Thursday, June 16, 2005

Bolivian Economy

Just thought I'd republish a bit of a previous post on this subject.
If you speak Spanish, there is interesting reading on Bolivia's economy here It is Instituto Milenio's report on Bolivia's Economic performance in 2004.
Key indicators of economic performance, show that Bolivia's economy was in fairly decent shape. First it grew last year - albeit at a slower rate than the rest of South America. In addition, the national deficit was reduced, and the external debt has gone down. Government revenues have increased, mainly due to the gas exports. That has also created a favorable trade balance Increased gas exports coupled to the higher prices of gas, have contributed much to this, as has tighter discipline of government spending.

So in other words all the work done over the past 19 years or so, to first of all discipline Bolivia's battered economy in the 1980's, was paying dividends.

Realistically, in the short run, this probably did not mean much to the countries poor. But a trimmed down Bolivian government, with increased gas revenue would be in a much better position to actually invest in basics like infrastructure, nutrition, healthcare, and education for the poorest citizens of the country.

All this could have conceivably happened had the proposed plan to export of gas to the US via Chile gone through. At the very least, the multinationals would have spent well over a billion dollars in Bolivian soil, for the part of the pipeline that went through the national territory. Not only that, increased demand in Argentina, Brasil, and Chile would certainly have meant increased exports and more investment.
After the collective tantrums in the Altiplano - starting in 2002, through last month's, the country has not only suffered immediate monetary losses in the hundreds of millions of dollars, it has also lost an incredible opportunity to generate much needed money, potentially losing out on millions of dollars daily. How the hell can anyone claim this is a good thing??? 20% of a billion is better than 100% of nothing.