Economy in Bolivia

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Economy - overview:

With its long history of semifeudal social controls, dependence on volatile prices for its mineral exports, and bouts of hyperinflation, Bolivia has remained one of the poorest and least developed Latin American countries. However, Bolivia has experienced generally improving economic conditions since the PAZ Estenssoro administration (1985-89) introduced market-oriented policies which reduced inflation from 11,700% in 1985 to about 20% in 1988. PAZ Estenssoro was followed as president by Jaime PAZ Zamora (1989-93) who continued the free-market policies of his predecessor, despite opposition from his own party and from Bolivia's once powerful labor movement. By maintaining fiscal discipline, PAZ Zamora helped reduce inflation to 9.3% in 1993, while GDP grew by an annual average of 3.25% during his tenure. President SANCHEZ DE LOZADA (1993-1997) vowed to advance the market-oriented economic reforms he helped launch as PAZ Estenssoro's planning minister. His successes included the signing of a free trade agreement with Mexico and the Southern Cone Common Market (Mercosur) as well as the privatization of the state airline, phone company, railroad, electric power company, and oil company. Furthermore, SANCHEZ DE LOZADA sponsored legislation creating private social security accounts for all adult Bolivians and capitalized these new accounts with the state's remaining 50% share in the privatized companies. Hugo BANZER Suarez took office in August 1997 and has proclaimed his commitment to the economic reforms of the previous administration.

GDP: purchasing power parity—$23.1 billion (1997 est.)

GDP—real growth rate: 4.4% (1997 est.)

GDP—per capita: purchasing power parity—$3,000 (1997 est.)

GDP—composition by sector:

agriculture: 17%

industry: 26%

services: 57% (1995 est.)

Inflation rate—consumer price index: 7% (1997)

Labor force:

total: 2.5 million

by occupation: agriculture NA%, services and utilities NA%, manufacturing, mining and construction NA%

Unemployment rate: 10%

Budget:

revenues: $3.75 billion

expenditures: $3.75 billion, including capital expenditures of $556.2 million (1995 est.)

Industries: mining, smelting, petroleum, food and beverages, tobacco, handicrafts, clothing

Industrial production growth rate: 4% (1995 est.)

Electricity—capacity: 786,000 kW (1995)

Electricity—production: 2.9 billion kWh (1995)

Electricity—consumption per capita: 370 kWh (1995)

Agriculture—products: coffee, coca, cotton, corn, sugarcane, rice, potatoes; timber

Exports:

total value: $1.4 billion (f.o.b., 1997)

commodities: metals 34%, natural gas 9.4%, soybeans 8.4%, jewelry 11%, wood 6.9%

partners: US 22%, UK 9.3%, Colombia 8.7%, Peru 7.4%, Argentina 7.2%

Imports:

total value: $1.7 billion (c.i.f. 1997)

commodities: capital goods 48%, chemicals 11%, petroleum 5%, food 5% (1993 est.)

partners: US 20%, Japan 13%, Brazil 12, Chile 7.5% (1996)

Debt—external: $4.2 billion (1997)

Economic aid:

recipient: ODA, $588 million (1997)

Currency: 1 boliviano ($B) = 100 centavos

Exchange rates: bolivianos ($B) per US$1—5.3724 (January 1998), 5.2543 (1997), 5.0746 (1996), 4.8003 (1995), 4.6205 (1994), 4.2651 (1993)

Fiscal year: calendar year

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Money exchange

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The current (March 2006) exchange rate is 8 pesos bolivianos for $1.00 USD.

Following are examples of some travel costs. Remember, costs in cities will be higher than in the rural areas.

Hotel: Budget less than $20 USD, Mid-range $45 USD, Luxury $80+ USD

Restaurant: American Breakfast $2.50 USD, Fixed-Lunch $2 USD, Lunch Entree $5 USD, Dinner $5 USD

Bus: La Paz to Cochabamba $12 USD, La Paz to Santa Cruz $24 USD

Airline: La Paz to Santa Cruz $100 more..

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