Resource information
As the result of past investments in gas
and mining sectors and high world commodity prices, the
Bolivian economy grew considerably during the last seven
years. Prudent macroeconomic policies and high taxes on
hydrocarbon revenues led to a significant accumulation of
fiscal surplus and external reserves. Under a state-led
development model, the government led by President Morales
pursued redistributive policies and invested heavily in road
construction. However, it has retained far more of the
conservative fiscal and macroeconomic policies than would
have been predicted. Sustained growth has translated into
significant poverty reduction and improved equity as
unskilled labor, including from indigenous groups, benefited
from booming non-tradable sector activities. The
availability of hydrocarbon revenues, however, created
little incentive for the government to address the
structural issues in the economy. The Plurinational State of
Bolivia is more resource dependent, institutions are weak,
decision making is increasingly discretionary, productivity
remains low both inside and outside the agriculture sector
and environmental degradation is worsening. Going forward,
the Bank Group should develop a long-term partnership with
the government as well as groups outside of the government.
The Bank should scale up the good practice programs in
agriculture and help the government develop a strategy for
improving agricultural productivity and rural development
more broadly. In transport, the Bank should continue to
focus on road maintenance to complement the construction
programs of the government and other partners.
