[News] IMF Tells Bolivia to Drop its Successful Economic Model

[Anti-Imperialist News]

kawsachunnews.com
<https://kawsachunnews.com/imf-tells-bolivia-to-drop-its-successful-economic-model>
IMF Tells Bolivia to Drop its Successful Economic Model
September 16, 2022
------------------------------

The IMF released a report
<https://www.imf.org/en/News/Articles/2022/09/14/pr22305-imf-executive-board-concludes-2022-article-iv-consultation-with-bolivia>
today on the Bolivian economy in which it recommends adopting drastic
neoliberal measures, including; reducing workers’ salaries, cutting public
investments, and ending currency controls. These policies have turned
Bolivia from one of the poorest countries in the region into it’s
fastest-growing economy.

The report takes aim at the government’s spending on development, saying,
“The government must restrict spending, including eliminating the end of
year wage bonus for workers, they must restrict the growth of wages for
public sector workers, and limit the growth of public investment and
subsidies.”

The ‘end-of-year wage bonus’ for workers (in both the public and private
sector) refers to a policy introduced under Evo Morales that requires
employers to pay their workers a bonus equal to double their monthly wage,
but only if annual GDP growth is over 4.5%.

The bulk of public investment is destined for infrastructure, while the
majority of subsidies are for ensuring the price of fuel doesn’t rise.
Bolivia is the only country in the region to see no rise
<https://kawsachunnews.com/bolivia-wont-see-rise-in-fuel-prices>in fuel
prices, a policy that has kept inflation at less than 2%
<https://kawsachunnews.com/how-bolivia-beat-inflation-interview-%EF%BF%BC>,
unlike the rest of South America.

The report even states that fuel prices must rise, and the inflation that
would inevitably cause could be offset by cash-transfer programs for the
poorest sectors, says the IMF:

“The successful implementation of an increase in domestic fuel prices will
require recycling a part of the budget savings in cash transfer programs
aimed at the poorest deciles of the population.”

Bolivia’s Economy Minister, Marcelo Montenegro, emphatically rejected the
report, stating today;
<https://kawsachuncoca.com/2022/09/15/gobierno-le-dice-al-fmi-que-bolivia-es-soberana-y-no-aceptara-sus-viejas-recetas-economicas/>
“They prescribe the old recipes from many decades ago where they call for
reducing subsidies, lowering public spending, gradually eliminating the end
of year bonus for workers. We are not going to accept these recommendations
because we are a sovereign country, and we have a sovereign economic
policy.”

The policies criticized by the IMF have helped Bolivia reduce poverty by
over 50%
<https://www.telesurenglish.net/analysis/Bolivia-Under-Evo-Morales-13-Years-of-Reclaiming-Sovereignty-20190123-0017.html>
since Evo Morales took office in 2006. It has also helped keep inflation at
the lowest rate in Latin America. Meanwhile, when IMF policies were
implemented in the early 2000s, over 60% of the country lived below the
poverty line.

In a recent speech in Brazil, Bolivia’s President Luis Arce stated
<https://twitter.com/KawsachunNews/status/1568447756867600386> that the
country’s impressive growth is due to rejecting IMF recommendations; “We
are in better conditions because, since 2006, Bolivia doesn’t have a single
agreement with the IMF. In 2020 with the de facto government, they tried to
enter into a loan program with the IMF, which we stopped as soon as we
entered government, we reversed that IMF loan because believe the best way
to make economic policy is to have a sovereign monetary and economic policy
without being submitted to any international organism.”

*For more news and analysis, check out our podcast Latin America Review:*
 https://linktr.ee/latinamericareview <https://linktr.ee/latinamericareview>

*By Kawsachun News*
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