Bolivia: 10 Years of Sustainable Economy

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By: Hedelberto López Blanch / Resumen Latinoamericano / The Dawn News / November 20, 2016

Photo credit: Noticias Bancarias
Photo credit: Noticias Bancarias

When Evo Morales became President, Bolivia had serious problems of hunger, misery and political instability (the country had spent more years ruled by dictatorships than in democracy).

Society suffered from poverty, lack of education and healthcare, while the economy was plundered by transnational companies and the remains were split between a handful of locals.

Since 2006, when Bolivia’s first indigenous President reached power, he issued a series of policies to nationalize companies and productive, mining and service goods, in order to improve the living conditions of the population.

In the mining sector, the State obtains between 50 and 55% of the profits of mines such as the tin mine Huanini or the metal mine VInto-Antimonio; and in the hydrocarbons sector it receives 85 to 93%. This includes the subsidiaries of Hispan-Argentine company Repsol YPF, British companies Ashmore and British Petroleum and the Peruvian-German consortium CLBH.

Under Morales, Bolivia also reclaimed the sectors of wood, gold, air transport, telecommunications, power, telephony and public transport.

The growth of this year’s GDP will reach between 4.6 and 4.8%, making it the highest rate in South America, and the absolute GDP is currently at 34,500 million dollars—more than three times the 9,500 million it amounted to in 2005.

According to the annual ranking of the IMF, Bolivia has gone from number 117 in the world GDP to somewhere between the 75th and 78th place.

Continuous activities, which include new factories of paper, cardboard, salt, almonds and derivatives, have allowed the plurinational State to have one of the lowest unemployment rates of Latin America: only 5,5%.

Bolivia had a 500-year-old debt to its society, which was impoverished after centuries of colonialism, neocolonialism and neoliberalism. And finally that debt is being paid.

In 2006, 9 out of 10 Bolivian peasants were living in extreme poverty, without access to drinking water, power, health, education nor food.

But thanks to a policy of redistribution, moderate poverty decreased from 59% to 39% between 2005 and 2015, and the Gini coefficient (which measures inequality) decreased from 0.60 to 0.47.

Internal consumption grew thanks to a raise in the income of the population. The active policies of employment and social programs for children (the Juancito Pinto program, by which the state gives 200 pesos per year to 1.7 million primary school students to revert the desertion rate) have been effective.

Furthermore, the state has implemented a lifelong pension for people over 60 (which amounts to between 1,800 and 2,400 pesos), and a 1,820 pension for pregnant women that lasts until their children are two, in order to curtail the infant mortality and mother mortality rates.

By using the Cuban alphabetization program “Yo sí puedo”, Bolivia solved the analphabetism problem and taught 850,000 Bolivians how to read and write.

The government is betting on the average growth to remain at a constant 5% for the 2017-2020 period and use it to reduce extreme poverty from 17% to 10%.

Big investments are planned for infrastructure, hydrocarbon exploration, industrialization of natural gas (for fertilizers and plastics) and thermoelectric and hydroelectric production.

The plan for the next 5 years is based on five fundamental axes: to increase investment in the oil sector, export power, develop petrochemistry, expand agriculture and industrialize lithium.

The private sector and foreign investment are called to play an important role in those development plans.

Undoubtedly, Bolivia is an example for the progressivist governments in the region, some of which have endured the attacks of oligarchy and right-wing press, while others continue to be threatened by the forces that intend to make Latin America a neoliberal area, in detriment of majorities.

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