How rejecting neoliberalism rescued Bolivia's economy
The small Andean nation of Bolivia has received praise from many quarters due to the economic transformation it has undergone over the past decade.
Curiosity regarding this conversion from “economic basket case” to the fastest growing economy in the region has been heightened by the fact it occurred under left-wing president Evo Morales. Understanding how the Morales’ government achieved this transformation is of great interest for those seeking an alternative to crisis-ridden neoliberalism.
Before Morales’ election in December 2005, Bolivians suffered through 20 years of neoliberalism. Successive right-wing governments privatised state-owned companies and handed over control of important chunks of the state to international financial institutions.
As public revenue shrank, the country entered a vicious cycle of deficits and debt. Each new budget required further international loans that were always accompanied by greater restrictive conditions. International loans and aid ended up covering about half of Bolivia’s public investment.
However, since electing their first indigenous president in a nation with a majority of previously excluded indigenous peoples, Bolivians have experienced economic growth rates higher than any period during the past three and a half decades.
At the same time, inequality has been greatly lessened and public debt brought under control. These successes are the result of the government’s overall strategy of focusing on recovering sovereignty over the economy and state.
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