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Bolivia: Foreign Assistance
Country Study > Chapter 3 > The Economy > Foreign and Economic Relations > Foreign Assistance

FOREIGN ASSISTANCE


As the poorest country in South America, Bolivia received generous amounts of multilateral and bilateral foreign assistance. The most important multilateral lenders were the IMF, the World Bank, and the IDB, all of which furnished mostly concessionary loans. The IMF and the World Bank provided several hundred million dollars to the Bolivian government for the restructuring of the financial system, debt management, balance of payments support, the Emergency Social Fund, and various other projects. In 1988 Bolivia received US$187 million in World Bank funding under the Enhanced Structural Adjustment Facility, a new loan mechanism available only to the poorest members of the bank. The IDB, another major multilateral donor, has lent the country in excess of US$1 billion since the early 1960s for projects in infrastructure, mining, industry, agriculture, energy, health, education, and other fields. In the late 1980s, the IDB's project funding focused on repair to the Cochabamba-Santa Cruz highway, export financing, small farming projects, tax reform, and the informal sector. Other multilateral organizations present in Bolivia were the Andean Development Corporation, the United Nations, and the Organization of American States.

Bilateral overseas development agencies in the first half of the 1980s granted Bolivia an average of US$170 million a year, or about 6 percent of GDP, and the United States on average provided a quarter of grant monies. As with multilateral agencies, bilateral agencies responded favorably to the orthodox policy reforms attempted by the Paz Estenssoro government. The United States, which had provided US$1.18 billion from 1946 to 1986, remained Bolivia's single most important bilateral donor in the late 1980s. AID transferred over US$61 million to the country in 1988 and earmarked US$77 million for 1989. Over half of that assistance was directed at PLZ480 Food for Peace programs, and another third went into specific development projects. An increasing percentage of assistance was being targeted for balance of payments support in the form of Economic Support Funds. AID supported market-oriented policy reforms, assisted in narcotics control and coca eradication efforts, and funded health, education, and informal sector projects to mitigate the effects of the economic crisis. Other United States agencies, including the Drug Enforcement Administration, the Department of Defense, and the Inter-American Foundation, also provided economic assistance to the country. The Peace Corps, which was expelled by the Bolivian government in 1971, hoped to return in the early 1990s. Japan, Canada, and most West European countries also extended bilateral assistance. The Soviet Union provided Bolivia with an estimated US$204 million from 1954 to 1987.

Definitive, book-length studies of the Bolivian economy in the 1980s were unavailable in early 1989. The literature tended to focus on labor unions and the history of tin. Nor were there any comprehensive, book-length studies of important economic developments, such as the 1985 tin-market crash and the 1985 NPE. The most comprehensive work on the tin industry, The Economics of Tin Mining in Bolivia by Mahmood Ali Ayub and Hideo Hashimoto, was written before the crash. An informative monograph on the collapse is the London-based Latin America Bureau's The Great Tin Crash by John Crabtree, Gavan Duffy, and Jenny Pearce. A useful monograph on the NPE is Bolivia's Economic Crisis by Juan Antonio Morales and Jeffrey Sachs. There are also few in-depth studies on the important revenue-producing hydrocarbon and coca industries. Data on Bolivia's coca eradication and other antidrug efforts can be found in the periodic International Narcotics Control Strategy Report, published by the United States Department of State's Bureau of International Narcotics Matters, and in Drug Control, published by the United States General Accounting Office. Among the few journal articles on the Bolivian economy is James M. Malloy's "Bolivia's Economic Crisis."

A definitive source of economic data on Bolivia also was lacking in early 1989, and, as with many developing nations, data varied greatly. Useful Bolivian sources include publications of the Central Bank and the Ministry of Planning and Coordination's National Statistical Institute, such as the annual Bolivia en cifras. The best English-language sources include the IMF's International Financial Statistics Yearbook, 1988; the World Bank's Annual Report, 1988; the IDB's discussion of Bolivia in Economic and Social Progress in Latin America; and Country Profile: Bolivia, 1988-1989, published by the London-based Economist Intelligence Unit. Useful monthly newsletters include Latin America Regional Reports and Latin American Monitor. (For further information and complete citations, see Bibliography.)

Data as of December 1989




Last Updated: December 1989


Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Bolivia was first published in 1989. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.

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