The global financial crisis has had a negative effect on the Bolivian
economy. Its outbreak has caused a drop in export commodity prices, such
as those for mining and hydrocarbons, and a reduction in remittances.
Nevertheless, the country was in a relatively good position to deal with
the negative effects: in recent years, Bolivia has experienced an
important commodity price boom, which has significantly increased
external revenues, public and private incomes and consumption levels.
Although the effects of the global crisis on the Bolivian economy have
so far been mild, important structural factors could put at risk the
long-term sustainability of policies and of macroeconomic equilibriums.
Among these are: 1. low investment rates, which could put growth
prospects and employment creation at risk; 2. heavy dependency of the
fiscal sector on the hydrocarbon rent, which brings into question the
long-term sustainability of macroeconomic policies and of the current
economic situation; 3. lack of a favourable investment climate necessary
to increase growth and employment, with regard to the rule of law,
property rights, judicial security, clearer and more stable rules of the
game and macroeconomic stability, among others; and 4. lack of a clear
strategy in relation to the country’s external integration. Access to
larger markets, with higher incomes and purchasing power, is necessary
to promote sustainable growth and employment creation, and to reduce
vulnerability to shocks. Trade agreements with the US, the European
Union (EU) and other regions of the world are necessary to promote
investment, growth and employment creation.
Jemio, L. C. and Nina, O. Global Financial Crisis Discussion Series. Papers 13: Bolivia Phase 2. ODI, London, UK (2010) 30 pp.
Global Financial Crisis Discussion Series. Papers 13: Bolivia Phase 2