Bolivia Unveils Measures to Tackle Dollar Crisis
Government’s Plan to Address Dollar Scarcity
Amid a worsening dollar scarcity in Bolivia, the government has unveiled a package of measures to spur investment and exports. The aim is to reverse the situation that has left shelves empty and workers unpaid. President Luis Arce’s government has collaborated with businesses to implement a plan that includes cutting red tape for exports, increasing investment in grains production, making diesel imports easier, and allowing bigger trucks on the roads.
Plunging Reserves and Economic Instability
With reserves plummeting from a peak of $15 billion a decade ago to under $2 billion now, Bolivia is facing economic instability. The erosion of reserves is attributed to sliding production and exports of natural gas, which has been the mainstay of the Bolivian economy for the last two decades. The country’s debt rating has also been downgraded to ‘junk’ territory by Fitch, citing the slide in reserves levels that threatens economic stability.
Measures to Address Dollar Shortage
According to Minister of Economy Marcelo Montenegro, the government aims to bring in up to $5 billion via the farming and mining sectors to gradually moderate the shortage of dollars in the private sector. The problem is stark, with net total reserves halving in the last year and the cash amount now under $200 million, most of which is in gold.
Impact on Business Sector and Citizens
The lack of dollars is a major concern for the business sector, especially in the import sectors. Many people are unable to access dollars through official channels, leading some to buy them on the black market. The shortage has also resulted in the unavailability of imported materials and essential supplies, such as medicines and medical supplies, as reported by veterinarian Fabiola Navia in La Paz.
Effects on Truckers and Government Payments
The reserves slide has also affected the wider economy, with striking truckers in the city reporting delayed payments. According to Ramiro Barrero, leader of the trucking union, the losses are in the millions, and they have been without payment for months. The situation is having a profound impact on various sectors and the livelihoods of citizens.
