Bolivia's Evo Morales_March 2011

Another sign of trouble is inflation which has surged

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Another sign of trouble is inflation, which has surged to 8.4% over the 12 months to January. Food prices have shot up, and there is a shortage of sugar and other staples. Higher world prices are partly to blame. So are drought and wildfires last year which hurt crops. Flooding this year, which killed 39 people, has caused further disruption to food supplies. But government policies have made matters worse. As prices rose in 2008 the government intervened to curb farm exports and imposed price controls. The result was that farmers planted less. Huge queues have formed at state food-distribution centres. Some of those centres closed when they ran out of supplies or their staff feared violence. Journalists found food stockpiled at the homes of several government officials and leaders of Mr Morales’s Movement to Socialism (MAS) party. Although the fuel-price rise was withdrawn, it prompted other price rises across the economy, many of which have not been reversed. Bus owner-drivers in particular are feeling the pinch. Fares have been frozen for more than a decade even as the cost of maintaining vehicles and paying police bribes has spiralled. “When I started ten years ago lunch cost two bolivianos, now it costs me eight,” says a disgruntled driver. All this has taken a toll on Mr Morales’s popularity. A poll taken in Bolivia’s main cities in February by Ipsos-Apoyo showed his approval rating at just 32% (rural areas tend to be more loyal). The government faces little threat from the formal opposition, partly because some of its leaders have chosen exile in the face of legal harassment. Rather, the main source of the president’s new difficulties lies in his own movement. The MAS is a coalition of far-left parties, indigenous activists and NGOs. Social movements, such as unions and peasant groups, form its political base. Until this year such groups believed Mr Morales was on their side, and forgave his verbal snafus and missteps. Now many of them will no longer give him the benefit of the doubt. The
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government’s new slogan is “Governing [is] obeying the people.” Having led the Bolivian street for the past decade, Mr Morales now finds himself ruling at its mercy.
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Another sign of trouble is inflation which has surged to 84...

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