LA PAZ – During a year in which the economies of Latin America touched bottom, Bolivia’s economy managed to keep growing and weathered the “out of control” crisis besetting the region, Economy and Public Finance Minister Luis Arce said.
In an interview with EFE, Arce evaluated Bolivia’s economic performance positively, despite the decline in the country’s income from the sale of natural gas, the country’s main export product, and the drought affecting the agricultural sector.
“The year 2016 is going to be remembered as a very tough year for different reasons, but it will also be remembered because, despite that profound crisis, Bolivia emerged ahead and has continued leading the region’s economic growth,” he said.
Arce said that while neighboring countries were registering negative growth rates, lower income, more unemployment and higher inflation rates, Bolivia managed to maintain its leadership in regional growth and guarantee the continuity of its social policies.
“We’re very happy with the results because we had set ourselves a goal – for the economic crisis that was out of control (in the countries) around Bolivia not to get to the pocketbooks or the stomachs of Bolivians – and I think that we’ve fulfilled that objective. The people haven’t felt the crisis at all,” he added.
The key element in Bolivia’s economy is natural gas sales to Brazil and Argentina at a price that is adjusted quarterly based on the change in the petroleum price, which this year fell to $26 per barrel.
The value of Bolivian hydrocarbon exports plunged by 46.9 percent from $3.715 billion between January-November 2015 to $1.972 billion during the same period this year, according to figures compiled by the National Statistics Institute (INE).
Meanwhile, the agriculture sector in the prosperous eastern Santa Cruz region lost some $500 million due to the drought.
The initial growth projection for Bolivia’s 2016 GDP was 5 percent but that was adjusted to 4.7 percent due to the drought and the decline in the oil price.
The Economic Commission for Latin America and the Caribbean projected that Bolivia’s economy will grow by 4 percent this year, while the International Monetary Fund forecast 3.7 percent growth.
Arce, however, said that the international entities “are underestimating Bolivian economic growth” and claimed that it will exceed 4 percent, while inflation will be below that percentage.
He also said that the country’s good economic performance was due to the Evo Morales government’s “communitarian social productive” model “in which the state becomes the engine of economic growth with heavy public investment,” strengthened state-run firms and income redistribution.
Bolivia budgeted $6.2 billion for public investment in 2016 and plans to invest about $7.1 billion in 2017, including the budgets of state-run firms.
Arce emphasized that while other countries had cut their social programs, fired public employees or raised fees for services, “in Bolivia none of that has occurred.”