BIF: food prices, higher fares, salary increases, flooding, access to the sea

Posted on | maart 1, 2011 | No Comments

* Bolivia Information Forum (BIF): news briefing February 2011

1. Protests against rising food prices

February has seen demonstrations in major cities against rising food prices, especially the price of sugar. Thousands marched through central La Paz on various occasions in protest against food and transport price increases.

The rise in food prices is partly due to the increase in world prices. The United Nations Food and Agriculture Organisation (FAO) warned in January that these had reached a historic peak and that millions of people worldwide would be affected.

However, following the approval of Supreme Decree 748 on December 26, which increased fuel prices by up to 83%, and its repeal a week later, prices have still not returned to their previous levels.

There have also been sugar shortages caused by falling production in 2010, due in part to severe drought. Shortages also have been caused by the failure of producers to honour commitments to supply the local market before exporting sugar. Low prices of sugar in Bolivia compared to neighbouring Peru and Brazil have encouraged contraband, further depleting stocks.

The government has responded by increasing sugar imports from Colombia and taking steps to ensure availability to consumers through EMAPA, the state food production agency. To stop contraband and reduce speculation, it was obliged to raise prices from Bs. 5 (45p) to Bs. 7.5 (66p) per kilo, roughly the same as the price in Peru.

Teresa Morales, the new production minister, has said that prices will fall from mid-April, when the new sugar harvest takes place. The government has announced that EMAPA, set up to provide support for small-scale producers, will cease to sell sugar once the shortage is resolved, because it does not want to compete with farmers and retailers. Associations of street sellers (gremiales) have protested that the state is infringing on their business activities.

2. Transport owners demand higher fares

Parallel to protests over food prices, there have been demonstrations both in favour of and against increasing the cost of transit fares in La Paz, Oruro, Potosi, Cochabamba and Santa Cruz. Owners of fixed-route taxis, minivans and buses argue that they have the right to increase fares as the prices of basic foods and necessities have increased, as has the cost of essential spare parts. Trade unions, factory workers and neighbourhood organisations in various towns and cities have organised protests and blockades in response.

The government’s position is that it is unreasonable for transport owners to demand higher fares when fuel is still being subsidised by the state. It has called on people to reject fare increases. Walter Delgadillo, the minister of public works and transport has called for a price freeze while a joint commission of local government authorities, transport workers and neighbourhood organisations decides where and by how much fares should rise.

A national transport sector strike on 25 February severely disrupted public transport in La Paz, Cochabamba, Oruro, Potosí and Sucre. The strike was called off in Santa Cruz as transport owners there negotiated price increases of between Bs. 1.50 and 1.80 with neighbourhood organisations in exchange for promised improvements in service. People across Bolivia object to paying more for a poor service when fuel is publicly subsidised.

3. Negotiations over salary increases for workers

The government is negotiating with the Central Obrera Boliviana (COB) over salary increases, with rising inflation reducing the value of real wages.

The COB has organised several marches across the country, demanding hefty wage increases. It claims that a monthly wage of equivalent to £730 is necessary to cover a family’s basic needs. The government argues that this is excessive, with the minimum wage currently at around only £60. It says raising pay to such levels would put at risk government social programmes, including payments to pensioners and a conditional cash transfer to ensure children attend school. It says that it is willing to increase wages by over the 7% inflation rate. Business leaders have said the maximum wage rise they would contemplate would be 8%.

Whatever agreement is finally reached, the majority of the working population will not benefit much; they do not have stable jobs in the formal sector of the economy.

4. Severe flooding

Heavy rains during February have led to rivers bursting their banks in the departments of Cochabamba, Beni, Santa Cruz, La Paz, Chuquisaca and Tarija. On 22 February the government declared a national state of emergency and made US$20 million available for humanitarian aid. The intensity of the rains appears to be a consequence of the climate phenomenon known as “La Niña”. By the end of February there had been about 30 deaths and some 9,500 families had been affected. The collapse of bridges has interrupted road communications. In Santa Cruz, flooding has also severely affected the soya, rice, maize and wheat crops.

In four of the last six years, the rains have come late and have been unusually heavy. They have led to severe flooding in the lowlands.

5. Talks with Chile for access to the sea

Following talks at ministerial level between Chile and Bolivia, Evo Morales has set 23 March as a deadline for a concrete answer from Chile on giving Bolivia access to the Pacific Ocean. His demand appears to have met a cool reception in Santiago.

Iván Moreira, a Chilean MP, has alleged that Morales and former Chilean President Michelle Bachelet had made progress on a deal that would have led to a territorial swap. Now, the Piñera government seems reluctant to countenance a deal that would involve relinquishing sovereignty over any part of Chilean territory. For his part, Bolivian Foreign Minister David Choquehuanca has denied the existence of any such deal.

AUTHOR: Bolivia Information Forum
URL: http://www.boliviainfoforum.org.uk/
E-MAIL: enquiries [at] boliviainfoforum.org.uk