The economy of Bolivia is the 95th-largest economy in the world in nominal terms and the 87th-largest economy in terms of purchasing power parity.
Bolivia
, image_flag = Bandera de Bolivia (Estado).svg
, flag_alt = Horizontal tricolor (red, yellow, and green from top to bottom) with the coat of arms of Bolivia in the center
, flag_alt2 = 7 × 7 square p ...
is classified by the
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
to be a lower middle income country.
With a
Human Development Index
The Human Development Index (HDI) is a statistic composite index of life expectancy, education (mean years of schooling completed and expected years of schooling upon entering the education system), and per capita income indicators, whi ...
of 0.703, it is ranked 114th (high human development). In recent history, Bolivia has consistently led Latin America in measures of economic growth, fiscal stability and foreign reserves.
The Bolivian economy has had a historic pattern of a single-commodity focus.
From silver to
tin
Tin is a chemical element with the symbol Sn (from la, stannum) and atomic number 50. Tin is a silvery-coloured metal.
Tin is soft enough to be cut with little force and a bar of tin can be bent by hand with little effort. When bent, t ...
to
coca
Coca is any of the four cultivated plants in the family Erythroxylaceae, native to western South America. Coca is known worldwide for its psychoactive alkaloid, cocaine.
The plant is grown as a cash crop in the Argentine Northwest, Bolivia, Al ...
, Bolivia has enjoyed only occasional periods of economic diversification.
Political instability and difficult topography have constrained efforts to modernize the agricultural sector.
Similarly, relatively low population growth coupled with low
life expectancy
Life expectancy is a statistical measure of the average time an organism is expected to live, based on the year of its birth, current age, and other demographic factors like sex. The most commonly used measure is life expectancy at birth ...
has kept the labor supply in flux and prevented industries from flourishing.
Rampant inflation and
corruption
Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...
previously created development challenges,
but in the early twenty-first century the fundamentals of its economy showed unexpected improvement, leading Moody’s Investors Service to upgrade Bolivia's economic rating in 2010 from B2 to B1. The mining industry, especially the extraction of natural gas and zinc, currently dominates Bolivia's export economy.
Between 2006 and 2019 (term of the presidency of the democratic socialist
Evo Morales
Juan Evo Morales Ayma (; born 26 October 1959) is a Bolivian politician, trade union organizer, and former cocalero activist who served as the 65th president of Bolivia from 2006 to 2019. Widely regarded as the country's first president to co ...
), GDP per capita doubled and the
extreme poverty
Extreme poverty, deep poverty, abject poverty, absolute poverty, destitution, or penury, is the most severe type of poverty, defined by the United Nations (UN) as "a condition characterized by severe deprivation of basic human needs, includi ...
rate declined from 38% to 18%. The poverty rate declined from 22.23% in 2000 to 12.38% in 2010. Moreover, the
Gini coefficient declined from 0.60 to 0.446. According to the Bolivian Institute of Foreign Trade, Bolivia had the lowest inflation accumulated inflation of Latin America by October 2021.
History
![GDP_per_capita_development_in_Bolivia](https://upload.wikimedia.org/wikipedia/commons/0/0c/GDP_per_capita_development_in_Bolivia.svg)
The Bolivian economy grew rapidly between 1960 and 1977.
According to one study, "persistent deficits and a fixed exchange rate policy during the 1970s led to a debt crisis that began in 1977. From 1977 to 1986, Bolivia lost almost all the gains in GDP per capita that it had achieved since 1960."
After 1986, Bolivian economy began to grow again.
Between 1998 and 2002, Bolivia experienced a financial crisis.
Inflation has plagued, and at times crippled, the Bolivian economy since the 1970s.
At one time in 1985 Bolivia experienced an annual inflation rate of more than 20,000 percent.
Fiscal and monetary reform reduced the inflation rate to single digits by the 1990s, and in 2004 Bolivia experienced a manageable 4.9 percent rate of inflation.
Starting with the
Supreme Decree 21060 in 1987, the Government of Bolivia implemented a far-reaching program of macroeconomic stabilization and structural reform aimed at maintaining price stability, creating conditions for sustained growth, and alleviating poverty. The most important structural changes in the Bolivian economy involved the capitalization of numerous public sector enterprises. (Capitalization in the Bolivian context is a form of privatization where investors acquire a 50% share and management control of public enterprises by agreeing to invest directly into the enterprise over several years, rather than paying cash to the government). A major reform of the customs service significantly improved transparency in this area.
Parallel legislative reforms have locked into place market-oriented policies, especially in the hydrocarbon and telecommunication sectors, that have encouraged private investment. Foreign investors are accorded national treatment, and foreign ownership of companies enjoys virtually no restrictions in Bolivia. While the capitalization program was successful in vastly boosting foreign direct investment (FDI) in Bolivia (US$7 billion in stock during 1996–2002), FDI later decreased as investors completed their capitalization contract obligations.
In 1996, three units of the Bolivian state oil corporation (
YPFB
Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) is a Bolivian state-owned enterprise dedicated to the exploration, exploitation, refining, industrialization, distribution and commercialization of oil, natural gas and derived products. It ...
) involved in
hydrocarbon exploration
Hydrocarbon exploration (or oil and gas exploration) is the search by petroleum geologists and geophysicists for deposits of hydrocarbons, particularly petroleum and natural gas, in the Earth using petroleum geology.
Exploration methods
Vis ...
, production, and transportation were capitalized, facilitating the construction of a gas pipeline to Brazil. The government has a long-term sales agreement to sell 30 million cubic metres a day (MMcmd) of natural gas to Brazil through 2019. The Brazil pipeline carried about 21 MMcmd in 2000. Bolivia has the second-largest natural gas reserves in South America, and its current domestic use and exports to Brazil account for just a small portion of its potential production. Natural gas exports to Argentina resumed in 2004 at four MMcmd.
In April 2000 violent protests over plans to privatize the water utility in the city of
Cochabamba
Cochabamba ( ay, Quchapampa; qu, Quchapampa) is a city and municipality in central Bolivia in a valley in the Andes mountain range. It is the capital of the Cochabamba Department and the fourth largest city in Bolivia, with a population of 63 ...
led to nationwide disturbances. The government eventually cancelled the contract without compensation to the investors, returning the utility to public control. The foreign investors in this project pursued an investment dispute case against Bolivia for its actions. A similar situation occurred in 2005 in the cities of El Alto and La Paz.
Protest and widespread
opposition to exporting gas through Chile led to the resignation of President
Sanchez de Lozada in October 2003. The government held a binding referendum in 2004 on plans to export natural gas and on hydrocarbons law reform. By May 2005, the carbons law draft was being considered by the Senate.
According to the data of the
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
, the
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
, as well as several international Institutes such as
ECLAC
The United Nations Economic Commission for Latin America and the Caribbean, known as ECLAC, UNECLAC or in Spanish and Portuguese CEPAL, is a United Nations regional commission to encourage economic cooperation. ECLAC includes 46 member States (2 ...
, during the period 2006 to 2019 (period of the presidency of
Evo Morales
Juan Evo Morales Ayma (; born 26 October 1959) is a Bolivian politician, trade union organizer, and former cocalero activist who served as the 65th president of Bolivia from 2006 to 2019. Widely regarded as the country's first president to co ...
and
Alvaro Garcia Linera) the economy of Bolivia quadrupled from a value of 9,573 million dollars to 42,401 million dollars, this is due in large part to the policy of nationalization of Natural Resources, the stability of the exchange rate, the incentive of the domestic market, strong public investment in infrastructure and industrialization of natural resources such as gas and lithium. Similarly, according to studies by the World Bank and
ECLAC
The United Nations Economic Commission for Latin America and the Caribbean, known as ECLAC, UNECLAC or in Spanish and Portuguese CEPAL, is a United Nations regional commission to encourage economic cooperation. ECLAC includes 46 member States (2 ...
, during the period 2006–2019, Bolivia experienced a marked reduction in poverty and extreme poverty, resulting in a reduction of the population living in extreme poverty from 38.2% to 15.2%. In terms of
HDI
The Human Development Index (HDI) is a statistic composite index of life expectancy, education (mean years of schooling completed and expected years of schooling upon entering the education system), and per capita income indicators, wh ...
, according to the
UNDP
The United Nations Development Programme (UNDP)french: Programme des Nations unies pour le développement, PNUD is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human dev ...
World Human Development Report, Bolivia in 2018 for the first time became classified as a "high human development Country", reaching an HDI indicator of 0.703 and rising to the 114th position of 189 countries and territories.
Macroeconomy
Main indicators
Bolivia's 2016 gross domestic product referred to PPP totaled $78.35 billion and in the official exchange $35.69 billion. Its standard of living, as measured in GDP in PPP per capita was US$7,191. Economic growth was about 5.2% a year and inflation was 4.5% in 2012. Bolivia experienced a
budget surplus
A balanced budget (particularly that of a government) is a budget in which revenues are equal to expenditures. Thus, neither a budget deficit nor a budget surplus exists (the accounts "balance"). More generally, it is a budget that has no budget ...
of about 1.5% of GDP in 2012. Expenditures were nearly US$12.2 billion while revenues amounted to about US$12.6 billion. The government runs surplus accounts since 2005.
The Bolivian currency is the boliviano (ISO 4217: BOB; symbol: Bs.) One boliviano is divided into 100 centavos. The boliviano replaced the
Bolivian peso
The peso boliviano (ISO 4217 code: ) was the currency of Bolivia from January 1, 1963, until December 31, 1986. It was replaced by the boliviano. It was divided into 100 ''centavos''. The conversion rate was 1,000,000 pesos bolivianos to 1 boliv ...
at a rate of one million to one in 1987 after many years of rampant inflation. At that time, 1 new boliviano was roughly equivalent to 1 U.S. dollar. At the end of 2011 the boliviano was only worth around 0.145 U.S. Dollar. Annual interest rates in 2010 had decreased steadily to 9.9 percent
from more than 50 percent before 1997.
Bolivia's
human development index
The Human Development Index (HDI) is a statistic composite index of life expectancy, education (mean years of schooling completed and expected years of schooling upon entering the education system), and per capita income indicators, whi ...
was reported at 0.675, comprising a health index of 0.740, an education index of 0.743 and a GNI index of 0.530, ranking within the group of medium human development. "Between 1980 and 2012 Bolivia (Plurinational State of)'s HDI rose by 1.3% annually from 0.489 to 0.675 today, which gives the country a rank of 108 out of 187 countries with comparable data. The HDI of Latin America and the Caribbean as a region increased from 0.574 in 1980 to 0.741 today, placing Bolivia (Plurinational State of) below the regional average."
The following table shows the main economic indicators in 1980–2019 (with IMF staff estimates in 2020-2026). Inflation below 5% is in green.
Sectors
Primary sector
Agriculture and forestry
Agriculture, forestry, and fishing accounted for 14 percent of Bolivia's gross domestic product (GDP) in 2003, down from 28 percent in 1986.
Combined, these activities employ nearly 44 percent of Bolivia's workers.
Most agricultural workers are engaged in subsistence farming—the dominant economic activity of the highlands region.
Agricultural production in Bolivia is complicated by both the country's
topography
Topography is the study of the forms and features of land surfaces. The topography of an area may refer to the land forms and features themselves, or a description or depiction in maps.
Topography is a field of geoscience and planetary sci ...
and climate.
High elevations make farming difficult, as do the
El Niño
El Niño (; ; ) is the warm phase of the El Niño–Southern Oscillation (ENSO) and is associated with a band of warm ocean water that develops in the central and east-central equatorial Pacific (approximately between the International Date L ...
weather patterns and seasonal flooding.
Bolivia's agricultural GDP continues to rise but has attained only a rather modest average growth rate of 2.8 percent annually since 1991.
Bolivia's most lucrative agricultural product continues to be coca, of which Bolivia is currently the world's third largest cultivator
after Colombia and Peru, with an estimated 29,500 hectares under cultivation in 2007, slightly higher than the previous year. Bolivia is the third-largest producer of
cocaine
Cocaine (from , from , ultimately from Quechuan languages, Quechua: ''kúka'') is a central nervous system (CNS) stimulant mainly recreational drug use, used recreationally for its euphoria, euphoric effects. It is primarily obtained from t ...
, a drug produced from coca, estimated at 120 metric tons potential pure cocaine in 2007 and a transit country for Peruvian and Colombian cocaine destined illegally for the U.S., Europe, Brazil, Argentina, Chile, and Paraguay. The Bolivian government, in response to international pressure, worked to restrict coca cultivation.
However, eradication efforts have been hampered by the lack of a suitable replacement crop for rural communities that have cultivated coca for generations.
The
Morales
Morales is a Spanish surname. Notable people with the surname include:
* Alfredo Morales (born 1990), American footballer
* Alvaro Morales (disambiguation), several people
* Amado Morales (born 1947), Puerto Rican javelin thrower
* Bartolomé Mo ...
government turned back some of the results obtained in previous years.
Since 2001 Bolivia's leading legal agricultural export has been
soybeans
The soybean, soy bean, or soya bean (''Glycine max'') is a species of legume native to East Asia, widely grown for its edible bean, which has numerous uses.
Traditional unfermented food uses of soybeans include soy milk, from which tofu and ...
.
Additionally, cotton, coffee, and
sugarcane
Sugarcane or sugar cane is a species of (often hybrid) tall, Perennial plant, perennial grass (in the genus ''Saccharum'', tribe Andropogoneae) that is used for sugar Sugar industry, production. The plants are 2–6 m (6–20 ft) tall with ...
have been viable exports for Bolivia.
For domestic consumption,
corn
Maize ( ; ''Zea mays'' subsp. ''mays'', from es, maíz after tnq, mahiz), also known as corn (North American and Australian English), is a cereal grain first domesticated by indigenous peoples in southern Mexico about 10,000 years ago. Th ...
, wheat, and potatoes are the crops of choice of Bolivian farmers.
Despite its vast forests, Bolivia has only a minor
timber industry
Lumber is wood that has been processed into dimensional lumber, including beams and planks or boards, a stage in the process of wood production
Lumber and wood products, including timber for framing, plywood, and woodworking, are create ...
.
In 2003 timber accounted for only 3.5 percent of export earnings.
The Forestry Law of 1996 imposed a tax on sawn
lumber
Lumber is wood that has been processed into dimensional lumber, including beams and planks or boards, a stage in the process of wood production. Lumber is mainly used for construction framing, as well as finishing (floors, wall panels, wi ...
and consequently cut Bolivian lumber exports significantly.
The tax was used to establish the Forestry Stewardship Council, which has been only minimally successful in
forest restoration
Forest restoration is defined as “actions to re-instate ecological processes, which accelerate recovery of forest structure, ecological functioning and biodiversity levels towards those typical of climax forest” i.e. the end-stage of natural ...
efforts and eliminating
illegal logging
Illegal logging is the harvest, transportation, purchase or sale of timber in violation of laws. The harvesting procedure itself may be illegal, including using corrupt means to gain access to forests; extraction without permission, or from a pro ...
.
With increased efficiency, Bolivia could likely expand the profitability of its forest resources, while still protecting them from
overexploitation
Overexploitation, also called overharvesting, refers to harvesting a renewable resource to the point of diminishing returns. Continued overexploitation can lead to the destruction of the resource, as it will be unable to replenish. The term app ...
.
Bolivia has a small fishing industry that taps the country's freshwater lakes and streams.
The annual catch averages about 6,000 tons.
In 2018, Bolivia produced 9.6 million tons of
sugarcane
Sugarcane or sugar cane is a species of (often hybrid) tall, Perennial plant, perennial grass (in the genus ''Saccharum'', tribe Andropogoneae) that is used for sugar Sugar industry, production. The plants are 2–6 m (6–20 ft) tall with ...
, 2.9 million tons of
soy
The soybean, soy bean, or soya bean (''Glycine max'') is a species of legume native to East Asia, widely grown for its edible bean, which has numerous uses.
Traditional unfermented food uses of soybeans include soy milk, from which tofu and ...
, 1.2 million tons of
maize
Maize ( ; ''Zea mays'' subsp. ''mays'', from es, maíz after tnq, mahiz), also known as corn (North American and Australian English), is a cereal grain first domesticated by indigenous peoples in southern Mexico about 10,000 years ago. Th ...
, 1.1 million tons of
potato
The potato is a starchy food, a tuber of the plant ''Solanum tuberosum'' and is a root vegetable native to the Americas. The plant is a perennial in the nightshade family Solanaceae.
Wild potato species can be found from the southern Unit ...
, 1 million tons of
sorghum
''Sorghum'' () is a genus of about 25 species of flowering plants in the grass family (Poaceae). Some of these species are grown as cereals for human consumption and some in pastures for animals. One species is grown for grain, while many othe ...
, 700 thousand tons of
banana
A banana is an elongated, edible fruit – botanically a berry – produced by several kinds of large herbaceous flowering plants in the genus ''Musa''. In some countries, bananas used for cooking may be called "plantains", distinguis ...
, 541 thousand tons of
rice
Rice is the seed of the grass species ''Oryza sativa'' (Asian rice) or less commonly ''Oryza glaberrima
''Oryza glaberrima'', commonly known as African rice, is one of the two domesticated rice species. It was first domesticated and grown i ...
, 301 thousand tons of
wheat
Wheat is a grass widely cultivated for its seed, a cereal grain that is a worldwide staple food. The many species of wheat together make up the genus ''Triticum'' ; the most widely grown is common wheat (''T. aestivum''). The archaeologi ...
, in addition to smaller yields of other agricultural products, such as
tangerine
The tangerine is a type of citrus fruit that is orange in color. Its scientific name varies. It has been treated as a separate species under the name ''Citrus tangerina'' or ''Citrus'' × ''tangerina'', or treated as a variety of ''Citrus retic ...
,
cassava
''Manihot esculenta'', common name, commonly called cassava (), manioc, or yuca (among numerous regional names), is a woody shrub of the spurge family, Euphorbiaceae, native to South America. Although a perennial plant, cassava is extensively ...
,
orange
Orange most often refers to:
*Orange (fruit), the fruit of the tree species '' Citrus'' × ''sinensis''
** Orange blossom, its fragrant flower
*Orange (colour), from the color of an orange, occurs between red and yellow in the visible spectrum
* ...
,
beans
A bean is the seed of several plants in the family Fabaceae, which are used as vegetables for human or animal food. They can be cooked in many different ways, including boiling, frying, and baking, and are used in many traditional dishes th ...
,
sunflower seed
The sunflower seed is the seed of the sunflower ('' Helianthus annuus''). There are three types of commonly used sunflower seeds: linoleic (most common), high oleic, and sunflower oil seeds. Each variety has its own unique levels of monounsat ...
,
cotton
Cotton is a soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of the cotton plants of the genus ''Gossypium'' in the mallow family Malvaceae. The fiber is almost pure cellulose, and can contain minor perce ...
etc.
Agriculture and forestry is also the lifeline for multitudes of small villages which house a majority of the population. Small village economy stumbled and dwindled from the late twentieth century due to aggravating environmental problems including
deforestation
Deforestation or forest clearance is the removal of a forest or stand of trees from land that is then converted to non-forest use. Deforestation can involve conversion of forest land to farms, ranches, or urban use. The most concentrated d ...
and consequent
soil degradation
Soil retrogression and degradation are two regressive evolution processes associated with the loss of equilibrium of a stable soil. Retrogression is primarily due to soil erosion and corresponds to a phenomenon where succession reverts the land t ...
, water pollution, loss of biodiversity, and so on. Besides, political and social problems also greatly obstruct the growth of small village development: political turmoil, post-civil war predicament and burgeoning fiscal deficit have strangled most investment incentives; corruption and manipulation of water supply by foreign companies have greatly undermined the availability and efficiency of local market, leaving little profits for village farmers and producers. Furthermore, the global market poses a threat to the stability and sustainability of Bolivia's frail economy: "a drop in export prices, reduction of informal trade" and low-skilled over-homogenized local products have further worsened the bleak condition of Bolivia's microeconomic activities, making it almost impossible for village farms and factories to make a living from trading with the world. Dwindling profits and surging cost of production have made small village economy in Bolivia extremely vulnerable and unstable; as a result, unemployment increases and small business is on the verge of bankruptcy, which in return made government intervention very inefficient and deferred many governmental initiatives and attempts to improve the condition.
Mining
![Bolivia Resource Map](https://upload.wikimedia.org/wikipedia/commons/8/8b/Bolivia_Resource_Map.png)
In 2019, the country was the 8th largest world producer of
silver
Silver is a chemical element with the Symbol (chemistry), symbol Ag (from the Latin ', derived from the Proto-Indo-European wikt:Reconstruction:Proto-Indo-European/h₂erǵ-, ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, whi ...
; 4th largest world producer of
boron
Boron is a chemical element with the symbol B and atomic number 5. In its crystalline form it is a brittle, dark, lustrous metalloid; in its amorphous form it is a brown powder. As the lightest element of the ''boron group'' it has th ...
; 5th largest world producer of
antimony
Antimony is a chemical element with the symbol Sb (from la, stibium) and atomic number 51. A lustrous gray metalloid, it is found in nature mainly as the sulfide mineral stibnite (Sb2S3). Antimony compounds have been known since ancient time ...
; 5th largest world producer of
tin
Tin is a chemical element with the symbol Sn (from la, stannum) and atomic number 50. Tin is a silvery-coloured metal.
Tin is soft enough to be cut with little force and a bar of tin can be bent by hand with little effort. When bent, t ...
; 6th largest world producer of
tungsten
Tungsten, or wolfram, is a chemical element with the symbol W and atomic number 74. Tungsten is a rare metal found naturally on Earth almost exclusively as compounds with other elements. It was identified as a new element in 1781 and first isolat ...
; 7th largest producer of
zinc
Zinc is a chemical element with the symbol Zn and atomic number 30. Zinc is a slightly brittle metal at room temperature and has a shiny-greyish appearance when oxidation is removed. It is the first element in group 12 (IIB) of the periodi ...
, and the 8th largest producer of
lead
Lead is a chemical element with the symbol Pb (from the Latin ) and atomic number 82. It is a heavy metal that is denser than most common materials. Lead is soft and malleable, and also has a relatively low melting point. When freshly cu ...
.
Mining continues to be vital to Bolivia's economy.
The collapse of the world tin market in the 1980s led to a restructuring of the industry.
The state dramatically reduced its control and presently operates only a small portion of mining activities.
Small-scale operations, often with low productivity, employ many former state miners.
Natural gas has supplanted
tin
Tin is a chemical element with the symbol Sn (from la, stannum) and atomic number 50. Tin is a silvery-coloured metal.
Tin is soft enough to be cut with little force and a bar of tin can be bent by hand with little effort. When bent, t ...
and silver as the country's most valuable natural commodity.
A discovery in 1997 confirmed a tenfold gain in Bolivia's known natural gas reserves.
Finding markets to utilize this resource, both domestically and internationally, has been slowed by a lack of infrastructure and conflicts over the state's role in controlling natural resources.
Although the world tin market has re-emerged, Bolivia now faces stiff competition from Southeast Asian countries producing lower-cost alluvial tin.
Gold and silver production has increased dramatically over the past decade.
Annually, as of 2002 Bolivia extracted and exported more than 11,000 kilograms of gold and 461 tons of silver.
Additionally, Bolivia has increased zinc production, extracting more than 100,000 tons each year.
Other metals excavated include
antimony
Antimony is a chemical element with the symbol Sb (from la, stibium) and atomic number 51. A lustrous gray metalloid, it is found in nature mainly as the sulfide mineral stibnite (Sb2S3). Antimony compounds have been known since ancient time ...
, iron, and
tungsten
Tungsten, or wolfram, is a chemical element with the symbol W and atomic number 74. Tungsten is a rare metal found naturally on Earth almost exclusively as compounds with other elements. It was identified as a new element in 1781 and first isolat ...
.
=Lithium
=
According to the
United States Geological Survey
The United States Geological Survey (USGS), formerly simply known as the Geological Survey, is a scientific agency of the United States government. The scientists of the USGS study the landscape of the United States, its natural resources, ...
, Bolivia has 9 million tons of
lithium
Lithium (from el, λίθος, lithos, lit=stone) is a chemical element with the symbol Li and atomic number 3. It is a soft, silvery-white alkali metal. Under standard conditions, it is the least dense metal and the least dense solid el ...
,
which can be used to make
lithium batteries
Lithium battery may refer to:
* Lithium metal battery, a non-rechargeable battery with lithium as an anode
** Rechargeable lithium metal battery, a rechargeable counterpart to the lithium metal battery
* Lithium-ion battery, a rechargeable batte ...
, used in hybrid and electric vehicles in addition to huge numbers of smaller batteries.
At 14.5%, this is the second-largest known concentration of lithium in any country; Argentina has 14.8 million known tons of lithium, Chile has 8.5 million tons, Australia has 7.7 million tons, and the United States has 6.8 million tons.
These large deposits are located in desert regions farmed by indigenous groups, who claim their share of the profits made from their natural resources.
Bolivian President Evo Morales favored national, rather than foreign, ownership of natural resources, and nationalized the country's oil and natural gas reserves.
Mining the mineral deposits would involve disturbing the country's salt flats (called
Salar de Uyuni
Salar de Uyuni (or "Salar de Tunupa") is the world's largest salt flat, or playa, at over in area. It is in the Daniel Campos Province in Potosí in southwest Bolivia, near the crest of the Andes at an elevation of above sea level.
The Sal ...
), an important natural feature which boosts tourism in the region. The government does not want to destroy this unique natural landscape to meet the rising world demand for lithium.
In January 2013 Bolivia opened a lithium production plant in Uyuni, producing mainly potassium chloride. Also, the Bolivian government signed intentions to develop not only lithium extraction but also lithium-ion battery production with numerous countries, especially from the
Asia Pacific region Asia Pacific Region can refer to:
* Asia-Pacific
* WOSM-Asia-Pacific Region
* WAGGGS-Asia Pacific Region
* Asia-Pacific Economic Cooperation
The Asia-Pacific Economic Cooperation (APEC ) is an inter-governmental forum for 21 member economy, ...
.
In 2019, Bolivia had signed a deal with German firm ACISA to develop a joint partnership with the Bolivian state-owned YLB for developing extraction and processing of lithium at
Salar de Uyuni
Salar de Uyuni (or "Salar de Tunupa") is the world's largest salt flat, or playa, at over in area. It is in the Daniel Campos Province in Potosí in southwest Bolivia, near the crest of the Andes at an elevation of above sea level.
The Sal ...
. The deal was later cancelled after long-running protests by locals over the perceived lack of local benefits and royalties of the project. Bolivia's state lithium YLB also created a joint venture together with the Chinese Xinjiang TBEA Group to explore extraction of lithium and other materials from the Coipasa and Pastos Grandes salt flats.
Industry and manufacturing
Annually, manufacturing accounted for in approximately 18% of Bolivia's gross domestic product between 1995 and 2005.
The share of industry as a whole (including the mining industry) to the GDP increased from 30 percent in 2000 to 37,3 percent in 2010. Most industry is a small-scale, aimed at regional markets rather than national operations.
Inadequate credit options and competition from the black market have kept Bolivia's manufacturing sector from developing fully.
Leading manufactured goods in Bolivia include textiles, clothing, non-durable
consumer good
A final good or consumer good is a final product ready for sale that is used by the consumer to satisfy current wants or needs, unlike a intermediate good, which is used to produce other goods. A microwave oven or a bicycle is a final good, but t ...
s, processed soya, refined metals, and refined petroleum.
Processing of food, beverages and tobacco is the biggest sector within the manufacturing industry (39% in 2001
). This sector occupies a prominent place in the manufacturing industry that is continually growing, both in production and number of businesses and jobs. In 2010 its share in exports was about 14%. Especially the
soybean
The soybean, soy bean, or soya bean (''Glycine max'') is a species of legume native to East Asia, widely grown for its edible bean, which has numerous uses.
Traditional unfermented food uses of soybeans include soy milk, from which tofu an ...
and its derivatives reached very large export markets in recent years. The largest factories producing
soybean
The soybean, soy bean, or soya bean (''Glycine max'') is a species of legume native to East Asia, widely grown for its edible bean, which has numerous uses.
Traditional unfermented food uses of soybeans include soy milk, from which tofu an ...
s,
sunflower seed
The sunflower seed is the seed of the sunflower ('' Helianthus annuus''). There are three types of commonly used sunflower seeds: linoleic (most common), high oleic, and sunflower oil seeds. Each variety has its own unique levels of monounsat ...
s, cotton and sugar from sugar cane, are mainly situated in
Santa Cruz, although a large edible oil
refineries
A refinery is a production facility composed of a group of chemical engineering unit processes and unit operations refining certain materials or converting raw material into products of value.
Types of refineries
Different types of refineries ar ...
operate in
Cochabamba
Cochabamba ( ay, Quchapampa; qu, Quchapampa) is a city and municipality in central Bolivia in a valley in the Andes mountain range. It is the capital of the Cochabamba Department and the fourth largest city in Bolivia, with a population of 63 ...
. All major cities have at least one brewery, one or more soft drink bottling plants, and one or more packaging plants for canned food.. There has been some growth in publicly owned manufacturing during the presidency of
Luis Arce
Luis Alberto Arce Catacora (; born 28 September 1963), often referred to as Lucho, is a Bolivian banker, economist, and politician serving as the 67th president of Bolivia since 2020. A member of the Movement for Socialism, he previously serve ...
, with Bolivia opening an açai berry processing plant in 2021.
The textiles industry was the second largest manufacturing sector after the food industry in the 1970s and was of decreasing importance afterwards, representing progressively diminishing value of total manufacturing. But since the 1990s the textile industry has increased its growth rate. The cotton and wool industry declined at the expense of synthetic fibers. The largest concentration of textile mills are to be found in La Paz, but also in Santa Cruz and Cochabamba and to a lesser extent in
Oruro
Oruro (Hispanicized spelling) or Uru Uru is a city in Bolivia with a population of 264,683 (2012 calculation), about halfway between La Paz and Sucre in the Altiplano, approximately above sea level.
It is Bolivia's fifth-largest city by populat ...
.
Another important industry is the oil refining industry.
Services
The services industry in Bolivia remains undeveloped.
Inhabiting one of the poorest countries in South America, Bolivians have weak purchasing power.
The retail sector suffers from weak demand and competition with a large black market of contraband goods.
U.S. companies such as
McDonald's
McDonald's Corporation is an American Multinational corporation, multinational fast food chain store, chain, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechri ...
and
Domino's
Domino's Pizza, Inc., trading as Domino's, is an American multinational pizza restaurant chain founded in 1960 and led by CEO Russell Weiner. The corporation is Delaware General Corporation Law, Delaware domiciled and headquartered at the Domino ...
have pulled out of Bolivia in recent years.
Banking and finance
Banking in Bolivia has long suffered from corruption and weak regulation.
However, a series of reforms initiated by the 1993 Banking Law and subsequent acts are gradually improving Bolivia's banking sector.
Bolivia has a
central bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
and nine private banks.
Consolidation occurred following reforms, lowering the number of private banks in Bolivia from 14 in 1995 to nine in 2003.
Foreign participation and investment in Bolivian banks are allowed.
About 90 percent of Bolivian bank deposits are held in U.S. dollars.
The Bolivian government is trying to change this situation by taxing dollarized accounts while exempting boliviano accounts from the tax.
As recently as 2002, 27 percent of all loans were non-performing, leading most foreign investors to focus their resources in the somewhat-safer venue of corporate lending.
Most bank lending in 2003 went to manufacturing (24 percent), followed by property services (18 percent) and trade and retail (16 percent).
Bad debt remains at a historically high level.
Further reforms are necessary, including the pending act to introduce a deposit guarantee system.
Bolivia's stock market expanded in 1998 to include corporate bonds, along with the money market and government bond options that had existed previously.
The privatization of Bolivia's social security program has bolstered the stock market.
Tourism
Bolivia's spectacular vistas and natural attractions have not been enough to transform the country into a major tourist destination because of its political instability and lack of first-class accommodations.
Still, Bolivia's tourist industry has grown gradually over the past 15 years.
In 2000 Bolivia attracted 306,000 tourists, compared with 254,000 in 1990.
Tourist revenue peaked at US$179 million in 1999.
Tourism in Bolivia declined following the 11 September 2001 attack on the United States, as was the case across North and South America.
Since from 2001 the tourism sector, however, is strongly increasing, in fact in 2018 the number of tourists reached 1.142,000 arrivals.
Infrastructure
Energy
Bolivia's energy needs are relatively small but growing consistently.
Bolivia uses oil for the majority of its power needs, followed by natural gas
and hydroelectric power.
Oil
Bolivia has estimated oil reserves of , the fifth largest in South America.
The fields are located in the east and south. The main activities in the refineries is crude oil fractioning, catalytic conversion for high octane gasoline, and refining of heavy fractions to produce lubricants. The final products are vehicle gasoline, liquid
propane
Propane () is a three-carbon alkane with the molecular formula . It is a gas at standard temperature and pressure, but compressible to a transportable liquid. A by-product of natural gas processing and petroleum refining, it is commonly used a ...
and
butane
Butane () or ''n''-butane is an alkane with the formula C4H10. Butane is a gas at room temperature and atmospheric pressure. Butane is a highly flammable, colorless, easily liquefied gas that quickly vaporizes at room temperature. The name but ...
, jet fuel,
diesel
Diesel may refer to:
* Diesel engine, an internal combustion engine where ignition is caused by compression
* Diesel fuel, a liquid fuel used in diesel engines
* Diesel locomotive, a railway locomotive in which the prime mover is a diesel engin ...
oil and lubricants for use in industrial machinery. As domestic oil production is insufficient to meet domestic demand Bolivia is a net importer of oil.
Until recently the country's oil industry was fully controlled by the state company
YPFB
Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) is a Bolivian state-owned enterprise dedicated to the exploration, exploitation, refining, industrialization, distribution and commercialization of oil, natural gas and derived products. It ...
, established in 1936 with the mission to develop, refine and distribute oil resources. After
privatization
Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
efforts in the 1990s the transport of natural gas and oil was in private hands during the 1990s while the production and refining of materials was part of risk-sharing contracts between the government and private investors. In 1999 the refineries were also completely privatized. In May 2006 president
Evo Morales
Juan Evo Morales Ayma (; born 26 October 1959) is a Bolivian politician, trade union organizer, and former cocalero activist who served as the 65th president of Bolivia from 2006 to 2019. Widely regarded as the country's first president to co ...
re-nationalized reserves, while its exploitation remained in private hands.
Natural gas
The country's natural gas reserves total according to Bolivian government figures, ranking Bolivia behind only
Venezuela
Venezuela (; ), officially the Bolivarian Republic of Venezuela ( es, link=no, República Bolivariana de Venezuela), is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in th ...
in terms of proven natural gas reserves in South America.
Additionally, Bolivia is self-sufficient in its energy production.
The sector changed significantly when the government allowed
privatization
Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
in the mid-1990s.
International companies quickly invested in Bolivian energy sources, particularly in natural gas, and made Bolivia into a player in the world
energy market
Energy markets are national and international regulated markets that deal specifically with the trade and supply of energy. Energy market may refer to an electricity market, but can also refer to other sources of energy. Typically energy developm ...
.
The exportation of Bolivian energy resources, while potentially lucrative economically, has been politically hazardous.
President
Gonzalo Sánchez de Lozada
Gonzalo Sánchez de Lozada Sánchez Bustamante (born 1 July 1930), often referred to as Goni, is a Bolivian businessman and politician who served as the 61st president of Bolivia from 1993 to 1997 and from 2002 to 2003. A member of the Revolut ...
ultimately resigned over his plan to export natural gas to the United States and Mexico in 2003.
On 6 June 2005, former president
Carlos Mesa
Carlos Diego de Mesa Gisbert (; born 12 August 1953) is a Bolivian historian, journalist, and politician who served as the 63rd president of Bolivia from 2003 to 2005. As an independent politician, he previously served as the 37th vice presid ...
offered his resignation to the Bolivian Congress after
months of demonstrations by Bolivia's indigenous population calling for renationalizing the
natural gas
Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
and oil sectors.
Mesa had increased taxation on foreign companies while still encouraging their investment in Bolivian energy development.
On 1 May 2006, his successor, former president Morales, signed a decree stating that all natural gas reserves were to be nationalized, recovering ownership, possession and control of hydrocarbons. US Exxon Mobil Corporation, Petrobras, Spain's Repsol YPF, UK gas and oil producer BG Group Plc, and France's Total are the main gas companies present in the country.
Bolivia's natural gas exports bring in millions of dollars per day, in royalties, rents and taxes. From 2007 to 2017, what is referred to as the "government take" on gas totaled approximately $22 billion.
Electricity
Until 1994 the electricity sector was dominated by the vertically integrated public utility ENDE (''Empresa Nacional de Electricidad''). In 1994 the electricity sector was privatized and was unbundled into
generation
A generation refers to all of the people born and living at about the same time, regarded collectively. It can also be described as, "the average period, generally considered to be about 20–30 years, during which children are born and gr ...
,
transmission
Transmission may refer to:
Medicine, science and technology
* Power transmission
** Electric power transmission
** Propulsion transmission, technology allowing controlled application of power
*** Automatic transmission
*** Manual transmission
*** ...
and
distribution Distribution may refer to:
Mathematics
*Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations
* Probability distribution, the probability of a particular value or value range of a vari ...
. The law aimed to increase efficiency in the sector, promote competition and encourage investment.
[ ]
The supply is dominated by thermal generation (60%), while hydropower (40%) has a smaller share in its generation mix compared to other South American countries (
Latin America and the Caribbean
The term Latin America and the Caribbean (LAC) is an English-language acronym referring to the Latin American and the Caribbean region. The term LAC covers an extensive region, extending from The Bahamas and Mexico to Argentina and Chile. The re ...
, or LAC, average hydropower capacity is 51%).
The electricity coverage in rural areas is with 30%
among the lowest in Latin America and improving it represents a major challenge in the future and requires the joint efforts from both the public and private sectors. Like in other countries, Bolivia's electricity sector consists of a National Interconnected System (SIN) and off-grid systems (known as the ''Aislado'').
Transportation
Telecommunications
Water supply and sanitation
Labor and welfare
The economic downturn of the late 1990s, coupled with privatization and austerity efforts led by President Mesa, resulted in significant unemployment.
Although the Bolivian government does not keep unemployment statistics, outside experts estimated unemployment to be between 8 and 10 percent of the population, as of 2006.
Underemployment of Bolivia's workforce of nearly 4 million is also widespread.
As a result of the lack of
formal employment
An informal economy (informal sector or grey economy) is the part of any economy that is neither taxed nor monitored by any form of government.
Although the informal sector makes up a significant portion of the economies in developing countrie ...
opportunities, nearly 65 percent of the urban workforce was self-employed in 2002.
Labor unions have a strong history in Bolivia, and many workers in the formal sector belong to unions.
The larger unions, such as the Bolivian Labor Federation and the Trade Union Federation of Bolivian Mine Workers, have been successful in rallying workers to countless strikes and work stoppages.
Nevertheless, working conditions for most Bolivian workers are difficult.
These conditions are even more critical as far as the informal sector is concerned. In fact, Bolivia has been listed in the 2014
U.S. Department of Labor
The United States Department of Labor (DOL) is one of the executive departments of the U.S. federal government. It is responsible for the administration of federal laws governing occupational safety and health, wage and hour standards, unemploym ...
's report on
child labor
Child labour refers to the exploitation of children through any form of work that deprives children of their childhood, interferes with their ability to attend regular school, and is mentally, physically, socially and morally harmful. Such e ...
and
forced labor
Forced labour, or unfree labour, is any work relation, especially in modern or early modern history, in which people are employed against their will with the threat of destitution, detention, violence including death, or other forms of ex ...
among the 74 countries where instances of such practices have been observed. According to the ''
List of Goods Produced by Child Labor or Forced Labor The ''List of Goods Produced by Child Labor or Forced Labor'' is an annual publication issued by the United States Government’s Bureau of International Labor Affairs at the U.S. Department of Labor. It has been published within the December 2014 D ...
'' issued under this report, Bolivia resorts to these practices in the
agricultural sector
The primary sector of the economy includes any industry involved in the extraction and production of raw materials, such as farming, logging, fishing, forestry and mining.
The primary sector tends to make up a larger portion of the economy in de ...
as well as in the
mining industry
Mining is the extraction of valuable minerals or other geological materials from the Earth, usually from an ore body, lode, vein, seam, reef, or placer deposit. The exploitation of these deposits for raw material is based on the economic via ...
until this day. The DOL has also reported that "The
olivianGovernment's National Plan to Eradicate Child Labor expired in 2010 and has not been updated."
Foreign economic relations
Trade agreements
Bolivia's trade with neighboring countries is growing, in part because of several regional preferential trade agreements it has negotiated. Bolivia was a founding member of the
Andean Group
Andean Group ( es, Grupo Andino) is a trade organization in Lima, Peru. In 1969, Bolivia, Chile, Colombia, Ecuador, and Peru established the group by the Treaty of Cartagena. In 1973, Venezuela
Venezuela (; ), officially the Bolivarian ...
, a South American organization designed to promote trade among Bolivia, Colombia, Ecuador, Peru, and Venezuela.
Subsequently renamed the
Andean Community
The Andean Community ( es, Comunidad Andina, CAN) is a free trade area with the objective of creating a customs union comprising the South American countries of Bolivia, Colombia, Ecuador, and Peru. The trade bloc was called the Andean Pact un ...
, the organization has succeeded in increasing intra-South American trade.
Trade among member countries rose from US$3.6 billion in 1991 to US$10.3 billion in 2003.
Bolivia also belongs to the Common Market of the South (Mercado Común del Sur—
Mercosur
The Southern Common Market, commonly known by Spanish abbreviation Mercosur, and Portuguese Mercosul, is a South American trade bloc established by the Treaty of Asunción in 1991 and Protocol of Ouro Preto in 1994. Its full members are Argentina ...
).
Bolivia became an associate member in March 1997 to open investment opportunities with the founding Mercosur countries (Argentina, Brazil, Paraguay, and Uruguay), as well as other Mercosur associate members (Chile, Colombia, Ecuador, Peru, and Venezuela).
The agreement provides for the gradual creation of a free trade area covering at least 80% of the trade between the parties over a 10-year period, though economic crises in the region have derailed progress at integration. The U.S.
Andean Trade Preference and Drug Enforcement Act
The Andes, Andes Mountains or Andean Mountains (; ) are the longest continental mountain range in the world, forming a continuous highland along the western edge of South America. The range is long, wide (widest between 18°S – 20°S l ...
(ATPDEA) allows (allowed?) numerous Bolivian products to enter the United States free of duty on a unilateral basis, including
alpaca
The alpaca (''Lama pacos'') is a species of South American camelid mammal. It is similar to, and often confused with, the llama. However, alpacas are often noticeably smaller than llamas. The two animals are closely related and can successfu ...
and
llama
The llama (; ) (''Lama glama'') is a domesticated South American camelid, widely used as a List of meat animals, meat and pack animal by Inca empire, Andean cultures since the Pre-Columbian era.
Llamas are social animals and live with othe ...
products and, subject to a quota, cotton textiles. Bolivia conducted more than US$1 billion in trade with Mercosur countries in 2003.
As a result of negotiations initiated in 1999 on a possible
South American Free Trade Area
The Union of South American Nations (USAN; es, links=no, Unión de Naciones Suramericanas, UNASUR; pt, links=no, União de Nações Sul-Americanas, UNASUL; nl, links=no, Unie van Zuid-Amerikaanse Naties, UZAN; French: ''Union des nations s ...
(SAFTA), Mercosur and the Andean Community of Nations announced in December 2004 that they would merge, creating a
Union of South American Nations
The Union of South American Nations (USAN; es, links=no, Unión de Naciones Suramericanas, UNASUR; pt, links=no, União de Nações Sul-Americanas, UNASUL; nl, links=no, Unie van Zuid-Amerikaanse Naties, UZAN; French: ''Union des nations s ...
modeled after the European Union.
Imports and exports
Bolivian tariffs are low; however, manufacturers complain that the tax-rebate program that allows some companies to claim refunds of import taxes on capital equipment is inefficient, with many companies now owed millions of dollars by the Bolivian Government, which can take years to recover.
Bolivian imports of goods were valued at about US$6.52 billion in 2020, while service imports were valued at about US$2.55 billion in 2019.
Bolivia enjoyed an estimated $500 million goods trade surplus in 2020. Leading sources of Bolivian imports include China, Brazil, Chile, Peru, and Argentina, with its top imports refined petroleum, cars, pesticides, delivery trucks, and raw iron bars.
Bolivian exports of goods and services in 2020 stood at US$7.02 billion
compared with US$1.9 billion in 2003.
Increased production of hydrocarbons, especially natural gas, led Bolivia's trade upturn in 2004.
A 20-year supply contract with Brazil for natural gas, ending in 2019, the necessary capital to increase production.
In 2004 export revenues for natural gas topped US$619 million.
Bolivia also exported significant quantities of petroleum.
Beyond hydrocarbons, other significant exports included zinc, soya, iron ore, and tin.
In 2001 Brazil overtook the United States as Bolivia's primary export outlet.
Switzerland, Venezuela, and Colombia are also important export partners.
Bolivia has actively sought to foster economic connections in South America after long relying on the United States as its primary trade partner.
The United States remains one of Bolivia's largest trading partners; however, it faded greatly on Brazil benefit in 2012. In 2002, the United States exported $283 million of merchandise to Bolivia and imported $162 million. Bolivia's major exports to the United States are
tin
Tin is a chemical element with the symbol Sn (from la, stannum) and atomic number 50. Tin is a silvery-coloured metal.
Tin is soft enough to be cut with little force and a bar of tin can be bent by hand with little effort. When bent, t ...
, gold, jewelry, and wood products. Its major imports from the United States are
computers
A computer is a machine that can be programmed to carry out sequences of arithmetic or logical operations (computation) automatically. Modern digital electronic computers can perform generic sets of operations known as programs. These programs ...
,
vehicles
A vehicle (from la, vehiculum) is a machine that transports people or cargo. Vehicles include wagons, bicycles, motor vehicles (motorcycles, cars, trucks, buses, mobility scooters for disabled people), railed vehicles (trains, trams), wate ...
, wheat, and machinery. A Bilateral Investment Treaty between the United States and Bolivia came into effect in 2001, however the Treaty was terminated by the government of Bolivia in 2012.
By 2004 Bolivia had become the market leader in the export of
brazil nut
The Brazil nut (''Bertholletia excelsa'') is a South American tree in the family Lecythidaceae, and it is also the name of the tree's commercially harvested edible seeds. It is one of the largest and longest-lived trees in the Amazon rainforest. ...
s, with thousands of local people involved in collecting the pods in Bolivian Amazonia.
Balance of trade
Bolivia had an estimated trade surplus of more than US$1.6 billion in 2011. This figure represents a marked change in Bolivia's economic balance sheet.
Bolivia reached a peak
trade deficit
The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance ...
of US$888 million in 1998 before increased hydrocarbon exports radically altered the situation.
Bolivia had a large negative
balance of payments
In international economics, the balance of payments (also known as balance of international payments and abbreviated BOP or BoP) of a country is the difference between all money flowing into the country in a particular period of time (e.g., a ...
for 2002⎯US$317 million.
However, this situation has been remedied by the vast increase in export revenue.
Estimates for the balance of payments for 2004 show a record surplus of US$126 million.
Bolivia's external debt totaled an estimated US$5.7 billion in 2004.
The
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
has assisted Bolivia in paying down this debt.
In 1995 the United States, among other countries, reduced Bolivia's debt by two-thirds.
Foreign investment
Foreign investment in Bolivia was buoyed in 1995 by privatization.
Investment in mining and natural gas extraction increased, as did investment in the banking sector.
However, the economic decline of the late 1990s, along with political unrest, caused foreign investors to pull out of Bolivia once again.
In 2000 foreign investors contributed US$736 million to the Bolivian economy.
In 2002 this total fell to US$676 million.
The Government of Bolivia remains heavily dependent on foreign assistance to finance development projects. At the end of 2002, the government owed $4.5 billion to its foreign creditors, with $1.6 billion of this amount owed to other governments and most of the balance owed to multilateral development banks. Most payments to other governments have been rescheduled on several occasions since 1987 through the
Paris Club
The Paris Club (french: Club de Paris) is a group of officials from major creditor countries whose role is to find co-ordinated and sustainable solutions to the payment difficulties experienced by debtor countries. As debtor countries undertake ...
mechanism. External creditors have been willing to do this because the Bolivian Government has generally achieved the monetary targets set by
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
programs since 1987, though
economic problem
Economic systems as a type of social system must confront and solve the three fundamental economic problems:Samuelson, P. Anthony., Samuelson, W. (1980). Economics. 11th ed. / New York: McGraw-Hill. p. 34
* What kinds and quantities of goods s ...
s in recent years have undercut Bolivia's normally good track record. Rescheduling agreements granted by the Paris Club have allowed the individual creditor countries to apply very soft terms to the rescheduled debt. As a result, some countries have forgiven substantial amounts of Bolivia's bilateral debt. The U.S. Government reached an agreement at the Paris Club meeting in December 1995 that reduced by 67% Bolivia's existing debt stock. The Bolivian Government continues to pay its debts to the multilateral development banks on time. Bolivia is a beneficiary of the
Heavily Indebted Poor Countries
The heavily indebted poor countries (HIPC) are a group of 39 developing countries with high levels of poverty and debt overhang which are eligible for special assistance from the International Monetary Fund (IMF) and the World Bank.
The HIPC ...
(HIPC) and Enhanced HIPC debt relief programs, which by agreement restricts Bolivia's access to new
soft loan
A soft loan is a loan with a below-market rate of interest. This is also known as ''soft financing''. Sometimes soft loans provide other concessions to borrowers, such as long repayment periods or interest holidays. Soft loans are usually provid ...
s. Bolivia was one of three countries in the Western hemisphere selected for eligibility for the
Millennium Challenge Account
The Millennium Challenge Corporation (MCC) is a bilateral United States foreign aid agency established by the U.S. Congress in 2004. It is an independent agency separate from the State Department and USAID. It provides grants to countries that ...
and is participating as an observer in
free trade agreement
A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occur ...
negotiations. Bolivia enjoys some financial assistance programs run by the
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
and
Microenterprise
A micro-enterprise (or microenterprise) is generally defined as a small business employing nine people or fewer, and having a balance sheet or turnover less than a certain amount (e.g. €2 million or PhP 3 million). The terms microenterprise and ...
Development programs provided by
Five Talents International
5 is a number, numeral, and glyph.
5, five or number 5 may also refer to:
* AD 5, the fifth year of the AD era
* 5 BC, the fifth year before the AD era
Literature
* ''5'' (visual novel), a 2008 visual novel by Ram
* ''5'' (comics), an awa ...
.
Mutun iron ore project
In 2007, India's third-largest steel manufacturer,
Jindal Steel and Power Limited
Jindal Steel and Power Limited (JSPL) is an Indian steel company based in New Delhi. JSPL is a part of OP Jindal Group, and a leading player in steel, mining, and infrastructure in India. The company produces steel through backward integration ...
, signed a contract with the Bolivian government to exploit the
Mutun iron ore deposit, considered to be one of the largest in the world. According to the contract, Jindal would invest US$1.5 billion initially and an additional US$2.5 billion over the next eight years. This is the single largest investment by an Indian firm in Latin America. Jindal Steel will set up an integrated 1.7 MTPA steel plant, a 6 MTPA sponge iron plant, a 10 MTPA iron ore pellet plant and a 450 MW power plant.
By September 2011, Jindal had obtained clearance for the project from the EIA and had hired an engineering consultant for
FEED work.
[ The project is expected to create 6,000 jobs directly and another 15,000 indirectly.
As of June 2011, Jindal had invested only US$20 million on the project due to considerable delay by Bolivian authorities in issuing land for the project and due to inability of the Bolivian government to commit 8 million cubic meters of natural gas per day for the power plant and ore smelting process. In 2012 Jindal exited Bolivia, prompting Bolivia to seize the bond. In 2014, international arbitration awarded Jindal $22.5 Million due to Bolivia's seizure of the bond
.]
See also
* Agriculture in Bolivia
*Bolivian boliviano
The boliviano (; sign: BsBanco Central de Bolivia. "Galeria de monedas y billetes''." Accessed 26 February 2011.Banco Central de BoliviaOfficial websiteAccessed 26 February 2011. ISO 4217 code: BOB) is the currency of Bolivia. It is divided int ...
*Electricity sector in Bolivia
The electricity sector in Bolivia is dominated by the state-owned ENDE Corporation (Empresa Nacional de Electricidad), although the private Bolivian Power Company (''Compañia Boliviana de Energía Eléctrica''; COBEE) is also a major producer ...
* Health in Bolivia
*Mining in Bolivia
Mining in Bolivia has been a dominant feature of the Economy of Bolivia, Bolivian economy as well as Bolivian politics since 1557. Colonial era silver mining in Bolivia, particularly in Potosí, played a critical role in the Spanish Empire and th ...
*Natural gas in Bolivia
Natural gas in Bolivia is one of the nation's main energy sources and export products. Bolivia's proved natural gas reserves are estimated to be 10.7 (TCF) (31 December 2017 est.).. Most of these reserves are located in the eastern region of the c ...
*Telecommunications in Bolivia Telecommunications in Bolivia includes radio, television, fixed and mobile telephones, and the Internet.
Radio and television
* Radio broadcast stations: AM 171, FM 73, shortwave 77 (1999).
* Television broadcast stations: 48 (1997).
* Bolivia h ...
*Tourism in Bolivia
Bolivia is a country with great tourism potential, with many attractions, due to its diverse culture, geographic regions, rich history and food. In particular, the salt flats at Uyuni are a major attraction.
Visitor statistics
Most visit ...
*Transport in Bolivia
Transport in Bolivia is mostly by road. The railways were historically important in Bolivia, but now play a relatively small part in the country's transport system. Because of the country's geography, aviation is also important.
Railways
''Tota ...
*Water supply and sanitation in Bolivia
Bolivia's drinking water and sanitation coverage has greatly improved since 1990 due to a considerable increase in sectoral investment. However, the country continues to suffer from what happens to be the continent's lowest coverage levels and fro ...
* List of Latin American and Caribbean countries by GDP growth
This is a list of estimates of the real gross domestic product growth rate (not rebased GDP) in Latin American and the Caribbean nations for the latest years recorded in the CIA World Factbook. Nations are not included if their latest growth esti ...
*
* List of Latin American and Caribbean countries by GDP (PPP)
This is a list of Latin American and the Caribbean countries by gross domestic product at purchasing power parity in international dollars according to the International Monetary Fund's estimates in the April 2022 World Economic Outlook database. ...
References
*
*
Notes
External links
*
Information about agriculture and industries in Bolivia.
*
Banco Central de Bolivia
*
Ministerio de Economía y Finanzas Públicas
*
Instituto Nacional de Estadística
*Tariffs applied by Bolivia as provided by ITC'
ITCMarket Access Map
, an online database of customs tariffs and market requirements.
{{Bolivia topics
Bolivia
, image_flag = Bandera de Bolivia (Estado).svg
, flag_alt = Horizontal tricolor (red, yellow, and green from top to bottom) with the coat of arms of Bolivia in the center
, flag_alt2 = 7 × 7 square p ...