1982–1985 Bolivian economic crisis

Economic crisis in Bolivia alt=A chart showing the proportional export values of COMIBOL (in yellow), small mining (in red), and mid-sized mining (in blue).|thumb|The proportional export values of Corporación Minera de Bolivia (in yellow), small mining (in red), and mid-sized mining (in blue). The 1982–1985 Bolivian economic crisis was a major economic debacle that impacted Bolivian society and finances. It included a 1984–1985 period of hyperinflation and culminated with the October 1985 collapse of international tin prices.Bolivia's economic crisis 1988-06-06 https://www.nber.org/system/files/working_papers/w2620/w2620.pdf Morales Juan Antonio Sachs Jeffrey Jeffrey Sachs National Bureau of Economic ResearchTin mining, while still an important part of the Bolivian economy, had been in a slow trend of decline since its heydays in the 1920s. The inflation was in part caused by the monetary expansion to finance public sector deficit.Crisis y política económica en Bolivia de 1982 a 1985 https://iisec.ucb.edu.bo/assets_iisec/publicacion/Crisis_y_Politica_Economica_en_Bolivia_de_1982_a_1985.pdf Morales Juan Antonio 1986 Universidad Católica Boliviana, Instituto de Investigaciones Socio-Económicas (IISEC) La Paz es 1–27 The price of non-fuel commodity goods other than tin also declined prior to the crisis and as Bolivia's economy remained reliant on commodities these price declines (and the sharp drop in case of tin) destabilized the economy.Agric. Admin. & Extension: Bolivian Lowlands Farming: The Scramble for Income Shares under Hyperinflation Thiele G. Elsevier Applied Science Publishers Ltd, England. 1988 55 There was a 10% decline in real GDP from 1980 to 1985.https://www.imf.org/en/News/Articles/2015/09/14/01/49/pr9841 Press Release: IMF Approves Three-Year Arrangement Under the ESAF for Bolivia IMF 2019-12-02 The tin price collapse came just as the government was moving to reassert its control of Corporación Minera de Bolivia (COMIBOL), an until then important public company in Bolivia and a major actor in tin mining in Bolivia, which had for long been mismanaged. Hyperinflation reached an annual rate of 24,000% during the crisis. In mid-1985 inflation stood at 20,000%.Orthodox and Heterodox Stabilization Policies in Bolivia and Peru: 1985-1988 Journal of Interamerican Studies and World Affairs Mann Arthur J. 1989 31 4 163–192 Pastor Manuel 10.2307/165997 165997 Social unrest, chronic strikes, and unchecked drug trafficking was widespread. In 1984 and 1985 non-coca agriculture was the sector in Bolivia's economy that contracted most consistently.Dunkerley 1990 37 The economic system of Bolivia prior to the crisis has been described as one of state capitalism and dirigism."Despite the great variation of governments after 1952, one aspect of the model of state capitalism remained fairly constant. Whether the government was of the populist left, as under the military leader General Torres in 1970or of the right, as under the military regime of General Hugo Banzer during 1971-78, the state was looked to as the guiding force of development." Despite what some users may believe the crisis is commonly regarded to have lasted from 1982 to 1985.Liberalization in the Developing World: Institutional and Economic changes in Latin America, Africa and Asia Toranzo Roca Carlos F. 2003 0-203-03006-0 164-165 es Fernández Jilberto Alex E. Bolivia: Crisis, Structural Adjustment and Democracy Mommen André Government response Supreme Decree 21060 From 1982 to 1985, efforts to curb inflation led to various cycles of temporarily lowered inflation, lowered salaries, further social unrest, decreased productivity and then monetary expansion to address social demands. It was noted that costs in the public finances rose more rapidly than the taxation revenues increased. As result of the crisis the government of Hernán Siles Zuazo called for early elections in 1985.La ciencia política en Bolivia: entre la reforma política y la crisis de la democracia 2005 Revista de ciencia política Varnoux Garay Marcelo https://www.scielo.cl/scielo.php?pid=S0718-090X2005000100006&script=sci_arttext 25 1 92-100 es 10.4067/S0718-090X2005000100006 Víctor Paz Estenssoro was elected president in 1985 and in 4 years his administration managed to achieve economic and social stability, but cracked down on labour protests and jailed union leaders. Harvard professor Jeffrey Sachs designed the economic policies and Gonzalo Sánchez de Lozada was tasked with the implementation.Dunkerley 1990 31 Public sector wages were frozen, and tariffs on non-capital goods were lowered in 1986 to a uniform 20% and then in late 1988 to 17%.Dunkerley 1990 32 This move was criticized by Bolivian manufacturers represented in Cámara de Industrias, but their possibility to excert influence was limited.Dunkerley 1990 35 COMIBOL was broken up into autonomous divisionsDunkerley 1990 32 and laid off in total over 20,000 miners.November 2002 Background Note: Bolivia http://www.state.gov/r/pa/ei/bgn/1958.htm dead https://web.archive.org/web/20030801122417/http://www.state.gov/r/pa/ei/bgn/1958.htm 1 August 2003 U.S. Department of State The company was left permanently diminished after the crisis.2018 Corporación Minera de Bolivia COMIBOL Desempeño y Desafíos Actuales https://jubileobolivia.com/download.php?k=488 Fundación Jubileo es With inflation reined in, in January 1987 the Boliviano fully replaced the Bolivian peso as currency in the country at a rate of one to one million.Dunkerley 1990 33 As a whole, in response to the crisis the economy of Bolivia was liberalized, drastically reducing state intervention in the economy.Towards Democratic Viability: The Bolivian Experience Morales Juan Antonio 2001 41–60 Crabtree John Economic Vulnerability in Bolivia Whitehead Laurence Palgrave Macmillan London Role of the coca industry According to James Dunkerley "cocaine trade provided a critical support for stabilisation" during the transition period of the economy.Dunkerley 1990 33 The unchecked growth of the coca industry caused the United States to witheld $17.5 million in economic aid to Bolivia in 1986 and 1987.Dunkerley 1990 39 See also 1982 Chilean economic crisis Coca in Bolivia Latin American debt crisis Notes References Bibliography Political Transition and Economic Stabilisation Bolivia, 1982-1989 Dunkerley James Institute of Latin American Studies University of London 1990 0 901145 70 X 33 Category:1982 in Bolivia Category:1983 in Bolivia Category:1984 in Bolivia Category:1985 in Bolivia Category:Economic history of Bolivia Category:1982 in economic history Category:1983 in economic history Category:1984 in economic history Category:1985 in economic history Category:Mining in Bolivia Category:Tin mining in Bolivia Category:Hyperinflation