Bolivia: Life Exists Beyond the Washington Concensus

Bolivia: Life Exists Beyond the Washington Concensus

 

By Hwaa Irfan

When one has been entrained to think a certain way for a long time, one loses the tools, the imagination and the free will to operate outside out of that entrainment. This factor, more than anything else is probably the sole issue that underlies all the global crises facing the world today. Whatever direction one takes sets up a pattern of inevitabilities if unsustainable, and opportunities of sustainable. The fact that global governance is in  state of catharthis , and is unable to think alternatively with the kind of imagination that is acountable to every man, woman and child is a serious indictment on a global socio-economic and political system that has depleted both natural and human resources to a status where it is no longer forbearing is a reality that far too many are still not willing to acknowledge.

Just keep pushing in the same direction making sure that it serves “my interests” is the addictive habit that prevails.

Hope on the Horizon

When Bolivia decided to occupy its space was the beginning of life outside the Washington Consensus. The process began as far back as 2006 under the current Administration of Evo Morales, an indigenous farmer who became a leader, who became the president. By 2007 Bolivia had drafted a new constitution that officially recognized the multiethnic population of Bolivia, which led to the adopted status as a Plurinational State of Bolivia recognizing ALL of its people, and the Law of Mother Earth. It was a clear conscientious, and diligent effort to “refound Bolivia” and construct a state based on the principals of sovereignty, dignity, complementarity, solidarity, harmony and equality in distribution and redistribution of the social product, where the common good predominates.

This is in fact a fundamental of the Laws of Nature that underlies all life systems, including human as reminded in the verse:

{There is not an animal (that lives) on the earth, nor a being that flies on its wings, but (forms part of) communities like you} (Al Anam 6:38).

It is the principle of tawhid or Unity, a principle that the Egyptian youth of the January 25th Revolution 2011 struggles to convey to its masses for it is all about the sacredness of  ALL life.

By June 2011, Bolivia signed in a new law to give Bolivia control over its seed supply, thus securing food sovereignty based on a healthy, and natural food supply, which would be phased out by foreign seed supplies.

Since then, Bolivia has acheived the following:

–        Improved the standard of living

–        Reduced unemployment –  down from 8.4% to 4% (2005 – 2010)

–        Falling rate of moderate poverty – down from 60% to 49.6% (2005 – 2010)

–        Falling rate of extreme poverty – down from 38% to 25% (2005 – 2010).

–        Improved public healthcare

–        Improved education – Bolivia has been declared illiteracy free, a key step towards facilitating democracy. Interestingly, the UN does not keep statistics (99% is the official literacy stamp) for rate of illiteracy in developed countries,  but hidden in the waffle of reports and documents one can find a recognized 20% of children leave British school with no or little literacy.

–        More children are able to attend school

–        Bolivia has been declared an illiteracy-free country. Income redistribution has fuelled a 7% increase in the internal consumption of electricity, purified water and domestic gas among sectors that didn’t have access to those services before.

–        Increased public pensions – a trend that is opposite to that taking place in so-called developed countries

–        Increased subsidies to mothers, and improved pre and postal natal care

–        Economic growth – has been growing since 2007, and reached 5.3% in 2011 through a process of nationalization: power, telecommunications, mining, and banking, reduced foreign investment, developed economically strategic products. External debt has been reduced, and foreign reserves are at U.S$12bn.

Recognized by the duplicitous UN as the top Latin American country for the transference of resources to the most vulnerable at 2.5% of its Gross National Product, GNP, and one of the few countries to reduce the gap of inequality between rich and poor, the societal sin that Islam seeks to eliminate through the sharing of wealth and resources

During 2011, the country’s economy grew at 5.3%, above the Latin American average. It is not an isolated event. The economy has been constantly expanding since 2007, averaging 4.5% a year, and has tripled its oil revenue. Now Bolivia has a 30% growth in grain and beef production.

By May 2012, Planning and Development Minister, Teresa Morales reports a surplus in corn, soy and rice crops, and beef. This presents an uncanny dilemma has the country has no means of storing this surplus – a first in its 187 years of history. The surplus will be exported to Cuba, Venezuela and Peru.

The Washington Consensus

The set of objectives arose out of Washington-based institutions in Latin America, and were as follows:

  • Fiscal discipline
  • A redirection of public expenditure priorities toward fields offering both high economic returns and the potential to improve income distribution, such as primary health care, primary education, and infrastructure
  • Tax reform (to lower marginal rates and broaden the tax base)
  • Interest rate liberalization
  • A competitive exchange rate
  • Trade liberalization
  • Liberalization of inflows of foreign direct investment
  • Privatization
  • Deregulation (to abolish barriers to entry and exit)
  • Secure property rights

Basically it puts wealth in the hands of the few. The term was coined by John Williamson who was inspired by the former British Prime Minister, Margaret Thatcher, becuase as he stated after obsevring failed policies:

“The exception was privatization, which was Mrs. Thatcher’s personal gift to the economic policy agenda of the world, and which by 1989 had proved its worth. But I thought all the other new ideas with which Reagan and Thatcher had entered office, notably monetarism…”

The objectives as applied are defined by interestingly, the World Health Organization as:

  • Fiscal discipline – strict criteria for limiting budget deficits
  • Public expenditure priorities – moving them away from subsidies and administration towards previously neglected fields with high economic returns
  • Tax reform – broadening the tax base and cutting marginal tax rates
  • Financial liberalization – interest rates should ideally be market-determined
  • Exchange rates – should be managed to  induce rapid growth in non-traditional exports
  • Trade liberalization
  • Increasing foreign direct investment (FDI) – by reducing barriers
  • Privatization – state enterprises      should be privatized
  • Deregulation – abolition of regulations that impede the entry of new firms or restrict competition (except in the      areas of safety, environment and finance)
  • Secure intellectual property rights  (IPR) – without excessive costs and available to the informal sector
  • Reduced role for the state.

With emphasis on privatization, and reduction of the role of the state, this removes the common man, woman, and child from public ownership, which in turn is eliminated, and establishes and maintains private ownership or wealth in the hands of the few.

The general impact of the Washington Consensus as described by Ravi Kanbur  leading up to the inception of the global economic crisis in 2008 has been:

“… many countries in Africa and Latin America which followed the prescriptions of greater trade openness and greater reliance on markets did not reap the growth benefits that were touted for them. Even those which grew, like Ghana, found the results to be short of what had been promised. But many in Latin America in particular had slow growth rates, leading to entire decades being described as “lost.”

The economic crisis that hit Asia, and Latin America in the 1990s was as a result of the Washington Consensus, and increasingly, developing countries have woken up to the fact that opening up to foreign financial markets through the accumulation of foreign reserves also exposed one a state to global economic volatility, and began to reverse the process by 2008.

A global economic policy without responsibility or accountability led to dramatic increases in equality in developing countries who benefited little from the Washington Consensus, and increasingly has stood to lose sovereignty. South Koreans recognize that fact, as they challenge their government’s adoption of U.S. policies that undermine the rights of South Koreans in terms of well being, natural resources, and U.S. military presence that as in Haiti, places degrades the citizens to second class position.

Sources:

“Food Production Surpluses for Export in Bolivia.” http://www.plenglish.com/index.php?option=com_content&task=view&id=509562&Itemid=1

Kanbur, R. “The Co-Evolution of the Washington Consensus and the Economic Development Discourse.” http://www.arts.cornell.edu/poverty/kanbur/Co-EvolutionWashingtonConsensus.pdf

Navarro, L.H. “Bolivia Has Transformed Itself by Ignoring the Washington Consensus.” http://www.informationclearinghouse.info/article30880.htm

“Washington Consensus.” http://www.cid.harvard.edu/cidtrade/issues/washington.html

Williamson, J. : “A Short History of the Washington Consensus”. http://www.iie.com/publications/papers/williamson0904-2.pdf

“Trade, foreign policy, diplomacy and health: Washington Consenus” http://www.who.int/trade/glossary/story094/en/index.html

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