Thanks to high commodity prices, increased mineral and natural gas exports and a prudent macroeconomic policy, economic growth in Bolivia averaged 4.9% between 2004 and 2014. In this context, despite the significant expansion of public investment, the country has maintained current account and fiscal surpluses that have enabled it to accumulate important macroeconomic cushions. International reserves equal 46% of GDP and public sector deposits in the Central Bank have reached 27% of GDP. Public debt has remained below 40% of GDP after the implementation of multilateral debt relief programs, which reduced the debt from 94% of GDP in 2003.

The positive economic context reduced moderate poverty, from 63% in 2002 to 45% in 2011, whereas the Gini Index fell from 0.60 to 0.49 between 2002 and 2013. These impressive results reflect the fact that citizens living in poverty were the population segment that most benefitted from the economic bonanza, especially through an increase in earnings.

Following the decline in international oil prices, Bolivia faces the challenge of maintaining these positive economic and social results in a less favourable global environment. Oil prices have a delayed effect on natural gas export prices, for which reason Bolivia has only partially felt the decrease in commodity prices. Nevertheless, external accounts have experienced a decline that has triggered a decrease in international reserves, from US$15.1 billion in late 2014 to US$14.3 billion in August 2015. The fiscal balance will experience a deficit this year – as it did in 2014 – following continuous surpluses between 2006 and 2013. Although growth remains strong as compared with other countries of the region, an economic deceleration has been observed throughout the year.

Adapting to the new international context – which many analysts believe will be permanent – is essential for maintaining growth and continuing to reduce poverty, which still affects 45% of Bolivians. The country should continue its prudent macroeconomic management, which makes use of the cushions available to ensure a smooth transition to the new equilibrium while consolidating public confidence. It is crucial to strengthen the efficiency and progressive increase of public spending to preserve macroeconomic balances without threatening the social advances achieved over the past decade. From a broader perspective, Bolivia needs to increase investment in exploration, which is important for ensuring the sustainability of its critical natural gas exports. Moreover, it is essential to promote increased private investment by strengthening the investment environment and investment in key infrastructure and by improving education quality in the long term. Increased private investment that complements public investment will create more jobs and increase diversity and productivity in non-extractive sectors.

Last Updated: Sep 29, 2015

In the Plurinational State of Bolivia, the World Bank finances projects through its two sources, the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD). The active portfolio is made up of 11 projects totalling US$ 752 million, mainly in the areas of rural development, disaster risk management and climate change, transport, strengthening of statistical capacity, energy, urban development, employment and health.  

Currently, the World Bank Group (WBG) is developing the new Country Partnership Strategy (CPS) for the fiscal period 2016-2020, which will be submitted to the WBG Executive Board in November 2015. The strategy attempts to respond to the country’s development opportunities and challenges identified in the Country-based Systematic Assessment, a rigorous study implemented previously. The strategy is aligned with the government’s development plan for the next five years and takes into account the comparative advantages of the WBG.

In the framework of the CPS, the World Bank will provide financing for new investment and policy development operations. Given that Bolivia is a middle-income country, the CPS will consider Bolivia’s transition from a recipient of IDA and IBRD resources to an IBRD borrower exclusively.

The International Finance Corporation (IFC), which is a WBG institution dedicated exclusively to the private sector, has traditionally provided advisory services to the country. In 2014, however, it established a new local team which over the next five years will focus on investments in the financial, agribusiness and service sectors. To contribute to this objective, long-term credit lines for the financial sector were approved for the first time in 10 years, which will be channeled to small and medium-sized enterprises.

Last Updated: Sep 29, 2015

Productive sustainable development

The Rural Partnerships Project (RPP) supported 770 producers’ organizations in 110 rural municipalities, benefitting 29,000 families, 90% of which are indigenous. Households participating in this project increased net income by 206%. The second phase of the project is expected to benefit 40,000 families.

The Community Investment in Rural Areas Project (PICAR) works in vulnerable communities throughout the country. One hundred and fifty-seven sub-projects are currently being implemented, including irrigation canals, greenhouses, latrines, livestock fences and wells. Additional financing has been approved, which will benefit a total of 350,000 people, including those in the first and second phases of the project.

Climate Change and Disaster Risk Management

The World Bank supports disaster risk management and climate change adaptation through grants, concessional loans, budget support operations and technical assistance.  The Emergency Recovery and Disaster Management Project (PREGD) has implemented 244 sub-projects to rehabilitate infrastructure (roads, water and basic sanitation, irrigation systems, river protection), health and education in 50 municipalities with high poverty rates that were affected by El Niño and La Niña weather phenomena, benefiting more than 400,000 people.

In response to the impact of natural disasters and in accordance with the regulations established in the Political Constitution, the government launched the reform and modernization of disaster risk management policies in an effort to reduce the impact of disasters and to promote climate change adaptation. To support this reform, the World Bank approved US$200 million to strengthen the country’s legal and institutional framework. Half of these funds come from the IDA under concessional conditions while the other half originate from the IBRD. For the first time in 10 years, Bolivia qualified for this type of public policy financing, which is normally approved for middle-income countries.

The most important preliminary contribution of the Climate Resilience Pilot Program is the development of the National Climate Resilience Strategy, which defines program priorities and organizes interventions into three main work areas: public policies, specific sectors and watershed management. Multi- and bilateral development agencies have based their support on this strategy for a second phase of contributions totalling more than US$ 40 million over the next few years. Through the World Bank, the government has prioritized the Climate Resilience-Integrated Watershed Management Project, which will be implemented nationwide to support the planning and design of investments from a climate change perspective, and at the regional level in the basins of the Mizque, Piraí and Rocha rivers in the departments of Cochabamba and Santa Cruz.

Human Development and Access to Basic Services

The World Bank contributes to improving early childhood care in populations with increased vulnerability to parental loss or risk of abandonment through a project to enhance the quality of care and improve ongoing training and professionalization of educators and facilitators of 144 public childcare centers (birth to age four) in La Paz and El Alto. The Early Childhood Development and Assistance Project implemented a model of quality developed in a participatory manner in 50% of the childcare centers. It is also promoting the comprehensive training of beneficiary mothers in entrepreneurship and sexual and reproductive health. The project target is to train 50% of the mothers.

The Project to Reduce Health Inequality through Expansion and Access (APLIII) seeks to reduce maternal and child mortality and risk factors in vulnerable populations. To this end, the project remodeled, expanded and equipped eight health centers in rural areas of Cochabamba, Oruro and Beni, and 20 health centers in peri-urban areas of La Paz. The project also supported the definition of standards and protocols for primary and secondary medical care as well as an accreditation program for health centers. Currently, a blood cancer center is being built for patients of the Children’s Hospital in the Miraflores Medical Complex, one of the country’s largest. This center will focus on the prevention and early detection of childhood cancer, outpatient and in-patient treatment and bone marrow transplants.

Real Neighborhoods is a key program of the La Paz municipal government. The World Bank, through the Urban Infrastructure Project approved in 2006, supported improved public lighting, drainage and sanitation facilities, disaster risk mitigation works and public recreational facilities in 22 low-income La Paz neighborhoods. Forty-five thousand people in peri-urban areas benefitted from the program’s comprehensive intervention. Additional financing has been approved to benefit 24 new neighborhoods in La Paz.

Support to Public Sector Efficiency

The  Project to Strengthen and Modernize the Statistics System has supported the implementation of two recent national censuses – one on population and housing and the other on agriculture – in addition to improving continuous household surveys and updating multipurpose maps. To complement these activities, the World Bank financed activities to improve poverty measurement, including the preparation of new poverty maps and the definition of multidimensional indicators for the Living Well Index. Recently, the Bank approved additional financing to cover the cost of a household budget survey (to update the Consumer Price Index), an agricultural survey (based on the agricultural census), a health and demographic survey and a census of economic establishments.

Last Updated: Apr 15, 2015


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

*Amounts include IBRD and IDA commitments