The center-left government of Bolivia took a turn in its economic policy and agreed this Monday with businessmen to release agricultural exports, to face
an acute shortage of dollars
.
The Minister of Economy, Marcelo Montenegro, made the agreement public in a joint announcement with union leaders.
The decision is part of a package of ten measures to increase the flow of currency in the country.
"The government of President Luis Arce is releasing exports with a completely expeditious and agile mechanism so that national producers can take their products to the rest of the world," said Montenegro.
The government "has made the decision to release exports, but always taking care that there is a commitment to supply the national market," the minister stated at a press conference.
Since 2008,
Bolivia has imposed restrictions,
through a quota system, on the sale of products such as soy, rice, corn and beef, as part of a
protectionist policy
that the governments of Evo Morales (2006-2019) and the current one have followed. president Luis Arce, both from the Movement towards Socialism (MAS).
Agroindustrial exports were released during the transitional government of Jeanine Áñez (2019-2020), but the Arce Executive put the quotas and certificate into effect again to ensure internal supply, which was always criticized by businessmen.
The president of Bolivia, Luis Arce, took measures against the shortage of foreign currency.
Photo: AFP
"Urgent problem"
In addition to eliminating these barriers,
the Executive will allow entrepreneurs to install their biodiesel plants
, under state control, within other reforms to facilitate private activity.
These measures will give "certainty to the national economy" and will foster "a scenario of corrective improvement so that this temporary lack of dollars can be overcome," Montenegro justified.
For his part, Giovanni Ortuño, president of the Confederation of Private Entrepreneurs of Bolivia, the country's largest employers' association, celebrated the understanding: "We are facing an urgent problem that required urgent measures."
According to businessmen, due to restrictions on agricultural exports, around 6 billion dollars stopped entering between 2008 and 2022.
Exchange gap
Since last year, Bolivia has faced a shortage of foreign currency, basically due to the
million-dollar subsidy on fuel imports
and to keep fuel prices frozen.
One dollar in the country is equivalent to 6.96 bolivianos, but in the parallel market it reaches 8.50 bolivianos.
In 2023, the government allocated around 1.1 billion dollars to subsidize the price of fuel and for 2024 it budgeted 1.408 million dollars.
This expense meant a drop in its international reserves, which as of December 2023 reached $1,709 million, after rising to $15,122 million in 2014.
The Arce government - today harshly confronted with Evo Morales, for whom he was Minister of Economy - also committed that the Central Bank of Bolivia (BCB) will issue bonds in dollars that are "profitable" and "safe", a mechanism that will be will negotiate with the private sector.
The Executive seeks to reduce spending on fuel imports and their corresponding subsidy in the domestic market with incentives such as the
promotion of private investment in biodiesel plants
, the promotion of investments to improve agricultural performance and a diesel "auction" with big buyers.
It was also agreed to increase the maximum weight and length allowed in cargo transport vehicles, in addition to establishing tax incentives for the purchase of "flex" or flexible fuel and electric vehicles.
The Minister of Economy assured that "there is a great opportunity and potential to develop productive activities within the country that generate dollars through exports" and that also "save foreign currency through the implementation of productive processes with import substitution ".
"With this, the government opens dialogue and consultation scenarios so that positive expectations are generated in relation to generating greater production, income and benefits for the population," he added.
Source: AFP and EFE
C.B.