Arce Catacora, the cashier of disaster

By: Hugo Marcelo Balderrama - 16/09/2024

Guest columnist.
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In November 2020, a few weeks after Arce Catacora's victory, Duda Texeira, a Brazilian journalist, interviewed me to find out my opinions on the new president, as he had been impressed by the praise the economist received from the IMF. Below, I transcribe part of the conversation we had on that occasion:

DT: “He was the minister who led the Bolivian economy through a period of great growth, of great strength of public finances, of great creation, the architect, creator and creator of reserve margins for that economy that made it easier to live through not so good periods.” These are the words that the IMF said about Arce Catacora. Do you think that the new president of your country will be more orthodox and leave ideology aside?

HB: Look, Arce Catacora is an economist trained, like everyone else, including me, under the paradigm of a State that must regulate supposed market failures, redistribute wealth and control "strategic" sectors of the national economy. In other words, his economic model, even if it has a pompous name, is simply the repetition of old mistakes. On the other hand, the man spent his entire life in public offices, he is a purebred bureaucrat, therefore, he does not understand the dynamics of the private sector, much less the mechanisms that create wealth. Finally, Bolivians, in particular, and Latin Americans, in general, must understand that all these individuals are simple employees of a criminal franchise called: 21st Century Socialism.

The current circumstances, which include an environmental catastrophe, make it necessary to remember and delve deeper into some issues, let's see.

During his first and second term, coca grower Morales loudly proclaimed the growth of the national economy. However, it was a deceitful growth, since it was sustained by public spending, which included the creation of enormous bureaucratic apparatuses and state-owned companies, which are uneconomical from their conception. Another of the tricks used was the arbitrary manipulation of the bank interest rate, which forced a monetary nationalization. In this regard, Mauricio Ríos García, in his article: The weak government thesis of growth, explains that:

If the ever-growing and ever-larger state-owned enterprises are nothing more than a black hole that absorbs all the money poured into them without producing anything at all, what is really driving growth? The financial banking system developed over the last ten years. Hence the pseudo-nationalization attempt of the sector. Domestic credit is growing at an alarming rate of between 20 and 25 percent annually with "Bolivianization" or monetary nationalism as a basis, which, with a correctly fixed but wrongly valued exchange rate, the country only imports consumption and makes investment more expensive for everything that it should be producing today precisely to take advantage of international prices.

His "successful" model was to spend the international reserves; force the financial system to increase its credits at an accelerated rate; induce businessmen to invest in highly risky projects, and get their hands on the savings of Bolivians.

All of the above is nothing more than an attack on private property. Here is the worst part, because without private property and free prices, economic calculation is impossible. So, the data that Morales and Arce Catacora boasted about were, to put it in everyday language, a free drawing.

Just in case, the above is not a mistake, or a lack of economic knowledge, but rather part of a macabre plan that seeks poor citizens and rich governments, the recipe of Fidel Castro, whom Arce Catacora admitted to admiring.

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