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Economy

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Bolivia remains one of the poorest states of the region. In recent years, it has created much economic growth backed by the export of gas and the exploitation of lithium. This is in line with the main Latin American economic powers which, up to now, do not seem to have suffered the economic crisis of the Euro area and the economic slowdown of the economic cycle of the older economies. In fact, the country confirmed the positive trend for 2012 with one of the largest growth factors of the last twenty years: GNP grew by 4.9% and almost all the other main economic indicators were positive too (inflation was kept within acceptable limits, at around 4%). Growth in recent years has enabled the administration to consolidate financial resources for active development policies, for social bol14policies to abolish poverty and to stimulate productive processes at different levels. The favourable fiscal situation has, besides, helped to radically improve the balance of payments (in the black since 2006) and to promote a definite reduction of public debt (from 90% of GNP during the period preceding nationalisation to 37.5% in 2013) and a reduction of foreign debt (since 2006, less than domestic debt). The country’s new economic situation increased its ability to attract direct investment from abroad. Despite the tension during the nationalisation of hydrocarbons, foreigners did not stop investing since they believed there were profitable opportunities. In exports, Bolivia is more balanced, even if it still gives pride of place to hydrocarbons. In the long period (1990 – 2012) the value of exports increased from $1bn to $10.5bn, with an increase of 25.5% in value and 15% in volume compared to the same period in 2011. This was attributed mainly to an increase in hydrocarbons (+38%) and agricultural products such as soya (+39%), sunflower, and derived products (+34%). This growth has contributed to large-scale economic stabilisation enabling the repayment both of public debts and an increase in imports. These rose to US$ 7.4bn, an increase of 7.1% compared to the same period in 2011, attributed to an increase in imports of fuel and derivatives (+22%) as well as consumer goods (+15%).
However, although these data show exceptional growth, Bolivia is still seen as one of the poorest countries of the sub-continent. Unlike other states, the strengthening of the middle class and the removal of a good part of the population from the threshold of poverty seem to be unfinished processes. For its part, the government assures that the nationalisation policy followed up to now is directed precisely towards reinforcing these socio-economic aspects and its effects will be more apparent in the medium to long term. (F.R.)

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