Overview

  • During the 2004-2014 decade, the Bolivian economy grew at an average annual rate of 4.9 percent due to the high commodities prices, the expansion of natural gas exports and a prudent macroeconomic policy. Consequently, moderate poverty was reduced from 59 percent to 39 percent and the Gini coefficient of inequality fell from 0.60 to 0.47.

    Due to a less favorable international context and a temporary reduction in  the external gas demand, GDP growth declined from a peak of 6.8 percent in 2013 to an estimated 4.2 percent in 2017. The poverty rate has remained about 37% between 2013-2016 and the Gini index of inequality has remained close to 0.47 since 2011. The effect of low commodity prices has been cushioned by expansionary policies that resulted in high fiscal deficits (7.8 percent of GDP in 2017) and current account deficits (6.3 percent of GDP in 2017), financed with the buffers accumulated during the boom, external financing and Central Bank loans.

    International reserves decreased from US$ 15.1 billion (46 percent of GDP) in 2014 to US$ 10.3 billion (27 percent of GDP) in 2017. In 2017, the gross public debt was close to 50 percent and fiscal savings reached around 17 percent of GDP.

    The National Economic and Social Development Plan (PDES) 2016-2020 was approved in 2016 with the objective to maintain high growth, continue reducing poverty and improve access to basic services. This plan includes a broad public investment program financed by macroeconomic buffers, external financing and Central Bank loans. Among other areas, investment in infrastructure, hydrocarbon exploration, industrialization of natural gas, and thermo and hydroelectric energy generation are contemplated. The plan also calls for greater dynamism of the private-sector and foreign direct investment.

    Given the international context, this development agenda implies facing some structural challenges such as: gradually reducing the macroeconomic imbalances, optimizing the efficiency and progressivity of public spending, and ensuring sufficient returns from large investment projects. Additionally, it is important to join forces with the private sector to continue developing the country's potential in the energy sector. The challenge is also to attract investment in sectors that have traditionally been less attractive to private investors, including mining, agriculture, and manufacturing.

    Last Updated: Oct 09, 2018

  • The World Bank Group (WBG) program in Bolivia is guided by the 2016-2020 Country Partnership Framework (CPF). The current portfolio of World Bank financing operations focuses on transport (44 percent), health (23 percent), rural and agricultural development (20 percent) and, to a lesser extent, on statistical strengthening (6 percent), environment (4 percent), social protection and employment (2 percent) and energy (1 percent).

    The current World Bank portfolio includes 10 active projects totaling US$1.270 million. Also, under the CPF and to be reviewed by the Board of Directors between 2019 and 2020, five new operations are being prepared for more than US$775 million in the areas of urban resilience, water and sanitation and irrigation.

    A Performance and Learning Review of the CPF was presented to the Board of Executive Directors in June 2018 introducing adjustments in the Framework’s pillars and objectives:

    Pillars:

    • Promote broad and inclusive growth.
    • Support environmental sustainability and resilience to climate change.

    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;
    • Improve the information base to provide quality data for public policy planning and evaluation.
    • Strengthen the capacity for adaptation to and mitigation of climate change, reducing vulnerability to natural disasters.

    The International Finance Corporation (IFC), the WBG agency that supports private sector development, will continue to focus 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: Oct 09, 2018

  • 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. An additional financing, approved in 2017, 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.

    In the employment sector, the Project to Improve Employability and Labor Income for Youth works to promote employability and to improve labor income of 6,500 low-income youth with no employment opportunities by supporting the expansion of young people’s entry into the labor market programs and developing their socio-emotional abilities, among others. 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 Health Services Network Project’s goal is to improve access to and quality of healthcare services for 3.8 million Bolivians, mainly for women, children and indigenous populations. It will implement a comprehensive hospital management system through the strengthening of health networks, complemented by training of healthcare professionals, application of clinical care standards and the construction and equipping of nine secondary hospitals and one tertiary care hospital.

    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 which concludes in April 2019 will help increase electric power coverage, benefitting some 4,480 households with the expansion of networks.

    The recently concluded Urban Infrastructure Project benefited La Paz and El Alto. Through the Real Neighborhoods and Communities Program, it supported the improvement of 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 helped to improve urban mobility.

    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 the agricultural census in 2013, the improvement of household surveys, the update of multipurpose maps, the Demographic and Health Survey 2016 and the 2015-2016 Household Budget Survey. Additionally, it will support the implementation and dissemination of economic surveys for the manufacturing, commerce and services industry, micro and small economic units, and small-scale and cooperative mining from September 2018 to May 2019. To complement these activities, the World Bank collaborated in the change of the base year for the Consumer Price Index (CPI) estimation and is supporting actions to improve poverty measurement. 

    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 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.

    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.

    Last Updated: Oct 09, 2018

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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