LA PAZ, Bolivia – On 24 February, Bolivia's President Evo Morales told Prensa Latina that the country's economy does not depend on remittances from Bolivians living abroad, but it does depend on oil prices, which is why the government could seek help from international organisations or issue bonds to avoid a crisis.
President Morales told La Opinión, in reference to the low price of oil and its impact on the economy, “the government is prepared to discuss this matter (the crisis) with international organisations such as the Economic Commission for Latin America and the Caribbean (ECLAC) and the Corporación Andina de Fomento (CAF) and manage options based on their experiences.
Meanwhile, if the downturn in crude prices continues, Morales believes his government would be forced to issue bonds or take out loans to prevent vacuums in the economy.
On an internal basis, the damage and side-effects of declining oil prices will have to be offset by bonds or loans,” added Morales.
During an interview on Kausachum Coca radio, President Morales announced, “remittances were higher in 2008... I have spoken to other presidents whose countries are tremendously dependent on them. Bolivia doesn't have that problem.
Annual remittances to Bolivia amount to approximately US$1 billion, a figure which equals vegetable oil sales and is higher than manufacturing exports to the US, double the income from tourism, and puts into question Foreign Direct Investment levels, according to the Bolivian Foreign Trade Institute (IBCE).
Bolivia's economy faces tough challenges in 2009 and growth rates will depend both on external factors arising from the global crisis and on internal political decisions adopted by Evo Morales' government.
In the first week of February, the International Monetary Fund (IMF) published its 2009 growth predictions for Bolivia and placed the figure at 4 percent, somewhat less than the 5.05 percent government forecast.
Both figures exceed the 3 percent estimated by ECLAC in its preliminary regional assessment, according to El Deber. This rate of growth falls below Peru's expected 5 percent, but higher than Brazil with 2.6 percent.
Meanwhile, Bolivia's Finance Minister Luis Alberto Arce told EFE that the country's total exports, mainly hydrocarbons, minerals and soy products, would drop off. According to Arce, the Bolivian Central Bank (BCB) also predicted that remittances from Bolivian immigrants would decline as employment conditions worsened in countries like Argentina, Spain, the US and Italy, that are home to many Bolivians.