Economy Overview:

    With its long history of semifeudal social controls, dependence on volatile
    prices for its mineral exports, and bouts of hyperinflation, Bolivia has
    remained one of the poorest and least developed Latin American countries.
    However, Bolivia has experienced generally improving economic conditions
    since the PAZ Estenssoro administration (1985-89) introduced market-oriented
    policies which reduced inflation from 11,700% in 1985 to about 20% in 1988.
    PAZ Estenssoro was followed as President by Jaime PAZ Zamora (1989-93) who
    continued the free-market policies of his predecessor, despite opposition
    from his own party and from Bolivia's once powerful labor movement. By
    maintaining fiscal discipline, PAZ Zamora helped reduce inflation to 9.3% in
    1993, while GDP grew by an annual average of 3.25% during his tenure.
    Inaugurated in August 1993, President SANCHEZ DE LOZADA has vowed to advance
    the market-oriented economic reforms he helped launch as PAZ Estenssoro's
    planning minister. His successes so far have included an inflation rate that
    continues to decrease - the 1994 rate of 8.5% was the lowest in ten years -
    the signing of a free trade agreement with Mexico, and progress on his
    unique privatization plan. The main privatization bill was passed by the
    Bolivian legislature in late March 1994. Related laws - one that establishes
    SIRESE, the regulatory agency that will oversee the privatizations, and
    another that outlines the rules for privatization in the electricity sector
    - were approved later in the year.


National product:
    GDP - purchasing power parity - $18.3 billion (1994 est.)
National product real growth rate:
    4.2% (1994 est.)
National product per capita:
    $2,370 (1994 est.)
Inflation rate (consumer prices):
    8.5% (1994 est.)
Unemployment rate:
    6.2% (1994 est.)
Budget:
  revenues:
    $3.75 billion
  expenditures:
    $3.75 billion, including capital expenditures of $556.2 million (1995 est.)


Industrial production:

    growth rate 5% (1994 est.)
Electricity:
  capacity:
    756,200 kW
  production:
    2.116 billion kWh


  consumption per capita:
    367 kWh (1994)


Economic Activity

Industries:

    mining, smelting, petroleum, food and beverage, tobacco, handicrafts,
    clothing; illicit drug industry reportedly produces 15% of its revenues
Agriculture:
    accounts for about 21% of GDP (including forestry and fisheries); principal
    commodities - coffee, coca, cotton, corn, sugarcane, rice, potatoes, timber;
    self-sufficient in food

Narco-economy factor
    World's second-largest producer of coca (after Peru) with an estimated
    48,100 hectares under cultivation in 1994; voluntary and forced eradication
    programs unable to prevent production from rising to 89,800 metric tons in
    1994 from 84,400 tons in 1993; government considers all but 12,000 hectares
    illicit; intermediate coca products and cocaine exported to or through
    Colombia and Brazil to the US and other international drug markets;
    alternative crop program aims to reduce illicit coca cultivation

Most of the businesses in Bolivia are engaged in lawful and legitimate business 
activity like any other country of the world. 

Exports:

    $1.1 billion (f.o.b., 1994 est.)
  Commodities:
    metals 39%, natural gas 9%, soybeans 11%, jewelry 11%, wood 8%
   Major Trade Partners::
    US 26%, Argentina 15% (1993 est.)


Imports:

    $1.21 billion (c.i.f., 1994 est.)
  Commodities:
    capital goods 48%, chemicals 11%, petroleum 5%, food 5% (1993 est.)
   Major Trade Partners::
    US 24%, Argentina 13%, Brazil 11%, Japan 11% (1993 est.)
External debt:
    $4.2 billion (January 1995)