Military personnel stand guard in Plaza Murillo, located in the administrative capital of Bolivia, La Paz.
Through the
newscasts of various bourgeois media, we learned, on June 26, of the news of a
"Coup d'état in Bolivia" in which a small number of high-ranking
officers, troops and two or three tanks were involved, which after having been
deployed in front of the presidential palace in Plaza Murillo have withdrawn,
with the coup leader being arrested by military forces loyal to President Arce
of the Movement for Socialism Party (MAS), whose leader is Hugo Morales and who
is only socialist on the letterhead, because he represents the interests of the
bureaucratic faction of the great native bourgeoisie.
"Bolivia
lived hours of uncertainty this Wednesday after a group of military personnel
mobilized in the center of La Paz, something that President Luis Arce called an
attempted "coup d'état."
Later, Arce
appointed new military chiefs, including General José Wilson Sánchez, who
assumed the general command of the Army.
While this
act was taking place at the government headquarters, the members of the army
who had mobilized in the center of La Paz began to leave Plaza Murillo.
At the time of his arrest, the military accused Luis Arce of mounting the coup attempt to "increase his popularity." Zúñiga said it was a "self-coup."
Former
President Evo Morales - leader of the ruling party Movement to Socialism -
described what happened on Wednesday as "a coup d'état" in progress.
Juan José
Zúñiga had been removed as head of the Army on Tuesday after making statements
against Morales and stating that “he cannot be president of this country any
longer,” in reference to the former president's aspirations to run for office
again.”
A number of
media outlets consulted have shown that the theory of a self-coup was later
disavowed by Morales himself. And the coup was also rejected by representatives
of the comprador faction of the Bolivian big bourgeoisie. The current governor
of Santa Cruz, Luis Fernando Camacho, declared: “The mandate of the popular
vote must be respected. Any action against it is absolutely illegal and
unconstitutional,” as did former president Jorge Tuto Quiroga and even former
de facto president Jeanine Añez, the former president before Arce.
OUR NOTES
ON THIS:
As will be
recalled, Evo Morales won the presidential elections at the end of 2005. Until
before that event there was a situation of instability in all areas with
continuous changes in government. In this situation, representing the
bureaucratic faction of the big bourgeoisie, he assumed the government and
implemented a program based on state enterprise and investment to maintain the
old semi-colonial, semi-feudal society, on the basis of which a bureaucratic
capitalism developed at the service of imperialism, mainly Yankee. The
bourgeois economists say that the “primary-export” model continued, that is,
bureaucratic capitalism and the economic policy of economic growth based on exports
to the world market, whose result has been the same as always, to promote
growth without economic development and, after the cycle of rising commodity
prices, to return to the point from which it started.
“The
economy grew significantly from 2006, and there were also significant advances
in the social area. However, all this happened in an extremely advantageous
external environment, now known as the super cycle of raw materials, with terms
of trade extraordinarily favorable not only for Bolivia, but also for the
entire region” (1)
In this
way, the MAS with Morales continued the path of its predecessors, the
governments of the comprador and bureaucratic factions (*).
It is
important to know that the MAS is divided into two factions, one led by the
current president of the country and the other by the “historical leader” of
the MAS, Hugo Morales. Arce has opted for the comprador program to get out of
the current economic crisis that afflicts bureaucratic capitalism in Bolivia,
as will be seen in the final note of the BBC (**).
Morales was
also president of the country for consecutive periods from 2005 to 2019, when
due to a political crisis at the top he had to temporarily leave for Mexico and
then Argentina, giving rise to a transitional government of the representative
of the comprador faction of the Bolivian big bourgeoisie, Jeanine Añez, and, as
agreed, new elections were called and the MAS was able to return to the government
headed by Arce.
The
solution to the situation of impasse in the collusion and struggle between the
two factions of the Bolivian big bourgeoisie in 2019 was arranged between Hugo
Morales and the head of the OAS, the servant of Yankee imperialism Almagro.
Thus, the castling was monitored by Yankee imperialism through Almago.
Almagro of
the OAS is the same one with whom the ronda member, counterrevolutionary and
genocidal Pedro Castillo Terrones entered into negotiations, to find a way out
of the situation in which he and his reactionary government found themselves,
at the head of the fascist, genocidal and traitorous regime in Peru, before his
reactionary “self-coup” and “counter-coup.”
Apparently,
Yankee imperialism and the intelligence services of the reactionary and
genocidal Army of the Peruvian State whispered in Castillo's ear that they
would support him in his "self-coup" to carry out the
"counter-coup" with the fascist, genocidal and traitor Dina Boluarte.
Everything indicates that this was the case: Castillo's trip to the US, his
interview with Almagro, the arrival of the OAS Commission in Lima and the
report, all before the declaration of a "self-coup" on December 7,
2022. In addition, the way it happened and the statements of Castillos and the
characters involved after December 7, 2022 - which seem more like the magical
realism of García Marquez's novels - despite the little that has been leaked to
public knowledge and taking into account the precedent of the deceitful way in
which the old Bush government proceeded with Saddam Hussein, to have a pretext
to invade Iraq, this conclusion can be drawn in this regard without much fear
of being wrong. Remember that the former genocidal president of the US, Bush,
who was also head of the CIA, through his ambassador whispered in Saddam's ear
that if he invaded Kuwait they would not intervene.
We have
made this long interpolation on the case of the “self-coup” of the rondero
Castillo in Peru, due to the circumstances and the way in which the “failed
coup” in Bolivia took place, which was dissipated in less than three hours.
Therefore, for many it has been a staging by the reactionary president Arce and
his friend General Zuñiga, giving rise to the conspiracy argument of the
Argentine newspaper Página 12 (see its World section, days 26 and 27 of this
month).
The
reactionary newspaper El País (June 28, 2024), in its editorial article:
“Bolivia returns to normality after the failed coup without solving the
underlying problems”, describes the “failed coup” as “unexpected and
implausible”.
Regarding these events in Bolivia, what is the responsibility of the Maoists in these situations?
In any
case, regarding these events in Bolivia, we want to say that what corresponds
to the revolutionaries in that country is to focus on the reconstruction of the
Communist Party. That, one cannot focus on the defense of the constitution and
against the coup d'état, those who proceed in this way focus on the enemy, they
do not focus on the power of the people, of the masses. In the struggle for
power, what is the main thing? The revolutionary struggle or the
counterrevolutionary struggle for political power. Which of the two changes and
transforms things? The Revolution, obviously, is that of the proletariat and
this tendency develops more and more, hence the need for the CP to initiate and
develop the people's war to culminate the democratic revolution.
What we
have to preach is that the P.W. is the form that corresponds to the
revolutionary struggle.
In the face
of fascism, fascist denial of the constitution and bourgeois laws, for the
corporatization of society, applying its fascist conception and policy and
developing a fascist legal system. Our position is the defense of the rights of
the people and the justice that they exercise. It is not about raising
bourgeois laws; we are for the conquest of power for the proletariat and the
people, for the new power conquered and defended by the people's war that
supports it, for a new legal system that serves today the joint dictatorship,
under the direction of the proletariat, represented by the PC, supported by the
worker-peasant alliance and in perspective, the dictatorship of the
proletariat.
We need a
new legal system that must be a product of the Revolution. We must not fight fascism
with the liberal-democratic criterion.
Then there
is the dispute between the two factions, in the MAS there are positions of
liberal democracy and the fascist tendency, today they are arguing about how to
get bureaucratic capitalism and the Bolivian landowner-bureaucratic State out
of the crisis at the service of imperialism, mainly Yankee, and at what moment
to apply such and such measures. There is no monolithism (President Mao).
Is the Arce
government in a position to develop a self-coup? It seems not. That has to do
with how much capacity it can deceive the masses. In addition, it is not in a
position because the MAS is divided
The armed
forces have remained on the balcony for the most part, in those three hours of
the attempted “coup” they have remained mostly on the balcony. Today the two
factions, both inside and outside the MAS, are in conflict but they can collude
and thus will be in conflict-collusion-etc. It is a problem of contradiction
within the reaction, particularly within the big bourgeoisie, but that
complicates other bourgeois and petite bourgeois sectors.
Revolutionaries
must worry about mass work to promote their struggles to serve the
reconstitution of the CP, now more than ever, the masses are an arena of
contention, which reaction and revisionism want to tie down. Do not forget the
game of contention of the imperialist powers.
Revolutionaries
must not stand in the queue of any of the reactionary factions. They must
expose the process, make people understand what it is about and denounce
opportunism, which seeks to contain the revolution and defend the State.
Opportunism does not care how much blood, shackles and hunger the masses
suffer. It is the same phenomenon as the old tradition of revisionism of social
democracy.
The
function of the Maoists is to develop the reconstitution of the CP for the PW.
Mass work must have two parts: the part of demand and the part of the fact that
only the revolution can solve the problem. If we only focus on demand, we fall
into a vicious circle, we advance but we lose when repression comes, it is like
going back to bourgeois democracy: constitutional or bourgeois democracy under
military dictatorship, or what is worse, going out through fascism. The only
way to ward this off is to make the revolution. Thus, what we ultimately want
to highlight is this: Bolivian society has only one way out, there is only one
way out, the New Democratic Revolution, which implies satisfying the needs of
the people, that is, the proletariat, the peasantry, the petite bourgeoisie,
and also taking into account the interests of the national bourgeoisie, that is
the only way out, there is no other; every position, every proposal of
alternatives are nothing but evolutionary plans to serve the old order to
maintain and develop - we are not saying develop - so that it survives, it is
the problem of the evolution of the system. As Chairman Gonzalo has
established:
“We are not
an alternative and we will never propose alternatives, because we are not going
to promote the evolution of the system, what we want is the destruction of the
system, and there is no possible alternative; there is no solution, which is to
destroy the old State, its backbone, the armed forces, and destroy its entire
system of social relations of exploitation to create new social relations of
production, that is in summary the position that we must maintain, there is no
other. Many times reactionary politicians or profiteers say that we do not
propose an alternative, we simply criticize, criticize, criticize, but we do
not propose what alternative can be followed, of course; why?: because we are
not in favor of the evolution of the system, we are in favor of its destruction
and the creation of a new one, we are in favor of New Democracy, that is the
reason.
In short,
what we must clearly emphasize is the only way out: New Democratic Revolution.”
(1) Note: the fact that the price of exported goods
from backward countries increases does not in any case, in any period, imply
that the goods exported from our countries have a value equal to the goods
imported from imperialist countries. This deterioration or improvement of the
“terms of trade” comes from the economists of imperialism, from CEPAL, because
exchange is always unequal. Marx in Capital (vol. III) wrote in this regard:
“Capital
invested in foreign trade can yield a higher rate of profit because, first of
all, in this case it competes with goods produced by other countries with
lesser production facilities, so that the more advanced country sells its goods
above their value, although cheaper than the competing countries. To the extent
that here the work of the more advanced country is valued as work of greater
specific weight, the rate of profit increases when the work that has not been
paid as such is sold as qualitatively superior. The same relation may hold with
regard to the country to which commodities are sent and from which commodities
are brought; namely, that such a country supplies a greater quantity of
objectified labour in kind than it receives, and thus nevertheless obtains the
commodity cheaper than it could produce itself. It is just the same as the
manufacturer who uses a new invention before it is generalised, and sells it
cheaper than his competitors, yet nevertheless sells his commodity above its
individual value, i.e., valorises as surplus labour the specifically higher
productive power of the labour he has employed. In this way he realises a
surplus profit. On the other hand, as regards capital invested in colonies,
etc., these can yield higher rates of profit because in such places the rate of
profit is generally higher on account of their low development, and the same
with the employment of slaves and coolies, etc., the exploitation of labour.”
( * ) The MAS with Morales continued the path of
its predecessors, the governments of the comprador and bureaucratic factions
As the
study we quote says:
“Bolivia
did have important cycles of boom and growth, mainly driven by increases in the
international prices of raw materials. However, the surplus generated in those
periods was not properly used to diversify the economy towards the secondary sector.
Rather, what is observed over and over again is the substitution of one natural
resource for another or, paraphrasing Gudynas (2015), diversification, but of
extractivism. The sequence has been: silver ore (1825-1894), rubber
(1890-1910), tin (1900-1985), natural gas (1999 to today) and soybeans (1997 to
today). In general, all governments have resorted to the theme of
diversification and have tried to implement some type of industrialization
policy, but efforts have so far been unsuccessful. (...) limitations of the
Bolivian State and the role it has played in its attempt to promote
development”
“In the
primary hydrocarbon link (upstream), exploitation is divided into oil and
natural gas, the latter being the most significant production (98%). The
strategic public company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB),
now present in all activities of this production chain, maintains exploration and
production contracts with about a dozen national and foreign companies. 47
Foreign direct investment by these transnationals represented 31.6% of the
total in 2017. In mining, zinc, 48 tin, gold, silver, lead, copper and tungsten
are mainly produced. There are three different forms or groups of production:
private mining (large, medium and small), national and foreign,49 mining
cooperatives and state mining,50 whose average shares (period 1990-2013) with
respect to the total production value were 57%, 36% and 6%, respectively
(UDAPE, 2015). Foreign direct investment by foreign mining companies
represented 20.7% of the total in 2017.
Since 2006,
several state companies have become part of this manufacturing sector, although
private companies predominate, some of which have attracted foreign direct investment
in recent years, which reached 21.2% of the total in 2017.
It is also
important to note that the issue of employment may be highly biased by the
level of informality in the country. According to World Bank statistics (2018),
informal employment, as a percentage of total non-agricultural employment,
reached 77.3% on average in the period 2007-2017. This means that, outside of
agricultural activity, official figures may be hiding about three-quarters of workers
who provide services in other sectors, but as informal workers, which is
extremely high.”
And we end
this part with a quote that shows the never-ending story that can only be ended
with the destruction of the three mountains: imperialism, bureaucratic
capitalism and semi-feudalism:
“The positive external shock of raw material prices began to reverse from 2015 (Chart 4), but the inertia of reprimarization of the economy will surely continue for several more years. What is impossible to predict is how manufacturing exports will evolve or adapt to this new environment” (The quotes come from “Bolivia”, SERGIO G. VILL ARROEL BÖHRT, early 2019, The challenges of productive transformation in Latin America, Friedrich-Ebert-Stiftung Proyecto Regional Transformación Social-Ecológica, 2020).
Another
consulted author says about the period of Morales as president and of Arce as
his Minister of Economy, in Genealogy of power and geopolitics of the economy*,
Raúl Prada Alcoreza, February 26, 2019; available at
<https://www.pluriversidad-oikologias.es/l/genealogia-del-poder-y-geopolitica-economica/>,
writes among other things:
"Specifically,
the State's greatest income is received from the export of hydrocarbon
resources, mainly gas. In second place, we can note the mining resources,
followed, to a lesser extent, by food products and manufactures. It can be
noted that there are currently plans to develop the generation and exploitation
of electric energy, with the construction of dams and hydroelectric,
thermoelectric, geothermal, photovoltaic and wind plants. It is said that, in
comparative terms, the Bolivian economy is the fourteenth economy in Latin
America, if we take into account the nominal gross domestic product (GDP), as
well as the thirteenth in terms of GDP at purchasing power parity (PPP) prices.
According
to statistics provided by the National Institute of Statistics (INE) on the
participation of economic activities in GDP, public administration services
account for the largest share, with more than 15%, followed by agriculture,
forestry, hunting and fishing with around 12%; and manufacturing industries
with more than 10%. If we take into account that the share of mineral
exploitation reaches more than 9% and hydrocarbon exploitation a little more
than 4%, we would have that traditional extractive exploitation participates
with around 14% in the formation of GDP. Thus, it turns out that traditional
extractive exploitation is the second sector, after public administration
services. Therefore, from the perspective of economic activities, under the
focus of macro-economic indicators, the Bolivian economy appears as an economy
mainly of services and extractive exploitation. That is, around 30% of the
economic structure, composed of economic activities, is made up of state
services and extractive exploitation. If we add to this share the share of
agriculture, forestry, hunting and fishing, approximately 41% of the GDP's
composition corresponds to services and is extractive and agricultural. With
the share of financial institutions, which reaches nearly 10%, the composition
of more than half of the GDP turns out to be services, extractive, agricultural
and financial. Only 9% corresponds to the manufacturing industry and the rest
to transport and storage, trade, construction, communication and other services.
If these other services, which exceed 6%, are added to state services, then the
aforementioned composition reaches more than 56%. Considering other data, 17%
of the share of the GDP corresponds to transport, trade, construction,
electricity, gas and water and communications.
In the case
of the Bolivian economic field, the preponderance of extractive activities
stands out in what corresponds to the economic activities themselves and much
more if it is about exports. According to Henry Veltmeyer (2015, pp. 129-130),
when Morales assumed power and established his post-neoliberal regime in
January 2006, backed by a social movement, around 10% of the Gross Domestic
Product (GDP) and 90% of exports were in the extractive sectors of hydrocarbon
exploitation and mining. By mid-2011—the middle of his second
administration—this economic structure was consolidated; commodity exports,
which now approached 96% of total exports, made Bolivia the most
resource-dependent economy in the region. In 2011, mining accounted for 6.2% of
GDP and 37.3% of exports, while the hydrocarbon sector contributed 6.9% of GDP
and 45% of exports. This shows us that dependence is generated in the exchange
relations: in exports and imports.
(…)
It is said
that in the 2010s Bolivia is experiencing the “golden decade.” This is
supported by the fact that it managed to double its GDP in just 7 years, in the
period 2010-2017; and this despite the fall in the world price of a barrel of
oil and the decrease in raw materials, as well as natural disasters (floods and
droughts). On the other hand, Bolivia has managed to maintain a fixed and
stable exchange rate for its currency against the dollar, even devaluing the US
currency by 15% during the period 2006-2011, when it went from 8.06 to just
6.86. 2 But, this “golden decade” is a media cliché; one cannot ignore a long
period of high prices for raw materials—which is still radiating, in terms of
impact—when the fall of these prices has already begun. A “golden period”
cannot last so short and then disappear as if nothing had happened, as if
everything had been a fiction. What happens is that primary export economies,
as defined by economists, are highly vulnerable to variations in the
international market. What there was was an artificial bonanza caused precisely
by the rise in the price of these raw materials; the bonanza evaporated because
it was managed by a rentier State. And the fact is that a rentier State spends
and enriches the rentier bourgeoisie, but it does not accumulate capital, it
does not convert the State’s income into capital. In other words, it does not
invest productively, although that term appears in the calculation of GDP, even
in the absence of productive investment processes.
Veltmeyer
(2015) states:
In order to
illustrate how lucrative and beneficial a joint venture contract with Comibol
[Corporación Minera de Bolivia] can be for a foreign company, Colque and Poveda
analyzed the San Vicente project, operated by the Canadian firm Pan American
Silver Corporation, making an assessment of the company's profit and loss
statements (projected to 2009) and based on the amount invested for the year
2018, the project's profits from the extraction of silver and zinc could
increase by 220%. This level of profit —they concluded— is the result of two
conditions: the continuation of a neoliberal policy regime that allows the
extraction of resources from reserves, where the exploitation costs are assumed
by Comibol, guaranteeing, in effect, profits with minimal risk, and a highly
favorable tax regime for foreign investors.
Veltmeyer
and Petras (2015) therefore conclude that the policies of the Morales-García
Linera regime in the mining sector, which to a certain extent are a
continuation of the neoliberal model of previous regimes (and which could be
seen as a new form of privatization rather than nationalization), have created
a scenario in which the extraction and export of minerals and metals is
dominated by transnationals. San Cristóbal, Sinchi Wayra and Manquiri (owned by
foreigners) together account for more than half of mineral production and
export, while the cooperative sector contributed 30% and the State (comibol)
only 10%.
And, after
the quote, the author asks:
Can we
speak of sovereignty under these conditions? If the control of the country's
strategic exports is in the hands of extractive transnationals, obviously not.
The sovereignty that the "progressive government" speaks of is
demagogy; it is part of its populist rhetoric. What happens is that now the
transnationals control the transfer of natural resources through a "revolutionary
government."
So, the
question is: how are economy and power articulated? This, to put it in the
usual way, without problems of conceptualization, especially taking into
account the perspective of complexity.
In other
words: if the extractive colonial model of dependent capitalism can be
reproduced using various conservative governments, then liberal governments,
then revolutionary nationalists, to continue with neoliberal governments, with
the “progressive governments” taking over later (these authors call dependent
capitalism to conceal the contradictions of what Maoism calls bureaucratic
capitalism).
(**) NOTE ON THE COUP AND THEN ON THE CURRENT
ECONOMIC SITUATION IN BOLIVIA
• June 26,
2024
Updated
June 27, 2024
Bolivia
experienced hours of uncertainty this Wednesday after a group of soldiers
mobilized in the center of La Paz, something that President Luis Arce described
as an attempted "coup d'état."
Soldiers
and military vehicles took control of Plaza Murillo in La Paz for a few hours,
and entered the Palacio Quemado, the former seat of government, led by General
Juan José Zúñiga, who had been dismissed as head of the Bolivian Army on
Tuesday for statements he had made about former President Evo Morales.
After the
start of the military actions, President Arce gave a televised speech
surrounded by members of his cabinet in which he called for the mobilization of
the people and said: "We are firm to confront any coup attempt."
"We
want to urge everyone to defend democracy"
Later, Arce
appointed new military chiefs, including General José Wilson Sánchez, who
assumed the general command of the Army.
After
taking the oath of office, the military man declared: "Nobody wants to see
the image that we are seeing in the streets. That is why now in my capacity as
commander... I ask, order, and dispose that all personnel who are mobilized in
the streets must return to their units."
While this
act was taking place at the government headquarters, the members of the army
who had mobilized in the center of La Paz began to leave Plaza Murillo.
Once the
troops had withdrawn, Luis Arce went out onto the presidential balcony and in
front of a crowd thanked the citizens who had mobilized. Hundreds of people
gathered in the vicinity of the government headquarters, despite the opposition
of the rebels, who tried to block their way with tear gas.
The arrest
of Zúñiga and his controversial words
At the time
of his arrest, the military man accused Luis Arce of organizing the coup
attempt to "boost his popularity."
"On
Sunday at La Salle school I met with the president and the president told me
that 'the situation is very screwed, this week is going to be critical. So it
is necessary to prepare something to boost my popularity,'" said Zúñiga in
front of the cameras during his arrest.
The general
continued describing his alleged conversation with Arce, in which he asked him
if they should "bring out the armored vehicles?" and Arce answered
affirmatively: "Bring them out." According to Zúñiga, that same night
preparations began, mobilizing military vehicles.
Before he
was taken into custody, Zúñiga said that it was a "self-coup."
The local press claims that the general will be prosecuted for the crimes of terrorism and armed uprising against the security and sovereignty of the State, along with the former commander of the Bolivian Navy Juan Arnez Salvador.
Former
President Evo Morales - leader of the ruling party Movement for Socialism -
described what happened on Wednesday as "a coup d'état" in progress.
"At
this moment, personnel from the Armed Forces and tanks are being deployed in
Plaza Murillo. They called for an emergency meeting at the Army General Staff
in Miraflores at 3:00 pm in combat uniforms," he wrote in X.
Juan José
Zúñiga had been removed as head of the Army on Tuesday after making statements
against Morales and stating that "he can no longer be president of this
country," in reference to the former president's aspirations to run for
office again.
"If
the time comes, I will not allow him to trample on the Constitution, to disobey
the mandate of the people," Zúñiga had said in a television interview,
assuring that the Armed Forces are "the armed wing of the people, the
armed wing of the country," and threatening to arrest Morales. The official
rejected the dismissal and for a few more hours he remained in his office and
even attended an official event.
The
underlying crisis
Arce and
Morales, who were once allies, have been in a political confrontation in recent
months over the future of the Movement Towards Socialism (MAS) party and the
former president's attempt to aspire to a new mandate.
In various
public statements, Arce said he was the target of a "soft coup" that
aims to "shorten mandates" and which is supported by Morales'
followers.
In turn,
the former president has denounced that Arce seeks to undermine his aspirations
for a new presidential candidacy by taking over the leadership of the MAS.
Morales
left power in 2019, after a military uprising following the first round of the
presidential elections. He then left the country with the support of Mexico,
but returned once Arce returned the MAS to power.
In
parallel, Bolivia faces a serious economic crisis due to a lack of fuel and a
shortage of foreign currency. This has led to union protests, for which Arce
blames Morales (BBC, June 26, 2024)
On the same BBC:
• February
23, 2024
The Bolivian government adopted a series of
measures this week to address the serious shortage of dollars in the country,
which represent a break with the pillars of what has been its economic policy
since Evo Morales' Movement Towards Socialism (MAS) came to power in 2006.
After
meeting with business groups, the Minister of Economy, Marcelo Montenegro,
announced the economic reforms, which modify some of those that have been hallmarks
of the government's policy for years, such as the subsidy for the purchase of
fuel and the control of exports.
Experts
have been warning for some time of a deterioration in the Bolivian economy, and
the change in government policy is interpreted as an attempt by President Luis
Arce to straighten out the situation before the next elections in the country,
scheduled for next year.
Arce thus
modifies some of the economic policies that he helped design when he was
Minister of Economy for former President Morales. (…)
WAS What is
the economic situation in Bolivia
According
to Juan Antonio Morales, “the country faces a complex macroeconomic situation
due to the depletion of its international reserves and the deterioration of the
trade balance.”
A concern
shared by the analysts of the Fitch rating agency, who this week lowered the
credit rating of the Andean country due to the “uncertainty” and “macroeconomic
risks it faces.”
The
government rejected the agency's new evaluation because it did not take into
account that Bolivia has “the lowest inflation in the region” or other
“strengths” of its economy.
The main
reason for concern is the fall in its international reserves.
Edwin
Rojas, current president of the Central Bank of Bolivia (BCB), estimated the reserves
at US$1.7 billion last January, when the country had around US$15 billion ten
years ago. Added to this is the decline in revenue from natural gas exports.
Bolivia's
gas fields have been depleted and, after years in which revenue from gas
exports underpinned sustained growth and poverty reduction during the
presidency of Evo Morales (2006-2019), the country began to import more fuel
than it exports, which reduced its foreign exchange earnings and worsened the
shortage of dollars.
(…)
Former BCB
president Juan Antonio Morales believes that “Bolivia needs these adjustment
measures, even if it must take them to protect the most vulnerable.”
Jaime Dunn,
however, points out that the “measures adopted are very timid and do not attack
the root of the problem, which is high public spending.”
Morales
doubts that the issuance of debt in dollars will have a significant impact,
since “the banks and the financial sector do not trust the Central Bank much
because of the amounts it already owes them.”
The expert
believes that if the reforms do not work, Bolivia may have no alternative but
to request assistance from the International Monetary Fund, which is anathema
to the ruling party.
Adding to
the uncertainty is a complicated political panorama.
The MAS
split between supporters of President Arce and former President Evo Morales and
the two are now rivals. Morales has criticized the government's economic
management and describes the current situation as "worse than in
neoliberal times."
According
to Dunn, "Evo is skillfully exploiting discontent with the economic
situation."
The
division of the ruling party has deprived the executive of the majority it
would need in the National Assembly to sell the Central Bank's gold reserves,
which further limits its room for maneuver.