On the ropes due to the lack of dollars and the de facto devaluation of the national currency, Bolivian President Luis Arce has made some aspects of the statist model more flexible that he himself set up when he was Evo Morales' Minister of Economy, between 2006 and 2019, and that guides the economic life of the country.
In a meeting with the main business associations, the Bolivian Government has taken 10 measures to alleviate the financial problems faced by the country's private producers.
These measures break some conditions that until now were considered immovable, such as the control of food exports to prevent shortages in the domestic market, the existence of a single national price for fuel, regardless of the buyer, and the state monopoly. of energy production.
Necessity has turned change into a virtue.
The Minister of Economy, Marcelo Montenegro, officially announced that Bolivian exports of soybeans, sugar and meat, among others, will be "liberated", which means that they will not have to process the "supply certificates" that they required to be able to leave the country.
This certificate established that this or that export was justified because there was a sufficient quantity of the good to satisfy domestic demand.
The mechanism was used to prevent increases in international prices from affecting domestic food prices.
Soybeans, for example, have a direct effect on the costs of the poultry and pork industries.
At this time, when the values of many commodities are on a downward trend, the suspension of regulation does not carry much risk.
In any case, it had not happened until now, despite many requests for it to be done to increase exports and obtain more dollars, at a time when the country has lost most of its international currency reserves.
It is estimated that it has about 340 million dollars, discounting the gold that the Central Bank is not authorized to sell.
This figure is not enough to pay for even one month of imports.
In 2023, exports were less than imports by $500 million.
In addition to trying to reduce this gap, the Government seeks to get exporters to put their currencies in the national financial system, which they have partly stopped doing because they prefer to keep the coveted banknotes in their hands, abroad.
To do this, it has invented an incentive: for every dollar that enters, the State will give the exporter, in no more than 15 days, 13 cents in national currency.
This amount comes from the refund of taxes spent by exporters, under the doctrine that local taxes should not make goods destined abroad more expensive.
The incentive is that this return generally took many months and was a cumbersome process.
Exporters that do not contribute dollars will have to continue obtaining it this way.
Another important novelty is the reform, still very slight, of the state fuel sales system.
This system is completely dominated by the State and, until now, established a fixed price for each type of fuel.
But, since Bolivia has to import between 60% and 80% of the fuel it uses, the lack of dollars is causing supply problems that for some companies may represent a greater cost than paying a higher price.
So, from now on, there will be diesel auctions for the benefit of large buyers, who will obtain a safe and timely supply by paying more per liter than the officially set price.
It is expected that this measure, added to the realization of special private imports for large companies, as is already happening, for example, with the largest mine in the country, San Cristóbal, will somewhat alleviate the Government's obligation to obtain the dollars necessary to import fuels consumed in the country.
Importers complain about the effective price of the dollar that they obtain from the banks, which is much higher than the official one.
When they turn to the banks, they are added the legal price, which cannot be altered, and bank commissions of up to 25%, with which the banks compensate themselves until they reach the market exchange rate.
To respond to this claim, the Government established a range for these commissions that ranges from 5% to a maximum of 10%.
This is evaluated as a new attempt to fix the price of the dollar: it should now cost a maximum of 10% more than 6.89 bolivianos per unit, the official exchange rate.
Several economists have pointed out that this claim will fail to the extent that there are no more dollars circulating in the market.
Furthermore, establishing a range for bank fees could make it even more difficult for importers to access foreign currency.
In addition, Montenegro has assured that it will facilitate the delivery of US currency for critical imports, such as medicines.
It will not be easy.
It was learned that the pharmaceutical businessmen asked the authorities for 15 million dollars to finance their immediate orders, but they only obtained three million.
Another relevant measure is an authorization for private companies to set up biofuel plants at their own risk or, in other cases, in alliance with the State.
For the first time since the nationalist cycle began in 2006, the state monopoly on energy production will be made more flexible.
The importance of this concession is relative because biofuels are not in great demand in Bolivia, as consumers express a deep-rooted inclination for fossil fuels.
The private company welcomed the package of decisions announced by Montenegro.
“The Confederation of Private Entrepreneurs of Bolivia expresses its satisfaction with the agreement reached with the national government that, in addition to defining measures to face the shortage of dollars, implements a new stage in the public-private relationship where open, transparent dialogue is prioritized. and direct to analyze the difficulties and find joint and effective solutions,” the main business group said in a statement.
Some groups of agroindustrial producers in the Santa Cruz region criticized the fact that their main demand has not been addressed, which is to obtain government authorization to use genetically modified seeds, which are prohibited in Bolivia, although they are used anyway in several cases.
According to agroindustrialists, this technology has the potential to increase agricultural productivity and, therefore, its profits.
Critics fear its environmental effects and the dependency it entails on large biotech companies.
The agreement with the businessmen is the first of this magnitude celebrated by the leftist Luis Arce, more rigid and distanced from the private sectors than his predecessor Evo Morales.
It means a relaxation of the environment full of bad economic news that existed in the country, especially due to the fall in foreign reserves and the consequent de facto devaluation, by 15%, of the national currency.
And because of the announcements that, under these conditions, imports, even the most sensitive ones, were becoming difficult.
To obtain the resources it urgently needs, the Government cannot issue sovereign bonds, since the country risk, and, therefore, the interest rates, are very high.
And it cannot approve the credits granted to it by other countries and multilateral organizations, due to the political blockade in the Legislative Assembly, where it lacks a majority since the division of the ruling party into a wing of Arce followers and another of Morales adherents.
So export earnings are the only source of foreign exchange you have on hand.
The problems of the economy still exist, but with this movement the Government has gained an unlikely ally not long ago: the business community.
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