IMF sees lower Bolivia growth, urges reforms Date: Fri, 10 Aug 2001 00:03:36 EDT aol://4344:30.L100e5Vp.5294142.681868782 08/09: IMF sees lower Bolivia growth, urges reforms IMF sees lower Bolivia growth, urges reforms By Simon Gardner LA PAZ, Bolivia (Reuters) The International Monetary Fund will have to revise its 2001 growth forecasts for Bolivia due to Argentina's woes and low export prices, the lender's representative in this poor Andean nation told Reuters in an interview Thursday. IMF representative Gerardo Peraza said he now saw Bolivia growing just 1.5 percent or less this year compared to the 4 percent first forecast, and that the credit body would be open to any reforms the new government -- which has pegged its own growth forecast between 2.5-3 percent -- might put forward. It was also time the international community invested in the cash-strapped, landlocked nation given its successes in stamping out illegal coca growing as a major ally in the U.S. anti-drugs war, he added. "There will have to be a revision of the targets," Peraza said. "The economic context is very different from when Ecuador's (aid) program started. Reaching 1.5 percent growth (in 2001) will be possible if hydrocarbon exports remain as they are." But that means Bolivia posting growth of 3 percent in the second half of the year to make up for zero growth in the first half, which means "growth could be a bit less than 1.5 percent." Hydrocarbon exports, including gas and oil, are now Bolivia's main earners after its once key silver, tin and soybean markets were hit by depressed prices. The IMF has voiced concern about delays to economic reforms in Bolivia, and has asked the country of 8 million to make "significant tax reforms" to help slash its budget deficit. AID HINGED ON REFORMS Any new package of economic reforms, including moves to tackle rampant tax evasion -- along the lines of recent reforms by Argentina -- could help open the door to more aid for Bolivia. "As for the Fund, we would be open to any (reform) program the government seriously proposes. I could not say if that would mean more aid, but it would have to be considered," Peraza said. The World Bank meanwhile is looking at ways of speeding up aid disbursements to aid the Bolivian government, which has been heavily reshuffled since pro-U.S. reformer Jorge Quiroga took over the presidency earlier this week when Hugo Banzer stood down after being diagnosed with liver and lung cancer. Peraza said the IMF had high hopes for Quiroga's younger administration. "They are going to have some very tough challenges," he said. "But there are real expectations for the new government. There has also been a change in terms of the hopes of what can be expected from them." Quiroga's government also faces the prospect of renewed social tensions in the wake of Banzer's campaign to rid Bolivia of the cultivation of illegal coca, the raw material used to make cocaine. Officials estimate there are now only about 6,200 acres of illegal coca plantations left in Bolivia. Peasants, who are allowed to plant up to 30,000 acres of coca in total for traditional uses, last year organized huge protests in which scores of protesters died in clashes with police. "The ideal would be for more international investment and cooperation to compensate for the coca eradication," Peraza said. "Wiping out coca and the fight against trafficking have huge costs in terms of growth." 19:59 08-09-01 Copyright 2001 Reuters Limited. All rights reserved.