pure partytime last night, as Evo declared “mission accomplished”
on his three year mission to rid Bolivia of illiteracy. As IKN did a chart and a post on this nine days ago (check it out here)
we’re not going to dwell on this significant achievement today.
Nah, let’s look at something that’s just as impressive, from this financial analyst’s viewpoint anyhow.
Bolivia’s currency reserves now stand at U$7.608Bn (as at 30 November 2008) and quite frankly I’ve never seen anything quite like this chart to counter people who say that nationalizations don’t work and that industrialized nations don’t take rampant advantage of their poorer cousins. In the case of Bolivia, the whole ballgame changed with the social unrest known as the ‘gas wars’ that brought down the previous administration (admittedly that single sentence simplifies things greatly). From 2005 Bolivia began to benefit from its own hydrocarbons revenues for the first time due to the protests led by Morales and his M.A.S. party.
Once Dr. Morales’ admin took official charge in 2006, things just took off. Prophets of doom have been totally and utterly silenced over the Bolivian hydrocarbons nationalization. Bolivia’s GDP has grown to 6.7% in the third quarter 2008….
……and the country is well-placed to survive the pressures it will feel from the global recession coming soon to a country near you. I’ve said it before and I’ll say it again; complain all you like about his politics, but the Morales administration has handled its country’s economic affairs impeccably; I’m one of those who have grown to expect fiscal and financial irresponsibility from left wing politicians once they reach power; that just isn’t so in the Bolivia of Evo Morales. It’s very impressive.
It’s not some panacea of perfection in Bolivia, of course. The country is very poor and it’s difficult for anyone from industrialized nations that hasn’t traveled through any ofthe world’s poorest areas to grasp just how poor places like Bolivia really are. Inflation is running at 11.37% for the first 11 months of 2008……
….. but as with all the region the biggest hike (to 8.85%) came in the first six months of 2008 as the main pressure came in the second half of 2007 and the first half of 2008 when commodities were going batshit. The last two months in Bolivia have seen things more under control, with inflation clicking up just 0.31%. Little doubt that Bolivia’s headline inflation rate will tumble in 2009.
All told, when those lists are made of “countries that will ride out the recession” Bolivia should be up there with Chile, Peru and the other usual suspects. This blog has already noted in this previous post how Bolivia in 2009 benefits from major countercyclical infrastructure projects that will keep the GDP number clicking over handily. Evo’s doing right by his country’s economy and has had precious little applause for his efforts. No need to wonder why.
Meanwhile, how have the economies of the world’s expert financial nations been doing recently?