Economists believe that now it is time to finalize a plan and adjust spending

After the vice president David Choquehuanca admitted that he government ran out of money Attributing the responsibility to the transitional government and blocking the approval of credits in the Legislative Assembly, economists believe that now it is time for the Government to come up with a “credible” plan and a adjustment to public spending.

Quoted in the state news ABI, the Minister of Development Planning, Sergio Cusicanqui, said that in the present management five contracts approved of a loan in the Assembly, for a total of approximately $705.8 million, and “we have earrings others seven contracts so far for an equivalent of $779.2 million”, he pointed out.

For Wálter Morales, doctor in economics, now it will be necessary to see the speed and efficiency with which the Executive will act to specify a credible plan that generates support, giving stability to prevent the situation from getting worse. “An ideal message modulation must be sought, but it is highly positive that the leaders assume responsibilities with the people and send signals that it must be improved. that is not pressuring the legislature to take more short-term measures. This has become too politicized,” she pointed out.

For Antonio Saravia, who is also a doctor in economics, Choquehuanca’s statements are pitiful. “He Government he stayed penniless and it is good that he recognizes it, but that is not due to the ‘transitory government’. The fiscal disaster is due to the economic mismanagement of almost two decades, because we have spent more than 10 years in fiscal deficits, because they squandered the Net International Reserves (NIR) from $us 15,000 to less than $us 4,000 million, because they squandered more than $us 55,000 million that we received from gas sales during the boom, because they quintupled the debt, because they created more of 70 public companies that they are just nests of inefficiency and corruption, because they spend almost $20 million a day on wages and salaries, among others. That Choquehuanca comes to blame ghosts for what his party caused is a complete lack of respect for the people, ”he said.

For Saravia, a strong adjustment to spending is necessary. This -he said- implies rreduce the fuel subsidycut the bureaucracy in half, eliminate public companies and raise the interest rate to collect bolivianos from the economy and defend the fixed exchange rate. “All these measures are contractive and they will hurt a lot, but it is what must be done. This is a critical moment that requires drastic measures and the political will to apply them. I am afraid, however, that the Government does not have that political will and does not seem very concerned about taking us to the cliff”, he pointed out.

Deterioration of expectations

Judging by the former director of the Central Bank of Bolivia (BCB), Roger Banegas, the government is in a complex economic situation. He infers that the latest reports from the risk rating agencies point to the country governance with a serious institutional weakness, since there is no parliamentary majority for the approval of loan laws, as well as for the approval of the gold law (due to internal divisions in the ruling party), this situation has become more complex due to the lack of transparency in the information on the part of the BCB, whose entity does not publish the data of the RIN, nor of the auction operations carried out by the TGN through of the BCB, since February 8 (more than 70 days), which will exacerbate the situation and deteriorate liquidity expectations in the country.

According to Banegas, in view of the Government’s budgetary restriction in achieving external financingthis has been operating through auction operations and liquidity capture from institutional clients (AFPs), subtracting liquidity from the financial system and affecting interest rates.

While the economic and financial analyst Jaime Dunn maintained that there is illiquidity in the Government because exports exhausted of gas due to the lack of an exploration policy and today the energy balance is negative because more is bought than sold. “This government has received many resources from abroad for more than $700 million, which has increased the external debt massively and public debt has deteriorated reserves. The ‘huge’ public spending on state companies that ‘burn’ foreign currency are other factors of state illiquidity”, he mentioned.

For the economist Fernando Romero, the Government is in time to turn the helm. “If you don’t do a major change In short-term economic policies, a major crisis may occur, which will significantly affect the middle class and population drop”, he alerted.