August 30, 2012

Trade Balance: Some Consideration about Bolivia's Trade Surplus

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 The Bolivian government is enjoying a period of favorable economic conditions. Granted the conditions for positive macroeconomic stability were laid out in the reforms of the 1980s, the current government has a lot to do with Bolivia's current positive development. One of the most important decisions the Morales government has made while in office was to nationalize the hydrocarbons sector, i.e. the extraction and export of natural gas, Bolivia's most valuable natural resource today.

Aside from positive growth, Bolivia's economic data has been showing record levels of international reserves, the (if I am not mistaken) only budget surpluses in history and more currently, its trade surplus. But, what is trade surplus and what does it mean for Bolivia?

As you very well may know, trade surplus means, in simple terms, that Bolivia sells more to the world than it buys. It also means that Bolivia receives foreign currency, in essence more money, and is of course better than it was before.

The below graph, taken from a recent publication by the National Statistics Institute (INE), shows the development of trade in Bolivia comparing two periods (January to July) in two different years, 2011 and 2012. Ergo the data is recent, and of course preliminary.

August 26, 2012

Silencing the Media

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Much like his Ecuadorian colleague, President Correa, President Morales has adopted a troublesome strategy to counter criticism from the press on his government. Within the last five days, the Bolivian Government (BG), through its Interior Ministry (Ministerio de Gobierno), has presented a formal accusation against three newspapers (ANF, Pagina Siete and El Diario) for "spreading or inciting racism or discrimination", which in Bolivia is a penal crime.

This is an old quarrel, one which Morales has been complaining about since he took office. He alleges that several private media outlets (among them TV stations, radios and newspapers) have been waging war against his "proceso de cambio" (change process) in a way in which only the media can do, tarnishing his image and putting him constantly in a bad light.

Morales has been looking for a way to quiet the press and criticism against himself and his government. He has tried, in some form, nationalizing some news outlets, creating a new state newspaper and taking advantage of the Internet presence, publicly ridiculing reporters, and avoiding altogether the private press. This is the latest attempt and might be the most efficient. If successful, the government can count with an investigation by the office of the Attorney General and a subsequent penal process against the newspapers. In the worst case for these news outlets, some editors or owners or directors would go to jail for up to three years, the newspapers themselves would be either closed or would have to pay penalties.

The situation is not only being closely followed by the immediately affected such as journalists and the media outlets but also by international press associations such as the Reporters without Borders or the International Association of Press as well as other organizations such as the Permanent Assembly for Human Rights in Bolivia.

Bolivia is the second country, after Ecuador, that goes after the critical press through the legal system. In the next days the Justice Department will take a look at the accusation and will either recommend to go ahead or will set it aside. The expectation is that, given the fact that the government has asked of any person working in any government office or function to have an unconditional "compromise" with the change process and that the government has had a lot of free hand to design the lists from which these judges were elected into office, the result will be the beginning of the process against the three newspapers.

I am very expectant of the outcome. This will be a pivotal proof of the Justice System's independence, especially considering that the rights to freedom of the press and that of free speech are guaranteed in the constitution.