• Short Summary

    Most of Bolivia's population faces the prospects of serious new economic hardships since the recent 6 per cent devaluation of Peso.

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    Most of Bolivia's population faces the prospects of serious new economic hardships since the recent 6 per cent devaluation of Peso.

    The devaluation followed consistent pressure from the International Monetary Fund (IMF) on Bolivian governments over the past three years. The IMF and other economists considered devaluation a basic step towards strengthening the economy and attracting outside investment.

    But some observers claim the IMF did not take into account the inability of Bolivian officials to cope with such sophisticated matters or, perhaps even more seriously, what it would do to the country's poor.

    Eighty five per cent of Bolivia's population could be classified as "poor". Before devaluation, the annual income of the nation was 200 US dollars a head. Overnight it fell to 100 dollars.

    In some politically militant areas, such as the Siglo Twenty Mining zone, the government froze prices on the four staple foods--meat, sugar, rice and bread.

    But in other areas food prices have risen sharply, and there is a growing climate of tension and unrest.

    The price of food was already astronomical to poorer Bolivians. With many of them already on a meagre diet, the average life expectancy in the country is only 42 years.

    SYNOPSIS: The devaluation of the Bolivian Peso in October has brought about an economic crisis.

    The value of the Peso--in relation to the United States' Dollar-was cut by sixty-six per cent. The poor, who make up eighty-five per cent of Bolivia's population, found their purchasing power had been halved... the per capita income drooped overnight from two hundred to one hundred dollars a year.

    Money has become so tight that there even has been a fall-off in sales of the poor man's dream passport to a better world--the lottery ticket.

    In some politically militant areas, such as the Siglo Twenty Mining Zone, the government has frozen price increases on four staple foodstuffs--meat, rice, sugar and bread.

    Bolivia's tin mines have been traditionally associated with a gruelling life of economic struggle. Siglo Twenty has produced the most militant protest against devaluation, with a march by 20-thousand miners against what they see as economic tyranny.

    But in other places, prices are rising. And rapidly. A kilo of mediocre beef has more than doubled in price. Vegetables, rice, bread and fruit have risen astronomically, too.

    The government has taken steps to help offset the higher prices.

    For instance, it has ordered that every Bolivian worker be paid a monthly bonus of just under seven dollars on top of regular salary. A child bonus has also been stipulated. But even so, the poorer Bolivians just don't have enough money.

    And the National Federation of Mineworkers wants the government to do more. One of its demands was an increase in salary of sixty six per cent for all workers. The union also demanded that the government cut its production tax, control prices and help with housing and rents. Meanwhile, unemployment is growing and correspondents say the combination has led to a climate of unrest in Bolivia.

    In the capital, La Paz, there is plenty of evidence of poverty...these Indians are among the capital's lowest income earners.

    But there remains a small, economically powerful group of well educated bolivians who continue to keep up with international standards of consumer living. And the city's contraband market still does a roaring trade, selling goods at lower prices than the shops. Many economists say this contraband trade which flourishes openly is a major reason for Bolivia's economic troubles.

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    Reuters - Source to be Verified
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