Bolivia news roundup
bolivia | by Miguel Centellas | 06 Mar, 2004 at 12:34 PM | comments (0) | trackback (0)

The following is a round up of recent Bolivian news.

Under pressure from the Santa Cruz business sector (made up of some of the country's riches families), Mesa's retreated on his economic package's previous tax proposal. Instead, the proposal now calls for a one-time rate tax on real estate & vehicles &meaning anyone w/ more than $10,000 would pay twice the previous years' taxes. Also, the tax on bank transactions will now include everyone, not just those w/ more than $50,000 net worth.

Mesa's government hopes to close Bolivia's daunting fiscal deficit. The original plan called for anyone who's net worth was more than $50,000 to pay a 1.5% tax. This plan was rejected by Santa Cruz business leaders, who announced they wouldn't pay the tax.

Meanwhile, both legislative chambers have reordered their agendas, reducing in priority President Mesa's economic agenda. Moved up in the agenda, were the Ley de Deportes, changes to penal codes, and debates over government subsidies to political parties.

The issues on Mesa's agenda include: approval of a referendum law (needed to have a gas referendum), the new tax laws, a law convoking the Constituent Assembly, and a reduction in the BONOSOL (the national elderly pension plan created by Goni's first presidency) from Bs.1,800 per year to Bs.1,200.

The first effects of the unfreezing of gas prices are now felt. After four years w/o change, the price of gas went up Bs.0.10 — from Bs.21 to Bs.21.10 per garrafa (a 10 kilogram container). Gasoline isn't affected, since the international price per barrel remains steady.

There's a row brewing over Bolivia's attempt to change the Ley de Hidrocarburos, altering the state's contracts w/ gas & oil transnationals. In the face of threats by companies to sue the Bolivian state (in international courts) over changes, Mesa's government asserts it's right to modify tax structures.

Perhaps the biggest news is that Evo Morales' MAS may withdraw its support of Mesa's government. Evo recently attacked Mesa for "playing dirty w/ the Bolivian people" over his recent backpedaling in negotiations w/ gas & oil transnationals and — more importantly for Evo & MAS — continuing the policy of coca eradication. According to Evo, Mesa shouldn't be negotiating at all w/ the transnationals, and should just impose the higher taxes (and consequences be damned, apparently). Nevertheless, Evo made clear that MAS hadn't yet officially left Mesa's makeshift legislative coalition.

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"President Mesa finally announced the questions for the gas referendum. And although there are five of them, they seem rather vague & almost destined to win a "yes" vote by their very wording (which, I'm sure, was the point). But. Despite that, the questions are unclear as to what they..."
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