Economic And Financial Reform In Bolivia: Back To The Future?

Despite almost two decades of economic and financial reform following the collapse of the economy at the beginning of the 1980s, Bolivia, a country of 9 million people, still has the lowest GDP per capita in South America and an official poverty rate that exceeds 60% of the population. Despite its mineral wealth - it has the second largest reserves of natural gas in Latin America - the unstable political environment (its democratically elected president was forced to resign and flee the country in October 2003) and recent civil strife are impeding the implementation of policy and institutional reforms needed to create the environment for increasing private-sector investment and exports to the end of enhancing growth prospects and living standards for all segments of society, and reducing the egregious poverty rates in Bolivia. This paper uses a well-tested framework to assess the progress in Bolivia's two-decade-old reform program, examines the "unfinished business," and identifies Bolivia's challenges and opportunities over the next decade.This paper was presented at the 14th international conference in San Antonio, Texas, May 2004.