February 19, 2007

Remittances Surpass Foreign Investment in Importance

MABB © ®

Just wanted to share this graph with you all. This is a graph from La Razon, which shows, among other things, the relation between remittances and foreign direct investment (FDI) in the Bolivian economy.

The graph depicts how over the last ten years, remittances of Dollars and Euros (mainly) have become an important part of the GDP, and how in the last years it has surpassed FDI. At least, that is what the Bolivian Central Bank says.

My impression, I think FDI will be even lower in the next year. What is somewhat alarming is how remittances are growing (39% p.a.). This may be the result of an increased numbers of Bolivians emigrating overseas, or those who already emigrated, are making more money. Most likely is that Bolivians overseas are making more money, but the biggest reason must be that even more Bolivians are emigrating. And that is just what is scary. The flight of human capital is alarming.

One grave problem for Bolivia has been that of 'brain drain'. There are an overwhelming number of Bolivian professionals working all over the world. However, currently, an even greater problem has been for the government to recruit professional people to take positions in the government. This emigration trend is most damaging, and no wonder Morales has a serious problem in recruiting people to work on his project..... Yes, remittances are up, the country has a new source of capital, but at what cost?


galloglass said...

Miguel: How about the fact that the educated need not apply for positions in the Morales regime? A whiff of Pol-Potism in the air.

Miguel said...

Well, yes. Morales is in great need for professional talent. At the rate he is losing people.... He's even got scouts outside Bolivia trying to recruit people. I tell you because it happened to me. So I assume, it is happening where Bolivians live. Specially, professionals.

I personally think it is a serious problem for him. One he'd never accept in public, nor would other Bolivians accept it. But, why does he have so many foreigners as advisers? Not to mention the Chavez guy, I know of at least other two Peruvians working close to him. And I also read the government palace is full of Venezuelans. So called advisers.

Anonymous said...

Miguel, please, are you going to let that pass without comment on your blog? Pol-Potism? Pol Pot, the guy who refused to hire a million or so educated people, so they had to emigrate? Or did they have poor morale, so they resigned their jobs in his government?

miguel said...

Well, I think I will. Much similarity I don't find. Morales wants capable people, he just doesn't find it.

galloglass said...

Anonymous...have you ever heard of hyperbole? The fact remains that Evo hires for ideology, not competence.

Anonymous said...

galloglass, I had heard of hyperbole and I tried to respond with some. But why ugly up a good blog for a cheap laugh?

Miguel says he has been recruited. I'm impressed. Maybe there is a search for competence, as much as other governments at least, but ideology affects who joins and who stays. Maybe you have it backward.

miguel said...

Oh, no, no, no, no! I was approached, but not recruited. Sorry, if I wasn't clear.

But, I do agree, Morales is recruiting and searching. And also, ideology, more than anything, is playing a role. In my opinion, that is what's limiting the choices. If you want to join Morales' 'project', you have to fully adscribe with it. A bit of dissension will just prevent you from staying on the job. That is what happened to Ric.

Under those circumstances, it is hard to recruit people.