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Friday, February 21, 2014

New York Times reporting on Bolivia's vibrant economy

This is a very positive article in the New York Times, which is usually negative to neutral on Bolivia; it reinforces what was being said on this blog for years about the Bolivian economy, especially after meeting Luis Alberto Arce Catacora, Minister of Economics and Public Finance when he came to talk at Columbia University in April, 2010 [see post for 24 April, 2010 on this blog].
We welcome this are  this kind of accurate reporting from the NYT. William Neuman wrote this article, with assistance from Monica Machicao; Neuman, along with Simon Romero, are the two most senior NYT reporters to cover Latin America and I have always liked Neuman's tone and style. His piece appeared on the internet on 16 February, and in print on pp. A4/A8 the next day:

LA PAZ, Bolivia — Argentina’s currency has plunged, setting off global worries about developing economies. Brazil is struggling to shake concerns over years of sluggish growth. Venezuela, which sits atop the world’s largest oil reserves, has one of the world’s highest inflation rates. Farther afield, countries like Turkey and South Africa have watched their currencies suffer as investors search for safer returns elsewhere.
And then there is Bolivia.
Tucked away in the shadow of its more populous and more prosperous neighbors, tiny, impoverished Bolivia, once a perennial economic basket case, has suddenly become a different kind of exception — this time in a good way.
Its economy grew an estimated 6.5 percent last year, among the strongest rates in the region. Inflation has been kept in check. The budget is balanced, and once-crippling government debt has been slashed. And the country has a rainy-day fund of foreign reserves so large — for the size of its economy — that it could be the envy of nearly every other country in the world.
“Bolivia has been in a way an outlier,” said Ana Corbacho, the International Monetary Fund’s chief of mission here, adding that falling commodity prices and other factors have downgraded economic expectations throughout the region. “The general trend is we have been revising down our growth forecast, except for Bolivia we have been revising upward.”
Bolivia has taken an unlikely path to becoming the darling of international financial institutions like the monetary fund, not least because the high praise today is coming from some of the same institutions that the country’s socialist president, Evo Morales, loves to berate.
Mr. Morales often speaks harshly of capitalism and some of its most ardent defenders, like big corporations, the United States, the monetary fund and the World Bank. He nationalized the oil and gas sector after taking office in 2006, and he has expropriated more than 20 private companies in a variety of industries.

 
A large market in El Alto, a working-class city in Bolivia. From colorful mansions to a proliferation of bakeries, there are signs that many have extra cash to spend. Meridith Kohut for The New York Times

Yet while Mr. Morales calls himself a revolutionary, others have begun using a very different word to describe him: “prudent.”
Both the monetary fund and the World Bank, in recent reports, praised what they called Mr. Morales’s “prudent” macroeconomic policies. Fitch Ratings, a major credit rating agency, cited his “prudent fiscal management.”
While Mr. Morales remains firmly in Latin America’s leftist camp, on many economic matters he fits within a broader trend away from ideological rigidity in the region.
In Peru, President Ollanta Humala went from ardent leftist to centrist. In Colombia, President Juan Manuel Santos, a former defense minister, now plays the role of peacemaker, negotiating with the country’s largest guerrilla group. In El Salvador, presidential candidates from left and right moved toward the center to woo voters. In Uruguay, President José Mujica, a leftist and a former Marxist guerrilla, has carried out business-friendly economic policies.
“There’s definitely an underappreciated element of pragmatism” in the region, said Maxwell A. Cameron, a professor of political science at the University of British Columbia.
Not long ago, Bolivia was a focal point of political and economic instability, and while it remains South America’s poorest country, much has changed.
Economic growth last year was the strongest in at least three decades, according to the monetary fund, and it continued a string of several years of healthy growth. The portion of the population living in extreme poverty fell to 24 percent in 2011, down from 38 percent in 2005, the year before Mr. Morales took office.

Though there is still much misery, the economic transformation is widely visible, in thriving urban markets or in the new tractors tilling land where farm animals pulled plows not long ago. In El Alto, a working-class city perched above the capital, the newly wealthy flaunt their success in the form of brightly colored mansions. Another recent addition: the proliferation of bakeries selling elaborate cakes, a sign that even those of more modest means have extra cash to spend.
One of the most surprising developments is the way that Bolivia has amassed foreign currency, salting away a rainy-day fund of about $14 billion, equal to more than half of its gross domestic product, or 17 months of imports, that can help it get through economic hard times.
According to the monetary fund, Bolivia has the highest ratio in the world of international reserves to the size of its economy, having recently surpassed China in that regard.
“We are showing the entire world that you can have socialist policies with macroeconomic equilibrium,” said Economy and Finance Minister Luis Arce. “Everything we are going to do is directed at benefiting the poor. But you have to do it applying economic science.”
The country is doing well thanks to relatively high prices for natural gas — its most important export — during Mr. Morales’s presidency. That enabled Mr. Morales to order in November that all government and many private sector workers get double the customary year-end bonus of a full month’s salary.
It was a populist move that critics linked to the coming election season — Mr. Morales will run for a new term in October. But it is consistent with a broader effort to redistribute wealth and direct some of the country’s natural gas income directly into people’s pockets.
“I wouldn’t necessarily say these are mainstream economic policies,” Ms. Corbacho said. “What we have assessed as very positive are the outcomes they have achieved when it comes to growth, social indicators” and other criteria.
Bolivia’s turnaround is noteworthy because for many years the country was a proving ground for the kind of orthodox, free market policies long promoted by the monetary fund and other international institutions. Grappling with a host of economic problems, including hyperinflation that reached 24,000 percent in 1985, the government cut spending, eliminated fuel subsidies, partially privatized government-owned companies and fired many workers.
Critics say that while those policies tamed inflation, they also did long-term damage, exacerbating the unequal distribution of wealth, pushing newly out-of-work miners and farmers into coca farming that increased cocaine production, and ultimately contributing to the social unrest that helped usher in Mr. Morales as president.
“The Morales administration has basically cast off the recommendations of the I.M.F. and other huge international lending organizations, and for the first time, during his tenure, you see those macroeconomic indicators improve significantly, which finally gains the approval of organizations like the I.M.F.,” said Kathryn Ledebur, director of the Andean Information Network, a research group based in Bolivia.
Mr. Morales has benefited by being president during a time of high commodity prices, which have driven economic growth here and in many countries throughout the region. In a highly contentious move, he nationalized the energy sector by taking a greater stake in the companies that extract the nation’s gas and demanding a bigger share of the revenues. That has greatly increased government income, giving him the money to pay for social programs like cash payments to young mothers, improved pensions and infrastructure projects.
But while the nationalization rattled foreign investors, Mr. Morales now gets generally good marks for the way he has handled the windfall.
“You could mismanage this opportunity, and the reality is they have not,” said Faris Hadad-Zervos, the resident representative of the World Bank in La Paz, who cited the large foreign reserves stock and substantial increases in government spending on infrastructure.
Not that there are no areas of concern. Both the monetary fund and the World Bank say much more should be done to encourage private investment. Bolivia has less than half the rate of private investment of most other countries in South America.

There are also worries about what will happen if natural gas prices fall significantly, and whether Bolivia is simply in the midst of the typical boom-and-bust cycle that often bedevils poor countries.
Bolivia’s gas exports go entirely to Brazil and Argentina on long-term contracts, meaning that sustained economic problems in those countries could eventually spell problems for Bolivia. But a greater concern is over a low level of investment in gas exploration, which could endanger Bolivia’s ability to maintain production levels in the future.
“This is not sustainable in the long term,” said Jose L. Valera, a lawyer based in Houston who has represented energy companies doing business in Bolivia. “The model is not designed to generate substantial profits for an oil industry that is going to then be incentivized to reinvest in Bolivia.”
Bolivia’s relations with the monetary fund and the World Bank, both based in Washington, are a sharp contrast to those of some of its leftist allies. Venezuela, Ecuador and Argentina refuse to take part in annual economic reviews by the monetary fund.
Mr. Morales’s public statements have also often been highly critical. He once said the World Bank tried to blackmail him into changing his economic policies. And in a speech in December 2012, he called for the dismantling of “the international financial system and its satellites, the I.M.F. and the World Bank.”
But his attitude toward the bank seemed to have changed in July at an event to announce a World Bank project to support quinoa farmers.
“The World Bank does not blackmail, or impose conditions, not anymore,” Mr. Morales said, according to a publication on the bank’s website. To celebrate, he played a friendly soccer game with the bank’s president, Jim Yong Kim.







 

 
 
 
 
 

 


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Wednesday, December 18, 2013

Jacob Ostreicher escaping Bolivia

So the story is that a gang of kidnappers set upon Jacob in Santa Cruz, demanded a ransom and
threatened to kill him...but decided to be nice and deliver him to his home thousands of miles away in Brooklyn. OK. Some believe it, some don't. At Chaplins and other comedy clubs in La Paz, this is a joke; the Russian customers call it skazka - fairy tale.
The sad part is that there are two sides left hurt in this - the Jewish Community and the La Paz government - but the real culprits are the drug dealers, extortionists and political opportunists; the latter of whom exasperated the La Paz governemnt, sending in clowns like Sean Penn and making the situation worse for all.
But what does this hold for the future? Should Bolivia ask extradition, will the US extradite or refuse? If the Brooklyn community thinks they have the US State Dept. and Obama on their side, maybe they are right; but maybe they are wrong, and the historical precedent for politicians is to get the lather and wash their hands. Today the NYT reports that Snowden is seeking asylum in South America in exchange for revealing secrets; the US has had bad year in Latin America, and keeping Jacob in New York might make for bad relations with an entire continent.
So the pendulum might swing the other way, and Jacob might be the token of appeasement the State Department will need.
And what of the lack of response from Melissa Mark-Viverito? She could have been a bridge between the Latin and the Orthodox communities, but she kept out of it, even when offered highly classified information that would have been of use to acquit Jacob and actually bring about better US-Bolivian relations; she is busy these days seeking the Speakers' seat in NYC politics.
So this saga may have more parts. Stay tuned. There may be more info leaked here than Snowden ever had.

Wednesday, December 4, 2013

Ostreicher case further notes

Hurry up and wait...this is the message from the US pols and big shot activists who claim to be helping Jacob Ostreicher.
Little do they take the time to comprehend that their activism is rude and ignorant, that they do not listen to those who have offered advice on the situation and that they only make more tension.
Presently a NYC Spanish speaking politician has been approached with this mission, and, ironically reproached on one site for not jumping in earlier - although this legislator's district does not include Ostreicher and they are not part of Ostreicher's community. The new batter has a better than average chance, but this situation is full of curve balls; speaking Spanish helps a lot, as does being a left wing politician, but it is not so easy. There is room to hit a grand slam; or, strike out.

Evo Morales, if he were to be briefed on the full extent of this case, I am sure would release Ostreicher and there would be more arrests in Bolivia, and hopefully in the US as well. A colleague
showed me recently an email in which there was nazi help for the GOP congressman in Brooklyn who replaced Weiner; as incidental as this seems to the Ostreicher case, I include it here without further explanation to tease the reader - huelga decir, es relativo pero yo voy a escribir mas de esto cuando me conviene. Este caso es muy complicado y muchos son involucrados - hay planes por cambios en Bolivia para agarrar los recursos - no es gran sorpresa a muchos - y como esto tiene relacion a Ostreicher yo voy a relevar.

Friday, November 29, 2013

Jacob Ostreicher info

The saga of Jacob Ostreicher continues, now NYC Councilwoman Melissa Mark-Viverito is getting involved - why she was not asked earlier is a good question...
She is stepping into a landmine, and as noted earliers this year, there is GOP involvement in this case
which was fabricated to undermine Morales from the beginning - it was meant to start trouble for Bolivia from the Jewish community.
Behind the scenes, many members know this as they have been briefed by someone acting on behalf
of many interests - including US and Bolivian.
GOP henchmen have been trying to incite civil war and assassination in Bolivia - see Melvyn Kohn's
April 2009 post at the UK Hurry up Harry site - and now the trail leads to NY.

To be continued.

Saturday, September 28, 2013

Evo Morales asks for a transfer of UN Headquarters to a more neutral country

In today's El Diario/La Prensa, (p. 11) there appears an article about Evo Morales asking that the location of the United Nations headquarters be changed to a 'neutral nation.' Given the complicity of the UN in CIA agression against Latin American countries, going back as far as 1954 when United Fruit took over in Central America, this is a most reasonable request. Switzerland, with its neutrality,
might be a far better choice. Morales then suggests that if they do not change the location, at least rotate its meeting places, "maybe to Geneva or somewhere in Austria is we're talking about Europe; if we're talking about South America, maybe Brazil", he told CNN.
He is presently in NY where he is attending the UN sessions.
One of the reasons for his appeal is that the US does not offer proper security, and he notes that it harbours terrorists. Which is very true. Absolute butchers from Latin America fill the cesspool in Miami.
Alluding to an incident in which the US denied a Venezuelan flight airspace over Puerto Rico, he notes that the US is not friendly to all foreign flights - one recalls the recent stopping of his own plane in Europe, possibly at the instigation of the CIA.
Bolivia in renewing its extradition request for the former president accused of genocide, Gonzalo Sanchez de Lozada.
And it has not been that long ago that certain Latin American presidents found that the NSA was eavesdropping on them...and not that long ago either that the US got caught bugging phones at the UN.
So yes, there are many arguments for transferring the UN headquarters to a nation with less controversy about its dealings with Latin America.

Friday, September 20, 2013

Brassia orchid in watercolour





Watercolour of a spider (Brassia) orchid.

Re-billed Toucan



Red-billed Toucan, also known as the White-throated Toucan  Ramphastos tucanus.