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Which will be worth more at end 2015?

11/13/08

No austerity for Bolivia 2009

Last week, away from the public glare and hidden behind the financial horror stories coming from the North, Bolivia announced its 2009 budget (Presupuesto General de la Nación, or PGN). The news gives the USA and its allies just another reason to fear Bolivia, because unlike most countries it is in the position to significantly expand public spending in 2009 in order to combat the effects of the world slowdown.

This chart shows Bolivia's 2009 public spending budget compared to the other three years under Morales (click on any chart to enlarge)

Even the 2006 budget was far more than was previously spent by the country pre-Evo, but next year's budget (U$1871Bn) is 33% bigger than this year's record spend. As to how that money will be used, here's the breakdown:


As any economist worth their salt will tell you, spending on infrastructure is investing in the future of the country. They'll also tell you it's good because it's anticyclical (but don't worry too much, it's just a silly word they use that means "we've saved for a rainy day and now the rainy day is here so let's crack open the savings"). Bolivia is in the middle of a roads upgrading program that will only accelerate in 2009, with energy distribution, mining and agriculture all being alloted significant investments, too. In the word of Bolivia's FinMin Luis Arce:

"The National Government is banking on public investment as a central tool (against) the eventual effects of the (world financial) crisis that is not yet being felt in Bolivia although, obviously, it is not the only measure that will be applied next year to this effect."

As for where the money is destined, here's the regional breakdown:

It must be disappointing for the Evo haters to note how much of the national coffers will be spent in the half moon regions. La Paz is the most populated region so it gets the most. Santa Cruz is the second....hey, it gets the second largest amount. This is a concept known as "equity", and Evo is teaching the fascists all about it. There's nothing controversial you can say here.... man, that must piss them off no end.

Life would be so much easier for the USA regarding Bolivia if it could point to the mess Evo Morales were making of the economy, but the truth is that Evo is running the country very well indeed. By accelerating public spending at a time of world recession he is protecting Bolivia from the worst of the US-created financial mess that is currently being exported to the rest of the world. Maybe he could teach Hank&Benny a thing or two about prudent fiscal management. In fact, scrub the word "maybe", Evo's kicking their tushes bigtime.