Eight of the nine main cities of Bolivia wake up today with protests and street-blockings because of the controversial decision of the Supreme Electoral Court (TSE) to allow president Evo Morales and vice-president Alvaro Garcia Linera to seek a fourth term.
President Evo Morales stated that the Bolivian economy does not depend on gas exports. He added that the engine of the economy is the internal demand. Morales attended the presentation of the book “12 years of economic stability in Bolivia”, edited by the Economic ministry. Although the president is optimists, economic experts warned that Bolivia still depends on hydrocarbons, the economy needs to diversify, and the fiscal deficit needs to be tackled. Economists José Gabriel Espinoza and Germán Molina said that the fiscal deficit in 2018 would be around 8% or more due to the high level of state indebtedness.
The Bolivian political opposition is convinced that the delay in the presentation of the national budget reflects the financial difficulties of the Morales administration. According to Unidad Nacional (UN) senator, Oscar Ortiz, the delay not only goes against constitutional provisions but it reflects the difficulties of the government after Argentina announced its intention to reduce the volume of gas shipments from Bolivia.
During the first quarter of 2018, Foreign Direct Investment (FDI) in Bolivia grew by 71%, according to the Bolivia Institute of International Trade (IBCE). FDI reached $US257 million during the first three months of 2018, pushed by the hydrocarbons sector ($US109.3 million) and the manufacturing industry ($US92.8 million)
Bolivia is among the fastest growing economies in Latin America, according to various international organisations. The International Monetary Fund (IMF) and the Economic Commission for Latin America (ECLA) increased Bolivia’s growth projections from 4 to 4.3% and the World Bank from 3.9 to 4.5%. These organisations place Bolivia in first or second place in regional growth. However, international experts such as CAF president Enrique Garcia, the country needs significant structural adjustments to diversify the economy that is highly dependent on hydrocarbons and minerals.
Although Argentina and Brazil expressed their intention of buying less volume of gas, the Bolivian government believes that there are opportunities. In the case of Brazil, the Hydrocarbon Minister, Luis Alberto Sanchez, said that the new conditions of the Brazilian market offer the chance to negotiate with private companies with the prospect of better prices. Gas exports to Brazil and Argentina reduce 16.7% since 2014. The government recognises that the development of new camp fields in these countries means strong competition, but it is confident in Bolivia’s competitiveness. However, Bolivia’s local governments and economic experts warned that the decrease in shipments would impact revenues, and they urged more investment in the sector.
Lynching, drug-trafficking and contraband are the main reasons why local inhabitants decided to take control of their towns surpassing the police.
The pay of a second Christmas bonus proposed by the Government is still contested by the private sector and also by the main trade union in Bolivia. The Morales Administration confirmed that the Christmas bonus should go ahead because the economy will grow 4.61%. However, the private sector represented by the Confederación de Empresarios Privados de Bolivia (CEPB), rejected the initiative arguing that it will put the economy and jobs at risk. Meanwhile, the main trade union (COB) rejected all the government proposals to comply with the payment of the bonus and demanded its cancellation before 20 December.
The Andean Development Corporation (CAF) praised Bolivia’s public investment program, which has helped to build basic infrastructure in the last ten years. The CAF’s representative in Bolivia, Gladis Genua, said that the Bolivian state had prioritised the construction of highways, water and electric projects that helped to the development of the country. CAF has invested in the last decade $US 2.5 billion in public investment projects.
Spain will deliver next week its economic proposal to participate in the construction of a bi-oceanic railway, informed the Minister of Public Works, Milton Claros. Initial estimations of the project suggest an investment cost of at least $US10 billion and a construction period of 5-7 years.