Bolivia and Chinese tales

Hugo Marcelo Balderrama

By: Hugo Marcelo Balderrama - 03/06/2024

Guest columnist.
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Bolivia has been trapped by the criminal franchise called 21st Century Socialism for two decades. The effects are felt in the difficulty of obtaining dollars, the lines for fuel, inflation, the devaluation of the currency and, especially, the hopelessness of the people.

The dictatorship, which can no longer hide the economic crisis, does everything to convince citizens of a supposed normality.

One of the stories he used was to affirm that Bolivia should not worry about the lack of dollars, since we were part of the new monetary system, the Yuan. However, there are two big details, 1) China's economy is a house of cards, and 2) the dollar is far from losing its status as an international currency of exchange and reserve of value.

The real estate crisis that China began in 2024 is the result of typically Keynesian policies to stimulate aggregate demand. But it has also revealed something very important: Xi Jinping's authoritarian trait.

According to Alfred Wu, associate professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore:

While the expected post-Covid recovery has yet to fully materialize, young people are struggling to find work, investors are grappling with market losses, and small business owners are struggling to stay afloat. Skepticism has been increasing about the direction set by the leader and his new team. Xi has also overseen a political shakeup in his own ranks, further clouding the start of the new term. These challenges may not pose a threat to Xi, who is China's most powerful and authoritative leader in decades. But how his team addresses these concerns will have implications not only for the future of China and its 1.4 billion people, but for the global economy as a whole.

Global investors, in addition to several Chinese millionaires, are not willing to risk their capital in what appears to be the return to the most radical Maoism, since, by the end of 2023, more than $ 10 billion had left the Red Dragon.

According to Andrew Amoils, Head of Research at New World Wealth, this could be more damaging to the country than in previous years, as overall wealth growth in China has slowed recently. In short, the Asian giant is collapsing.

On the other hand, the Yuan defeating the dollar in a currency war is nothing more than a story that the dictatorship of China and its partners of 21st Century Socialism have tried to impose, since in world markets the dollar occupies 88%.

The Bolivian bosses are fully aware of the above, since, while supporting the Yuan narrative, they desperately seek for the Assembly to approve credits in dollars to, among other things, continue financing Public Expenditure and the illusion of stability.

But what does it mean that Bolivia not only supports the siren song regarding the Yuan, but also the entire anti-Western agenda of the dictatorships of China, Iran and Russia?

At the very least, especially in economic terms, sanctions by the IMF, and, if they continue with their bluster, expulsion from the Bretton Woods agreement. In his article, Arce ratifies his anti-Western foreign policy by strengthening his ties with Iran and China, Mauricio Ríos expresses the following:

Let us remember that Bolivia is a signatory of the Agreement of its creation in 1944 along with 44 other countries. This great pact, and the institutions that derive from it (IMF and World Bank), were established mainly by Western powers, especially the United States and Western Europe, who achieved victory against the National Socialist German Workers Party in World War II and the great global economic instabilities that derived from it; It is not that the IMF is going to collapse if Bolivia is not part of its permanent members, but the message it sends and the position it assumes in the face of the main global geopolitical threats will not remain indifferent if there is an escalation in which has contributed decisively.

In conclusion, the verbal incontinence of Evo Morales, David Choquehuanca and, lately, Luis Arce Catacora have put Bolivia in serious diplomatic trouble. But the worrying thing here is that there is no opposition force that considers these points, it seems that everything boils down to waiting for which of the two factions of the Movement Toward Socialism is going to win the internal dispute to get on that bandwagon.

«The opinions published herein are the sole responsibility of its author».