Economy In Bolivia - Bolivian Economy
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Bolivia is one of the poorest and least developed countries in South America. The economy in Bolivia suffers from many factors. Being that Bolivia has a lack of infrastructure and poor roads, while its landlocked position hinders export and import development makes the economy of Bolivia very difficult to develop.
Bolivias economic history shows a pattern of reliance on a single-commodity. From silver to tin mining which has long since collapsed. Bolivia has enjoyed only occasional periods of economic diversification. Also, political instability, corruption and rugged terrain has constrained efforts to grow the economy in Bolivia.
The mining industry, especially the extraction of natural gas and zinc, currently dominates Bolivias export economy. Agriculture is an important sector of the economy in Bolivia and employs much of Bolivia's labor force.
Despite having over $50 billion worth of natural gas reserves, the second-largest in South America after Venezuela. The country has suffered from a lack of development.
Gross Domestic Product (GDP):
Bolivia had an estimated GDP of US$17.55 billion in 2009.
Agriculture:
Agriculture is an important sector of the Bolivia economy, contributing to about 15% of Bolivia's GDP and employing about 40 percent of Bolivia's workers. Bolivias agricultural GDP continues to rise but only at a modest average growth rate of 2.8 percent annually since 1991.
Agricultural production in the highland regions of Bolivia is complicated by both the countrys topography and climate. High elevations makes farming difficult, though small scale farming is the dominant economic activity of the highlands region.
In the eastern part of Bolivia the land is flat and very fertile. The most productive areas are in the department of Santa Cruz. Though they sometimes experience El Niño weather patterns and seasonal flooding, the tropical climate typically allows two crops a year of soy beans and farmers achieve high yields compared to neighboring countries.
Bolivias most lucrative agricultural product continues to be coca, of which Bolivia is currently the worlds third largest cultivator. The Bolivian government, in response to international pressure, has worked to restrict coca cultivation for the use of producing cocaine. However, eradication efforts have been hampered by the lack of a suitable replacement crop for rural communities that have cultivated coca for generations.
Since 2001, Bolivias leading legal agricultural export has been soybeans. Additionally, cotton, coffee, and sugarcane have been viable exports for Bolivia. For domestic consumption, corn, wheat, and potatoes are the crops of choice of Bolivian farmers.Despite its vast forests, Bolivia has only a minor timber industry. In 2003 timber accounted for only 3.5 percent of export earnings.
Energy - Oil & Natural Gas:
Bolivia has the second largest natural gas reserves in South America. A discovery in 1997 confirmed a tenfold gain in Bolivias known natural gas reserves. Finding markets to utilize this resource, both domestically and internationally, has been slowed by a lack of infrastructure and conflicts over nationalization of natural resources.
Bolivia exports natural gas to Argentina, Chile, Paraguay, Brazil and has built huge pipelines to the neighboring countries to transport the gas (See image below). The government has a long-term sales-agreement to sell natural gas to Brazil through 2019.
Mining and Minerals: Mining continues to be vital to Bolivias economy, but only contributes to about 10% of Bolivia's GDP, but is an area of considerable investment and growth.
Bolivia is a major producer of tin, bismuth, silver, lead, zinc and gold, while there are large reserves of iron, potassium and lithium.
Bolivia is estimated to have 50%70% of the world's lithium. The light metal is used to make high-capacity batteries used in electric cars and such. However, to mine for it would involve disturbing the country's salt flats (called Salar de Uyuni), an important natural feature which boosts tourism in the region. The government doesn't want to destroy this unique natural landscape, to meet the rising world demand for lithium.
Industry and Manufacturing:
Annually, manufacturing has accounted for approximately 18 percent of Bolivias gross domestic product since 1995. Most industry is small-scale, aimed at regional markets rather than national operations. Inadequate credit options and competition from the black market have kept Bolivias manufacturing sector from developing fully. Leading manufactured goods in Bolivia include textiles, clothing, non-durable consumer goods, processed soya, refined metals, and refined petroleum.
Tourism:
Bolivias spectacular vistas and natural attractions have not been enough to transform the country into a major tourist destination because of its political instability and lack of first-class accommodations.
Still, Bolivias tourist industry has grown gradually over the past 20 years. In 2000 Bolivia attracted 306,000 tourists, compared with 254,000 in 1990.
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