World Affairs
Bolivians choose the euro
Published 04 March 2008
Hugh O'Shaughnessy reports how poor Bolivians able to save for the first time ignore the dollar in favour of the euro
They may in their majority be needy indigenous people, Aymaras, perhaps, or Quechuas, living here in the High Andes, but they are touched by the winds of financial globalisation.
Even poor Bolivians are not stupid. They know when to get out of the dollar US as it falls in the wake of that country's worldwide difficulties and now it will not buy 1.50 Euros and 20 dollars will hardly buy ten pounds sterling.
For older Bolivians with strong memories of the hyperinflation here when they had to struggle with armfuls of banknotes if they were to buy the smallest thing, it is a strange thing to be confronted with the local currency, the boliviano, rising in value as the dollar skids downwards. For years those who could would make a practice of changing what Bolivian currency they were unfortunate to possess into US currency. Not any more.
These days the latest slip in the dollar is carried on the front page of all the main newspapers and is fuelling the flight from it.
Bolivia's banks have done fabulous business in the two years President Evo Morales has been in office. As Bolivia has earned more and more money from its oil and natural gas which its neighbours, especially Brazil and Argentina, are bursting to buy, a new sense of prosperity is slowly creeping into society.
Since he came in, the profits of the dozen largest banks have tripled. And last year alone they went up by a whopping 83 per cent.
Understandably the bankers are in a happy mood and are not in the business of letting opportunities slip past them. Hoardings all round La Paz tell the world that savers would do well to open accounts in Euros and that the friendly bankers in Banco X or Banco Y would be happy to help them.
With the oil and gas money Morales has set up a scheme to distribute a small amount of money every year to schoolchildren and a similar amount to almost all citizens over 60. This is taking the edge off the keenest feeling of poverty and destitution in Bolivia. So people are beginning to have something to save at last.
Yet it is not the banker's advertisements which tell the whole story. It is at the stalls set out here for the Alasitas fair which tell the debt of the growing Bolivian rejection of the dollar. Alasitas held in the first few weeks of the year in La Paz, Bolivia's commercial capital built in a canyon 12,500 feet below the freezing plain, is the time the citizens beg Ekeko, the stumpy god of plenty, for prosperity during the coming year. It is a time for relaxation before the children go back to school and at the fairground swings and other amusements are set out. There are all manner of toys on sale and the air resounds to the cries of the young.
Little statues of the Andean deity are on sale in many of the stalls. Others have on sale the tiny miniatures of the goods which ordinary Bolivians yearn for - bundles of tiny banknotes; model cars and vans; teeny ovens and fridges, kitchen and garden implements. The Andean people decorate the statues with the miniature replicas in the hope that the god will bring them the real thing later in the year. Alasitas (which means "buy me one" in the Aymara language) bears witness to four millennia of civilisation at 11,000 feet in the Andes.
"This year there are more miniature euro banknotes and fewer tiny dollar bills", says my friend Alfredo, an assistant to one of Bolivia's more influential politicians. "Bolivians don't want Ekeko to bring them dollars any more," The day of the almighty dollar has passed. Even in Bolivia.
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