𝐄𝐥 𝐃𝐞𝐬𝐦𝐚𝐧𝐭𝐞𝐥𝐚𝐦𝐢𝐞𝐧𝐭𝐨 𝐝𝐞𝐥 𝐏𝐚𝐭𝐫𝐢𝐦𝐨𝐧𝐢𝐨 𝐍𝐚𝐜𝐢𝐨𝐧𝐚𝐥: 𝐋𝐚𝐬 𝐏𝐫𝐢𝐯𝐚𝐭𝐢𝐳𝐚𝐜𝐢𝐨𝐧𝐞𝐬 𝐝𝐞 𝐉𝐚𝐢𝐦𝐞 𝐏𝐚𝐳 𝐙𝐚𝐦𝐨𝐫𝐚 𝐲 𝐞𝐥 𝐂𝐨𝐬𝐭𝐨 𝐇𝐢𝐬𝐭𝐨́𝐫𝐢𝐜𝐨 𝐩𝐚𝐫𝐚 𝐁𝐨𝐥𝐢𝐯𝐢𝐚
𝐋𝐚𝐬 𝐏𝐫𝐢𝐯𝐚𝐭𝐢𝐳𝐚𝐜𝐢𝐨𝐧𝐞𝐬 𝐝𝐞 𝐉𝐚𝐢𝐦𝐞 𝐏𝐚𝐳 𝐙𝐚𝐦𝐨𝐫𝐚 𝐲 𝐞𝐥 𝐂𝐨𝐬𝐭𝐨 𝐇𝐢𝐬𝐭𝐨 ́ 𝐫𝐢𝐜𝐨 𝐩𝐚𝐫𝐚 𝐁𝐨𝐥𝐢𝐯𝐢𝐚
By: Marco A. Ayllón Bueno.
Bolivia's economic history at the end of the 20th century is marked by a profound ideological and structural transition that redefined the relationship between the State, society, and its strategic resources. Following the severe hyperinflation crisis of the 1980s, the country adopted a neoliberal economic model based on the Washington Consensus.
While the reforms formally began with the landmark Supreme Decree 21060 in 1985, it was during the administration of former President Jaime Paz Zamora (1989-1993) that the decisive step was taken toward dismantling the state's productive apparatus with the enactment of Privatization Law No. 1330 on April 24, 1992. Under the auspices of this legislation, supported by ministers such as Samuel Doria Medina and Jorge Tuto Quiroga, an aggressive process of selling off public assets was initiated. Far from stabilizing the economy, this resulted in losses of millions of dollars and severe damage to Bolivian national interests.
The central argument of the ruling party at the time to justify handing over public companies was based on the need to reduce the fiscal deficit, attract foreign direct investment, and highlight the State of the administration of entities considered inefficient or loss-making. However, the practical application of Law 1330 revealed a highly detrimental reality.
Dozens of medium-sized and regional companies, under the administration of departmental development corporations, were transferred to the private sector at ridiculously low prices, in what popular memory and subsequent investigations have dubbed a "fire sale." Companies that had cost the national treasury millions of dollars in infrastructure and equipment were liquidated for fractions of their real value, depriving the State of its sources of income and its capacity for regional economic planning.
The financial impact of these policy decisions has been rigorously documented in the years since. Parliamentary reports and joint investigative commissions of the Bolivian Legislative Assembly, tasked with evaluating the neoliberal period (1985-2005), estimated that the overall economic damage resulting from privatization and subsequent capitalization amounted to an alarming cumulative total of 22 billion dollars.
This structural damage was not distributed evenly, but hit hard the centers of regional productive development controlled by the Regional Development Corporations (CORDES), leaving deep economic scars in the four driving departments of the country:
• Tarija and the Dispossession of its Local Industries: The Joint Special Commission of the Legislature determined that Tarija was the department with the highest number of companies subject to this process, with a total of 13 affected institutions dependent on the Tarija Development Corporation (CODETAR). Of these, 6 were transferred directly to private hands and 7 ended up closed or dissolved. While the implementation and setup of this industrial network had cost the Bolivian State more than 78 million dollars, they were liquidated for a mere 31 million, resulting in a net economic loss of 47.4 million dollars. Among the most emblematic assets were the Tarija Cider Paper Industry (IPTASA) and La Entrerriana Iodized Salt, as well as the Villamontes Oil Factory, whose transfer at symbolic prices deprived the region of capturing the surplus from its nascent agro-industrial potential.
• La Paz and the Dismantling of Manufacturing: In the seat of government, the La Paz Development Corporation (CORDEPAZ) witnessed the dismantling of six key public companies, four of which were transferred to private management and two of which were permanently closed. The blow to La Paz's assets was epitomized by the liquidation of the National Flat Glass Factory and the Los Andes Refrigeration Plant. Official legislative reports revealed that the transfer of just five of these production units resulted in a direct loss to the State exceeding $12 million. The closure of these facilities not only represented a financial setback but also led to mass layoffs and the loss of regional manufacturing sovereignty. • Cochabamba and the Foundations of Service Commodification: Under the supervision of the Cochabamba Development Corporation (CORDECO), five state-owned companies entered the first wave of privatization, with four being transferred and one closing. Regional entities such as the Piusilla Trout Farm and various food processing plants were sold off, causing economic damage exceeding US$3.5 million, according to reports from the parliamentary commission. Although this period focused on CORDES companies, the legal framework for privatization and corporate institutionalization structured under the Paz Zamora administration and Law 1330 set a legal precedent that, years later, would facilitate attempts to privatize basic drinking water services. This regulatory line would culminate in the handover of the municipal company SEMAPA to the transnational consortium Aguas del Tunari, igniting the historical spark of the "Water War" in the year 2000 .
Santa Cruz and the Handover of the Agro-industrial Sector: The once-thriving Santa Cruz Development Corporation (CORDECRUZ) suffered the intervention and privatization of 12 public companies, eight of which were transferred to private consortiums, while four underwent dissolution processes. The economic damage in the eastern region was particularly severe for the department's agricultural and textile sectors. High-value strategic assets such as the Portachuelo Animal Feed Factory (ALBAPOR) and the Santa Cruz Spinning Mill were auctioned off through dubious bidding processes.
The Legislative Assembly report identified that the sale of these plants directly benefited power networks comprised of pro-government politicians and businesspeople linked to the regime, who acquired textile and food production monopolies at fractions of their current market value, distorting Santa Cruz's economic development at the expense of the national treasury.
Alongside the substantial financial losses in these four regions, the process was marred by serious ethical questions and conflicts of interest, with the then Minister of Planning, Samuel Doria Medina, at the center of it all.
The fact that the very authorities responsible for designing, promoting, and implementing the privatization regulations went on, shortly after leaving public office, to become the direct beneficiaries of the purchase of these state assets—as occurred with the acquisition of cement companies and the subsequent formation of private monopolies like SOBOCE and the controlling stake in FANCESA—constitutes one of the most criticized aspects of the period.
The use of insider information and the transfer of state assets into the hands of the political elites who governed during that time consolidated a model of state capture that prioritized corporate profit over social welfare.
In conclusion, the privatizations promoted during Jaime Paz Zamora's presidency represented a historic setback for Bolivia's economic sovereignty. Although proponents of the model argued that the funds raised mitigated short-term fiscal emergencies and financed social programs, the overall balance sheet demonstrates that the productive base and the assets of future generations were sacrificed in exchange for marginal income. The lessons of this process left a deep mark on the civic consciousness of departments such as Tarija, La Paz, Cochabamba, and Santa Cruz, laying the groundwork for the social movements that, years later, would demand the nationalization and recovery of strategic resources, reminding everyone that a nation's public assets belong to the people and should not be auctioned off based on transient political interests.
Bibliographic References
1. Plurinational Legislative Assembly of Bolivia (2019). Final Report of the Joint Special Commission of Inquiry into the Privatization and Capitalization Process of Public Enterprises (1985-2005). La Paz, Bolivia.
2. Official Gazette of the Plurinational State of Bolivia (1992). Privatization Law No. 1330 of April 24, 1992. La Paz, Bolivia. 3. Kohl, B. (2004). Privatization Bolivian Style: A Cautionary Tale. International Journal of Urban and Regional Research, 28(4), 893-908. 4. Mendoza Leigue, A. (2014). Preliminary reports on the plundering of public enterprises during the Bolivian neoliberal period. Special Commission of the Plurinational Legislative Assembly. Peace. 5. Doria Medina, S. (2015). Institutional statements on transfers and revenue collection by the 24 development corporation companies during the period 1991-1993. ERBOL Network archive interview. 6. Spronk, S. (2007). Roots of Resistance: Class Formation and Bolivia's Water Wars. International Labor and Working-Class History, (71), 7-27. Bolivian and Pan-American Economic Pointers. BPAEP © #MAAB 2026.
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