Bolivia: A glance at the most important achievements of the new economic model

Presentation by Luis Alberto Arce Catacora, Minister of Economy and Public Finance

Since 2006, under the direction of the President of the Plurinational State of Bolivia Evo Morales Ayma, we the Government and the people have worked designing a new State and a new economic model steaming from an analysis of the structural crisis of capitalism and from a commitment to change our reality up to then characterized by economic and social exclusion to most Bolivians since the colonization period. Exclusion got worse during the twenty years of neoliberalism before 2006. 

The New Economic Social Community Productive Model was built based on sovereignty of our economic policy. On these grounds, a historic decision about nationalizing the Bolivian hydrocarbons was taken, in accordance with the people’s mandate, adopted after overcoming neoliberal policies. 

By means of that important decision, the State began to recover the control over strategic sectors of the economy, which allowed us Bolivians to take control of the economic surplus previously deprived from us; and apply a policy of income redistribution through Conditional Cash Transfers programmes (Juancito Pinto, Dignity Rent, Juana Azurduy,) public investment, inversely proportional wage increases , and crossed subsidies among other measures.

Through the New Economic Model, we engaged in strengthening the role of the State that now directs the economy for the purpose of transferring the economic suplus -steaming from strategic sectors’-to income-employment generating sectors in order to articulate existing structures of economic organization in Bolivia (State, community, social, cooperative and private,) under the principles of complementarity, reciprocity, solidarity, redistribution, equality, legality, sustainability, equilibrium, justice and transparency. 

In the same vein, we recovered sovereignty on fiscal, monetary, financial and exchange rate policy in order put them to work for the economic and social development of the Bolivian people. Since 2006, every year we self-design our Fiscal-Financial Programming. Since then the fiscal policy is oriented to achieve growth with income redistribution , output incresing, industrialization, food sovereignty and job creation. We pursued the de-dollarization of the economy which was before highly dollarized; and we also transformed the financial system in order it to go along with the Government’s social objectives. The Government also enhanced and diversified the productive matrix. 

It is also important to highlight that because of the implementation of social and income redistribution policies, supported by higher levels of public investment; we managed to stimulate domestic demand for it to become the main growth engine, which is oriented towards developing productively and industrially our natural resources and eradicate the multiple dimensions of inequity and poverty. In this document, we describe the main achievements reached since 2006, because of the implementation of the New Economic Social Communitarian and Productive Model, which are outcomes from a collective effort to improve the quality of living and reach what we call the Vivir Bien (Live Well) for Bolivian people.

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