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🇧🇴 Bolivia /Economy & Trade

What Comes After the Subsidy?

From El Deber · () Spanish

Translated from Spanish and summarized by DistantNews. Read the original for the full story.

At a glance

Opinion Official statement Context piece
  • The article argues that removing Bolivia’s fuel subsidy will not by itself resolve the state’s fiscal deficit.
  • It says further spending cuts or tax increases would face major social and economic constraints.
  • The author calls for a new role for the state, including performance-based public-sector management and institutional restructuring.

Bolivia may remove the entire subsidy on gasoline and diesel and still remain financially broken and in deficit. That is the contradiction the national debate has yet to confront, the article argues, even as the government prepares for social protests after raising diesel prices to 18 bolivianos per liter for certain sectors.

In recent weeks, President Rodrigo Paz has again called the subsidy “a cancer that must end.” The author agrees that the mechanism creates deep distortions and that eliminating it has become unavoidable. Delaying the decision, the article says, would only deepen the crisis. Targeted subsidies or temporary fixes would multiply the problems rather than solve them.

But ending the subsidy will not repair the state’s finances the next day. The author warns that the public is being sold the illusion that everything will be fixed once the fuel subsidy disappears. After the subsidy is removed and loss-making public companies are liquidated or reduced, the government’s room to cut spending will be limited, unless it confronts sectors traditionally considered untouchable, including education, health, police and the armed forces.

Raising taxes would also be difficult in a recessionary economy where 80% of activity is informal, the article says. Its proposed answer is to redefine the state’s role and improve the use of existing resources. Teachers should face a single, unexpected national assessment, with higher pay for the strongest performers and reduced incomes for those who fail. Police evaluations should include rigorous physical standards. The armed forces should move beyond a 20th-century structure and generate income through research, technology and development.

Health care, meanwhile, requires an urgent restructuring to restore dignity to hospitals, doctors working without basic conditions, organ-donation programs and people with disabilities. The author also criticizes the president’s promise that new public works will follow subsidy cuts, arguing that expanding infrastructure before fixing internal management would preserve inefficiency. The article calls instead for a new social contract and an end to the patrimonial state.

a cancer that must end

· Rodrigo Paz, president of BoliviaThe president uses this phrase to describe the fuel subsidy and argue that it should be eliminated.
About this summary

Originally published by El Deber in Spanish. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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