Sunday, May 02, 2010

Evo Morales and the Populist Paradox --

Bolivian Economist Roberto Laserna has deconstructed Morales policies, Evo Morales and the Populist Paradox (in Spanish here), exposing the reality that he has benefitted:
1. From Neoliberal economic policies that created the climate for investment and set in motion the industries that are now generating income for the country, and
2  Political policies from "Neoliberal" governments that opened the political space for Evo Morales rise, and created institutional mechanisms that allow the government to transfer resources to many communities. . That would be the municipal decentralization and local community budgeting laws passed by Sanchez de Lozada in the mid-90's.

Private investment in the mid-1990’s, moreover, increased output of natural gas. Soon gas was being exported – very profitably – to Brazil. Thus, when Morales came to power, Bolivia’s economy was in a position to take advantage of the global price boom for raw materials. As a result, revenues increased, despite his government’s nationalist and statist policies, which drove away investment and hindered access to new markets.

Since 2005, Bolivian exports have increased six-fold, along with fiscal revenue. This money is distributed automatically to local governments, according to the model established by Morales’s predecessors, carrying resources to the farthest reaches of the country. But it is not only local governments that have benefited; through cash transfers created during the so called neo-liberal years, families have gained as well, most importantly through a universal and non-contributive old-age pension benefit given to persons over 60, which reaches slightly more than 30% of households.

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