U.S. disruption of the global economic order reaches a major milestone on Tuesday as the World Trade Organization (WTO) loses its ability to intervene in trade wars, threatening the future of the Geneva-based body. Two years after starting to block appointments, the United States will finally paralyze the WTO’s Appellate Body, which acts as the supreme court for international trade.
Bolivia is making a structural review of the road construction contracts with Chinese firms signed with the former government of Evo Morales, announced the Public Works Minister, Iván Arias. He added that the government is looking to change the term reference of the contracts.
Bolivia’s government will reduce electricity tariffs across the country. It will start in the departments of Santa Cruz with a reduction of up to 50% and Chuquisaca with a decrease of up to 41%. The reductions were negotiated with energy companies (generation, transport and distribution) and the new tariff structure will not affect their profits.
Moody’s has placed Bolivia’s Ba3 rating under review for downgrade. The rating agency said in its report that the monetary and fiscal cushions, key to keep Bolivia’s current grade, have been deteriorating due to constant and important fiscal and current account deficits.
Bolivia’s international reserves are at their lowest levels since 2008, falling from $8.9 billion in December 2018 to $6.7 billion as of 7 November 2019. At the end of 2008, Bolivia’s international reserves reached $7.7 billion. The decline in reserves is the result of the country’s trade deficit, according to economic analyst Rene Martinez from the Jubileo Foundation.
Of 59 operating fields in Bolivia, 41 are in decline, according to data from State-owned YPFB. Between 2006 and 2018, oil revenues reached $37.5 billion, while investment on exploration reached $2.5 billion.
BancoSol will raise its fix income deposit rate to 5% to incentivise savings and have enough resources to support micro and small businesses in Bolivia. The new rates will run throughout December, and the term will be equal or greater than 370 days with a minimum deposit of $10,000.
Monthly inflation in November this year was 1.11% compared to October. The 11-month cumulative rate reached 3.06% and cumulative 12-month inflation was 3.41%, according to the National Statistical Institute (INE) report.
The United Nations on Thursday demanded further assistance to facilitate the development of landlocked countries, such as Bolivia and Paraguay, which face particular difficulties over their geographical situation in combating poverty. The UN General Assembly adopted a declaration calling for more financial support for these nations and more cooperation to facilitate their access to international trade.
The Government is considering returning $449 million (as at end-November) which had been allocated to the hydrocarbon exploration fund, in force since December 2015. The Incentives Act (Ley de Incentivos) will not be overturned, but the Government will assess whether or not the funds were or will be deployed. The funds were initially taken from regions, universities and others.