improved social conditions. Between 2006 and 2014, the country enjoyed resources and external conditions that were exceptional and could hardly be considered permanent.

A boom does not only bring money. It brings a historic responsibility.

While resources are flowing in, many decisions seem easy. The difficult part is deciding how much of that wealth should be transformed into something that will remain when the extraordinary revenues disappear.

That was the real decision: not only what to do with abundance, but also what to avoid. Mistaking extraordinary income for permanent wealth. Maintaining an economy that is overly dependent on exceptional conditions. Postponing decisions that could only be made when there was room to act.

When everything is going well, it is easy to believe it will continue that way.

But cycles change.

Today, the situation is different. Bolivia faces constraints, fiscal difficulties, reduced foreign currency availability, and an economy that needs to regain its capacity for growth. The current government must make decisions within a much narrower context.

And here it is important to be precise: the problem is not whether the government decides or does not decide. It does make decisions. The issue is the quality, timing, and direction of those decisions.

In a crisis, some measures must address the emergency. But there are also decisions that must prepare the recovery. An isolated measure may ease immediate pressure while pushing the problem into the future. A postponed decision may make it harder and more costly to resolve tomorrow.

A crisis does not merely force the management of scarcity. It forces a choice about what kind of country can emerge after it.

Because while during a boom the question is how much we can do with the resources available, during a crisis the question is what we must do to regain the ability to produce those resources.

During a boom, we decide what future to prepare. During a crisis, we decide how much of that future is still possible to build.

But there is something that should connect both moments: the capacity to learn.

A country also accumulates economic knowledge. It learns from its successes, its mistakes, and above all from those decisions that were postponed until they became more costly.

The true economic memory of a society does not consist of remembering how much money it had or how much it lost. It consists of understanding why it happened, which decisions worked, which failed, and what lessons must remain to avoid repeating the same path.

It is also possible to waste a crisis. This happens when, after going through it, a country reorganizes its economy in the same way and fails to transform the experience into knowledge, productivity, and new opportunities.

That is why Bolivia needs more than simply overcoming the current crisis. It needs to learn from it.

Here, a deeper dimension of development emerges: the relationship between human development and economic development.

There can be no productive and sustainable economy if people do not have the capabilities to participate in it. A modern economy requires knowledge, education, health, technical and professional training, research, and the ability to adapt.

Human development is not only about improving living conditions. It is about expanding people’s capabilities so they can participate in an increasingly complex economy.

A person who develops new skills can generate greater value. A society that accumulates knowledge can innovate. A population with greater opportunities to learn, work, and undertake new ventures can respond better to economic changes.

That is why human development is not only a consequence of growth. It is also a condition for generating higher-quality growth.

If economic development does not improve people’s opportunities, it ultimately becomes fragile. And if human development does not find an economy capable of generating opportunities, many capabilities remain unable to flourish.

The real challenge, then, is not simply to ask what resources Bolivia will have in the coming years. It is to ask what we will be capable of doing with them.

Gas reserves may decline. Prices may change. Technologies may render advantages that once seemed permanent obsolete. Markets may open or close.

What makes it possible to respond to these changes is not merely having resources, but having built the knowledge and capabilities necessary to adapt.

One generation should not receive only the resources left by the previous one. It should also receive greater capabilities to create the resources of the next.

This changes the way we view public decisions. It is not enough to ask what results they produce today. We must also ask what lessons they leave behind, what capabilities they strengthen, and what possibilities they open.

Continuity does not mean preserving everything from the past. It means preserving what works, correcting what fails, and learning from experience.

Bolivia does not need to wait for another boom to have another opportunity. It needs the next stage to find the country with greater capabilities than the previous one.

The question is unavoidable:

What did Bolivia receive from each boom, and what are we leaving for the next generation?

Economic cycles come to an end. What is learned can remain. When it is transformed into knowledge, human capabilities, and productivity, the next cycle finds the country in a different place.

A country does not move forward simply by overcoming a cycle. It advances when it learns from it and begins the next one with greater capabilities.

That is Bolivia’s challenge: not to start over every time the cycle changes, but to build upon what has been learned.

A country produces its future when it transforms what it has lived through—abundance and scarcity, successes and mistakes—into capabilities that endure.

The author is a political and economic analyst and former Rector of UMSA.