Bolivia dismantling neoliberal policies!


Richard Moore

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Bolivia to Spend $6.8B to Fight Poverty
The Associated Press
Saturday, June 17, 2006; 9:46 AM

LA PAZ, Bolivia -- Bolivian President Evo 
Morales' leftist government says it will fight 
poverty, hunger and homelessness in South 
America's poorest nation by investing $6.8 
billion through 2010, much of it with ambitious 
public works projects.

The funding will come chiefly from Bolivia's 
recently nationalized natural gas wealth, with 
international lenders and foreign investment also 
important sources.

The development plan, announced Friday, would 
significantly boost the state's role in the 
economy, creating jobs and delivering more basic 
public services such as subsidized meals for 
school children and greater access to potable 

Bolivia will be "dismantling the neoliberal 
policies that have impregnated Bolivia in recent 
decades in order to build a social and communal 
state to live well," Carlos Villegas, the 
planning and development minister, told a crowd 
of dignitaries at the presidential palace that 
included foreign diplomats and representatives of 
the country's indigenous poor.

Although Villegas didn't mention Venezuela by 
name, many of the social projects he mentioned 
are similar to programs created by that country's 
leftist president, Hugo Chavez.

The administration already has about 60 percent 
to 70 percent of the funds it plans to invest 
over the next few years in projects beginning 
with housing and highway construction and 
including the creation of a metallurgy industry 
and the retooling of Bolivia's electrical grid, 
Villegas told The Associated Press.

The rest would come from international lenders, 
said Villegas, who are to convene jointly with 
the government in the last quarter of 2006 to 
work out details.

It was unclear whether the government, which is 
currently in testy negotiations with Brazil and 
Argentina over natural gas price increases, will 
be able to cover all the plan's costs.

Foreign diplomats said much would depend on 
Bolivia's gas revenues. The vice minister of 
planning and development, Noel Aguirre, said the 
plan was also predicated on gas sale revenues 
from Paraguay.

He said Bolivia was also negotiating to sell gas 
to European and Asian countries he would not name.

With the heavy public investment, the government 
hopes to create 90,000 jobs per year and cut the 
current 8.4 percent unemployment rate by more 
than half by 2011.

Over the same period, it also wants to drop the 
poverty rate to just under 50 percent from the 
current 59 percent and close the gap between the 
rich and the poor.

Currently, the top 10 percent of Bolivians earn 
25 times what the bottom 10 percent. The 
government seeks to reduce that to 21 times by 

In the next five years, the government also wants 
to nearly double Bolivia's gross domestic product 
growth rate from 4.1 percent in 2005 to 7.6 
percent, reduce deficit spending from 3.1 percent 
to 2.1 percent, be self-sufficient in 
agricultural production, bring electricity and 
gas to hundreds of thousands of families, create 
a state development bank and build more roads.

"We need to get into more depth to know whether 
we'd support this or not," said Roberto Mustafa, 
president of The Association of Private Business 
Leaders of Bolivia, one of the country's biggest 
industry groups.

"We've heard the what, but we still need to know 
the how _ and with what," he said.

Business leaders have been critical of Morales' 
economics, especially after he said he would 
"never" negotiate a free trade agreement with the 
United States, instead signing an alternative 
"people's" trade pact with his close allies 
Venezuela and Cuba.

The government changed its position Friday, 
however. Celinda Sosa, the country's minister of 
production and small business, told reporters 
Bolivia would like a trade deal with Washington.

While the export of raw materials such as 
minerals and timber are important to Bolivia's 
economy, it depends most on its vast natural gas 

Morales nationalized Bolivia's natural sector on 
May 1, giving the state energy company majority 
control over all operations and telling foreign 
companies operating in Bolivia they had six 
months to negotiate new contracts or leave.

In the mining sector, Villegas reiterated earlier 
statements that the government would be looking 
to boost revenues by raising mining taxes and 
would revert unused mines back to state control.

Associated Press Writer Frank Bajak contributed to this report.
© 2006 The Associated Press

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