Bolivia, Economic Situation 1985

1982-1984: The political arena is characterized by infighting and corruption. The international recession and domestic fiscal mismanagement put the Bolivian economy in a state of crisis. The government prints money, fueling inflation. Per capita income falls below 1965 levels, with more than half the labor force employed in the informal sector. Paz Estenssoro is elected president again. 1985-1988: Shifting his focus away from the center left that elected him, Paz Estenssoro institutes a drastic New Economic Policy that liberalizes trade, deregulates the financial sector, privatizes some state enterprises, and implements tax-reform law. These "shock therapy" measures succeed in reducing record inflation and bringing about slow but steady economic growth. Success comes at a high social cost. http://www.pbs.org/wgbh/commandingheights/

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Google Video | May 5, 2006

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