Bolivian minister of finance speaks on economic reforms

Bolivia's Minister of Finance, Juan Cariaga '70, outlined the programs he initiated to curb his country's ailing economy at a speech in October at the Rockefeller Center. For the past three years Bolivia has endured a severe recession. Concurrent with the economy shrinking nearly 30 percent, there was hyper-inflation running at an annual rate of 25,000 percent. Furthermore the prices of its major exports dropped to record lows.

According to Cariaga his reforms have stabilized the economy. Inflation is now running at .5 percent a month, capital is returning to the country, and the IMF and the World Bank will extend badly needed credit. Among the reforms that brought about change: setting the currency exchange at the market rate; implementing a uniform tariff of 20 percent; raising gasoline taxes; and eliminating price controls and subsidies.

Cariaga also initiated tax reform in a country which had no tradition of paying taxes. He estimated that two-thirds of the population is involved with the underground economy. Cariaga feels that since he took office in January the precipitous slide of Bolivia's economy has been stopped and he now foresees an uphill battle to restore the level of economic activity to what it was a decade ago. Although commodities prices are still low and exports are only about one-third of what they once were, Cariaga is optimistic. He pointed out the tough reforms did not cause the civil strife that one might have expected, indicating to him that there was a consensus among the people that something had to be done.

Cariaga's speech was co-sponsored by the economics department and the Committee for Intellectual Alternatives. The event was funded by the John Brown Cook Foundation.