Embassy of the United States La Paz, Bolivia

Source: National Bureau of Statistics (INE) and International Monetary Fund

• In the past two years Bolivia's economy grown and trade has begun to recover from its 2009 low (the year with the lowest growth rate since 2003). The economy grew 5.1% in 2011.

The 2011 increase in GDP primarily reflected growth in oil and gas production (7.9%); electricity, water and gas distribution (7.6%); construction (7.2%); transport and communications (6.0%); and financial services (5.5%).

• Accumulated inflation for 2011 was 6.9%, with a peak year-on-year inflation rate in June 2011 of 11.3%.  The drop is due to lower inflationary pressure on food prices, which reached a high of 17.5% in June 2011, falling to 8% at the end of the year.  Non-food items registered an overall decrease from 7.7% in June to 6.1% in December.
• Total investment in Bolivia in 2011 reached 23% of GDP, up from 17% in 2010.  Public investment has risen from 9.2% of GDP in 2010 to 11.4% of GDP in 2011 ($1.8 billion to $2.8 billion), due mostly to road construction and increases in investment of state-run companies.  Private investment (both domestic and FDI) increased from 7.8% of GDP in 2010 to 11.6% ($1.5 billion to $2.9 billion) of GDP in 2011, due to investments in hydrocarbons, construction, and mining.
• Exports rose by more than 30% between 2010 and 2011, reaching $9.1 billion. In 2011 Bolivia’s top exports were: hydrocarbons (45% of total exports), minerals (27%), manufactured goods (24%), and agricultural products (4%). More specifically, top export products were: natural gas (42% of total exports), silver (12%), zinc (10%), soy (7%), tin (4%), and lead (3%). Export items with the greatest increases by value were non-processed gold (570% compared to 2010 levels), paper (190%), processed gold (181%), processed silver (158%), other metals (120%), borates (66%), copper (59%), non-processed silver (58%), processed antimony and antimony oxide (58%), and manufactured leathers (50%). The products with the sharpest decreases in exports were: sugar (-98%), sunflower seeds (-72%), tobacco (-67%), and furniture (-46%).
• Bolivia’s top export markets in 2011 were Brazil (33%), Argentina (11%), United States (10%), Japan (6%), Peru (5%), South Korea (5%), Belgium (4%), China (3%), and Venezuela (3%).
• From 2010 to 2011, Bolivian imports rose by 41% to $7.6 billion. Bolivia imports a large number of industrial supplies and inputs (for example, replacement parts, chemicals, software, and other production items) (31% of total imports), other imports are: capital goods (21%), fuel (13%), consumer goods (10%), and others. Top import products within these categories were machinery and mechanical appliances (17% of total imports), chemical products (14%), fuels and oils (14%), vehicles (13%), minerals (8%), and food (7%). Bolivia also imports significant quantities of steel, electrical machinery equipment and parts, and plastics and plastic products. Import items with the largest increases by value were: services for oil and gas extraction (307% compared to 2010 levels), agricultural products (80%), personal vehicles and transport vehicles (77%), coal and lignite (71%), leather products (71%), office supplies and software (64%), and electronic devices (54%). Those that experienced the sharpest decline were minerals (down 45% from 2010 levels), and items related to publishing, printing, and recorded reproduction (-32%).
• Despite the fact Bolivia's trade with the United States increased in 2011, the U.S. fell to the third place -- after Brazil and Argentina -- in terms of overall trade numbers, in part due to the increase in natural gas exports to Argentina. However, if gas exports to the Brazilian and Argentinean markets were excluded from consideration, the U.S. would be Bolivia's top trading partner.  Exports to the U.S. rose 35% from $660 million in 2010 to $890 million in 2011 while imports from the U.S. rose 20% from $707 million in 2010 to $851 million in 2011. The U.S. supplied 11% of Bolivia's imports and received 10% of its exports. Bolivia has a total trade surplus of $1.5 billion, of which the U.S. accounts for $39 million.  
• Bolivia, South America’s poorest and least industrialized country, remains a challenging place to do business. The Movimiento al Socialismo (MAS) party-led government, elected in 2005, advances an economic policy focused on productive development and in which the state plays a key role in economic activity. In January 2009, Bolivians ratified a new constitution, which emphasizes state involvement in the economy, particularly in the management of natural resources. Since his January 2006 inauguration, President Evo Morales has nationalized companies in the hydrocarbons, telecommunications, electricity and mining sectors, a cement plant, and the pension administration system. In December 2009, Morales was reelected and the MAS won a commanding majority in the legislature. The government continues to focus on increasing state control over natural resources and key economic sectors.
• Bolivia is generally open to foreign investment, but weak judicial security, complicated regulatory decisions, cumbersome bureaucratic procedures, and political pressure to abrogate contracts may adversely affect companies’ operations.
• Investors should beware that the judicial system faces a huge backlog of cases, is short staffed, and has problems with corruption. Swift resolution of cases, either initiated by investors or against them, is unlikely. Commercial disputes can often lead to criminal charges. Cases are processed slowly, and suspects can be held legally for 18 months without charges as a case is investigated. Foreigners are more likely to be deemed a flight risk than Bolivian nationals and, as such, may not receive bail in lieu of pretrial incarceration. 
• Bolivian commercial legislation does not have any significant technical barriers or tariffs that substantially affect commerce with other countries. The export of certain edible products requires previous licenses (for example in the cases of sugar, vegetable oils, soy, and sunflower flour), and in some cases export is not allowed (for example, export of wheat is currently prohibited as the GOB often restricts export based on supplying local markets first).