Recently Bolivian officials signed a new constitution with the aim of creating an egalitarian state but the referendum has a serious possibility of backfiring. Globalization has created an uneven distribution of income, particularly in developing countries like Bolivia, giving rise to populist style governments like that of Evo Morales who championed the new constitution.
One of the more controversial aspects of the new constitution is the land reform policy which limits the size of industrial farms. This seems like a noble gesture, giving land back to people it was stolen from years ago, however these large scale agricultural complexes are very efficient and provide a large portion Bolivia’s demand for food. I cant help but think it sounds like Robert Mugabe’s land reform policy which resulted in a sharp drop in Zimbabwe’s agricultural production. Politically it gave Mugabe a short term boost but created famine and suffering within his country.
In addition to the possibility of food shortages, the new constitution could have further implications for Bolivia’s overall development. Risk Analysts look at leftist governments and see the possibility of another Cuba or Iran where there is a possibility of expropriation or nationalization of private assets. Firms could chose not to locate a plant in Bolivia or pull investment capital out of the economy leading to further economic problems and a continued cycle of poverty.
http://www.economist.com/world/americas/displaystory.cfm?story_id=12974135
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