After criticism of centralism, the Government says that the regions will receive more resources

“Municipalities, governorates and universities are going to have more resources” with the General State Budget (PGE) 2023, said the Minister of Economy, Marcelo Montenegro, in response to criticism from opposition legislators who denounced that the Financial Law project next year is centralist.

The opposition assembly members “have expressed their rejection for a strictly ideological issue; They have stated that they cannot approve a budget that is oriented towards centralism, when this budget is showing that the municipalities, governorates and universities are going to have more resources,” the authority said yesterday at a press conference.

According to data from the Economy, between September 2021 and September 2022 the autonomous territorial entities and universities received 17.8% more resources, while this increase will be 3.9% between September 2022 and September 2023.

Last Wednesday, the majority of the legislators of the Chamber of Deputies formally rejected the PGE 2023 Bill. The opposition observed its incoherence and its centralism, while those of the ruling party missed projects focused on the regions.
An analysis of the Millennium Foundation indicates that of the Bs 27,482 million of public investment budgeted for next year, 82% (23,056 million) is assigned to the Executive, decentralized institutions and public companies; leaving 18% for subnational levels.

The PGE 2023 was rejected because it “allocates 30% of the resources to loss-making companies” and leaves 15% for the governorates, municipalities and universities, said the deputy Luisa Nayar (CC).

“The Government insists on retaining for itself works and programs that should be decentralized. This, despite the poor execution of public investment resources in previous administrations, and at the expense of the needs and demands of subnational governments”, says Fundación Milenio.

“It has been shown that a centralized budget is more inefficient than one that distributes resources among the various levels of administration and according to the powers and attributions defined in the Framework Law on Autonomy and Decentralization. And not only that, it also lends itself less to citizen control and surveillance than at local and departmental levels and, therefore, it is more prone to waste and discretion ”, he warns.

José Gabriel Espinoza, former director of the Central Bank of Bolivia, argued that the fact that Deputies rejected the draft of the PGE 2023 Law “is a good sign for several reasons, but mainly because the conception of that budget is totally out of reality ”.
According to Milenio, the General State Budget is an instrument of economic policy that must provide certainty about public accounts, the programming of income and expenses, annual public investment and macroeconomic goals.

However, “that is not what the 2023 budget project offers. The untidiness in its preparation is obvious, as well as a series of inconsistencies that leave more questions than answers,” he remarked.

The Jubilee Foundation maintains that the PGE 2023 shows the same orientation and result of public finances of previous years: a deep fiscal deficit, greater indebtedness and current spending, and less public investment. “It is striking that in the face of this complicated situation, adjustments or reforms are not being addressed to address this and other problems and challenges that the country faces, from an economic point of view, and that require urgent attention,” he says.

“It causes us extreme concern that the budget project for the 2023 administration has not been approved, because this is detrimental to various state entities at the national and subnational levels, such as municipalities, governorates and universities that will be harmed at the time to do their activities” next year, Montenegro said.