Upside Down World
 
Thursday, 02 October 2014
Bolivia: Sachs Versus the Facts PDF Print E-mail
Written by Benjamin Kohl and Linda Farthing   
Monday, 19 March 2012 12:08

Jeffrey Sachs

What follows is a response to the piece published in The Nation’s website by Jeffrey Sachs entitled Why I'm the Right Candidate for World Bank President.

“Who else but me among the widely rumored candidates has a record of standing for the poorest of the poor?" – Jeffrey Sachs

Jeffrey Sachs has nominated himself as the ‘progressive’ candidate in a non-election to head the World Bank, and judging from his campaign materials it’s a good thing they’re looking for an economist and not a historian. Nothing reveals this historical shortsightedness better than a review some of the ‘facts’ on Bolivia in his post on Economic Reforms in Bolivia, Poland in the 80s and 90s, A Look at the Data.

Among the ‘facts’ that Sachs includes is a slide that shows the increase in immunization rates following the 1985 neoliberal structural adjustment program (SAP) that he calls ‘stabilization’. One would think that a world-class development economist would understand the difference between correlation and causation. The implication is that the reduction in inflation rates somehow allowed the government to increase health expenditures, yet nothing is further from the truth. Immunizations were not paid for by the state and social investments by the state actually fell during this period.

Sachs also praises the democratically-elected government of Victor Paz Estensorro for declaring a state of siege and sending opponents into internal exile, rather than simply murdering them, making another spurious comparison, this time to Chile. He fails to mention that Chile was in the hands of a brutal, US-sponsored dictatorship after 1973, which, unsurprisingly more violently repressed dissidents than Bolivia’s civilian government. But even more disingenuous, structural adjustment didn’t occur in Chile until years after the most violent repression to eliminate Allende supporters had ended.

What Sachs fails to mention, however, is the clear link between the SAP in Bolivia and the 1980s coca and cocaine boom. Thousands of miners, peasants, and factory workers who lost their livelihoods because of ‘stabilization’ fled to the agricultural frontier to sow coca, the one crop that had a guaranteed market. The government implicitly allowed the laundering of drug money through offering certificates of deposit in US dollars at the central bank, no questions asked. The influx of money from the drug trade, perhaps the best expression of what capitalism can do in an unregulated market, was responsible for a substantial part of the economic growth for which Sachs wishes to claim credit.

We show in Impasse in Bolivia that the neoliberal ‘stabilization’ plan that Sachs is so proud of set the stage for 15 years of slow economic growth and increasing opposition to neoliberalism. Bolivia, promoted by the World Bank and IMF as a neoliberal success story in the 1980s and 1990s, morphed into the poster child of the anti-globalization movement when the people of Cochabamba rose up in the ‘Water War’ of 2000. This set in motion a period of unrest that led to the resignation of two presidents before a leader committed to the interests of the poor majority was elected in 2005.

While Sachs may indeed be the best of possible candidates (a narrow field if limited to US economists) to lead the World Bank, it is worrisome that he chooses to gloss over rather than critically address the complex issues associated with the SAP that helped launch his global career.

Just the Facts:

The world according to Jeffrey

And the rest of us

Bolivia’s stabilization ushered in the longest period of democracy in the country’s history.

The return to democracy came in 1982, before the period of hyperinflation. Some attribute the subsequent hyperinflation to international financial institutions’ demands on the UDP government.

Bolivia’s stabilization created economic growth.

23,000 miners were fired, 120 factories were closed, the informal economy mushroomed, coca cultivation boomed, and income distribution worsened. Private investment did not materialize and the informal sector (including coca) boomed.

Stabilization led to improvements in health.

Health indicator improvements stemmed from increased spending by international health organizations, not ‘stabilization’. Arguably the greatest decrease for under-5 mortality rates derived from programs that introduced oral re-hydration therapy, largely paid for by international aid

Bolivia’s great success was recognized by Poland’s Solidarity Movement

A Solidarity leader told Lawrence Wechsler in a 1991 NACLA article, “Yes, I would like to see Bolivia, just not here in Poland.”

Benjamin Kohl and Linda Farthing are co-authors of Impasse in Bolivia: Neoliberal Hegemony and Popular Resistance (Zed 2006), and with Felix Muruchi of From the Mines to the Streets: a Bolivian Activist’s Life (U Texas Press 2011).

 

"If the world is upside down the way it is now, wouldn't we have to turn it over to get it to stand up straight?" -Eduardo Galeano

En Español
Informe mundial sobre las drogas: No las descriminalizen solamente, ¡Desmilitarizen-las!

 
Chile afronta su deuda con el derecho al aborto de las mujeres

 

 
Monsanto en Argentina: El bloqueo que cumple un año

 

 
Webdesign by Webmedie.dk Webdesign by Webmedie.dk