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New Left Review I/155, January-February 1986

James Dunkerley and Rolando Morales

The Crisis in Bolivia

On the morning of Thursday, 29 August 1985 the government of Bolivia presented Supreme Decree no. 21060 to the nation. The 166 articles of this charter for a ‘New Economic Policy’ constituted the most radical shift in planning and policy in the country for over thirty years. Wages in the state sector were to be frozen for four months of a year in which inflation was expected to exceed 15,000 per cent while all controls on prices were annulled; the central enterprises of a state system that controlled over sixty per cent of the economy were to be broken up, ‘rationalized’ according to strict criteria of profitability, and deprived of legal and economic protection from privatesector incursions; the peso was floated and underwent an immediate devaluation of some hundred per cent; subsidies of basic foodstuffs and gasoline were lifted, resulting in price rises of up to a thousand per cent; exchange controls were removed and the hegemony of the dollar re-established as government policy; tariffs were lifted wholesale, threatening many sectors of a weakling local industrial circuit and the thousands of jobs that it provided; and the long-respected, legally enshrined guarantees for public-sector employees were declared void, to be replaced by the practice of ‘relocation’, a transparent euphemism for the power to fire at will.

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James Dunkerley, Rolando Morales, ‘The Crisis in Bolivia’, NLR I/155: £3

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