Editing Economy of Bolivia (section)

== History ==
[[File:GDP_per_capita_development_in_Bolivia.svg|thumb|right|Historical GDP per capita development]]
Bolivia was a major mineral exporter during the colonial period.<ref name=":0">{{Citation |last=Klein |first=Herbert S. |title=Bolivia from the War of the Pacific to the Chaco War, 1880–1932 |date=1986 |work=The Cambridge History of Latin America: Volume 5: c.1870 to 1930 |volume=5 |pages=553–586 |editor-last=Bethell |editor-first=Leslie |url=https://www.cambridge.org/core/books/abs/cambridge-history-of-latin-america/bolivia-from-the-war-of-the-pacific-to-the-chaco-war-18801932/2B08A9A899AE7061C9463520E8E3AF7E |publisher=Cambridge University Press |doi=10.1017/chol9780521245173.017 |isbn=978-0-521-24517-3}}</ref> The turbulent independence period led to the collapse of the mining industry.<ref name=":0" /> By the 1840s, silver production was half that of 1790.<ref name=":0" /> In the decades following 1850, Bolivia experienced economic growth.<ref name=":0" /> Bolivia remained a primarily rural country into the 20th century.<ref name=":0" /><ref>{{Citation |title=THE AGES OF SILVER AND TIN, 1880–1932 |date=2011 |work=A Concise History of Bolivia |pages=144–177 |editor-last=Klein |editor-first=Herbert S. |url=https://www.cambridge.org/core/books/abs/concise-history-of-bolivia/ages-of-silver-and-tin-18801932/A1D2295FE79C8C5490644774676F1394 |series=Cambridge Concise Histories |edition=2 |publisher=Cambridge University Press |doi=10.1017/cbo9780511976964.008 |isbn=978-0-511-97696-4}}</ref> Tin production became Bolivia's main industry after 1900.<ref name=":0" />

The Bolivian economy grew rapidly between 1960 and 1977.<ref name="Kehoe-2019">{{Cite report |last1=Kehoe|first1=Timothy J|last2=Machicado|first2=Carlos Gustavo|last3=Peres-Cajías|first3=José|year=2019|title=The Monetary and Fiscal History of Bolivia, 1960–2017|series=Working Paper Series |url=http://www.nber.org/papers/w25523|doi=10.3386/w25523|doi-access=free}}</ref> According to one study, "persistent deficits and a fixed exchange rate policy during the 1970s led to a debt crisis that began in 1977. From 1977 to 1986, Bolivia lost almost all the gains in GDP per capita that it had achieved since 1960."<ref name="Kehoe-2019" /> After 1986, Bolivian economy began to grow again.<ref name="Kehoe-2019" /> Between 1998 and 2002, Bolivia experienced a financial crisis.<ref name="Kehoe-2019" />

Inflation has plagued, and at times crippled, the Bolivian economy since the 1970s.<ref name="loc" /> At one time in 1985 Bolivia experienced an annual inflation rate of more than 20,000 percent.<ref name="loc" /> Fiscal and monetary reform reduced the inflation rate to single digits by the 1990s, and in 2004 Bolivia experienced a manageable 4.9 percent rate of inflation.<ref name="loc" />
A major blow to the Bolivian economy came with a drastic fall in the price of tin during the early 1980s, which impacted one of Bolivia's main sources of income and one of its major mining industries.<ref>{{cite journal | last1=Crabtree | first1=J. |last2=Buffy |first2= G. |last3=Pearce |first3= J. | title=The Great Tin Crash: Bolivia and the World Tin Market | journal=Bulletin of Latin American Research | volume=7 | issue=1 | pages=174–175 |year=1988 | doi=10.2307/3338459 | jstor=3338459}}</ref>

Since 1985 the government of Bolivia has implemented a far-reaching program of macroeconomic stabilization and structural reform aimed at maintaining price stability, creating conditions for sustained growth, and alleviating scarcity. A major reform of the customs service has significantly improved transparency in this area. Parallel legislative reforms have locked into place market-liberal policies, especially in the hydrocarbon and telecommunication sectors, that have encouraged private investment. Foreign investors are accorded national treatment.<ref>{{cite web |url=https://2009-2017.state.gov/r/pa/ei/bgn/35751.htm#econ |title=Economy of Bolivia |publisher=US State Government |date=23 October 2012 |access-date=14 July 2013 }}</ref>

In April 2000 Hugo Banzer, the former president of Bolivia, signed a contract with Aguas del Tunari, a private consortium, to operate and improve the water supply in Bolivia's third-largest city, [[Cochabamba]]. Shortly thereafter, the company tripled the water rates in that city, an action which resulted in [[2000 Cochabamba protests|protests and rioting]] among those who could no longer afford clean water.<ref>{{cite magazine |last=Hattam |first=Jennifer |title=Who Owns Water?|magazine=Sierra|date=September 2001|volume=86|issue=5|url=http://www.sierraclub.org/sierra/200109/lol1.asp|access-date=14 July 2013|archive-url=https://web.archive.org/web/20130825105255/http://www.sierraclub.org/sierra/200109/lol1.asp|archive-date=25 August 2013|url-status=live}}</ref><ref>{{cite web |url=https://www.pbs.org/frontlineworld/stories/bolivia/ |title=Leasing the Rain |publisher=PBS Frontline/World |date=June 2002 |access-date=14 July 2013 |archive-url=https://web.archive.org/web/20130825104154/http://www.pbs.org/frontlineworld/stories/bolivia/ |archive-date=25 August 2013 |url-status=live}}</ref> Amidst Bolivia's nationwide economic collapse and growing national unrest over the state of the economy, the Bolivian government was forced to withdraw the water contract.

Once Bolivia's government depended heavily on foreign assistance to finance development projects and to pay the public staff. At the end of 2002, the government owed $4.5 billion to its foreign [[creditor]]s, with $1.6 billion of this amount owed to other governments and most of the balance owed to multilateral development banks. Most payments to other governments have been rescheduled on several occasions since 1987 through the [[Paris Club]] mechanism. External creditors have been willing to do this because the Bolivian government has generally achieved the monetary and fiscal targets set by IMF programs since 1987, though economic crises have undercut Bolivia's normally good record. However, by 2013 the foreign assistance is just a fraction of the government budget thanks to tax collection mainly from the profitable exports to Brazil and Argentina of natural gas.
Parallel legislative reforms have locked into place market-oriented policies, especially in the hydrocarbon and telecommunication sectors, that have encouraged private investment. Foreign investors are accorded national treatment, and foreign ownership of companies enjoys virtually no restrictions in Bolivia. While the capitalization program was successful in vastly boosting foreign direct investment (FDI) in Bolivia (US$7&nbsp;billion in stock during 1996–2002), FDI later decreased as investors completed their capitalization contract obligations.

In 1996 three units of the Bolivian state oil corporation ([[YPFB]]) involved in [[hydrocarbon exploration]], production, and transportation were capitalized, facilitating the construction of a gas pipeline to Brazil. The government has a long-term sales agreement to sell 30 million cubic metres a day (MMcmd) of natural gas to Brazil through 2019. The Brazil pipeline carried about 21 MMcmd in 2000. Bolivia has the second-largest natural gas reserves in South America, and its current domestic use and exports to Brazil account for just a small portion of its potential production. Natural gas exports to Argentina resumed in 2004 at four MMcmd.

In April 2000 violent protests over plans to privatize the water utility in the city of [[Cochabamba]] led to nationwide disturbances. The government eventually cancelled the contract without compensation to the investors, returning the utility to public control. The foreign investors in this project pursued an investment dispute case against Bolivia for its actions. A similar situation occurred in 2005 in the cities of El Alto and La Paz.

Protest and widespread [[Bolivian gas conflict|opposition to exporting gas]] through Chile led to the resignation of President [[Sanchez de Lozada]] in October 2003. The government held a binding referendum in 2004 on plans to export natural gas and on hydrocarbons law reform. By May 2005, the carbons law draft was being considered by the Senate.

According to the data of the [[International Monetary Fund]], the [[World Bank]], as well as several international Institutes such as [[United Nations Economic Commission for Latin America and the Caribbean|ECLAC]], during the period 2006 to 2019 (period of the presidency of [[Evo Morales]] and [[Álvaro García Linera|Alvaro Garcia Linera]]) the economy of Bolivia quadrupled from a value of 9,573 billion dollars to 42,401&nbsp;billion dollars, this is due in large part to the policy of nationalization of Natural Resources, the stability of the exchange rate, the incentive of the domestic market, strong public investment in infrastructure and industrialization of natural resources such as gas and lithium. Similarly, according to studies by the World Bank and [[United Nations Economic Commission for Latin America and the Caribbean|ECLAC]], during the period 2006–2019, Bolivia experienced a marked reduction in poverty and extreme poverty, resulting in a reduction of the population living in extreme poverty from 38.2% to 15.2%.<ref>{{Cite web|url=https://www.ine.gob.bo/index.php/component/k2/item/3383-bolivia-entre-los-paises-de-la-region-que-mas-redujo-la-pobreza|title=Bolivia is the country that most reduced poverty|website=INE Bolivia|date=12 March 2019 }}</ref> In terms of [[Human Development Index|HDI]], according to the [[United Nations Development Programme|UNDP]] World Human Development Report, Bolivia in 2018 for the first time became classified as a "high human development Country",<ref>{{Cite web|url=https://www.bo.undp.org/content/bolivia/es/home/presscenter/articles/2019/bolivia-es-clasificado-por-primera-vez-como-pais-de-desarrollo-h.html|title=Bolivia is classified as a high human development country|publisher=UNDP}}</ref> reaching an HDI indicator of 0.703 and rising to the 114th position of 189 countries and territories.