The dollar standard sucks

[Signifyin(g)Monkey]

Dollar Scarcity Threatens Bolivia's 'Economic Miracle'

 

For context, Bolivia is no Venezuelan-style tinpot socialist basketcase.  Yes, it has leaned on commodity exports, but so does every developing country, regardless of ideological affiliation.  However, it has been prudent with its finances, so that it has relatively low public and foreign debt, and it has avoided expropriating firms in the private sector, so that the country sports a well-functioning market economy.  As a result, it has enjoyed years of relatively strong growth, and its redistributive policies have lowered inequality and fostered a growing middle class, while allowing businesses in the non-rent-based sectors of the economy to operate in relative freedom.  In terms of inflation and GDP, it has been among the leaders in the region in containing the former and expanding the latter.  Its level of industrial development is also well above the regional norm.  All of this being in contrast to what it was like before its 'socialists' came into power, when all the gains from its growth went largely to a small oligarchic class and international financiers, and the average person's standard of living arguably declined.

 

But the dollar standard will now be used to try and club it into acquiescing to demands by the IMF and international finance to implement policies on their behalf, rather than on the behalf of its own populace.  Not because it pursued horrible development strategies, smothered the productive economic forces of its private sector, and pissed away its wealth--missteps socialist regimes often make, but it did not--but because it doesn't own the dollar printing press.

 

This happens like clockwork to any developing country that doesn't have the U.S. subsidizing its growth, (as it did for Japan during its 'economic miracle', the 'Asian Tigers' in the 90s, and China from Nixon until Trump) whether it pursues good or bad economic policies.  Some exogenous shock is suffered (like a drop in commodity prices, or a pandemic) and they begin to run out of dollars.  A crisis is generated and the oligarchs rush in to buy up the means of production at firesale prices, screaming "WE TOLD YOU SO!" 

 

To Bolivia's credit, the government isn't turning to devaluation to bail it out--largely because it's been smart with its money.  But We. need. a. better. system.

[Dodger]

Countries are moving away from the dollar, so problem getting solved. 

[GeneticBlueprint]

My wife is from Bolivia. A bank there is collapsing because of this and lots of people can't get their money out. They can't buy dollars right now either because supply is really constrained. Shit sucks, man.