March 17, 2008

The Economy Back in Discussion

MABB © ®

It's been a while since we've talked about Bolivia's economic trends. For the last years, it has been relatively stable. But, now the economy, and much worst, inflation, have made a come back. I just found a nice illustrative article from a Bolivian research institute that talks about...

How can $700 million in hydrocarbon revenues be bad for the poor?
By Lykke E. Andersen, La Paz, 31 July 2006

It was recently shown in an academic paper (1) that the natural gas boom
in Bolivia is likely not only to increase inequality but also to increase poverty.

How can this be true? How can windfall revenues of $700 million per
year, received by a clearly pro-poor government, increase poverty???

Three main mechanisms are at work:
It nicely lays out the perversion of the current Bolivian situation. Enjoy!