Bolivia Economic Conditions

Protests and social mobilization

The construction of a highway through the national park and the indigenous territory of TIPNIS has been an inflamed theme since 2011. The protests against the highway and dissatisfaction with the government resulted in a march that received international attention, first in 2011 and later in 2012. The background for the road development has been both national and regional integration, where Brazilian interests have been accused of being behind.

What appears to be a conflict between growth and protection has proved to be packed with different interests and power struggles to promote a variety of interests, both economic and political. These are related to the use of natural resources, access to forests and land, self-determination and consultation. With a grassroots with legitimate demands such as education, health and protection of indigenous peoples and the right to land, the opposition sought to seize the opportunity to weaken the government, well supported by broad press coverage. The government, which is accused of failing to consult with locals and environmental impact assessments, has struggled to cope with the situation, while accusations have hailed between indigenous leaders and the government.

In October 2011, a comprehensive agreement was entered into between indigenous leaders and the Government, which included, among other things, a definition of TIPNIS which is particularly worthy of severe restrictions on activities in the area that prohibited road development. However, at the beginning of 2012, a new march, supported by the peasant and coca-peasant movement, put pressure on the government to pass a law on consultation on the road development. The consultation was adopted and later carried out, leading to another protest march in 2012. The consultation process was criticized for being selective and for putting pressure on the local population. In 2012, President Morales stated that no road would be built until poverty was eradicated in the area. As of 2015, the road is still not built, but after MAS ‘victory it is expected to be completed in the coming period.

Constitutional process and new legislation

The most important battle case when MAS came to power was a new constitution. The elected Constituent Assembly started its work in 2006. Proposals were submitted from all over the country. The draft Constitution opened to the autonomy of indigenous peoples, while the opposition presented a proposal for autonomy at the county level that was not approved. This led to an escalation of opposition opposition, and a civil coup attempt in 2008. The riots were carefully planned, and were carried out, among other things, by violent groups paid for by the civilian civic committees in the lowlands. After negotiations with the county governors, a new chapter on autonomy was written. In January 2009, the new constitution was passed in a referendum.

Since the new constitution was passed, new laws are constantly being made. Some of the first central laws dealt with topics such as autonomy and decentralization, electoral regimes, legal bodies, the Constitutional Court and racism and discrimination. Laws are constantly being presented at meetings between the government and grassroots organizations closest to MAS. Of the laws with the greatest symbolic power, the law on Mother Earth’s rights has received a lot of attention, a law that details the rights of nature in detail. The law has at the same time been criticized for being significantly reduced and changed from the original proposal of the social movements. The Law of the “Productive Revolution” gives great support to the agricultural sector, and the conditions of small farmers in particular have been improved. At the same time, the law has been criticized by parts of the left, who believes it offers many benefits to large agricultural companies, and in addition to allowing genetically engineered varieties not native to Bolivia. In 2013 came a new law on forestry and agriculture, the law on the protection of vulnerable indigenous groups, the cooperative law, the law on violence against women, and the law on participation and social control, while in 2014 came new mining law and the law on the coca leaf.

Multinational state and inclusion

Since the Spanish arrived in the country in 1524, descendants have represented the country’s elite who have controlled land, natural resources and politics, while the majority of indigenous peoples have been excluded. The new Constitution of 2009 recognizes for the first time Bolivia as a multinational state in which the 36 different indigenous groups are respected and recognized. The Constitution provides for autonomy on four different levels: indigenous, regional, county and municipal autonomy. The concept of “indigena-originario-campesino” was introduced with the new constitution, and includes all societies that existed in Bolivia before colonialization. Autonomy for local communities and indigenous peoples means that parts of the administration are added to their local organizations as part of the state apparatus. Bolivia has also been the first country in the world to include the entire UN Declaration on Indigenous Rights as part of its own legislation. An area with a large proportion of indigenous peoples and small farmers can even apply for autonomy.

One of the most important elements of the multilateral Bolivian process is the inclusion of previously excluded groups in political and public space: from participation in parliament, in ministries and government institutions, to staying in public parks without discrimination. The feeling of being included is especially prevalent among indigenous people in the highlands, and to varying degrees among indigenous groups in the lowlands. For the MAS government, national integration is important for establishing contact between areas and groups, with road construction, telecommunications, health and education services. The state development unit ADEMAF, which works with the Amazon, Chaco and Chuquitania macro-regions and border regions, was established in 2010, as a decentralization of economic and social development.

Land reform

Despite a land reform after the 1952 revolution, the distribution of land in Bolivia is among the most uneven in Latin America. In 1996 came the INRA Act, which emphasizes the social and economic function of the land and the one who works with agriculture. This is emphasized in the new constitution, where land that does not fulfill its function can be expropriated. No one can own more than 5,000 acres of land, but since the provision has no retroactive effect, many large landowners will remain untouched. The new constitution recognizes both private and collective property rights, and women’s right to own land is emphasized. Land reform was resumed in 2006, and land has been allocated specifically to indigenous communities or communities. In 2011, 258 indigenous territory claims were made, of which 190 have been distributed, amounting to 20.7 million hectares.

Decline in the share of poor and economic growth

The large support to MAS is also due to the country’s stable economy in recent years. Formerly a debt-ridden country, Bolivia today has $ 15 billion in international reserves, equivalent to 51 percent of GDP, which has strengthened the country’s economic independence to the United States and the IMF. The renegotiation of contracts in the oil and gas sector, as well as high commodity prices, have provided the state with substantial revenues, which have also nationalized parts of the telecommunications, electricity and mining sectors. In addition to weak economic growth and stability, several groups have been lifted out of poverty, in the countryside as well as in the cities. In the highland village of El Alto, the growth is reflected in constantly new construction projects, while at the same time characterized by highland culture with embellishments and colors. In rural areas, electricity grids and water supply have expanded,

Public spending on health, education, pensions and poverty reduction increased by 45 percent between 2005 and 2012, while poverty was reduced from 60.6 percent in 2005 to 43.4 percent in 2012, which has meant lifting a million people out of poverty.

Economic growth has been among the best in the region, and has been between 5.2 -6.5 percent in the years 2011-2014, according to the Bolivian Ministry of Finance. The nationalization of strategic companies has led to increased revenues for the state. In 2006, the state tax revenue from the oil and gas sector was US $ 1473 million, in 2013 the amount had increased to US $ 5585 million. Bolivia was the leading exporter of natural gas in South America in 2012, primarily to Argentina and Brazil, and the third largest producer. The country produced 8.7 percent of the world’s tin minerals in 2012 and 5 percent of silver, as well as other metals.

Public consumption and revenues have increased, and foreign debt has decreased by 39 percent since Morales came to power until 2013. Public investment has increased in both the infrastructure sector, the productive sector and the social sector. International reserves increased from US $ 1.7 billion in 2005 to US $ 11.4 billion in 2011. Morales has been fighting corruption as a tabloid case, and the corruption index has fallen sharply since 2005.

With the increased revenue, the government has initiated several social support schemes, such as Juancito Pinto, Juana Azurduy and Renta Dignidad, which benefit school students, first-time and pensioners respectively. Investments have been made in health, education and basic infrastructure such as water, sewage and electricity. Bolivia’s economy grew most in Latin America during the international economic crisis, and Morales’ macro politics is praised by the IMF.

Growth and protection

Investments are made in both infrastructure, exploration and recovery activities in the oil and gas industry. In addition to oil and gas, Bolivia has the world’s largest iron reserve, MutĂșn, in Santa Cruz. Bolivia also has the world’s largest reservoir of lithium in the Uyuni salt desert, and large future revenues are expected in connection with industrialization, which began in 2010.

Extraction and industrialization entail challenges in terms of consulting affected communities, distribution of income and environmental considerations. Lack of technical expertise is also inhibitory, and a lot of effort is being spent on educating qualified, national labor. With major replacements in the state apparatus and bureaucracy, continuity and learning are a challenge.

Bolivia also faces a challenge of preserving ecosystems, biodiversity and forests. The Ministry of the Environment is still among the ministries with the lowest budget. A new forest law is under preparation, and the work in the national program for climate change and forests has been conflicting. In 2012, Bolivia launched its own mechanism for working with forests and climate change, but the mechanism is still in its initial phase. The environmental movement in Bolivia is pushing for the environment to be higher on the agenda, especially with large-scale developments in road and hydropower, oil, gas and mining, and deforestation as a result of commercial agriculture, cattle farming, low sustainable harvesting and failing state control.

Bolivia in international forums

Bolivia has made its mark in the climate negotiations and the World Trade Organization (WTO) in recent years. The Declaration of the People’s Conference on Climate and Mother Earth Rights in 2010, which the government later promoted in international forums, renounces that nature is made into a commodity and the use of market mechanisms. It also contains claims against carbon markets, agro fuels, patent rights and free trade agreements. The Declaration promotes fair technology transfer, the right to water, indigenous rights and small scale agriculture, and proposes a global climate justice court. At the same time, the declaration has been criticized for not taking up oil, gas and coal, and the role of multinational companies in the energy sector.

In international climate negotiations, Bolivia has promoted climate justice and the rights of nature and Mother Earth. However, Morales is criticized for pursuing a different policy for the energy, petroleum and mining sectors than he prescribed internationally. The answer from Bolivia is climate justice, where the rich countries must take responsibility for climate change and emission cuts, while poor countries should have the right to develop. In December 2014, the ALBA countries came together to support Bolivia to hold an international meeting of social movements to discuss climate change strategies.

In the WTO, Bolivia has been at the forefront of a social and environmentally friendly trade agreement. Based on its own constitution, which includes the right to water and food, Bolivia refuses to liberalize trade in goods and services that could threaten human rights, food security and the right to own development. Bolivia wants water outside the GATS agreement, and that countries in the south should be able to protect their own industrial sector. In addition, the processing of natural resources is beneficial to its own population and to create new jobs central to the Bolivian authorities.

Strengthening regional integration

According to, Bolivia is part of ALBA – the Bolivarian Alliance for Our America – along with Venezuela, Cuba and Ecuador, among others. Through this collaboration, Bolivia has received hospitals and medical personnel from Cuba, and with the help of Cuban teachers, Bolivia in 2008 declared itself free of illiteracy. Bolivia is an associate member of Mercosur trade cooperation, while President Morales has stated that CAN (the Andean trade cooperation) and Mercosur are tools for business and the rich rather than poor people. Instead, Bolivia has concentrated on strengthening South American cooperation through UNASUR, which seeks integration in politics, social affairs, culture, economy, finance, environment and infrastructure. This regional cooperation also includes the IIRSA project, a large-scale infrastructure development in the region of telecommunications, energy, ports,

Oil for development

In 2007, Norway and Bolivia signed an agreement on exchange of experience in the oil and gas sector, and the Oil for Development Program established itself in Bolivia. The agreement involved technical assistance to the authorities, where Norway provided expertise in institutional building, information systems, legislation and management of revenues from oil and gas resources. The increased awareness of the role of civil society has led to the program also supporting cooperation between grassroots organizations in Norway and Bolivia. The program with public authorities was completed in 2014, while support for civil society organizations continues.


Capital: Sucre, Government seat: La Paz
Population: 10.97 million (2016)
Life expectancy: 69.2 years (2016)
Infant mortality: 36.4 per 1000 (2016)
GDP per capita (PPP): US $ 7,200 (2016))
Religion: Catholicism 76.8%, evangelical and Pentecostal movement 8.1% Protestantism 7.9%
Official languages: Spanish, Quechua, Aymara and Guarani.
Currency unit: Boliviano
Export items: Natural gas, ore, gold, soybeans and soy products and tin.
Regional relations: Member of CAN, CELAC, Mercosur (associate member), UNASUR, ALBA, OAS, Union Latina