22 April 2014 Last updated at 05:45 ET

Bolivia raises minimum wage by 20%

President Evo Morales agreed to meet the unions' demands to raise the minimum salary by 20%

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Bolivia will raise the minimum wage by 20%, President Evo Morales announced on Monday.

Following talks with leaders from Bolivia's main trade union federation, President Morales also said that the basic salary would go up by 10%.

The increase is well above inflation, which was 6.5% in 2013.

The move has been welcomed by the trade unions but harshly criticised by the employers' federation, who said they had been bypassed in the negotiations.

'Bitter talks'
The minimum salary for public and private sector workers will go up from 1,200 bolivianos ($175; £100) to 1,488 bolivianos.

"There has been economic growth, and that's why we have decided to raise the minimum salary by 20%," President Morales said.

Bolivian Central Labour Union leader Juan Carlos Trujillo said the negotiations had been "very bitter, icy and heavy" but that in the end, the two sides had reached an agreement.

He said he had asked the executive to recognise "the need and the obligation to create a salary structure which is based on the country's growth and the recognition that the riches of Bolivia have to be shared between the haves and the have-nots in equal measure".

The Confederation of Private Entrepreneurs (CEPB) rejected the increase, saying the workers would end up paying for it through increased taxes.

The director of Bolivia's largest employers' organisation, Daniel Sanchez, said the decision had been based on politics rather than on sound economic reasons.

He suggested President Morales was trying to curry favour with the trade unions ahead of October's presidential elections, in which he will be running for re-election.

Bolivia's gross domestic product tripled to $27bn in 2012 since Mr Morales took office in January 2006, according to World Bank figures.

President Morales has set a goal of 5.2% growth in GDP for 2014.