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BOLIVIA +5912 261-3300

Calle Fernando Guachalla, 342, Edificio Víctor, piso 9. La Paz
gorozcoruiz@worldbank.org

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1818 H Street NW, Washington, DC 20433
gorozcoruiz@worldbank.org

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Bolivia Overview

Bolivia has recently achieved political stability after President Evo Morales launched a reform in 2006. This reform included a major modification of the Constitution, the strengthening of the role of the state in the economy and the application of a variety of social programs. Strong citizen support for President Morales led to his re-election in 2009. He continues to enjoy broad-based support on the eve of the 2014 elections.

Thanks to high commodity prices and a prudent macroeconomic policy, economic growth has averaged 4.8% over the past 10 years, leading to a significant reduction in poverty and inequality. Despite these advances, moderate poverty still affects about 45% of the population and income inequality remains high.  The country has had significant current account surpluses since 2003 and the fiscal balance became positive beginning in 2006.

Due to this performance and the overall debt relief, public debt declined from 94% of the Gross Domestic Product (GDP) in 2003 to less than 40% in 2013. International reserves increased from nearly US$1 billion to over US$14 billion in recent years. Bank deposits and loans have more than tripled during the past seven years and banks have strengthened their solvency and liquidity.

The positive economic context led to a reduction in moderate poverty, from 63% in 2002 to 45% in 2011, whereas the Gini Index (which measures inequality) fell from 0.60 to 0.46 in the same period. These extraordinary results reflect the fact that citizens living in poverty were the population segment that most benefitted from the economic bonanza, which was complemented by a variety of social programs. For example, between 2002 and 2011, average income of the poorest 40% of the population grew three times more rapidly than average income.

Despite these advances, Bolivia faces significant challenges. Moderate poverty still affects 45% of the population and income inequality remains high. In addition, several social indicators still fall short of regional averages.

Economic growth is vulnerable to changes in international commodity prices. Private investment requires strengthening and the large government-backed investment projects in extractive industries are behind schedule. Informal employment is high, which results in lower productivity. While there have been noteworthy advances in productive development in rural areas, where a third of the population lives, further progress has been hindered by precarious infrastructure and services.

Governance of the public sector must be strengthened to improve policy implementation and service delivery.

Last Updated: Apr 08, 2014

Two years after the implementation of the Country Partnership Strategy (CPS), a midterm review was carried out in February 2014. The CPS remains relevant and will continue to guide activities of the World Bank Group during 2012-2015.

The CPS, which was designed in keeping with the comparative advantages of the World Bank Group and the goals of the National Development Plan (PND) of the Plurinational State of Bolivia, was also aligned with the 2025 Patriotic Agenda, which establishes medium-term objectives to eliminate extreme poverty and ensure that growth results in well-being. The goal is to increase productive capacity and food security through support to small-scale producers, prioritizing improvements in infrastructure and basic health and education services and the promotion of inclusive economic growth.

During the remainder of the CPS period, Bolivia will continue to benefit from credits issued by the International Development Association (IDA). It will also have access to financing and the range of financial solutions offered by the International Bank for Reconstruction and Development (IBRD).

The current WBG portfolio includes 11 investment projects totaling US$ 460 million. Seven new operations for more than US$ 500 million are being prepared in 2014. For the period remaining, the CPS also calls for the introduction of more innovative, results-based approaches and tools with a view toward ensuring that the interventions focus on providing transformational solutions in the medium term.

In addition, the International Finance Corporation (IFC) will continue to support private-sector development opportunities. Its program focuses on improving the investment climate, simplifying public procedures, increasing access to financing for the agricultural sector, and training small and medium-sized enterprises.

The CPS proposes a flexible technical assistance and financing program through investment projects and grants in four results areas: sustainable productive development, climate change and disaster risk management, human development and access to basic services and public sector efficiency. Crosscutting themes of the CPS are gender equality, good governance and the fight against corruption.

Last Updated: Apr 08, 2014
  • Sustainable productive development

Results for this pillar have been significant in rural areas. The Rural Partnerships Project (RPP) supported 770 producers’ organizations in 110 municipalities, benefiting a total of 29,000 families.  Of these beneficiaries, 90% are indigenous. The total partnerships reflect an increase in net family income of 206% as compared with those without RPP intervention. A second phase of the RPP plans to increase the total number of beneficiary families to 40,000.

Likewise, with the Regional Concurrent Development Project, the World Bank has channeled through the government investment sub-projects in productive infrastructure and basic infrastructure in 180 departmental and municipal governments. A total of 244 sub-projects have been financed. Sixty-three irrigation sub-projects were implemented, benefitting over 15,400 individuals. In addition, 168 transportation infrastructure (roads, pedestrian and vehicle bridges) sub-projects benefitted more than 340,000 people whereas 13 sub-projects in business environments and productive promotion (rural fairs, basins, ethno-ecotourism, soil conservation and management and markets) benefitted over 77,000 people.

Also implemented were 132 pre-investment sub-projects in irrigation systems, transportation infrastructure, ethno-ecotourism and soil conservation and management.

In addition, 30,700 representatives of 418 civil and government organizations received training in the development, management and assessment of plans, programs, projects and articles of incorporation at the sub-national level.

Other results include project support to 93 indigenous municipalities in drafting their Letters of Autonomy and to eight municipalities transitioning to Indigenous Autonomous Regions in the development of their bylaws, an important step in the process to become autonomous, which Bolivia is attempting to consolidate through constitutional mandate.

The Community Investment in Rural Areas Project currently benefits 293 poor rural communities that are investing in micro-irrigation, production and road projects, among others. The project directly supports more than 45,000 families and plans to benefit a total of 500 extremely poor rural communities by 2017.

The Lands for Agricultural Development Project has helped 237 producer associations use their land more effectively. It has issued non-reimbursable funds to increase production and technical assistance in five municipalities of Santa Cruz Department, in the Chaco and Chiquitanía. Project activities have benefited more than 2,800 families living in poverty, including those residing in indigenous communities, and have resulted in the incorporation of nearly 150,000 hectares of land for agricultural use.

Rural development projects have enabled Bolivia to share its knowledge in south-south knowledge exchanges with Guatemala, Bhutan and Vietnam. With respect to urban infrastructure, projects have improved poor neighborhoods of La Paz and the road network in El Alto.

  • Climate Change and Disaster Risk Management

The World Bank supports disaster risk management and the adaptation to climate change through grants, loans and technical assistance. The Emergency Recovery and Disaster Management Project has intervened in 244 sub-projects to rehabilitate roads and infrastructure in water and basic sanitation, irrigation, river protection, health and education that was damaged by El Niño and La Niña weather phenomena, benefiting over 400,000 inhabitants of municipalities with high poverty rates.

  •  Human Development and Access to Basic Services

This pillar has demonstrated interesting preliminary results in improving the quality of and access to education of primary and secondary school students. In terms of employment, advances have been made in key indicators of skills development of low-income youth living in the country’s largest urban areas.

The World Bank also contributed to expanding sustainable access to energy in remote areas through the supply of domestic solar-powered systems in 9,000 homes, schools, clinics and microenterprises, benefitting some 45,000 people.

  •  Support to Public Sector Efficiency

In a new, complex context of autonomous regions, with increased requirements for timely, reliable statistical information for decentralized policymaking, the World Bank has supported the implementation of two national censuses, one of population and housing and the other of agriculture, in addition to improving the Continuous Household Surveys.

Last Updated: Apr 08, 2014

LENDING

Bolivia: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

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