RIO DE JANEIRO, BRAZIL – Bolivian Congress yesterday (25) passed a government-backed law allowing citizens to withdraw up to 15% of their private pension funds to assist them in addressing the impact of the Covid-19 pandemic and related blockades.
An estimated 1.4 million people in the 11.51 million-strong South American country have lost their jobs during the pandemic. Bolivia has suffered 3 Covid waves so far and has only vaccinated 26% of its population with at least one dose.
Bolivia’s Economy Minister Marcelo Montenegro said the plan is “an exceptional and unique measure” after senators voted to pass it, previously backed by the Lower House.
Chile’s private pension fund system was introduced during the dictatorship of Augusto Pinochet and is regarded as the cornerstone of the country’s widely emulated free market model.
In Bolivia, pension funds are managed by Previsión BBVA, owned by Spain’s Banco Bilbao Vizcaya Argentaria, and Futuro de Bolivia, owned by Zurich Financial Services.
The plan establishes a 15,000 Bolivianos (US$2,170) limit on withdrawals per person. According to the Ministry of Economy, this will mean the withdrawal of 3.9 billion Bolivianos (US$565 million) with no impact on the funds or pensions.
“Mission accomplished,” said Gonzalo Melgar, an unemployed accountant who walked for 65 days from eastern Bolivia to the city of La Paz to demand the reimbursement of his pension contributions, thus becoming the campaign’s protagonist.