Economy
Bolivia is one of the poorest nations in Latin America, with an economy based heavily on agriculture and mining. The majority of the people are poor Indians and mestizos, many of whom live at a bare subsistence level with little or no dependence on money.
Brief periods of economic growth have usually been followed by longer periods of either economic stagnation or decline. Such past measures as land redistribution programs and the nationalization of major mining operations failed to materially improve the economy. A series of steps—including the privatization of many stateowned industries and progress with trade relations—contributed to economic progress in the early 20th century. The early 21st century, however, saw the government assume a greater role in the economy, by escalating the state control on certain industries.
Bolivia's basic currency unit is the boliviano.
Service industries, which include businesses, government agencies, hospitals, schools, and retail and wholesale trade, account for about half of Bolivia's GDP and occupy about one-third of the country's workers. Many poor Bolivians also work as housekeepers, street vendors, or small-scale artisans in the informal economy that lies beyond government control and tax structures.
Accounting for about 15 per cent of the GDP of Bolivia, and employing more than 50 per cent of workers, Agriculture is an important part of the nation’s economy. For centuries agriculture has centered on the Altiplano and in the basins and valleys of the eastern cordilleras. On the Altiplano climatic conditions are harsh, and people there eke out meager livings by growing such hardy crops as potatoes, barley, wheat, and quinoa, a pigweed with edible seeds. They also raise livestock, especially sheep, goats, alpacas, and llamas, which yield food, fibers, hides, and skins. Llamas are also used as beasts of burden.
In the eastern basins and valleys agriculture is partly subsistence and partly commercial, producing for local markets. Crops are more varied here than on the Altiplano, mainly because the climate is milder and in some areas irrigation can be practiced. Corn, wheat, potatoes, beans and other vegetables, and hardy fruits are the principal crops.
Tropical crops, such as bananas, beans, coffee, cacao, coca, corn, and citrus fruit, are grown in a few areas of the Yungas, for use primarily in La Paz. Agriculture in the eastern lowlands is limited presently to only a few areas, chief of which is the area around the booming city of Santa Cruz. Production consists mainly of cotton, sugarcane, rice, and cattle. Much of Bolivia's food is imported.
Bolivia is a world leader in the production of coca, which is widely grown on the warm eastern slopes of the Andes, where it has largely replaced many traditional crops. The dried leaves yield cocaine, which is smuggled to a number of Western nations, especially the United States. In places like Oriente, farmers are engaged in raising cattle, and cultivating rice, soybeans, and sugarcane.
has long been the mainstay of Bolivia's economy, and accounts for around 10 per cent of the country’s GDP. It employs many of the country's industrial workers and accounts for by far the largest part of the nation's legal export earnings. Zinc, gold, iron ore, and tin are the chief non-fuel minerals produced. In fact, even though its deposits are fast being depleted, Bolivia still ranks as a leader in tin production, with metal deposits lying high in the Andes Mountains. Other minerals include antimony, copper, tungsten, silver, and lead. Many of the mines are located at very high elevations, making production difficult and costly.
Bolivia produces petroleum and natural gas in the eastern lowlands, especially around Santa Cruz. The country is virtually self-sufficient in petroleum and has large amounts of natural gas. Petroleum, natural gas, and gold are also found in the Oriente. Combined together, these supply about 90 per cent of Bolivia’s energy requirements. Most of the gas is exported, mainly to Argentina.
Manufacturing, which employs around 10 per cent of the work force of the country, contributes around 15 per cent of Bolivia’s GDP. Production consists chiefly of consumer goods for local markets. Products include processed foods, beverages, textiles, clothing, shoes, furniture, and simple household and personal items. Many products are still made by hand. The few heavy industries of Bolivia are linked primarily to mining and include petroleum refining, metal smelting, tin refining, and the making of mining equipment. Virtually all the technically advanced products needed within the country are imported. Bolivia’s chief industrial areas are La Paz, Santa Cruz, and Cochabamba.
Trade. Natural gas is Bolivia's chief legal export. The major agricultural products that Bolivia exports include coffee, lumber, soybeans and soy products, sugar, and rubber. Further, Bolivia also exports tin, zinc, and other minerals. Coca, which is illegally exported, is one of the most profitable export goods, and brings in a lot of money. There are a number of items that Bolivia imports from foreign countries which include heavy machinery, petroleum products, transportation equipment, and such consumer goods as clothing and food. Bolivia chiefly trading partners are Argentina, Brazil, and the United States, apart from South American countries and Japan.
Bolivia's land transportation facilities are located mostly in the southern two-thirds of the country. The northern third is accessible only by air and navigable rivers.
Major cities in the highlands are linked by railways and roads, which cover only about 2,300 miles (3,700 kilometers), all generally poor in quality. Automobile ownership is restricted to almost 1 in a 100 people. Highland cities are also linked to four Pacific ports—Arica and Antofagasta in Chile and Matarani and Ilo in Peru. Bolivia also has rights of navigation on the Paraguay and Amazon river systems and access to duty-free Atlantic ports in Argentina and Brazil. Two railways, both starting at Santa Cruz, link Bolivia to Argentina and Brazil.
Regular boat service on Lake Titicaca links Bolivia with Peru. A petroleum pipeline runs across the Andes to Arica, carrying oil for export; a natural gas pipeline runs southward into Argentina. Internal and international air services are provided by several Bolivian airlines. Foreign airlines also serve Bolivia. There are international airports at La Paz, Cochabamba, and Santa Cruz.
There are around 15 daily newspapers published in Bolivia. Radio and television ownership is somewhat mixed, with almost 2 out of three people having access to radios, whereas only about 1 out 8 people have access to televisions. Telephone and telegraph systems help in linking the major cities of Bolivia.
