Arce in Brazil to talk up Bolivia’s economic model

Arce in Brazil to talk up Bolivia's economic model
Luis Arce in São Paulo. Photo: Lucas Berti/TBR

Bolivian President Luis Arce on Monday spoke to journalists in São Paulo at an event organized by left-wing media outlet Mídia Ninja. He spoke largely about Bolivia’s economic model, having served as Finance Minister between 2006 and 2017 under the Evo Morales government.

Mr. Arce said he kicked off the Bolivian economic plan during “a moment of crisis” for the previous capitalist model, when Bolivia — as well as Latin America — slipped into financial, tax, and macroeconomic problems that drove inequality up during the 1990s. 

This cycle was later replaced by the so-called Pink Tide, with the ascendance of several left and center-left leaders to power around South America.

Mr. Arce said that, in the face of these problems, the Morales government saw the necessity of replacing the country’s economic model with one “focused on domestic development, not foreign companies.” For Mr. Arce, economic plans cannot be dissociated from “solving social causes at home.” 

Bolivia managed to reduce poverty from 38.2 percent to 15.2 percent with Mr. Morales as president and Mr. Arce as Finance Minister. Before the pandemic, the country’s GDP enjoyed average yearly growth of over 4.5 percent.

“In a time of regional crisis, Bolivia is one of the few Latin American nations to keep inflation under control,” Mr. Arce said. 

The president highlighted that the country’s economic model is based on using its natural resources for its own benefit. “Before us, Bolivia had some of the largest natural resources, but it was the least prepared country to use them.” 

Bolivia nationalized hydrocarbons in 2006 under a public-private regime, which successfully funded the so-called “economic miracle.” Attempts to do the same with lithium, however, have not borne fruit. 

“Bolivia has enough space for the private sector, for cooperatives, for many sectors (…) But all under the state’s supervision, as there is no point in developing without providing benefits to Bolivians,” he added. 

President Arce is in Brazil as part of a South American tour. Earlier on Monday, Mr. Arce met with Brazil’s presidential frontrunner Luiz Inácio Lula da Silva, who has close ties with the Bolivian left. Lula said he will support Bolivia’s accession to Mercosur, the trade bloc comprising Argentina, Brazil, Paraguay, and Uruguay. 

Mr. Arce’s trip does not include a meeting with President Jair Bolsonaro, given his relationship with Lula and the fact that he has not been traveling in an official capacity.