The Global South after the Crisis Growth, Inequality and Development in the Aftermath of the Great Recession
Growth, Inequality and Development in the Aftermath of the Great Recession
Edited by Hasan Cömert and Rex A. McKenzie
Chapter 5: Commodities economy in times of crisis: Bolivia after the global financial meltdown
AbstractThis chapter explores on the factors that made it possible for the Bolivian government to manage the consequences of the global financial crisis without major disruptions. The government of Evo Morales’ Movimiento al Socialismo (MAS) has shifted from past neo-liberal policies to giving the state a more relevant role in the economy, nationalized the hydrocarbons sector, increased transfer payments to help a vast segment of the population living in poverty, and passed a new constitution. Since the crisis erupted Bolivia has enjoyed a period of high commodity prices, which has provided the Morales administration large financial inflows from the natural resources companies controlled by the state. This funding allowed the government to implement an ambitious expansionary fiscal policy based on large government spending, particularly on social programs. At the same time, Bolivia has managed to diversify its foreign trade partners reducing the dependence from foreign markets that were severely affected by the financial crisis.
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