Under threat of a military coup, Evo Morales has stepped down as President of Bolivia today, November 10th 2019. Though not above criticism, Morales’ government over the last 13 years has been one of the most impressive examples of progressive social democracy in modern times. As the first indigenous president of a nation long dominated by a small wealthy white elite, he resisted pressures from the IMF and the US government in turning Bolivia into a Latin American success story. From a new CEPR report on Bolivia’s economy under Morales:
Bolivia’s economy has undergone structural economic transformation during Evo Morales’s presidency. Real (inflation-adjusted) per capita GDP grew by more than 50 percent over these past 13 years. This was twice the rate of growth for the Latin American and Caribbean region. Even as the Latin American regional economy slowed over the past five years, Bolivia had the highest growth of per capita GDP in South America.
For most of the past 13 years, Bolivia has had balance of payments surpluses, which helped to maintain macroeconomic stability. The country’s solid economic growth has contributed substantially to the reduction of poverty and extreme poverty. The poverty rate has fallen below 35 percent (down from 60 percent in 2006) and the extreme poverty rate is 15.2 percent (down from 37.7 percent in 2006).
Bolivia’s economic transformation was possible due to overarching political transformations in the country. These included a new constitution with significant economic mandates; nationalization and public ownership of natural resources and some strategic sectors of the economy; redistributive public investment and wage policies; policy coordination between the Central Bank and the Finance Ministry; and monetary and exchange rate policies directed toward de-dollarizing the Bolivian financial system.
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