The discussion of economic issues arouses passions for ideologization or pigeonholing in concepts that do not contribute to a resolution of differences and prevent -in extremis- giving rise to the benefit of the doubt, at least when there is no consensus. This is the case of “import substitution”, severely criticized by some and fiercely defended by others.
On the side of those who evict it is the memory of the import substitution industrialization model of ECLAC in the 1960s, under the theory that the industrialized countries of the “Center” took advantage of the natural resources and markets of the primary underdeveloped countries. exporters, in the “Periphery”. The idea arose, then, that the State promote the production of consumer, intermediate and capital goods, to increase their supply in the local market, hoping to generate employment and reduce external dependence. An “inward” model with tariff, non-tariff and non-tariff protection, to increase or prevent the purchase of foreign goods and protect the internal market and induce “industrialization at any cost”.
Unfortunately, the overprotection that ensued caused productive inefficiency, in such a way that – once the cycle was over – the industries that were born under that logic faced survival problems. With this “lesson learned”, should promoting the substitution of imports from the State be classified as something intrinsically bad? No, especially when an economy faces rigidities and if its stability is at stake.
According to the Bolivian Institute of Foreign Trade (IBCE), the propensity to import in the country has risen in such a way in the last 15 years, that the annual average 2017-2021 has been 8,900 million dollars, for almost 6,000 products that we bring from abroad, of which more than 1,000 each exceeded one million dollars/year; products with which we are familiar, such as diesel and gasoline; wheat and flour; furniture and industrialized wood; fabrics and clothing; footwear; dairy products; urea; apples; chocolates; among others, exceeded 10 million annually.
But, let’s take as an example the 2 main products -diesel and gasoline- that only in the last 5 years involved spending almost 6,000 million dollars. Given that its price cannot go up in Bolivia (it was tried at the end of 2010 but it had to be backed off because people took to the streets because “everything went up”), and since this implies hundreds of millions of dollars in subsidies -for transportation public mainly, not agriculture, as they say- should we continue to raffle more than 2,100 million dollars to import them, as in 2021, just because ECLAC’s import substitution failed 70 years ago? No, well!
In fact, the bioethanol production program is underway thanks to the Santa Cruz agroindustry and should be deepened; Likewise, there should be a Program to produce biodiesel from the private sector, in light of the successful experience with ethanol which, thanks to a wise definition by the Minister of Economy and Public Finance, this year will involve the purchase of 160 million liters by YPFB and savings of more than 100 million dollars in non-imported gasoline.
The IBCE has been insisting for years on the need for a “Competitive Import Substitution Policy” that, without repeating the errors of statism and protectionism of the past, aims to lower production and realization costs to achieve a greater supply of national products – substitutes or substitutes for imported ones – in the Bolivian market.
Thinking about it, this is what Santa Cruz has been doing since the 1950s, allowing the country to save millions by building our food self-sufficiency, generating jobs for Bolivians: that is why the Santa Cruz development model is successful and has nothing to do with ECLAC!
“One button is enough of a sample” -said the song- “the others… to the shirt!”.
The discussion of economic issues arouses passions for ideologization or pigeonholing in concepts that do not contribute to a resolution of differences and prevent -in extremis- giving rise to the benefit of the doubt, at least when there is no consensus. This is the case of “import substitution”, severely criticized by some and fiercely defended by others.
On the side of those who evict it is the memory of the import substitution industrialization model of ECLAC in the 1960s, under the theory that the industrialized countries of the “Center” took advantage of the natural resources and markets of the primary underdeveloped countries. exporters, in the “Periphery”. The idea arose, then, that the State promote the production of consumer, intermediate and capital goods, to increase their supply in the local market, hoping to generate employment and reduce external dependence. An “inward” model with tariff, non-tariff and non-tariff protection, to increase or prevent the purchase of foreign goods and protect the internal market and induce “industrialization at any cost”.
Unfortunately, the overprotection that ensued caused productive inefficiency, in such a way that – once the cycle was over – the industries that were born under that logic faced survival problems. With this “lesson learned”, should promoting the substitution of imports from the State be classified as something intrinsically bad? No, especially when an economy faces rigidities and if its stability is at stake.
According to the Bolivian Institute of Foreign Trade (IBCE), the propensity to import in the country has risen in such a way in the last 15 years, that the annual average 2017-2021 has been 8,900 million dollars, for almost 6,000 products that we bring from abroad, of which more than 1,000 each exceeded one million dollars/year; products with which we are familiar, such as diesel and gasoline; wheat and flour; furniture and industrialized wood; fabrics and clothing; footwear; dairy products; urea; apples; chocolates; among others, exceeded 10 million annually.
But, let’s take as an example the 2 main products -diesel and gasoline- that only in the last 5 years involved spending almost 6,000 million dollars. Given that its price cannot go up in Bolivia (it was tried at the end of 2010 but it had to be backed off because people took to the streets because “everything went up”), and since this implies hundreds of millions of dollars in subsidies -for transportation public mainly, not agriculture, as they say- should we continue to raffle more than 2,100 million dollars to import them, as in 2021, just because ECLAC’s import substitution failed 70 years ago? No, well!
In fact, the bioethanol production program is underway thanks to the Santa Cruz agroindustry and should be deepened; Likewise, there should be a Program to produce biodiesel from the private sector, in light of the successful experience with ethanol which, thanks to a wise definition by the Minister of Economy and Public Finance, this year will involve the purchase of 160 million liters by YPFB and savings of more than 100 million dollars in non-imported gasoline.
The IBCE has been insisting for years on the need for a “Competitive Import Substitution Policy” that, without repeating the errors of statism and protectionism of the past, aims to lower production and realization costs to achieve a greater supply of national products – substitutes or substitutes for imported ones – in the Bolivian market.
Thinking about it, this is what Santa Cruz has been doing since the 1950s, allowing the country to save millions by building our food self-sufficiency, generating jobs for Bolivians: that is why the Santa Cruz development model is successful and has nothing to do with ECLAC!
“One button is enough of a sample” -said the song- “the others… to the shirt!”.
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