By: Hugo Marcelo Balderrama - 14/05/2023Guest columnist.
In Bolivia, dollars are scarce, the exchange rate falters, in addition, the second that passes, the public loses confidence in the financial system, but antics abound, we are not going to die of boredom.
In the last staging, Marcelo Montenegro, Minister of Economy, described the economic management of the President, Luis Arce Catacora, as an oasis with price stability and great economic growth. However, the comedy does not end there, but Montenegro went so far as to say: "That is the Government that, like a mother, covers its chicks so that they do not receive the impact of the shocks." The statements by the head of the economy, although funny, contain a dictatorial whiff, what Friedrich Hayek baptized as: Fatal arrogance.
In the first place, the economy does not move by whims or government decrees, but by the information that is transmitted through prices. For example, if there are ten houses on offer and thirty applicants, the price will be located at such a level that it allows selling the ten houses, this means that at that price there are no surpluses or shortages. It is true that these houses will have a high cost, but that is the mother of the lamb, because businessmen will see a profit opportunity in the real estate market. This system has two great achievements: 1) efficiently allocate the always scarce factors of production, making societies more prosperous, and 2) allows men to live in freedom.
That is why the minister's message is so dangerous, since he is affirming, in a hidden way, that we are not capable of managing our lives. He is telling us that, in exchange for our freedom, the dictatorship will take over our present and future.
But economic theory aside, on a practical level the Plurinational State of Bolivia is the typical example of an economic failure. Let's see.
Bolivia, product of the “devilish” neoliberal reforms of the 90s, came to receive more than $50 billion from the sale of gas. However, that boom ended in 2014. The ideal would have been to cut public spending and start saving. However, gas revenues were replaced by debt and an appalling waste of reserves.
Let the shit not stop! It was the government's policy since 2014. Obviously, fiscal deficits appeared, and we have already had them for ten consecutive years at a rate of 8% of GDP. Our debt has multiplied 14 times since 2007, when it reached just over $2 billion (17% of GDP), until reaching more than $32 billion today (more than 80% of GDP). For its part, our NIRs, which reached $15 billion in 2014, have plummeted to less than $4 billion today. An aggravating circumstance must also be noted, the Central Bank has not published information since February, we are navigating blindly.
In the department of Santa Cruz, the most productive in the country, the agricultural sector began a series of protests due to the lack of diesel supply. Furthermore, in one of the few glimpses of honesty, Arce Catacora admitted that the country had lost its energy potential. His words were:
The structural solution to the issue of hydrocarbons is going to take us a little longer, because the wells have grown tired, they no longer have the same amount of gas and more exploration must be done, more investments must be made to be able to reactivate another sector that It is important.
Would you entrust your future to a government that destroyed the economy, dismantled democratic institutions, and turned Bolivia into a failed state?
I don't. No thanks, I don't need babysitting.
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