October 15, 2014

Elections 2014: Problems with the Results


The votes are in and now the counting has began. The Supreme Electoral Tribunal has been busy counting the votes, trying to get the ballot boxes to its counting centers and also trying to transmit the results electronically to its central office in La Paz. However, already in the third day of counting, this task has proven very difficult. Though the office has 12 days after the election to present official results, it has been the normal process to have close to 100 per cent of the votes two or three days after the elections. At least that is how I remember from past elections. During the rest of the available days, the office usually counted twice or three times to make sure the results were correctly counted.

This time around however, there are a number of irregularities being reported by some people. For example:

- militants of opposition parties reported the departmental elections office had published (on the web) the results in a special district when in fact the ballot boxes had not been open yet.

- in the same site (see prior post), the results for UD had gone up and then down in a matter of hours (taking into account votes for a party can only go up as the votes are counted).

- in Sucre, the departmental office published the percentage of votes counted for the district 1 which first were 75 and later in the day were 45 per cent.

- in Tarija, for district 40, earlier in the day there were 420 voting tables from which were counted around 66 thousand votes. Later in the day there was one more table and the votes went up to 88 thousand votes. The curious thing was the first time around an opposition candidate was winning and later a MAS candidate had won.

- in Tarija a ballot box with 4000 votes appeared in a voting precinct which only had 300 voters.

If this is an indication of anything, it is an indication the counting process has not been planned well and it has turned very chaotic.

Of course, the opposition has been prompt in proposing several theories for why are these things happening.

1. The first explanation, made by an opposition leader from Santa Cruz, argues the government is slowing the counting process down because it wants to justify the lead it had in the polls. This assumes of course the MAS did not have such a significant lead.

2. The other explanation/accusation argues the government (namely the electoral office) is manipulating the results to reallocate seats from the opposition in favor of the MAS.

I have to say, this type of denunciations from the part of the opposition is not rare in Bolivia. In the last elections, there was also a wave of electoral fraud reports. Some people also found ballot boxes full of MAS votes and the like. However, nothing got cleared or investigated and some weeks after no one remembered those reports. If I had to guess, I would say, this time will happen the same thing.

October 13, 2014

Elections 2014: Results


Update: For up to date results, as the counting progresses, follow this link which takes you to the Bolivian electoral office's (TSE) web site. The results are in Spanish.

There you can see the results at the national as well as the departmental and the district level.

Have fun!

It looks like Evo Morales was re-elected for a third term. According to exit polls reported in local media (here and here), Morales won the general elections with 60 per cent of the vote. The result for the other candidates has proven to be irrelevant this time around because the difference between Morales and the second candidate Doria is more than 40 per cent.

What is relevant still is whether Bolivians have made use of what they call the crossed vote, which means to vote for Morales for president but locally for a candidate of another party. This might translate in a larger and more relevant opposition in the national assembly, i.e. less power for Morales.

October 10, 2014

Elections 2014: Better Late Than Never - On Transparency


I guess better late than never, as the saying goes. Several partners, among them some universities, some ngos, some research institutes and other organizations have gathered together to present the Bolivian electorate two websites where they can inform themselves about the October 12 elections, the candidates and what is going on during election day.

It sounds good. I just ask myself why now? It is Friday 10, two days before the elections. Don't the electorate need such digital tools much before the elections? All I can say, is good try.

Here is one of the sites: voto informado Bolivia. The title translates to a very promising, informed vote for Bolivia. It is very poorly designed site. I wish they'd saved themselves the trouble. While you can obtain all the names of all the candidates (10 president and vice president, 72 senators and 260 deputites, primary and alternates, 18 representatives to supra national assemblies) running for election, in many cases that is all you will get. Of course, the presidential candidates are featured prominently. As you land in the site you see a dynamic row with the pictures of all candidates for president and vice president. However, once you click on one picture (thinking you'll get some info on the person), all you get is a short paragraph on them. It is really disappointing. Also prominent on the home page is a search field where you are prompted to enter a department name. However, once you do that you get the lists of the candidates for that geographic area. Many of the profiles don't even have a picture and when you click on a person you mostly get the gender, party, age and the name. That is all!

The other web site is: yo reporto Bolivia. This site, which translates to I report Bolivia, is a bit more useful. It has the motto voto informado y transparente, plataforma ciudadana, which, in light of what I am highlighting in this post, I am not sure whether it is entirely wishful thinking or only half of it. The motto translates to a citizens' platform for an informed and transparent vote. The main objective of the site is for citizens to report whatever they want to report on the day of the elections. Citizens can call, sms, twitt, and submit reports. Citizens can also sign up to receive alerts. So, the web site works as follows. A citizen reports what is going on in a voting precinct, be it he thinks it is something irregular or if she want to show the interior of a voting precinct or if he or she wants to take a picture of his or her vote. Anyone online can go to the website and in a geo-tagged map can follow the incident or observation or picture. Something similar to this was available last elections and proved for me to be very useful and, at the same time, very interesting in terms of digital or even liquid democracy.

However, and this is a very big however, the elections office or court prohibited two days ago the use of any electronic device in the voting precincts. That means people cannot report incidents or take pictures or make videos of what is going on in a voting precinct. The elections office argues it wants to guarantee the secrecy of the vote.

Well, that is it. Two days before the elections Bolivians get two pretty much obsolete web sites which could have been very interesting had they been published much earlier. Though, the second might have something interesting after all. I will give it a look or two on Sunday.

October 07, 2014

Elections 2014: On Preferences, Voting Intentions and Polls


As fun exercise I have been collecting (and updating) prediction polls in the Bolivian electoral process. Though everyone is pretty much sure Evo Morales will win the elections, I would like to think it is interesting (at the very least fun) to take a look at the trends and guess what they might or might not say about who will win and/or whether there will be a second round or not. I have to say, the Brazilian results have given me some inspiration to bring this post to an end.

During this electoral period, which has been in my opinion weird because of the quiet campaigns and the timid media coverage, three polling companies have conducted voter opinion polls at the request of different media. As the first polls came out, I posted a few of them just to have them in one place. Throughout the months that followed, I kept collecting the few polls that were published. It has not been that much, I have to say. Nevertheless, below you will find, whatever has been published, though I am sure is not a complete set. 

The fact that I put them together does not mean they are comparable. Most polls, if considered generally, are a bit confusing. Most make use of a different methodology and, in consequence, they deliver different numbers, which may lead to different interpretations. For example, some make a difference between intention of voting and preference for a candidate and others conflate these two. Yet others formulate questions less accurately.

At the risk of showing something irrelevant and due to a lack of polling numbers in these elections, I decided to follow the polls anyways and see if they have something interesting to say.

Clearly, they are less informative than the ones we had in prior general elections.

In the following table you will see the polling companies, the dates of the polls, the names of the candidates, and the poll results in percentage of the electorate.

Evo (MAS)
Samuel (UD)
Tuto (PDC)
Juan (MSM)
Fernando (PV)
Tal Cual for Los Tiempos (July 20)
Ipsos for ATB (2 to 18 July)

Captura Consulting for Poder y Placer (eje central)
for El Deber
(July 19 and 28)
Mori for El Deber (5 and 23 Aug)
Tal Cual for Los Tiempos
(23 and 24
Mori for El Deber (18 to 29 Sept)

Ipsos for PAT and ATB (8 and 23 Sept)

If a trend is a prediction then the following graph suggests what we already think we know, i.e. Evo Morales will win Sunday's general elections. The graph displays the average percentage of support per month.

Own elaboration

As the graph suggests, Morales has been increasing its large lead in the polls. While in July he led with around 30 percentage points, his lead in September has increased to somewhat over 40 per cent. That is a large lead. In addition, it has been predicted in September he will have gathered around 59 per cent support among the voting population. The candidate who has been following him from far is Samuel Doria. However, it seems Doria has not been able to maintain the support it had. In fact, he seems to have lost support from almost 20 per cent in August to somewhere around 16 per cent in September. The third in the race, Tuto Quiroga, seems to have made the most improvement, however he has not left the single digits. One thing I have to point out is that the undecided line in the graph does not have much meaning because I have no data for September. That is the reason why it goes to zero. Careful, it does not mean there is not undecideds any more. It simply means I do not have date for that month.

Does this seem Evo Morales is heading towards his third consecutive presidential period? It surely seems that way. After all, the new constitution says a candidate wins an election if he or she gets 50 per cent + 1 of the vote or 40 per cent with a difference of at least 10 per cent with the next most voted candidate. If he does not fulfill these criteria, he would have to face the second most voted candidate in a second round election. So the conditions for his win are given. However, if the recently past Brazilian elections are any kind of indication, the Bolivian outcome may possibly not be that easy. Though a significant gap to close, and if so it would be very close to a miracle, the final vote might end up sending Morales and a second contender to a second round. I think, this is what the Bolivian opposition is wishing itself right now.

What I think the most important issue is, is another one. Morales has been confidently expecting to win this election as well. I have speculated on the reasons why in other posts. What he has been asking his supporters all along is to help him achieve the 2/3 control of the assembly, which would mean a blank check from the electorate in favor of Morales. What he is looking in the end, and forgive me if I go very speculative, is the means to be able to reform the constitution so he can stay in power indefinitely. I think that is Morales' goal this time and not merely winning the elections. But that is just me.

You can find the latest polls in rar format in the electoral agency's web site. Other polls you can find in this web site, which I think is also from the government.

October 03, 2014

Elections 2014: Party Programs and Word Clouds


It is October second and we are 10 days away from Bolivian elections. In a prior post I described MAS's political program to bring a bit more understanding on what they are proposing this time around. In this post I hope to contribute a bit of analysis on all the parties' programs using word clouds. FYI, as you know very well, the five political groups running for elections are the MAS, MSM, UD, PDC and the PV. From these five, really the MAS has all the possibilities to being re-elected, but the UD is its closest competitor, albeit it is really a considerable difference (see here). The PV (green party) has literally no chance because it is the party with the smallest support.

I got inspired after reading this post (in Spanish), which also attempted a similar approach. What the author of that post basically did is to attempt to draw some conclusions by looking at the frequency of discourse in the programs of four of the five political groupings taking part in the Bolivian elections. He basically defined two dimensions (democracy and state as well as economic policies) and proceeded to conduct a simple quantitative analysis of the text in hand. The procedure was to count how many words fell under the mentioned dimensions. His results show, for example, that MAS places emphasis on production, industry and economics because the frequency of those words are 30, 24 and 23 per cent, respectively. The assumption is, of course, the program was written by a group of party members and discussed by the party before making it public. This paper, in fact, would represent a collective opinion about which policy areas are important for the party and what aims or plans that party has for the future.

Now on this post the assumptions are similar, i.e. it has a constructivist approach. At this point I should disclose I am a critic of this approach but see it a useful tool to formulate interesting questions. To read my critic you will have to keep reading until the end.

Nevertheless, what I did is ask myself why not use word clouds to analyze the entire text rather than come up with dimensions and go through the text to try to find what I am looking for? I thought why not let the text tell me what the authors place emphasis on? So, that is basically what I did and what word clouds do, namely a word cloud is the graphical representation of the frequency of word usage in a particular text. This assumes the important issues people who are producing the text have get introduced into the text reflecting thereby what is important for that group. Careful interpretation should show what issues, concepts and policies are important.

Moreover, I produced four graphs or word clouds for each of the four most important political groups in the elections. The clouds are to be read as concentric circles, with the center part displaying the most frequent words in thicker fonts and the outer areas the less frequent words. Finally, I left out the green party or Partido Verde (PV) not only due to some technical difficulties but because the party has virtually no support among the population.

I will proceed the analysis by first looking at each party program to then engage on some comparative analysis. The last part will discuss what is potentially wrong with this approach.


Own elaboration. Please click on image for a larger view.
As you may observe on the word cloud above, it seems the Movimiento al Socialismo (MAS) places emphasis on issues that signal a feeling of togetherness such as our (nuestro), Bolivia, and country (pais). In addition to wanting to transmit a feeling of "our country", it seems that social work, development, living well (Buen Vivir), national resources, production and education and construction are also important. This is consistent with what MAS and Morales are currently working on and with the fact that Morales has been speaking indirectly about his desire to continue with his government's process of change. This means to use natural resources to practically finance the economic and social development of the country by continuing the re-distribution policies and the starting of more state companies (see my post about Morales' economic model here). Curiously enough we find at the edge of the concentric circles issues such as violence, corruption, socialism, democracy, and equality. However, this does not have to mean too much because there is not much difference in the size of the words among the outer most circles and the other circles closer to the center.

The UD

Own elaboration. Please click on image for a larger view.
The Unidad Democratica (UD) party, led by Doria Medina, seems to place emphasis on social issues as well. At the same time however, development is also an important issue. The word cloud shows a tendency to emphasize resources (recursos), production, growth (crecimiento), education, services, rights, security and justice. Meanwhile, less emphasis seems to be placed on construction, enterprises (empresas), legislative issues (legislativo), administrative, discrimination, exports and autonomy. The latter is an issue which will still be relevant for the country due to the new financial resources distribution arrangements the government wants to reform in the coming years. Another interesting observation is that the word democracy seems to be underused within a party that has suggested Morales was not that democratic.


Own elaboration. Please click on image for a larger view.
The Movimiento Sin Miedo's (MSM) word cloud distinguished itself by the number of words and the sheer volume of the document. It is actually the largest document of the four and the one who used a well developed vocabulary. I take it is because a number of intellectuals has been dominating this party since the days it was part of the MIR, which was also a party that emerged from an academic setting. It is the document that has the least difference among the size of the words, meaning the emphasis on a number of issues and concepts and also meaning they want to achieve, perhaps, too much. The center is populated by words like production, development, resources, education, investment, economy and, here is a new issue, health. It seems that less emphasis is placed on technology, institutions, pluralism, unemployment, export, autonomy, decentralization, transparency, corruption and regions. This may point to the leftist orientation of the party, which may explain the emphasis on health and development and natural resources but less interest on autonomy, decentralization, export or international trade and pluralism issues.


Own elaboration. Please click on image for a larger view.

The Partido Democrata Cristiano's (PDC) word cloud indicates an emphasis on power, people, government and differentiation. In addition, it seems that for the party, the economy and development is a bit less important. It also seems that housing, the development of lithium production and citizen security are also some issues which the party might place some emphasis on. Less important issues seem autonomy, decentralization, corruption, employment, and regional governments. However, as in one case above, I have to highlight the relatively equal size of the words which might diminish the difference between word importance among the concentric circles.

Comparing the four cases

What can be said about the four political programs of the four most important political groups taking part in the oncoming Bolivian general elections. First, it is very clear and understandable that all four parties place more emphasis on economic development. This, I suggest, is because Bolivia is at a time in its history where for the first time it has plenty of financial resources and thus time to think and act upon the country's economic development. In prior times this was not always the case. While development has always been an important issue, the country has always had existential worries that placed development a bit behind the country's to do list. Some examples that comes to mind is the endemic weakness in its institutions, or the effects of corruption on the development of the country or the social issues of discrimination, inequality and inclusion which plagued the country for so long.

It is also clear that most parties make an emphasis on the use of Bolivia's natural resources to achieve economic and social development. On the one side, it seems logical because that is how the country largely finances itself, with the sell of natural gas. On the other side, the country does not seem to have an alternative other than rely on its natural resources to develop. While there is some activity on the private sector, the current government has managed to crowd out the economy and has placed all its cards on the selling of its natural resources.

Another clear outcome is the emphasis on social issues. I explain this on the back of what the MAS has already achieved. The future government will have the task to deal with the several social transfer programs Morales has put into place. The population will want to make these better or even will expect to get more such programs. All parties seem to be willing to work on the betterment of such programs. There are no parties that advocate restriction on the volume of transfers or even talk about the dangers of spending too much. Not this time around.

Another concept that seems to be the focus of emphasis for all parties is production. Once again, I suggest this is due to the current policy direction. As you know, the government has been creating several companies to push the manufacturing sector's growth.This the government calls the productive sector, which means really the manufacturing of value-added products. Based on those efforts, it seems that all parties have plans to continue with this type of development policy. Whether they will adopt the MAS' model or not is left out on the air.

Some parties also agree on the importance of education, as observable in the word clouds.

All parties also seem to place less emphasis on issues such as corruption, autonomy, decentralization, regional issues, the health of institutions, and administration. Many of these issues are no surprise because for now issues on autonomy, decentralization and regional issues are seemingly resolved by the new law on decentralization and autonomy. However, I think these issues will come back to hunt Bolivians because of the many discrepancies and contradictions built into the laws framing these issues, including the mentioned law and the constitution.

However, there are also differences, as there should be. For example, the MAS places much emphasis on the realization of its aspiration of Buen Vivir (living well). As noted earlier, living well means a life with the most basic human necessities satisfied as well as other necessities such as education, access to health and water and even access to Internet. All this in harmony with the community and the environment. That is more or less my interpretation. For its part, the MSM places a visible emphasis on health. Why? I can only speculate that this is an issue perceived by MSM as needing more attention in the current situation. The Unidad Democratica has placed emphasis on rights, justice and citizen security. This is very understandable having in mind the criticism on Morales and his government. The country has been experiencing an increase on crime, such as brutal assaults, some shootings among criminal groups on the streets and kidnappings (specially of young women). In addition, the people have been complaining about the quality of justice and its notoriously slow pace. For example, people who get preventive and short retention orders end up staying in cells for years. Many people complain there is no justice in Bolivia. It has become a really problematic issue that the next government will have to tackle. Related to that is the UD's emphasis on rights. The party has been the one who has complained about the political persecution of the opposition by the government. The reason is because there is a large number of opposition leaders who are in jail or have sought asylum in other countries because in Bolivia there was no guarantee of a fair and expedite trial. Finally it seems the Christian Democratic Party places emphasis on the exploitation of lithium and housing, which might be two issues strategically chosen to differentiate themselves with MAS.

Notoriously lacking attention for all political groups, in my view, is the problem of corruption. I am not sure whether it is cultural, i.e. that corruption is not that bad, or because the country has other more urgent issues to tackle than to worry about corruption at this point. However, corruption is an endemic problem and should be addressed because it tends to undermine all other efforts. Also, I am encourage to see that discrimination and racism has been addressed and hopefully the country will find a positive way to keep dealing with it. Lastly, and also notoriously missing was a bit of attention to foreign policy, foreign relations and also, to a lesser extent, foreign trade issues. I guess the country is busy with itself at this time.


In summary, all this tells me there will be much continuity on the path Bolivia will take after the elections. Even if we see a defeat of the Morales ticket, most other parties have displayed a degree of emphasis on issues of economic growth, reliance on natural resources to finance that growth, attention to social issues improvements and efforts to diversify production in the country.

Now, before you say, yes but ... I have to clarify that this analysis is not a rigorous scientific analysis. So much is clear. One special problem with it is contextual relevance. While the counting of words might seem to indicate emphasis on such concepts, issues and policies, the context in which those words were produced is not taken into account. To illustrate this, the word poder in Spanish has two meanings. It can be used to express 'can do' or it can also mean 'power'. So the frequency of the word may not be useful because it might be used in both ways. In which case, the meaning or emphasis of the word may be misplaced. In essence, I am suggesting that context matters and the mere counting of words might be a good way to begin a rigorous scientific analysis.

October 01, 2014

The Bolivian Economic Model


It has been eight years in the making, but Bolivia has developed an economic model which the Morales government calls: The new economic, social, communal and productive model of development. It has taken this long because the government has basically been rewriting all the laws in Bolivia, and I am not exaggerating too much when I say this. If you want to get an idea of what I mean, take a look at this post of mine. Morales and his supporters call this effort the "re-foundation or re-establishment of Bolivia". To achieve that they needed to pass new legislation. Now, it is highly debatable whether the country has indeed been re-founded (if you ask me the government has been largely re-inventing the wheel), another thing is to say that the government has consequently been redrawing the State's structures and its basic foundations. So much, that the model has began to show shape in recent years. Part of that effort has been the implementation of an economic model of development, which has increasingly become a reality for most Bolivians. For that reason, this post aims at explaining what kind of a model it is.

To begin to understand what the government is trying to do, the fundamental question is what does social, communal and productive model of economic development means?

To start of, this model rests on two principles:
  1. a) reduction of poverty and 
  2. b) reduction of social inequality.

To follow up, those principles rest on several goals:
  1. the recovery of the natural resources ownership
  2. the recovery and the subsequent generation of income for the State
  3. the re-distribution of the State's income through distribution mechanisms
  4. the re-distribution of the State's income into other income and employment generating economic activity

Source: The Ministry of Economic and Public Finances

The Morales government has set itself a particular purpose to achieve, also with economic development. The Buen Vivir, which is translated as Living Well in English, has the aim of producing economic development by rejecting materialism and capitalism in favor of a dignified, healthy, well satisfied life in harmony with the community and the environment. At this point, I will leave this definition as it is, because it can be the material for another post or a book.

To reach its goal, the Morales government's economic model places the State at the center of economic activity. In fact, it would be fair to characterize it as "the" most important economic actor in such an economy. One, because it is the entity that "recovers" the natural resources from private hands and, in doing that, it also "recovers" State income, which otherwise would have been going to other places. This last statement means that large corporations or private companies which have been in charge of the exploitation and commercialization of Bolivian natural resources transfer the income generated by this activity to their central offices, wherever those may be. Second, the State oversees and plans the production and generation of income to then re-distribute it within the population to achieve a social goal.

In that vein, the State has a simple plan. As the most important economic actor in the economy, the State administers the income-generating nationalized companies so they can continue generating income, this time however, in favor of the state, and of course, as the dogma goes, in favor of the people. These companies, which the State calls strategic, have the necessary and only task of generating income. In Bolivia's case these are mainly the companies dealing with natural gas, oil and minerals.

With the income stemming from the strategic companies, the State has two main tasks. On the one side, as administrator of that income, the State designs mechanisms of distribution such as the mentioned subsidies of prices (gasoline prices, for example) and other things such as housing, social transfers (bonuses and rents), wage increases, and public investment. On the other side, and related to the last distribution mechanism mentioned, the State promotes the industrialization of the economy through the investment of financial funds on the creation of state-owned or state-sponsored industry (tourism, manufacturing of textiles, handicrafts, etc.).

However, the state is considered the only player in what the government calls a plural economy (that would be too communist, wouldn't it?). This means that, in addition to the state, there are other economic actors which may play a role in the economy. The most important of these is the private sector. However, while the private sector is welcomed to make joint investments with the State or even allowed to engage in enterprise by itself in some areas, the end results have to align with the State's political agenda and goals. This is however not to say the system is authoritarian in a sense that private enterprise cannot exist. The influence of the State is subtle and many times subversive. For example, if the government does not like what a large firm is doing in the country (e.g. the cement factory), it might just create its own firm and try to drive the private firm out of the market. Finally, other players might be communities, which may produce agricultural or handicraft goods and social cooperatives, which in Bolivia's case I take it to mean the production of agricultural goods.

The next question would be if that model can be observed in reality.

Source: The Ministry of Economic and Public Finances

Well, Bolivia receives income from the following sources:
  1. Public Enterprises (Strategic: to generate resources, transport, telecommunications, energy, hydrocarbons, mining; Social: to create employment, providing services, meeting non-satisfied demand, to intervene in the market to prevent distortions)
  2. Central Administration (national taxes SIN, international trade levies/tariffs AN)
  3. Decentralized Entities (institution that generate other types of income such as fees)
  4. Departmental Governments
  5. Municipal Governments
  6. Public Universities
  7. Social Security Institutions (selling goods and services)
  8. Financial Institutions (selling goods and services)

From those, 50 per cent and 35 per cent of the State's income is generated by the public enterprises (i.e. the selling of natural gas and, in less capacity, minerals) and the collection of taxes and tariffs by the central government.

However, as I mentioned before, the Morales government is working hard in implementing its model of economic development. Here is how:

Here is a list of public enterprises divided into strategic and non-strategic categories:

  • Empresa Siderurgica Mutun (mining)
  • Empresa Minera Huanuni (mining)
  • YPFB (petrol or oil)
  • COMIBOL (mining)
  • Empresa Metalurgica VINTO (mining)
  • ENTEL (telecommunications)
  • Transporte Aereo Militar (transport, mainly cargo)
  • Empresa Boliviana de Industrializacion de Hidrocarburos (natural gras)
  • EPSAS (water and sanitation)
  • Empresa de Apoyo a la Produccion de Alimentos (sells commestibles)

  • Empresa Naviera de Bolivia (transport)
  • Boliviana de Aviacion (transport)
  • Corporacion de las Fuerzas Armadas para el Desarrollo Nacional (infrastructure)
  • Cartonbol (carton)
  • Empresa Boliviana de Almendras y Derivados (almonds and related goods)
  • Complejo Agroindustrial Buena Vista (agriculture)
  • Lacteosbol (milk)
  • Papelbol (paper)
  • Empresa de Comercializacion de materia prima, insumos, equipos de trabajo (commercialization of raw material and capital goods)
  • Empresa Nacional de Electricidad (electricity)
  • Empresa de Cemento Boliviano (concrete)
  • Depositos Aduaneros Bolivianos (customs)
  • Azucarbol (sugar)
  • Empresa de Correos de Bolivia (mail)
  • Agencia Boliviana Espacial (space, such as satellites)
  • Servicio de Aeropuertos Bolivianos (airports)
  • Bolivia TV (television)

Now, before you get impressed with the number of industries and industry-promoting agencies listed here, you have to know that this is a comprehensive list of all the government has been and still wants to do. Many of those mentioned companies or entities exist only in paper and many already exist but are not operating yet and still, others are already operating, but either at a loss or are in the early stages and others are already bringing benefits (at least to the government, as in the case of Bolivia TV).

In light of what has been happening and the real possibility that Morales will be re-elected this October 12, the possibility that this model will be fully implemented is very high. However, there are several things that come to my mind when I think about this.

The first though in my mind seriously questions the reliance of economic growth on a few nationalized companies. While I agree the money has to come from somewhere, it might as well come from those nationalized companies, which at the same time forces me to seriously think about the role nationalizations can play in such contexts, however to rely on basically the production and sell of one product seems to me crazy. Not just me, but many others have been expressing their anticipation of how will things turn out for Bolivia when the prices of natural gas take a turn down on international markets. This skepticism is specially relevant when we consider that 50 per cent of Bolivia's income is generated by the sell of natural gas to Brazil and Argentina. An alternative would be, for me, to classify a few other capital-intensive sectors as strategic and invest in them with special attention so as to diversify the risk. I would consider perhaps the industrialization of lithium, the production or assemblage of electronic goods or even the manufacturing of textiles (El Alto had a very lively textile sector until recently).

The second thought, and countering the pessimism of the first one, I cannot help of thinking the government is perhaps just doing that, namely industrializing. I think this when I look at the list of efforts enumerated above. Many of these efforts are in the manufacture sector and many in the industry sector. The only fear is, and with this coming back to the critical side of my argument, if whether the decisions to create factories, assembly lines, refineries, transport companies, etc., are all of many of them based on political consideration rather than economic ones. By that I mean, for example, if the decision to construct and launch a communications satellite has not been based on the intentions to improve Bolivia's profile in the world and not on the necessity of a satellite because the internal market was needing such an investment. Similarly, if the construction of a refinery or a separation of liquids plant in such and such part of the country has not been decided because of the local constituencies and the fact that such plants were far away from any distribution net were neglected in the decision process. In fact, these things have been happening in the implementation of the Bolivian economic model.

Finally, I also have to think about the deficiencies the model might have. For example, the central role of the government seems to me on the wrong side of the development path. In my opinion, such a centrality of the government's role is bound to hamper growth rather than stimulate it, in the end. This not only in light of the crowding out effects economists like to cite but simple mechanisms of the markets. If the government, due to political decisions, either subsidizes to a large extent prices, this distorts the functioning of the markets. Demand does not meet supply anymore and the mechanism does not function. But, leaving aside, economic arguments, which I am convinced are very important, I can convincingly say that if the government seeks to undermine a rival through the creation of a competing firm to take it out of the market, I suggest this will not be in the interest of the country. Once again, the heavy reliance on one sector seems to me not to be sustainable. I think I don't need to hammer this nail any more that what I have done. To end on a positive note, I have to think on the social transfers the model prescribes. I think they are necessary, so long they are kept under control. The social transfers the Morales government has implemented has directly reached many people who otherwise had not had the chance to bust their income like that. These transfers have to some degree contributed to reduced indigent poverty in Bolivia.