Bolivia plans to raise US$2.5 billion with the release of agricultural exports

The government of Bolivia predicts that it will be able to raise some US$ 2.5 billion with the release of the agricultural exportsone of the measures agreed with private entrepreneurs to increase the flow of foreign currency in the country, said the Minister of Economy and Public Finance, Marcelo Montenegro.

“Considering that the liberalization of exports is opening up, we can easily have a space in the agricultural sector of about US$ 2.5 billion”the minister said this Tuesday in a meeting with international press correspondents.

However, the figure will depend on the performance achieved by the agricultural sector, taking into account that the summer planting campaign “has been affected by drought” that hit the country in the last months of 2023, he clarified.

According to Montenegro, the projection could even reach US$5 billion if the mining sector is included, which has already been working with the Central Bank of Bolivia (BCB), although it noted that the private sector must also comply with its part of the agreement, which involves carry “their currencies to the national financial system.”

The release of food exports such as soy, wheat, rice or sugar, which were controlled by quotas, is one of the ten measures agreed on Monday between the Government of Luis Arce and the main business associations of the country.

The Executive also seeks to reduce spending on fuel imports and their corresponding subsidy in the domestic market with incentives such as the promotion of private investment in biodiesel plants, the promotion of investments to improve agricultural performance and a “auction” diesel with large buyers.

Origin of the problem

Bolivia has been suffering from a lack of currency liquidity since the beginning of 2023, something that coincided with official reports that showed a decrease in net international reserves (RIN), which until December 31 reached US$ 1,709 million.

The Minister of Economy assured that between August and October 2019 there was a strong outflow of dollars from the financial system, between 5,000 to 6,000 million that were in savings and deposits in that currency.

That money “has not returned to the financial system” because after the crisis that occurred in the country between October and November 2019, then the covid-19 pandemic arrived.

The authority maintained that in 2021, already under the Arce Government, “The economy has begun to rebuild” and recalled that in 2022 there was a historical record of exports worth US$ 13,653 million.

“But there has begun to be political friction, that unnecessary friction due to an early candidacy in my reading that is generating this rarefied environment that does not allow the economy to have elements of certainty, at least in the political part,” considered.

Without mentioning names, Montenegro alluded in this way to the internal fight in the government Movement towards Socialism (MAS) that has distanced President Arce and the former president. Evo Morales (2006-2019), among other reasons due to the electoral aspirations of the former ruler towards the 2025 general elections.

Given the conflict, the Government seeks “give other types of signals”how are you “joint strategies with the private sector” that show that “The right path is to unite to improve production”added the minister.