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<a class="gmail-domain gmail-reader-domain" href="https://kawsachunnews.com/imf-tells-bolivia-to-drop-its-successful-economic-model">kawsachunnews.com</a>
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<h1 class="gmail-reader-title">IMF Tells Bolivia to Drop its Successful Economic Model <br></h1>September 16, 2022</div>
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<p>The IMF released<a href="https://www.imf.org/en/News/Articles/2022/09/14/pr22305-imf-executive-board-concludes-2022-article-iv-consultation-with-bolivia"> a report</a>
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. </p>
<p>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.”</p>
<p>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%. </p>
<p>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 <a href="https://kawsachunnews.com/bolivia-wont-see-rise-in-fuel-prices">no rise </a>in fuel prices, a policy that has kept <a href="https://kawsachunnews.com/how-bolivia-beat-inflation-interview-%EF%BF%BC">inflation at less than 2%</a>, unlike the rest of South America. </p>
<p>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: </p>
<p>“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.”</p>
<p>Bolivia’s Economy Minister, Marcelo Montenegro, emphatically rejected the report, <a href="https://kawsachuncoca.com/2022/09/15/gobierno-le-dice-al-fmi-que-bolivia-es-soberana-y-no-aceptara-sus-viejas-recetas-economicas/">stating today;</a>
“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.”</p>
<p>The policies criticized by the IMF have helped Bolivia reduce poverty <a href="https://www.telesurenglish.net/analysis/Bolivia-Under-Evo-Morales-13-Years-of-Reclaiming-Sovereignty-20190123-0017.html">by over 50%</a>
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.</p>
<p>In a recent speech in Brazil, Bolivia’s President Luis Arce<a href="https://twitter.com/KawsachunNews/status/1568447756867600386"> stated</a>
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.”</p>
<p><strong>For more news and analysis, check out our podcast Latin America Review:</strong><a href="https://linktr.ee/latinamericareview"> https://linktr.ee/latinamericareview</a></p>
<p><em><strong>By Kawsachun News</strong></em></p>
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