Editing Economy of Bolivia (section)

==Foreign economic relations==

=== Foreign exchange reserves ===
The amount in reserve currencies and [[gold]] held by Bolivia's Central Bank advanced from 1.085 billion US dollars in 2000, under [[Hugo Banzer Suarez]]'s government, to 15.282 billion US dollars in 2014 under [[Evo Morales]]' government. By 2022, a large part of the currency reserves had been used up, at which point they still stood at just under US$3.8 billion.<ref>{{Cite web |title=Total reserves (includes gold, current US$) - Bolivia |url=https://data.worldbank.org/indicator/FI.RES.TOTL.CD?locations=BO |access-date=2024-02-26 |website=World Bank Open Data}}</ref> In the course of 2023, they fell to less than US$500 million, with the country facing a [[liquidity crisis]].<ref>{{Cite web |date=2023-05-18 |title=Bolivian governor says country faces 'liquidity crisis' |website=Central Banking |url=https://www.centralbanking.com/central-banks/reserves/gold/7958760/bolivian-governor-says-country-faces-liquidity-crisis |access-date=2024-02-26 |language=en}}</ref>

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| style="background:black; color:white; text-align: center; background-color: #9acd32;" colspan="6" |'''{{big|Foreign-exchange reserves 2000–2022 (MM US$)}}''' '''<ref>{{cite web |url=https://www.bcb.gob.bo/webdocs/ReservasInternacionales/graficas/RIN_PAGWEB15ene15.pdf|title=Bolivia: Reservas Internacionales del BCB al 15 de Enero del 2015|author=BCB|date=19 January 2015|access-date=1 January 2017 |archive-url=https://web.archive.org/web/20170102171343/https://www.bcb.gob.bo/webdocs/ReservasInternacionales/graficas/RIN_PAGWEB15ene15.pdf|archive-date=2 January 2017|url-status=live}}</ref>'''
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|  style="background:#f5f5f5; text-align:center;"| Fuente: [[Banco Central de Bolivia]], Gráfica elaborada por: [[Wikipedia]].
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===Trade agreements===
Bolivia's trade with neighboring countries is growing, in part because of several regional preferential trade agreements it has negotiated.{{Citation needed|date=November 2020}} Bolivia was a founding member of the [[Andean Group]], a South American organization designed to promote trade among Bolivia, Colombia, Ecuador, Peru, and Venezuela.<ref name="loc" /> Subsequently renamed the [[Andean Community]], the organization has succeeded in increasing intra-South American trade.<ref name="loc" /> Trade among member countries rose from US$3.6&nbsp;billion in 1991 to US$10.3&nbsp;billion in 2003.<ref name="loc" /> Bolivia also belongs to the Common Market of the South (Mercado Común del Sur—[[Mercosur]]).<ref name="loc" /> Bolivia became an associate member in March 1997 to open investment opportunities with the founding Mercosur countries (Argentina, Brazil, Paraguay, and Uruguay), as well as other Mercosur associate members (Chile, Colombia, Ecuador, Peru, and Venezuela).<ref name="loc" /> The agreement provides for the gradual creation of a free trade area covering at least 80% of the trade between the parties over a 10-year period, though economic crises in the region have derailed progress at integration.{{Citation needed|date=November 2020}} The U.S. [[Andean Trade Preference and Drug Enforcement Act]] (ATPDEA) allows (allowed?) numerous Bolivian products to enter the United States free of duty on a unilateral basis, including [[alpaca]] and [[llama]] products and, subject to a quota, cotton textiles.{{Citation needed|date=November 2020}} Bolivia conducted more than US$1&nbsp;billion in trade with Mercosur countries in 2003.<ref name="loc" /> As a result of negotiations initiated in 1999 on a possible [[South American Free Trade Area]] (SAFTA), Mercosur and the Andean Community of Nations announced in December 2004 that they would merge, creating a [[Union of South American Nations]] modeled after the European Union.<ref name="loc" />

===Imports and exports===
Bolivian tariffs are low; however, manufacturers complain that the tax-rebate program that allows some companies to claim refunds of import taxes on capital equipment is inefficient, with many companies now owed millions of dollars by the Bolivian Government, which can take years to recover.
<!-- The OEC ref covers everything from here to "US$7.02 billion". -->

Bolivian imports of goods were valued at about US$6.52 billion in 2020, while service imports were valued at about US$2.55 billion in 2019.<ref name="The Observatory of Economic Complexity-2023">{{Cite web |date=January 13, 2023 |title=Bolivia (BOL) Exports, Imports, and Trade Partners {{!}} OEC |url=https://oec.world/en/profile/country/bol/ |url-status=live |archive-url=https://web.archive.org/web/20230103070604/https://oec.world/en/profile/country/bol/ |archive-date=January 3, 2023 |access-date=January 13, 2023 |website=[[The Observatory of Economic Complexity]]}}</ref>

Bolivia enjoyed an estimated $500 million goods trade surplus in 2020. Leading sources of Bolivian imports include China, Brazil, Chile, Peru, and Argentina, with its top imports refined petroleum, cars, pesticides, delivery trucks, and raw iron bars.<ref name="The Observatory of Economic Complexity-2023" />

Bolivian exports of goods and services in 2020 stood at US$7.02 billion<ref name="The Observatory of Economic Complexity-2023" /> compared with US$1.9 billion in 2003.<ref name="loc" />

Increased production of hydrocarbons, especially natural gas, led Bolivia's trade upturn in 2004.<ref name="loc" /> A 20-year supply contract with Brazil for natural gas, ending in 2019, the necessary capital to increase production.<ref name="loc" /> In 2004 export revenues for natural gas topped US$619 million.<ref name="loc" /> Bolivia also exported significant quantities of petroleum.<ref name="loc" /> Beyond hydrocarbons, other significant exports included zinc, soya, iron ore, and tin.<ref name="loc" /> In 2001 Brazil overtook the United States as Bolivia's primary export outlet.<ref name="loc" /> Switzerland, Venezuela, and Colombia are also important export partners.<ref name="loc" /> Bolivia has actively sought to foster economic connections in South America after long relying on the United States as its primary trade partner.<ref name="loc" />

The United States remains one of Bolivia's largest trading partners; however, it faded greatly on Brazil benefit in 2012. In 2002, the United States exported $283 million of merchandise to Bolivia and imported $162 million. Bolivia's major exports to the United States are [[tin]], gold, jewelry, and wood products. Its major imports from the United States are [[computers]], [[vehicles]], wheat, and machinery. A Bilateral Investment Treaty between the United States and Bolivia came into effect in 2001,<ref>{{Cite journal |last1=Feinschreiber |first1=Robert |last2=Kent |first2=Margaret |date=October 2010 |title=What the Tax Practitioner Should Know About the U.S.-Bolivia Bilateral Investment Treaty |journal=Corporate Business Taxation Monthly |volume=12 |issue=1 |pages=37–40 |via=ProQuest}}</ref> however the Treaty was terminated by the government of Bolivia in 2012.<ref>{{Cite web|url=https://www.govinfo.gov/content/pkg/FR-2012-05-23/pdf/2012-12494.pdf|title=Federal Register Vol. 77 No. 100 – Wednesday, May 2012 – Notices}}</ref>

By 2004 Bolivia had become the market leader in the export of [[brazil nut]]s,<ref>{{cite web|url=https://www.nytimes.com/2004/08/26/world/maraba-journal-brazil-s-problem-in-a-nutshell-bolivia-grows-nuts-best.html|title=Marabá Journal; Brazil's Problem in a Nutshell: Bolivia Grows Nuts Best|first=Larry|last=Rohter|date=26 August 2004|work=The New York Times}}</ref> with thousands of local people involved in collecting the pods in Bolivian Amazonia.<ref>{{cite news|url=http://news.bbc.co.uk/1/hi/business/2807293.stm|title=Business – Nut harvest sustains Bolivian Amazon|date=3 March 2003 |access-date=11 June 2015}}</ref>

===Balance of trade===
Bolivia had an estimated trade surplus of more than US$1.6&nbsp;billion in 2011.{{Citation needed|date=November 2020}} This figure represents a marked change in Bolivia's economic balance sheet.<ref name="loc" /> Bolivia reached a peak [[trade deficit]] of US$888&nbsp;million in 1998 before increased hydrocarbon exports radically altered the situation.<ref name="loc" />

Bolivia had a large negative [[balance of payments]] for 2002⎯US$317&nbsp;million.<ref name="loc" /> However, this situation has been remedied by the vast increase in export revenue.<ref name="loc" /> Estimates for the balance of payments for 2004 show a record surplus of US$126&nbsp;million.<ref name="loc" /> Bolivia's external debt totaled an estimated US$5.7&nbsp;billion in 2004.<ref name="loc" /> The [[International Monetary Fund]] has assisted Bolivia in paying down this debt.<ref name="loc" /> In 1995 the United States, among other countries, reduced Bolivia's debt by two-thirds.<ref name="loc" />

===Foreign investment===
[[Foreign direct investment|Foreign investment]] in Bolivia was buoyed in 1995 by privatization.<ref name="loc" /> Investment in mining and natural gas extraction increased, as did investment in the banking sector.<ref name="loc" /> However, the economic decline of the late 1990s, along with political unrest, caused foreign investors to pull out of Bolivia once again.<ref name="loc" /> In 2000 foreign investors contributed US$736&nbsp;million to the Bolivian economy.<ref name="loc" /> In 2002 this total fell to US$676&nbsp;million.<ref name="loc" />

The Government of Bolivia remains heavily dependent on foreign assistance to finance development projects. At the end of 2002, the government owed $4.5&nbsp;billion to its foreign creditors, with $1.6&nbsp;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 targets set by [[International Monetary Fund]] programs since 1987, though [[economic crisis|economic problem]]s in recent years have undercut Bolivia's normally good track record. Rescheduling agreements granted by the Paris Club have allowed the individual creditor countries to apply very soft terms to the rescheduled debt. As a result, some countries have forgiven substantial amounts of Bolivia's bilateral debt. The U.S. Government reached an agreement at the Paris Club meeting in December 1995 that reduced by 67% Bolivia's existing debt stock. The Bolivian Government continues to pay its debts to the multilateral development banks on time. Bolivia is a beneficiary of the [[Heavily Indebted Poor Countries]] (HIPC) and Enhanced HIPC debt relief programs, which by agreement restricts Bolivia's access to new [[soft loan]]s. Bolivia was one of three countries in the Western hemisphere selected for eligibility for the [[Millennium Challenge Account]] and is participating as an observer in [[free trade agreement]] negotiations. Bolivia enjoys some financial assistance programs run by the [[World Bank]]<ref>[http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/BOLIVIAEXTN/0,,menuPK:322289~pagePK:141132~piPK:141107~theSitePK:322279,00.html Bolivia Country Brief] on the World Bank website</ref> and [[Microenterprise]] Development programs provided by [[Five Talents International]].<ref>[http://www.fivetalents.org/content.asp?pl=406&contentid=583 Releasing the Talents of the Poor in Bolivia via Microenterprise Development] {{webarchive|url=https://web.archive.org/web/20100212122539/http://www.fivetalents.org/content.asp?pl=406&contentid=583 |date=12 February 2010 }}</ref>

====Mutun iron ore project====
In 2007, India's third-largest steel manufacturer, [[Jindal Steel and Power Limited]], signed a contract with the Bolivian government to exploit the [[El Mutun|Mutun]] iron ore deposit, considered to be one of the largest in the world. According to the contract, Jindal would invest US$1.5&nbsp;billion initially and an additional US$2.5&nbsp;billion over the next eight years. This is the single largest investment by an Indian firm in Latin America.<ref>{{cite news | url=http://www.theaustralian.news.com.au/story/0,25197,22858026-5005200,00.html | work=The Australian | title=India's Bolivian ore | date=3 December 2007 | access-date=3 December 2007 | archive-url=https://web.archive.org/web/20071205011554/http://www.theaustralian.news.com.au/story/0,25197,22858026-5005200,00.html | archive-date=5 December 2007 | url-status=dead }}</ref> Jindal Steel will set up an integrated 1.7 MTPA steel plant, a 6 MTPA sponge iron plant, a 10 MTPA iron ore pellet plant and a 450 MW power plant.<ref name="Jin">{{cite web|url=http://www.indiainfoline.com/Markets/News/Jindal-Steel-and-Power-expects-10-12-percent-growth-in-Indian-steel-consumption/3936250780|title=Jindal Steel and Power expects 10–12% growth in Indian steel consumption|access-date=11 June 2015|archive-url=https://web.archive.org/web/20130509132547/http://www.indiainfoline.com/Markets/News/Jindal-Steel-and-Power-expects-10-12-percent-growth-in-Indian-steel-consumption/3936250780|archive-date=9 May 2013|url-status=dead}}</ref> By September 2011, Jindal had obtained clearance for the project from the EIA and had hired an engineering consultant for [[Front-end loading|FEED work]].<ref name="Jin"/> The project is expected to create 6,000 jobs directly and another 15,000 indirectly.<ref>[http://afp.google.com/article/ALeqM5gVpRQ9-JLWmbpxT08MJw-E5yxQBw AFP: Bolivia OKs Indian firm to mine vast iron deposit<!-- Bot generated title -->] {{webarchive|url=https://web.archive.org/web/20071208204706/http://afp.google.com/article/ALeqM5gVpRQ9-JLWmbpxT08MJw-E5yxQBw |date=8 December 2007 }}</ref>

As of June 2011, Jindal had invested only US$20&nbsp;million on the project due to considerable delay by Bolivian authorities in issuing land for the project and due to inability of the Bolivian government to commit 8 million cubic meters of natural gas per day for the power plant and ore smelting process.<ref>{{cite web|url=http://www.hidrocarburosbolivia.com/bolivia-mainmenu-117/analisis-y-opinion/44327-la-espera-del-mutun-editorial.html|title=La espera del Mutún (Editorial)|work=Hidrocarburosbolivia.com|access-date=11 June 2015|archive-url=https://web.archive.org/web/20131027210505/http://www.hidrocarburosbolivia.com/bolivia-mainmenu-117/analisis-y-opinion/44327-la-espera-del-mutun-editorial.html|archive-date=27 October 2013|url-status=usurped}}</ref> In 2012 Jindal exited Bolivia, prompting Bolivia to seize the bond. In 2014, international arbitration awarded Jindal $22.5 Million due to Bolivia's seizure of the bond.<ref>{{cite web| url = https://www.wsj.com/articles/bolivia-to-appeal-ruling-favoring-indias-jindal-in-el-mutun-dispute-1409074729| title = Bolivia to Appeal Ruling Favoring India's Jindal in El Mutún Dispute - WSJ}}</ref>