Bolivia - Strengthening Competitiveness for Export Diversification and Inclusive Growth

Abstract

In this context, a recent World Bank report investigates how Bolivia can achieve greater diversification in the nontraditional sectors through higher compositeness. The report identifies the main constraints with an emphasis on transport and logistics, paramount for a landlocked country. The report analyses how Bolivia's opening to foreign trade since the mid 1980s has affected economic growth, employment, and poverty. The analysis further assesses the role of Bolivia's current preferential trade agreements on those key economic indicators. Rapidly rising inflation poses a threat to the competitiveness of Bolivian exporters. Inflation climbed to 12 percent at end-2007, up from 5 percent in 2006, increasing the price of Bolivian exports. The higher inflation is the result of such variables as the global rise in food prices, a slow supply response attributable to low private investment, increased aggregate demand fueled by remit tends to under-export relative to other countries.