[p2p-research] how the policies of bolivie (and venezuela) are resulting in record growth

[Michel Bauwens]

Bolivia Stands Up for Common Wealth
http://www.onthecommons.org/content.php?id=2610

Evo Morales's bold bet against privatization pays off. Posted by David
Bollier <http://www.onthecommons.org/profile.php?user_id=6>
[image: Photo]

Photo by Alain Bachellier,
http://www.flickr.com/photos/alainbachellier/146126417 from Flickr, under a
Creative Commons license (Attribution, NonCommercial, No Derivatives).

Four years ago, the international press sent up red flares when the
President of Boliva, Evo Morales, announced that he would reclaim his
country’s natural resources for the benefit of Bolivians. As I wrote at the
time, <http://www.onthecommons.org/content.php?id=835> most press coverage
took the “skeptical and fearful perspective of foreign investors, who
consider themselves the rightful beneficiaries of Bolivia’s natural wealth.
‘Dammit!’ goes the subtext. ‘Now we won’t be able to earn the same sorts of
massive profits that we did before’.” The other fear was that Morales would
simply rip off foreign investors when he reasserted public control over
Bolivian oil and minerals.

Didn’t happen. We now learn that Morales’ move has indeed benefited
Bolivians, who are among the poorest people in the Western Hemisphere.
Writing in *Yes!* magazine, Sara Kozameh of the Center for Economic and
Policy Research, describes
how<http://www.yesmagazine.org/new-economy/bolivias-economic-success/?searchterm=bolivia>the
Morales administration has achieved record growth despite the
recession
by reclaiming public ownership of natural resources.

The country was expected to have the highest growth in the Southern
hemisphere last year, according to a new study by the Center for Economic
and Policy Research. For the previous four years, growth rates averaged 5.2%
per year — a considerable achievement in light of the decline of foreign
remittances to Bolivia from citizens living abroad and the U.S. Government’s
exclusion of Bolivia from a trade treaty that would have helped its exports.

What made the difference, writes Kozameh, was Bolivian government revenues
from hydrocarbons, which increased from 5.6% in 2004 to 25.7% at the end of
2008. She adds:

*“Bolivia dramatically increased its foreign reserves, from under $2 billion
in 2005 to over $8 billion in 2008, providing a cushion against economic
shocks like the current global downturn. This increase in revenue and
reserves allowed Bolivia to implement expansionary macroeconomic policies
that kept the Bolivian economy growing through the world recession.*

*“It also helped fund one of the most important policies taken up by the
Morales administration: a significant increase in public spending. The
Morales administration has ramped up public support for education, health
care, loans to small businesses, infrastructure, and public pensions to
reduce extreme poverty among the elderly. It is also making conditional cash
transfers available to poor families, enabling them to keep their children
in school and providing health care for pregnant women and children up to
the age of two.*

*“According to the report, public spending has increased from 34 percent of
GDP in 2005 to 45 percent of GDP in 2008. Morales’ administration has
succeeded in maintaining growth during the world recession, and has
continued to put the interests of the poor at the forefront of his policies,
which undoubtedly helps to explain the president’s popularity in Bolivia.”*

If Bolivia had followed the neoliberal orthodoxy and sold off its natural
resources to investors — as so many U.S. states now seem eager to do — the
investors would have done better but the country would have been in much
worse shape.

The Bolivian experience confirms just how fallacious and socially misguided
the “Washington consensus” of privatization, deregulation and government
spending curbs really is. Governments should treat public resources and
infrastructure as precious equity assets to be carefully stewarded for
maximum public benefit — not sold at fire-sale prices to well-heeled foreign
investors who negotiate sweetheart deals for themselves and then call it the
“free market.”


-- 
Work: http://en.wikipedia.org/wiki/Dhurakij_Pundit_University - Think thank:
http://www.asianforesightinstitute.org/index.php/eng/The-AFI

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