Overview

  • Thanks to high commodity prices and a prudent macroeconomic policy, economic growth in Bolivia averaged 4.9 percent between 2004 and 2014. The favorable economic context led to a reduction in moderate poverty, from 59 percent in 2005 to 39 percent in 2014, while the Gini Index fell from 0.60 to 0.47 in the same period.

    Due to a less favorable international context, GDP growth decreased from a high of 6.8 percent in 2013 to 4 percent in 2016 and progress toward reducing poverty and inequality stagnated. The effect of low commodity prices on domestic demand was contained by expansive policies that took advantage of the important economic cushions accumulated during the boom and direct financing from the Central Bank of Bolivia. International reserves remain high despite declining from US$ 15.1 billion in 2014 to nearly US$ 10.1 billion in 2016. Fiscal savings are approximately 15 percent of GDP and gross public debt is nearly 40 percent of GDP.

    In an effort to maintain strong growth, assure continued poverty reduction and improve access to basic services, the Government of Bolivia approved the 2016-2020 National Economic and Social Development Plan in early 2016. With this plan, the government aims to maintain growth at an average rate of 5 percent between 2016 and 2020, reducing extreme poverty from 17 percent to 10 percent. This plan includes an extensive public investment program funded in part by savings accumulated during the economic boom, Central Bank of Bolivia loans and external financing. Investment areas include infrastructure, hydrocarbon exploration, industrialization of natural gas (fertilizers and plastics) and hydroelectric energy generation. The plan also calls for increased private-sector activity and foreign direct investment.

    In the current global context, the government’s ambitious development agenda faces structural challenges. Despite the important cushions accumulated during the economic boom, prudent management is needed to maintain macroeconomic stability. Public spending efficiency must be improved to ensure that it increases the coverage and quality of public services, protects the most vulnerable groups and promotes private investment. It is also critical to guarantee that the plan’s large-scale investment projects provide sufficient returns to cement long-term growth with macroeconomic stability.

    Additionally, consolidating the country’s position as an exporter of natural gas in the region requires joining forces with the private sector to expand proven gas reserves. It is also important to promote investments in sectors that traditionally have been less attractive for private investors, such as mining, agriculture and manufacturing.

    Last Updated: Apr 24, 2017

  • The World Bank Group (WBG) program in Bolivia is guided by the 2016-2020 Country Partnership Strategy (CPS). The current portfolio of World Bank financing operations focuses mainly on transportation (53 percent), rural and agricultural development (24 percent), good governance (7 percent), urban development and energy (5 percent each), environment (4 percent) and employment (2 percent).

    The current World Bank portfolio includes 10 active projects totaling US$1.057 million. Also under the CPS, and which will be reviewed by the Board of Directors between 2017 and 2019. four new operations are being prepared for US$ 525 million in the areas of water and sanitation, risk and energy from a climate-change resilience and risk prevention perspective.

    The CPS has two main pillars:

    • Promote broad and inclusive growth; and
    • Support fiscal and environmental sustainability and resilience to climate change and economic shocks.

    Within these two pillars, the CPS has five objectives:

    • Reduce transportation costs and increase connectivity of isolated, vulnerable communities in selected areas to the road network;
    • Increase access to certain quality basic services in low-income urban and rural communities;
    • Improve opportunities for income-generation, market access and sustainable productivity gains;
    • Strengthen the capacity for adaptation to and mitigation of climate change, reducing vulnerability to natural disasters; and
    • Strengthen institutional capacity for improving public resource management and the investment climate.

    The International Finance Corporation (IFC), the WBG agency that supports private sector development, is focusing on investments in the financial, agribusiness, manufacturing and services sectors. These investments seek to promote the development of small and medium-sized enterprises and foreign trade and to protect natural resources through the implementation of good global practices in environmental sustainability.

    Last Updated: Apr 24, 2017

  • Opportunities to generate income, access markets and increase productivity

    The Rural Partnerships Project (PAR) supported producers’ organizations in rural areas, which raised their income by 33 percent and the net income of overall activity by 42 percent. PAR II supported 522 partnerships in 120 municipalities, directly benefiting 18,000 households. Recently approved additional financing will expand the project throughout the country to improve productivity through investments in automated irrigation, which will strengthen climate change resilience in agricultural practices.

    In the framework of the Community Investment in Rural Areas Project (PICAR), 656 extremely poor rural communities of Cochabamba, Chuquisaca, La Paz and Oruro benefitted from 769 infrastructure sub-projects, half of which were administered by women. Additional project financing will give an estimated 200,000 more people access to basic, productive and service infrastructure.

    The recently concluded Project for Agricultural Innovation and Services (PISA) strengthened the National Institute for Agricultural and Forestry Innovation (INIAF), which currently leads a network of 130 research and extension organizations around the country and implements programs in several sub-sectors, such as wheat, providing the industry with improved seed varieties. The INIAF has surpassed previous records by increasing its certification capacity to more than 100,000 seeds annually.

    A sustainable land planning model for peasant and indigenous communities, including the Esse-Ejja community (at risk of disappearing), is implemented in the Bolivian Amazon with non-reimbursable funds of the Japan Social Development Fund (JSDF) administered by the World Bank. This initiative complements the construction of the San Buena Aventura-Ixiamas Highway financed by the institution, strengthening the capacities of 25 of the most vulnerable communities in the area to better exploit this new infrastructure. In addition to soil management, the beneficiaries (5,600 rural residents) implement project-supported productive sub-projects and participate in municipal land planning processes.

    In the employment sector, the Project to Improve Employability and Labor Income for Youth works to promote employability and to improve labor income of 15,000 low-income youth by supporting the expansion of skills-development programs and young people’s entry into the labor market. A large percentage of women participate in this project. Mothers are given special stipends to help them raise their children under five years of age.

    Capacity to manage climate change and reduce vulnerability to natural disasters

    Since 2015, the World Bank has supported the implementation of disaster-risk management policies through development policy financing, which contributed to strengthening Bolivia’s legal and institutional framework.

    The Climate Resilience Pilot Program contributed to the development of the National Climate Resilience Strategy. To support this tool, the World Bank is implementing the Climate Resilience Project – Integrated Watershed Management, which works to build institutional capacity for climate change adaptation. To this end, it is expanding the surveillance system of climate change effects, as well as strengthening the structure of the climate and water information system and drought monitoring. The project also works in three basins of Cochabamba Department, an area of approximately 16,000 square kilometers with a population of 1.4 million. Interventions include irrigation and defense, as well as integrated micro-basin management.

    Access to quality basic services in the poorest urban and rural communities

    The Early Childhood Development and Assistance Project (ADEPI), financed by JSDF and administered by the World Bank, implemented a quality management model developed in a participatory manner in 50 percent of the 150 childcare centers in La Paz and El Alto. Between 2013 and 2016, 4,315 children up to age four benefitted from the educational materials. Some 500 mothers participated in workshops to develop productive and entrepreneurial skills as well as in workshops on sexual and reproductive health.

    The Urban Infrastructure Project benefits La Paz and El Alto. Through the Real Neighborhoods and Communities Program, it supports improved public lighting, drainage infrastructure, sanitation facilities, disaster risk mitigation works and recreational facilities in 46 low-income La Paz neighborhoods, benefiting 8,100 families. In El Alto, investments in infrastructure and the provision of technical assistance to the municipalities help improve urban mobility and promote sustainable transportation.

    The World Bank has been supporting electrification programs in Bolivia since 2003 with operations such as the Decentralized Infrastructure Project for the Transformation of Rural Areas (IDTR I), which brought electricity to nearly 30,300 households (connected to the electric power grid and household solar panels), 110 schools and 14 health centers. The Decentralized Electricity Project for Universal Access provided electricity for nearly 7,600 households, 136 schools and 5,700 pico lamps with household solar panel systems during 2010-2012, benefitting 222,800 people. The IDTR II Project will help increase electric power coverage, benefitting some 14,600 households with the expansion of networks, 12,600 households with individual solar PV systems and 138 public buildings (schools and health posts) with solar PV systems.

    Institutional capacity to improve public resource management

    The Project to Strengthen Statistics Capacity and the Information Base for Evidence-based Planning (STATCAP) supported the implementation of a population and housing census in 2012 and an agricultural census in 2013, improved household surveys and updated multipurpose maps. The project also financed the 2016 Demographic and Health Survey and the 2015-2016 Household Budget Survey. Additionally, it will support the implementation of the 2017 Economic Census for the first time in 30 years. To complement these activities, the World Bank has financed actions to improve poverty measurement and define multidimensional indicators for the Living Well Index. 

    Connectivity and reduction of transportation costs for isolated, vulnerable communities

    To increase connectivity, the Project for the Highway of the Santa Cruz Connection Corridor (the 208-kilometer San Ignacio-San José section) will finish construction on a highway of the road network linking Bolivia and Brazil, which completes the tourist circuit of Chiquitanía and forms part of the East-West Bi-oceanic Corridor.

    The National Highways and Airport Infrastructure Project supports regional and international integration through the construction of the 114-kilometer San Buenaventura – Ixiamas road. The road will link the departments of La Paz and Pando with Brazil, promoting the economic development of local populations. The project will also finance improvements to the Rurrenabaque Airport, which will facilitate the flow of tourism in the region.

    The rehabilitation of the 546-kilometer Santa Cruz–Trinidad road, which will benefit some three million residents of Santa Cruz and Beni departments, as well as users from other regions, most of whom are farmers who need to transport their produce to other markets. The highway will also facilitate access to health and education services for remote rural communities.

    Last Updated: Apr 24, 2017

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Country Office Contacts

BOLIVIA +591 2 261-3300
Calle Fernando Guachalla, 342, Edificio Víctor, piso 9. La Paz
enogales@worldbank.org
USA +1 202 473-1000
1818 H Street NW, Washington, DC 20433
enogales@worldbank.org