Bolivia, IDH (Special Hydrocarbon Tax) Dignity Bonus: October 2007

Context

The promotion of specific social policies to benefit the elderly is a demand from Bolivians to the State. The BONOSOL[1] is an acquired right. According to a survey by PAPEP on October 2007, Bolivians who know of BONOSOL (98%) have a precise idea of what it is (70%), approve its payment (83%), believe it had a positive impact on the elderly, its direct beneficiaries,(91%), Bolivian families (84%), human-social development of the country (70%), and even to a lesser degree, themselves (62%), and the economic development of Bolivia (58%).

“Renta Dignidad (Dignity Bonus)”[2] counts with the same level of support as BONOSOL (79%). People who approve the payment say it is a good policy for the elderly (66%); it is a measure with solidarity that helps or gives protection to those who do not have a retirement fund. Bolivians only marginally note its multiplying effect in the economy (13%); its better and larger coverage than the BONOSOL (12%), or that it would be the best way to distribute resources from natural gas (9%).

The Dignity bonus causes conflict when it is learned that financing for the bonus comes from the Hydrocarbons Tax (IDH); it takes 30% of IDH participation from prefectures, municipalities, universities and the General Treasury of the Nation. This measure generated an immediate negative response, with mobilization by civic organizations, Indigenous groups, universities, prefectures, municipalities and Assembly members.

In terms of public opinion, the political conflict around the Dignity bonus tends to show gaps between East/West and government/opposition. While the political positioning of the inhabitants from Cochabamba is similar to that of the west, those from Sucre copy patterns detected in the southeastern areas of the country. Three types of fundamental determining conditions have been detected on the basis of which the positioning of public opinion is built. In the first place, the degree of support differentiating the Dignity Bonus: those who completely support the measure are more than half in the west (48%) and among MAS voters (52%); a third in the South-east (34%) and among opposition voters (30%). In the same manner, rejection of the measure ranges from 11% in the MAS to 33% in the opposition.

Lastly, differentiated perceptions about the government role in the financing of the Dignity bonus exist: while the west of the country (65%) and among MAS voters (65%), a concurrence scheme among the different levels of the state to finance the measure is prioritized, in the Southeast (52%) and among opposition voters (55%) the exclusive responsibility of the central government for financing the measure is noted.

In the end, in the West and among MAS voters, there are very high levels of support both for the Dignity bonus as well as for the use of IDH resources, and the participation of decentralized government levels in its financing. On the contrary, in the Southeast and among opposition voters, support for the Dignity bonus is more critical, and the acceptance of use of IDH resources and participation by prefectures/municipalities in the financing scheme, is noticeably lower.

In this context, President Morales has to provide answers to two strategic dilemmas, to be able to build favorable scenarios:   ¿The Dignity bonus will be covered by government funds or by Prefectures out of IDH resources? ¿Will a scheme of old age bonuses be built or not as a result to an innovative inter-territorial agreement in the country?