Bolivia: Socialism Success Story

Venezuela is collapsing. There is no denying that.
Since their government is socialist, their collapse must be because of socialism. Or so we are told.

Once you accept that premise, Bolivia must also be collapsing too because they are also socialist.
Right-wing sources have already announced Bolivia's collapse.

Socialist Evo Morales has been president of Bolivia for over a decade.
Although he claims to be working for the people, his populist policies have been a major roadblock on Bolivia’s path to economic growth and development.

There's just one, tiny, little problem with this article - it's untrue.

Bolivia has the fastest growing economy in South America.
And that's just the start.

Since 2006, Bolivia has been run by socialists every bit as militant as Venezuela’s. But as economist Omar Zambrano has argued, the country has experienced a spectacular run of economic growth and poverty reduction with no hint of the chaos that has plagued Venezuela. While inflation spirals toward the thousand-percent mark in Venezuela, in Bolivia it runs below 4 percent a year. Shortages of basic consumption goods — rampant in Caracas — are unheard of in La Paz. And extreme poverty — now growing fast in Venezuela — affects just 17 percent of Bolivians now, down from 38 percent before the socialists took over 10 years ago, even as inequality shrinks dramatically. The richest 10 percent in Bolivia used to earn 128 times more than the poorest 10 percent; today, they earn 38 times as much.

Per capita GDP in Bolivia has more than tripled from just $1,000 a year to over $3,200 over a decade, while seeing a quadrupling of the minimum wage.
So why has Bolivia prospered while Venezuela imploded? The difference was competence, not more or less socialism.

Venezuela ran large budget deficits every year, even as oil prices skyrocketed between 2005 to 2014...In the meantime, Bolivia was running budget surpluses every year between 2006 and 2014. This allowed it to draw down the public sector’s debt, which fell from 83 percent of GDP in 2003 to just 26 percent in 2014, even as Bolivia built up its international reserves dramatically, from $1.7 billion in 2005 to $15.1 billion at the end of the boom in 2014.

That happened even while social spending on health, education, and poverty programs increased by over 45 percent. The rate of illiteracy dropped from 13% to 3%. Cocoa production was dramatically reduced.
International borrowing costs have dropped so low that President Morales recently announced 'Total Independence' from the World Bank and IMF.

“During neoliberalism, Bolivia did not have the capacity of getting out of debt.”
-- Bolivian President Evo Morales

So an all-around success story.
Who could possibly be upset with a story like this? Oh, right.

The Bolivian leader accused Washington of supporting separatism in his country in 2008.
Bolivian President Evo Morales on Monday accused the United States of funding opposition groups with at least US$4 million to destabilize his government.
“According to e-mails, between 2006 and 2009, the United States Agency for International Development (USAID) poured at least four million dollars into separatist movements” in four of the nine regions of the country, said the left-wing leader.
He then noted on his personal Twitter account that Washington had paid this money to the opponents “who have committed terrorist acts in order to divide us (in 2008).”
...Morales also reiterated that Washington “had planned a coup against Bolivia” this year.
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thanatokephaloides's picture

If I had private retirement assets, Bolivia is one of the places I'd consider retiring to. I like the climate (nice and cool, with winter snows); a deliberately non-racist form of government by design (the official name of the country is: "The Plurinational State of Bolivia"); and the Bolivian Peoples have a good idea of what the word "progressive" really means and are conducting their affairs accordingly.

Give rose

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"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar

"All power corrupts absolutely!" -- thanatokephaloides

k9disc's picture

Big difference between Bolivia and Venezuela on that front, I think.

It reminds me of some Chomsky commentary I recall:
The danger of the Soviet Union was that it provided the model of 3rd to the 2nd world in a single generation.

That was the gist of it. Bolivia, and the spirit of solidarity of the global South, might be getting ready to be a terrorist threat.

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“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

@k9disc Hence, the collapse. Without socialism, the collapse would have been worse.

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Cant Stop the Macedonian Signal's picture

@SancheLlewellyn The oil-dependency allows them to be fucked in the ear by the powers that do such things as move the price of oil up and down.

And yes, I do believe that there are powers that manipulate oil prices for political reasons. Have ever since George W. Bush's 2nd campaign.

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"More for Gore or the son of a drug lord--None of the above, fuck it, cut the cord."
--Zack de la Rocha

"I tell you I'll have nothing to do with the place...The roof of that hall is made of bones."
-- Fiver

dervish's picture

@Cant Stop the Macedonian Signal and all that's happened is that KSA is near broke. Gas prices will be headed north again.

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"Obama promised transparency, but Assange is the one who brought it."

Cant Stop the Macedonian Signal's picture

@dervish All they could do to Russia (a near-superpower, if not a superpower outright) is put a dent in them, inconvenience them, make them slow down. When you're a much smaller nation in the global south, it's different.

BTW, this is the power that the oil barons don't want to give up. They probably wouldn't have it in an economy based on renewables, or on a combination of renewables and nuclear.

Rare earths might become the next commodity through which barons of some sort could wield this sort of control, but then again, that might not work. For one thing, I know a lot of them are in China. and China is playing its cards close to the chest. (not that I blame them)

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"More for Gore or the son of a drug lord--None of the above, fuck it, cut the cord."
--Zack de la Rocha

"I tell you I'll have nothing to do with the place...The roof of that hall is made of bones."
-- Fiver

dervish's picture

@Cant Stop the Macedonian Signal they're everywhere.

I think you're right about not giving power. The oligarchs would rather be the last two-bit warlord over an impoverished settlement, Mad Max style, than be a regular (rich) schmoe in a prosperous society based on renewables. This is why they are so toxic, they are against the public good.

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"Obama promised transparency, but Assange is the one who brought it."

Cant Stop the Macedonian Signal's picture

@dervish Exactly. They're fucking crazy. They're crazy enough that Trump almost looks sane standing next to them, for the sole reason that he's not generally in favor of nuclear war.

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"More for Gore or the son of a drug lord--None of the above, fuck it, cut the cord."
--Zack de la Rocha

"I tell you I'll have nothing to do with the place...The roof of that hall is made of bones."
-- Fiver

dervish's picture

have been announcing the impending collapse of Sweden and Denmark for at least a generation, probably longer.

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"Obama promised transparency, but Assange is the one who brought it."

Arrow's picture

'The Axis of Evo'.

His party's governance has been steady and methodical. Not going too far ahead of what the country could economically bear.
Here in Ecuador 'Raffia splurged a little too much in reliance on oil revenue.
It's the 'Land of Lenin'(tm) now and he's trying to focus on funding direct help to the people as opposed to thebig infrastructure projects of the past.

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I want a Pony!

@Arrow Correa

The results for the decade of left government in Ecuador (2007-16) include a 38 percent reduction in poverty and a 47 percent reduction in extreme poverty. Social spending as a percentage of GDP doubled, including large increases in spending on education and healthcare. Educational enrollment increased sharply for ages 17 and under, and spending on higher education as a percent of GDP became the highest in Latin America. Average annual growth of income per capita was much higher than in the prior 26 years (1.5 versus 0.6 percent), and inequality was considerably reduced.

Public investment as a percent of GDP more than doubled, and the results were widely appreciated in new roads, hospitals, schools, and access to electricity.
...
The most important decision in bringing about Ecuador’s current economic recovery was also perhaps the most unorthodox: The government imposed a variety of tariffs on imports under the World Trade Organization’s provision for emergency balance-of-payments safeguards. This reduction of imports in 2015-16 added about 7.6 percentage points to GDP during those years. This counteracted spending cuts that the government had to make as revenues crashed.

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@gjohnsit link

Economic growth has been the highest in Central America averaging 4 percent in the last decade, and 4.7 percent since the 2008 global economic crisis. In 2014, economic activity grew by 4.7 percent, after 4.5 and 5.1 percent, respectively, in 2013 and 2012. In 2015, despite mediocre growth projections across Latin America the IMF conservatively forecasts a 4 percent growth for Nicaragua, still the highest in Central America. On average Nicaragua’s Foreign Direct Investment inflows have more than quadrupled since 2006; exports have more than double within the same timeframe, while formal job creation was the fastest growing in Latin America in 2014 according to ECLAC. Despite high growth rates, inflationary pressures have been contained and even more so with decreasing oil prices as 2015 year-end inflation is projected to close at around 3 ½ percent. In the fiscal front, government deficits and public debt are in check. Since 2012, the central government deficit has averaged ½ percent of GDP. The consolidated public sector deficit has averaged 1.4 percent of GDP in the same period, and public debt has remained stable at around 40 percent of GDP.
...
The results of the last two national households surveys on measurement of Level of Life (2009 and 2014) given by the Nicaraguan Institute of Statistics (INIDE) and World Bank specialists are quite encouraging: general and extreme poverty have respectively dropped from 48.3 to 29.6 percent and 17.2 to 8.3 percent in the last 10 years.
...
Nicaragua ranks first as the country in the world that increased its happiness levels the most from 2007 to 2014.
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@gjohnsit Nicaragua and El Salvador both elected the parties the Reaganistas feared most. El Salvador is still a living hell, but Nicaragua has improved.

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dervish's picture

But there's a thesis going around that echoes one of your recent essays... good job!

Battlefield Casualties and Ballot Box Defeat: Did the Bush-Obama Wars Cost Clinton the White House?

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"Obama promised transparency, but Assange is the one who brought it."