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IMF cuts off credit to Bolivia
Bolivia is South America’s poorest country. Every night, 615,000 Bolivian children under 13 years of age go to bed hungry, according to a recent report by the United Nations World Food Program. Life in the countryside has changed little since colonial times, and cities lack basic public services. Clearly, there is an urgent need for infrastructure investments to help raise the living standards of the people in the Andean country.
This, ostensibly, is the role of international financial institutions like the International Monetary Fund (IMF), the World Bank and the Inter-American Development Bank. Nevertheless, the head of the IMF’s mission to Bolivia, Antonio Furtado, made an announcement last week that the IMF will not extend new credits to Bolivia.
The last standby agreement between the Bolivian government and the IMF expired March 31, and the recently elected government of President Evo Morales decided not to sign a new memorandum of understanding with the agency.
According to Correo del Sur, a daily paper published in the city of Sucre, Furtado justified the IMF’s decision on the grounds that “Bolivia benefits today from a high level of net international reserves, a low inflation rate and a fiscal budget under control.” Bolivia, he declared, is in “good economic health.”
Whose “good economic health” is the IMF man, Antonio Furtado, concerned with?
The Correo del Sur article sites all the “good” statistics required by foreign capital to guarantee the plundering of Bolivia’s natural resources and the extraction of superprofits from the Bolivian masses: $2 billion in foreign reserves, an inflation rate less than 0.4 percent in March, growth in the export sector to $813 million in March, and a projected fiscal deficit of only 3.2 percent of Gross Internal Product for 2006.
The cynical, politically charged nature of the IMF’s decision is exposed by the fact that the business community does not share Furtado’s positive outlook on Bolivia.
The Latin Business Chronicle publishes a Latin Business Index, which ranks Latin American countries from a business perspective. This month it ranked Bolivia in 18th place out of 19 countries, leading only Haiti.
The Chronicle writes: “While the gas nationalization in Bolivia last week affected the country’s score in terms of political outlook and business policies of the government, it came on top of a wide range of negative factors that propelled the country to the second-last position in the index. Bolivia has the lowest score in Latin America in terms of globalization and competitiveness, the fourth-lowest in macro environment and technology level and the fifth-lowest in business environment.”
More
http://wsws.org/articles/2006/may2006/boli-m24.shtml
The last standby agreement between the Bolivian government and the IMF expired March 31, and the recently elected government of President Evo Morales decided not to sign a new memorandum of understanding with the agency.
According to Correo del Sur, a daily paper published in the city of Sucre, Furtado justified the IMF’s decision on the grounds that “Bolivia benefits today from a high level of net international reserves, a low inflation rate and a fiscal budget under control.” Bolivia, he declared, is in “good economic health.”
Whose “good economic health” is the IMF man, Antonio Furtado, concerned with?
The Correo del Sur article sites all the “good” statistics required by foreign capital to guarantee the plundering of Bolivia’s natural resources and the extraction of superprofits from the Bolivian masses: $2 billion in foreign reserves, an inflation rate less than 0.4 percent in March, growth in the export sector to $813 million in March, and a projected fiscal deficit of only 3.2 percent of Gross Internal Product for 2006.
The cynical, politically charged nature of the IMF’s decision is exposed by the fact that the business community does not share Furtado’s positive outlook on Bolivia.
The Latin Business Chronicle publishes a Latin Business Index, which ranks Latin American countries from a business perspective. This month it ranked Bolivia in 18th place out of 19 countries, leading only Haiti.
The Chronicle writes: “While the gas nationalization in Bolivia last week affected the country’s score in terms of political outlook and business policies of the government, it came on top of a wide range of negative factors that propelled the country to the second-last position in the index. Bolivia has the lowest score in Latin America in terms of globalization and competitiveness, the fourth-lowest in macro environment and technology level and the fifth-lowest in business environment.”
More
http://wsws.org/articles/2006/may2006/boli-m24.shtml
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IMF cuts off credit to Bolivia
Wed, May 24, 2006 6:26PM
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