Challenge
The Bolivian government recognized the need to improve the management of its state-owned enterprises (SOEs) and address deficiencies in related rules and policies. In particular, the SOEs needed to improve their corporate governance, financial management, and strategic planning models, all of which are necessary to modernize the sector. In December 2013, the Bolivian Parliament approved a law on SOEs with the objective of completing the design of these models by 2015. With this mandate, the Ministry of Development Planning communicated to the World Bank’s Country Office its interest in making progress, taking into account the experiences of other countries in Latin America.
Solution
The Bank-sponsored Improving the Capacity of the Bolivian Central Government to Develop Corporate Governance, Financial Management Supervision, and Strategic Planning in State Owned Enterprises Project facilitated the exchange of experiences with other countries that have had successful experiences in these areas. This exchange supplemented the capacity building efforts that had been initiated during the preparation of the draft Law on SOEs and the knowledge shared by the Bank. The exchange offered a unique opportunity for the Bolivian participants to interact with representatives of neighboring countries with robust SOE sectors and significant reforms in the sector.
Results
The project’s knowledge sharing exercise improved communications between the Bolivian participants and representatives in Brazil and Peru and established opportunities for continued learning on SOE management issues. The project exposed the participants to best practices in corporate governance in public companies. The exchanges among the participants also built the capacity of technicians in Bolivia’s Ministry of Development Planning to develop general guidelines related to the legal regime of SOEs, and to analyze regulations. The participants also collaborated on preparing general guidelines for SOE management in business planning and financing.
Bank Group Contribution
The Bank provided grant financing of US$49,000 in 2014, to finance the travels of the Bolivian, Brazilian (DEST) and Peruvian (FONAFE) teams. The trips consisted of four missions (one to Brasilia, two to Lima, and one to La Paz). The project’s budget included the translation into English of the reports drafted by the missions.
Moving Forward
This exchange further developed the participating entities ability to share knowledge and experiences. DEST (Brazil) and FONAFE (Peru) have been particularly proactive, they have largely cooperated with the Bolivian counterpart and with the Bank Team, and they also have enlarged their approach about the importance and signification of SOEs from a regional (LAC) approach.
Both countries have explicitly confirmed their interest in the continuation of the cooperation with Bolivia, and they are also open to further exchanges with other countries. DEST and FONAFE remain very active in the conferences and workshops organized at the regional level on SOEs.
Beneficiaries
The direct beneficiaries of this project are the 47 SOEs and the three ministries with responsibilities over SOEs: the Ministry of the Presidency, the Ministry of Development Planning, and the Ministry of Finance.
As the General Director of SOEs at the MDP said in her final report, “the contributions of Brazil and Peru will allow Bolivia to take into account positive experiences and challenges faced by our neighbors in the implementation of legal and technical frameworks for public enterprise administration at the time it develops specific rules and regulations for the administration of Bolivian public enterprises.”
