Bolivia to spend 6.8B to fight poverty


Bolivian President Evo Morales‘ leftist government says it will fight poverty, hunger and homelessness in South America‘s poorest nation by investing $6.8 billion through 2010, much of it with ambitious public works projects. The development plan, announced Friday, would significantly boost the state‘s role in the economy, creating jobs and delivering more basic public services such as subsidized meals for school children and greater access to potable water. Although Villegas didn‘t mention Venezuela by name, many of the social projects he mentioned are similar to programs created by that country‘s leftist president, Hugo Chavez. - Fiona Smith


Staff and agencies
17 June, 2006

By FIONA SMITH, Associated Press Writer

LA PAZ, Bolivia - Bolivian President Evo Morales‘ leftist government says it will fight poverty, hunger and homelessness in South America‘s poorest nation by investing $6.8 billion through 2010, much of it with ambitious public works projects.

The development plan, announced Friday, would significantly boost the state‘s role in the economy, creating jobs and delivering more basic public services such as subsidized meals for school children and greater access to potable water.

Although Villegas didn‘t mention Venezuela by name, many of the social projects he mentioned are similar to programs created by that country‘s leftist president, Hugo Chavez.

The rest would come from international lenders, said Villegas, who are to convene jointly with the government in the last quarter of 2006 to work out details.

Foreign diplomats said much would depend on Bolivia‘s gas revenues. The vice minister of planning and development, Noel Aguirre, said the plan was also predicated on gas sale revenues from Paraguay.

With the heavy public investment, the government hopes to create 90,000 jobs per year and cut the current 8.4 percent unemployment rate by more than half by 2011.

Currently, the top 10 percent of Bolivians earn 25 times what the bottom 10 percent. The government seeks to reduce that to 21 times by 2011.

"We need to get into more depth to know whether we‘d support this or not," said Roberto Mustafa, president of The Association of Private Business Leaders of Bolivia, one of the country‘s biggest industry groups.

Business leaders have been critical of Morales‘ economics, especially after he said he would "never" negotiate a free trade agreement with the United States, instead signing an alternative "people‘s" trade pact with his close allies Venezuela and Cuba.

While the export of raw materials such as minerals and timber are important to Bolivia‘s economy, it depends most on its vast natural gas reserves.

Morales nationalized Bolivia‘s natural sector on May 1, giving the state energy company majority control over all operations and telling foreign companies operating in Bolivia they had six months to negotiate new contracts or leave.

In the mining sector, Villegas reiterated earlier statements that the government would be looking to boost revenues by raising mining taxes and would revert unused mines back to state control.
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Associated Press Writer Frank Bajak contributed to this report


Last Updated June 20, 2006 8:15 AM

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