ELECTION WATCH: Bolivia outlook review

Tuesday, October 7, 2014

"[Bolivian President Evo Morales'] administration has operated in an environment of historic record raw material prices, tax regime changes that have increased collection and allowed substantial current spending increases, higher public investment and, in a few years into this administration, a fiscal surplus," Comité Pro Santa Cruz head Fernando Castedo Cadari said recently.

Castedo argues, however, the country has not increased productivity, and the state has gone beyond its regulatory role as authorities look to turn itself into the principal production actor.

IDB adds that Bolivia's "significant public investment growth observed in recent years, together with the execution of the 2015-25 investment plan, raise the challenge of ensuring good management of growing public resources."

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These viewpoints come in the lead up to Sunday's election, where Morales is expected to win a third term.

Other comments made in recent weeks and months reported by BNamericas include:

Boris Santos Gómez Úzqueda, Bolivian energy analyst: "I'm convinced the time of nationalizations has passed. And it's time to begin building a new scenario with a profound energy reform, following the successful Mexican model."

César AriasFitch sovereign analyst: "Low governance indicators, high political risk and a poor business environment remain key constraints for Bolivia's sovereign rating."

IMF: "High commodity prices and accommodative policies have supported growth in Bolivia in recent years, but private investment as a share of GDP remains among the lowest in the region. Long delays in finalizing key legislation (for example, on investment, hydrocarbon, mining and labor) have weakened business confidence, as has the uncertainty regarding expropriation and nationalization processes."

Katie Micklethwaite, principal Latin America analyst at global risk advisory firm Maplecroft: "The president's commitment to state ownership of natural resources will continue to undermine Bolivia's attractiveness... Despite his recent overtures to foreign companies, the chief loyalty of President Morales continues to be to the broad-based coalition of labor unions and indigenous and civil society organizations that first brought him to power, many of whom do not share his support for outside investment."

Moody's: "High commodity prices and prudent macroeconomic policy management are expected to drive 5% growth in the economy this year."

Susana Maida de Rossetti, academic and research director at Bolivia's hydrocarbons and energy institute Inegas: "We look favorably on a third Morales term because the sector will continue to be strengthened, productively as well as training."

BNamericas will host its 11th Southern Cone Energy Summit in Lima, Peru, on November 12-13. Click here to download the agenda.