A/HRC/43/45/Add.1
12.
The laudable Patriotic Agenda 2025 and the national Economic and Social
Development Plan envisage large-scale public investment to boost the economy and to
significantly improve the well-being of the population. However, given the falling revenue
from gas and oil, there is a legitimate question as to whether the current economic and
social model is sustainable in the medium and long terms.
13.
The Government has turned to the use of international reserves and external
borrowing to sustain the level of fiscal revenue. While this policy choice has been prudent
in the circumstances, international reserves have been diminishing at a fast pace. The
percentage of international reserves to GDP has dwindled from 45.5 per cent in 2014 to 22
per cent at the end of 2018.25 The external debt-to-GDP ratio has been rising since 2014 and
has reached 24.9 per cent of GDP at the end of 2018. 26 While this level of external
borrowing is still considered to be non-critical, some observers have rung an alarm bell
over the rising level of total public debt. Total public debt includes loans from the Central
Bank to State-owned enterprises and is projected to reach 54 per cent of GDP in 2023. 27
While the public debt to the private sector still remains at a reasonable level, at 33.5 per
cent of GDP, the sustainability of the current revenue matrix is increasingly being
questioned, particularly in light of the growing fiscal deficit, which now exceeds 7 per
cent.28
14.
The State has long sought to overcome its historical dependence on the export of
raw materials, but its current economic model is still associated with “extractivism”, and
the export of hydrocarbons and oil continues to be a significant source of revenue. Over the
period from 2009 to 2017, mining and hydrocarbon-related revenues contributed an average
of 30 per cent of annual total fiscal revenues,29 although tax revenues from other sectors,
such as commerce, financial services and communications, have been increasing. In recent
years, the Government has taken a number of steps to promote industrialization and
economic diversification, including investing in a variety of sectors, such as agriculture,
hydroelectric power, renewable energies and lithium production. In particular, the
Government has identified lithium production as one of the five strategic industrial
productions to be prioritized,30 and has invested in the exploitation of lithium deposits in
the Uyuni salt flat. However, large-scale exploitation of lithium resources has not taken
place, partly due to a lack of interest from private investors with the appropriate technical
experience. 31 The pilot plant in the Uyuni salt flat reportedly produced only 250 ton of
lithium carbonate in 2018, although the Government had pledged to produce over 10,000
ton per month by 2015.32
15.
There appear to be a number of historical obstacles to the successful diversification
of the economy. One of the factors most commonly identified by experts and stakeholders
is a lack of robust private investment. Total private sector investment has been consistently
low and growing at a much slower pace,33 in stark contrast with public investment, which
25
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27
28
29
30
31
32
33
6
Assessment Report, No. 126362 (Washington, D.C., 2018), p. 82 (health indicators for Bolivia and
Latin America and the Caribbean, 1991–2015); and Social Panorama, pp. 157–158 (indicators on
access to adequate sources of drinking water and sanitation, 2002 and 2016).
IMF, “Bolivia: 2017 article IV consultation – press release, staff report and statement by the
authorities of Bolivia” (December 2017), p. 23; and comments of the Ministry of Economy and
Public Finance. See also Preliminary Overview of the Economies of Latin America and the
Caribbean, 2018 (United Nations publication, Sales No. E.19.II.G.2).
Banco Central de Bolivia, Informe de la deuda externa pública al 31 de diciembre de 2018 (La Paz,
2019), p. 5.
See IMF, “Bolivia: 2018 article IV consultation”, annex I.
Ibid., p. 5.
Ibid, at 61.
Economic and Social Development Plan, 2016–2020.
Economist Intelligence Unit, “Chinese investment will fund new mineral extraction project”, 26
February 2019.
Ibid.
Ministry of Economy and Public Finance, “En los últimos 13 años la inversión pública supera la
inversión privada”, 24 June 2019.
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