Friday, 12 July 2013


Main article: Economy of Bolivia Graphical depiction of Bolivia's product exports in 28 color-coded categories.

Bolivia’s estimated 2011 gross domestic product (GDP) totaled $23.3 billion. Economic growth was estimated at about 5.1%, and inflation was estimated at about 6.9%. Bolivia was rated 'Repressed' by the 2010 Index of Economic Freedom. Despite a series of mostly political setbacks, between 2006 and 2009 the Morales administration has spurred growth higher than at any point in the preceding 30 years. The growth was accompanied by a moderate decrease in inequality.

A major blow to the Bolivian economy came with a dramatic fall in the price of tin during the early 1980s, which impacted one of Bolivia's main sources of income and one of its major mining-industries. Since 1985, the government of Bolivia has implemented a far-reaching program of macroeconomic stabilization and structural reform aimed at maintaining price stability, creating conditions for sustained growth, and alleviating scarcity. A major reform of the customs service has significantly improved transparency in this area. Parallel legislative reforms have locked into place market-liberal 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.

Young miners at work in Potosí

In April 2000, Hugo Banzer, the former President of Bolivia, signed a contract with Aguas del Tunari, a private consortium, to operate and improve the water supply in Bolivia's third-largest city, Cochabamba. Shortly thereafter, the company tripled the water rates in that city, an action which resulted in protests and rioting among those who could no longer afford clean water. Amidst Bolivia's nationwide economic collapse and growing national unrest over the state of the economy, the Bolivian government was forced to withdraw the water contract.

Bolivia has the second largest natural gas reserves in South America. The government has a long-term sales-agreement to sell natural gas to Brazil through 2019. The government held a binding referendum in 2005 on the Hydrocarbon Law.

The US Geological Service estimates that Bolivia has 5.4 million cubic tonnes of lithium which represents 50%–70% of world reserves. However, to mine for it would involve disturbing the country's salt flats (called Salar de Uyuni), 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.

Bolivia's government 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 mechanism. External creditors have been willing to do this because the Bolivian government has generally achieved the monetary and fiscal targets set by IMF programs since 1987, though economic crises have undercut Bolivia's normally good record.

The income from tourism becomes increasingly important. Bolivia's tourist industry has grown gradually since about 1990.

Transport See also: List of airlines of Bolivia and List of airports in Bolivia

The General Directorate of Civil Aeronautics (Dirección General de Aeronáutica Civil—DGAC) formerly part of the FAB, administers a civil aeronautics school called the National Institute of Civil Aeronautics (Instituto Nacional de Aeronáutica Civil—INAC), and two commercial air transport services TAM and TAB.

TAM – Transporte Aéreo Militar (the Bolivian Military Airline) is an airline based in La Paz, Bolivia. It is the civilian wing of the 'Fuerza Aérea Boliviana' (the Bolivian Air Force), operating passenger services to remote towns and communities in the North and Northeast of Bolivia. TAM (a.k.a. TAM Group 71) has been a part of the FAB since 1945.

A similar airline serving the Beni Department with small planes is Línea Aérea Amaszonas, using smaller planes than TAM.

Although a civil transport airline, TAB – Transportes Aéreos Bolivianos, was created as a subsidiary company of the FAB in 1977. It is subordinate to the Air Transport Management (Gerencia de Transportes Aéreos) and is headed by an FAB general. TAB, a charter heavy cargo airline, links Bolivia with most countries of the Western Hemisphere; its inventory included a fleet of Hercules C130 aircraft. TAB was headquartered adjacent to El Alto International Airport. TAB also flew to Miami and Houston, with stops in Panama.

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