Tuesday, December 9, 2008

Bolivian Economic Forecast

The IHT lists a number a factors that Bolivia faces with the upcoming current worldwide economic sh*tstorm, among them:

  • Declining commodity prices, which affects exports (natural gas;

  • Declining remittances, from Spain, the U.S., and Argentina;

  • U.S. trade preferences withdrawal--thanks, Bush! (Will Obama reverse this?);

  • Suspension of investment, which has slowed to a "trickle" in recent years.

But, as bad as this looks, the IHT concludes that "The social effects of the downturn will accentuate problems affecting the Morales administration as--assuming a 'yes' vote in January's constitutional referendum--it seeks to campaign for re-election in December 2009. However, as the August recall referendum showed, Morales's personal popularity remains high. Opposition to his government is fragmented. It will be difficult for the opposition to unite around a single presidential candidate."

I'm no economist, so I can't make an informed comment. But I do know that data is frequently twisted to tell one side or the other. Anybody have any insight to this analysis?

(La Razón has a Spanish-language article that touches the same themes, with a more upbeat forecast.)


Bina said...

I'm no economist either, but I can tell you that the IHT (and its low-rent cousin, the LAHT) has a major hate-on for the "bad leftists" of LatAm, particularly Chavecito and Evo. Given that it's a US-based rag, maybe that's not so surprising. I'd take any economic "forecast" they offer with a truckload of road salt.

Anonymous said...

Natural gas prices to Brazil and Argentina are locked in for several years by long-term contracts. (The price for Argentina is close to today's price in North America, $5.55 per 10M BTU, if I recall correctly, and Brazil's price is a bit lower.) And if Brazil somehow reduces demand for Bolivian gas, Argentina has been wanting more.

Also, Bolivia has had several good years. See