Cargando Video
Thursday, June 09, 2011

Bolivia Country Brief


's economy, South America's poorest in per capita terms, is expected to grow by 4.5 percent this year and next year, the IMF predicts
. That compares with 3.3 percent last year.

Inflation is expected to reach 4.1 percent this year and 3.5 percent next year, the IMF predicts. That compares with 1.7 percent registered last year.


President Evo Morales, who assumed office in January 2006 and was re-elected in December 2009, has followed economic policies characterized by hostility towards local and foreign private investment and the United States, combined with chaotic management and constant fighting with political opponents. U.S.-Bolivian relations have gradually been worsening and after the U.S. ambasador was expelled, Bolivia in January this year lost its duty-free access to the U.S. market for the first time in 18 years.


GDP and GDP Per Capita
Bolivia's economy of $17.6 billion is the fifth-smallest in Latin America and second-smallest in South America, while its GDP per capita of $4,455 is the 4th-lowest in Latin America and lowest in South America.

Foreign Direct Investment
Foreign direct investment reached $418 million in 2009, a 17.7 percent decline from 2008,  according to estimates from ECLAC.

Exports reached $5.5 billion in 2009, ECLAC estimates. That's a decrease of 26.2 percent from 2008. Imports fell an estimated 10.8 percent to $5.1 billion. 

Bolivia is the 11th-most globalized country in Latin America, according to the Latin  Globalization Index 2009. It is the second-least globalized country in the Andean Community. The index of 18 countries looks at five factors that determine global links: exports of goods and services as a percent of GDP, imports of goods and services as a percent of GDP, foreign direct investment as a percent of GDP, tourism receipts as a percent of GDP,  remittances as a percent of GDP and Internet penetration.

Remittances from Bolivians working in the United States and Europe reached $853 million in 2009, a 10.7 percent fall from 2008, according to the Inter-American Development Bank. The 2009 figure is equivalent to 5.8 percent of Bolivia's GDP in 2009, according to a Latin Business Chronicle analysis of IMF data. That's the highest level in South America and seventh-highest in Latin America.


Latin Business Index
Bolivia is the fifth-worst place to do business in Latin America, according to the Latin Business Index 2010. With a score of 11.821,  Bolivia ended in 15th place out of 19 countries. The index is the broadest measure of business climate in Latin America. Rather than looking at the size of a country’s GDP or GDP per capita, it looks at five key categories and 27 subcategories to measure the recent, current and future business environment in a country.

Bolivia's economy is the fourth-least competitive in Latin America, according to the 2010-11 Global Competitiveness Index from the World Economic Forum. With a score of 3.64, Bolivia ranks 15 out of 18 countries in Latin America and 108 out of 139 nations worldwide.

Bolivia ranks 15th on the Latin Infrastructure Index, which measures transport, technology, electricity and water infrastructure in 19 countries in Latin America.

Capital Access
According to the latest Capital Access Index from the Milken Institute, Bolivia ends up in 16th place in Latin America and 92st place worldwide, with a score of 3.30 (a decrease from 2008). That means entrepreneurs in Bolivia can get capital easier than their counterparts in Paraguay, but not as easy as in the rest of South America.

Tax Climate
Bolivia has Latin America's second-worst tax climate, according to the 2010 Latin Tax Index from Latin Business Chronicle. The index measures the overall tax climate in a country by looking at four factors: corporate tax rates, tax rates as a percent of profits and the number of payments and hours spent to pay taxes yearly.

Tourism Sector
Bolivia last year posted tourism receipts of $219 million, an increase of 1.5 percent from 2008. That made Bolivia the second-smallest market in Latin America
, according to the 2010 Latin Tourism Index from Latin Business Chronicle.

Economic Freedom
In its 2010 Index of Economic Freedom, Heritage Foundation said Bolivia's economy was 49.4 percent free and gave it the classification "Repressed."  Bolivia's economy is the fourth-most repressed in Latin America.

Property Rights
Bolivia has the second-worst property rights climate in Latin America, according to the 2010 International Property Rights Index from the Property Rights Alliance.


Bolivia has Latin America's fourth-lowest technology level, according to the Latin Technology Index 2010, which measures the technology level of 20 Latin American countries by looking at the penetration rates of Internet, broadband Internet, personal computers (PCs), wireless subscribers and fixed telephone lines. Bolivia is among the five worst countries in Latin America in all five categories.

Wireless phone subscribers (2009): 7.1 million
Wireless phone penetration (2009): 72.5%

Fixed telehophone lines (2009): 810,200
Fixed telephone penetration (2009): 8.2%
Internet users (2009): 1.1 million
Internet penetration (2009): 11.2%
Broadband users (2009): 282,400 
Broadband penetration (2009): 2.9%
PCs in use (2009): 525,000
PC penetration (2009): 5.1%

Sources: International Telecommunications Union (ITU), Computer Industry Almanac (PC users), IMF (population data) and Latin Business Chronicle.


Crime and Security
Bolivia scores 4 points the 2010 Latin Security Index developed by FTI Consulting Ibero America for Latin Business Chronicle. The index measures security for visiting foreign business executives and companies. That means Bolivia is safer than countries like Brazil, Colombia and Venezuela, but less so than Peru.

Bolivia scores 2.7 on the 2009 corruption survey from Transparency International, where 10 is best. That makes it the fourth-most corrupt country in South America.

Political Freedom
Bolivia is classified as "Partly Free" by Freedom House as a result of getting 3 in political rights and civil liberties (1 is best and 7 is worst).

Health and Education
Bolivia ranks as the fourth-worst country in Latin America when it comes to human development, which looks at life expectancy at birth, adult literacy rate, enrolment ratio in education and GDP per capita. That's better than Peru and Ecuador, but worse than Panama and Venezuela.

Poverty and Unemployment
More than half -- 60 percent -- of the population live below the poverty line, according to 2006 data from the CIA. Unemployment reached 8.5 percent last year.  

  © Copyright Latin Business Chronicle


  Other articles in : Bolivia
Back to Bolivia