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Recover private company to restore growth and trust

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One of the worst results of the current economic model has been the extreme precariousness of the private sector, especially companies that operate in formality, complying with labor, tax and administrative regulation.

According to figures published by the Integrated Productive Information System, the number of formal active companies, to February 2025, reached 116,238, compared to 144,129 registered by Fundempresa in 2014; that is, in 11 years, 27,891 formal companies went to inactivity. Currently, active manufacturing industrial companies total 10,623, while in 2018 they were 12,206. Industrial GDP fell from 5.5% in 2018 to less than 1% in 2024. Medium and large companies are just 4,294 and employ 312,822 people; While micro, small and non -categorized reach 111,944 and have 185,478 dependents.

This situation is a consequence of the imposition of a model that concentrated the generation and distribution of wealth in the hands of the State, distorting growth and promoting the increase in informality,-from 68% in 2013 to 85% in 2024–, and smuggling, which today exceeds 3.5 billion dollars per year. But that also implemented repressive measures against companies, such as the salary increase disconnected from productivity, tax harassment and excessive bureaucratic burden.

Without a solid legal framework and with a collapsed justice system, property rights and contracts became insecure; Corruption and bureaucracy expanded; The State created politicized and inefficient companies to compete with the private sector and impose monopolies; Markets such as ATPDA were closed; commercial and tariff barriers increased; and the policies that encouraged innovation and technological development were abandoned.

It was not the external conditions, but the model itself that led the Bolivian private sector to face an increasingly restrictive environment, characterized by legal insecurity, regulatory excess, disproportionate tax pressure and a political climate loaded with uncertainty. Despite their resilience, companies continue to operate in adverse conditions that limit their ability to generate formal employment, invest, innovate and compete in the global market. In this context, informality grows, productivity stagnates and business sustainability margins are reduced dangerously.

Despite all the above, from the governmental perspective, formal business is considered inefficient, which would justify strengthening the role of the State in the economy. What is not mentioned is that the weakening of companies was a deliberate political objective, which caused structural problems such as the fall in investment and competitiveness, slowing down, increase in unemployment and underemployment, capital escape, deepening of inequality, macroeconomic instability, commercial isolation, technological recoil, expansion of informality and tax evasion. In fact, the shortage of dollars, the energy crisis, inflation and international distrust have their root in statism and in the precarization of companies.

We must understand that the strengthening of the private sector does not depend solely on individual business effort, but on an environment that guarantees clear rules, legal stability, healthy competence and opening. The success of productive, commercial and service units requires more than economic incentives. It needs solid institutions, state transparency, an efficient regulatory framework and a vision of shared development between the public and the private.
For these reasons, one of the greatest challenges for the next government will be to recover the value of private property and company freedom, creating institutional, economic and regulatory conditions that ensure an environment conducive to investment, innovation and free competition.

Bolivia requires a structural change that respects the role of business, ensuring clear and stable norms, transparent and fair regulatory environment, responsible fiscal policy, reasonable tax burden, free competition, macroeconomic stability, access to markets, legitimate and stable political institutions and a culture of legality and trust. This does not imply the absence of the State, but to ensure that it is limited to fulfilling its role and acts as a guarantor of clear rules, stability and openness, without arbitrary interference or excessive barriers; In addition to defining a public-private collaboration framework that encourages investment and releases the entrepreneurial spirit, especially among young people.

Promoting an environment where companies can develop freely is not just an economic measure, it is a commitment to social progress, productive innovation and the construction of more equitable, free and fair societies.

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