<NREC>Boliviatoc Bolivia: Table of Contents <A>=Bolivia

 

 

Country Commercial Guide

BOLIVIA

 

Fiscal Year 1999

Prepared by U.S. Embassy La Paz

Released July, 1998

 

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TABLE OF CONTENTS

Chapter I:    Executive Summary

Chapter II:   Economic Trends and Outlook

Chapter III:  Political Environment

Chapter V:    Leading Sectors for U.S. Exports and Investments

Chapter VI:   Trade Regulations and Standards

Chapter VII:  Investment Climate

Chapter VIII: Trade and Project Financing

Chapter IX:   Business Travel

Chapter X:    Economic and Trade Statistics

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Bolivia01 Bolivia: Executive Summary <A>=Bolivia

 

 

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I.  EXECUTIVE SUMMARY

This Country Commercial Guide (CCG) presents a comprehensive look at Bolivia's commercial environment, using economic, political and market analyses. The CCGs were established by recommendation of the Trade Promotion Coordinating Committee (TPCC, a multi-agency task force) to consolidate various reporting documents prepared for the U.S. business community. Country Commercial Guides are prepared annually at U.S. Embassies through the combined efforts of several U.S. Government agencies.

The commitment of Bolivia's successive governments to the free-market economic system for the last 13 years -- following the trauma of hyperinflation in the early 1980s -- has created conditions that have led to a period of steady economic growth. This growth has been largely non-inflationary, thanks to the Central Bank's strict control of money supply growth. The rate of economic growth over this period has been disappointing, however, and its distribution has been uneven across the population. Bolivia remains the poorest country in South America, with a significant portion of its population living outside the reach of the government and the market economy.

 

Bolivia has a relatively low level of industrialization and remains highly dependent on imports -- especially of capital and consumer goods -- to fuel its growth. The United States is Bolivia's largest trading partner: in 1997, the United States exported goods worth US$295 million to Bolivia and imported goods worth US$223 million; trade figures for 1998 suggest that the surplus continues. U.S. investment in Bolivia has grown rapidly and will soon exceed US$1 billion, if it doesn't already.

We expect that Bolivia's real GDP will grow in 1998 by over 4%, with nominal GDP equaling roughly US$8 billion. Bolivia's engine of growth in recent years has been the service sector, with the most rapid growth occurring in banking, communications, commerce and transport. Investments in the hydrocarbons sector are being spurred by the construction of the gas pipeline to Brazil (due to come on line in early 1999), which will absorb all the gas that Bolivia has to offer and more. Inflation in consumer prices fell slightly in 1997, to 7%; in 1998, the projections suggest it will fall further, to 6%.

 

Bolivia welcomes foreign direct investment throughout its economy, with very few restrictions. The Investment Law guarantees national treatment and the free convertibility of currency; a recently signed Bilateral Investment Treaty will provide means for U.S. investors to defend these rights.

Potential investors should be aware, however, that there is a severe lack of transparency in the country's judicial system. The Banzer Administration recognizes this deficiency and is working with the political opposition to legislate changes to the system which should remedy this over time. In the meantime it can be difficult to enforce contracts through the court system.

The United States and Bolivia have had a long-standing cooperative relationship in pursuit of the promotion of the country's social and physical development, the strengthening of its democratic institutions, the eradication of illegal coca production and the interdiction of the trade in cocaine and related products. Since taking power in August 1997 the Banzer Administration has proven that it will continue to cooperate with the U.S. Government in these key areas of mutual concern.

The best prospects for U.S. trade and investment in the coming years are in the mining, petroleum and agriculture sectors.

Country Commercial Guides are available for U.S. exporters from the National Trade Data Bank as CD-ROM or via the internet. (Please contact STAT-USA at 1-800-STATE-USA for more information.) Country Commercial Guides can also be accessed via the World Wide Web at "http://www.stat-usa.gov"; "http://www.state.gov" and "http://www.mac.doc.gov." They can also be ordered in hard copy or on diskette from the National Technical Information Service (NTIS) at 1-800-553-NTIS. U.S. exporters seeking general export information/assistance and country specific commercial information should contact the U.S. Department of Commerce, Trade Information Center by phone at 1-800-USA-TRADE.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Bolivia02 Bolivia: Economic Trends and Outlook <A>=Bolivia

 

 

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II.  ECONOMIC TRENDS AND OUTLOOK

Major Trends and Outlook

To date Bolivia has enjoyed 11 years of moderate but sustained growth. We expect this trend to continue: real GDP is projected to grow 4.7% in 1998. The Bolivian economy grew 4.2% in 1997, and consumer prices rose by 7%. Inflation in consumer prices in 1998 is expected to fall to a 20-year low of about 6%.

Despite continuing weaknesses and the recent collapse of a bank, Bolivia's banking system is in the best shape it has ever been, with total deposits exceeding US$3.5 billion for the first time ever. Interest rates remain high, however: secured loans denominated in U.S. dollars cost about 17% per annum. Citibank's recent buy-out of troubled BHN/Multibanco has helped increase confidence (and heighten competition) in the sector; other foreign banks are expected to enter the sector in the coming year, placing still further pressure on local banks to modernize their systems and clean up their bad debt portfolios to stay competitive.

 

The Sanchez de Lozada Administration ended in 1997 by building upon its package of sweeping structural reforms with further capitalizations and privatizations, as well as by encouraging greater administrative decentralization through expansion of its "popular participation" program. During the Sanchez de Lozada Administration the role of the state shifted notably from its traditional role as the manager of productive units towards a new role as the regulator of the environment in which the private sector takes the lead. Though far from complete, the continuance of this transition will be the key to the eventual elimination of the myriad opportunities and incentives which have provided a nurturing environment to corruption, which has plagued Bolivia for much of its history.

 

The capitalization of the five of the Bolivian Government largest parastatals in 1996-97 is expected to contribute significantly to the country's rate of economic growth in the coming years. The foreign-based "strategic partners" in the capitalized companies pledged almost US$1.7 billion in new investment in the country's transportation (LAB, ENFE), energy (ENDE) and communications (ENTEL) infrastructure; in return they received 50% of each company's assets.

 

Capitalization provided needed investment and introduced new technology and management skills to these key companies. The program has been criticized, however, for having few job-creation effects outside the immediate sector. Indeed initially some jobs were eliminated from the over-staffed state corporations, although we expect employment levels to rise over time, we also expect that the introduction of greater efficiencies through continuing investment in these sectors will have a very positive impact across the entire economy. In particular, the development of the country's infrastructure should create an environment far more conducive to unrelated investments, which should lead eventually to the job-creation needed to spread the benefits of the program more widely across the economy.

 

The present Banzer Administration plans to use its limited public investment program to develop such essential activities as education, public health and roads. These sectors should, therefore, be more attractive as well in the coming years to U.S.-based providers of goods and services. The Government has committed itself to improve social indicators during the next five years under the terms of its agreements with donors.

Bolivia's successive administrations since the hyperinflationary period of the early 1980s have maintained fiscal and monetary discipline and thereby successfully avoided recurrences of the scourge of uncontrolled inflation. By 1993-94 the Government was able to bring inflation in consumer prices down to single digits, before prices rose almost 13% in 1995. Improved monetary controls -- and favorable weather -- helped bring the inflation rate back down to 8% in 1996 and to 7% in 1997. In 1998 the Government is targeting holding it to about 6%.

 

Improved controls on spending and some progress in improving tax collection enabled the Government to reduce its fiscal deficit to 1.8% of GDP in 1995, down from 3.0% in 1994 and 6.0% in 1993. After rising slightly in 1996, the deficit rose to 3.3% in 1997, due largely to the cost of the pension reform launched in 1996. During 1998 the Government is expected to renew its commitments to the International Monetary Fund (IMF) under an Enhanced Structural Adjustment Facility (ESAF) and see the debt relief program under the Highly Indebted Poor Country (HIPC) program come into force. Fiscal deficit in 1998 is expected to be equivalent to about 4% of GDP.

 

The outlook for Bolivia's economy is quite positive. Bolivia's principal political parties are now uniformly dedicated to free market principles, and all recognize the importance of maintaining a stable, predictable investment climate. There can be significant differences, however, in how each administration might pursue these commonly shared goals. Even as each succeeding administration has sought -- for political reasons -- to define how it differs from its predecessor, each has found that economic necessity requires that they preserve the fundamental "rules of the game" faced by investors of all stripes, an increasing number of whom are foreign-based.

 

Despite its generally encouraging prospects, Bolivia's endemic poverty and public indebtedness remain daunting challenges. A large percentage of the population lives outside of the cash economy, while many more face the grinding reality of securing a livelihood through small-scale agriculture. The Banzer Administration has identified the need to address Bolivia's poverty as one of its primary objectives, and it will use donor assistance and concessional financing from the international financial institutions (IFIs) to help finance these necessary developmental activities.

 

As of the end of May 1998, Bolivia faced bilateral and multilateral debt totaling US$4.1 billion. In 1998 disbursements from the IFIs have equaled only one-third of their respective debt amortization payments. The strain of this basic imbalance will be greatly alleviated when Bolivia becomes the second country to benefit from the Heavily Indebted Poor Country (HIPC) debt relief scheme, which will result in debt relief equal to about US$450 million if the program's conditions -- requiring improvements in many fundamental social indicators -- are met over the coming five years.

 

Principal Growth Sectors

The three major sectors of the Bolivian economy -- energy, mining and agriculture -- should enjoy significant growth in 1998 and beyond for several reasons. The hydrocarbons sector in particular enjoys very solid future prospects, due to the near-term completion of a gas pipeline to Brazil, an economy whose growth potential (and demand for energy) seems unlimited.

Companies from the United States, Brazil and Argentina are actively exploring for hydrocarbons throughout the country, investing a total of US$130 million in 1995, US$116 million in 1996 and approximately US$250 million in 1997 in exploration and development activities. This total will significantly increase in 1998 and beyond: petroleum companies already operating in Bolivia have announced investments totaling US$2 billion through 2002. There will also be new investments made in new concessions to be awarded by the government in 1998-99 in 11 new areas.

The mining sector is also expected to see an upturn in investment in the coming years, a result of active prospecting by several companies and announcements of dramatic new finds. New drilling projects continue to discover and upgrade ore reserves. An on-going project to define mining claims using GPS coordinates will also help encourage new investment in the sector.

 

The agricultural sector is growing dynamically, as land in the Department of Santa Cruz is being shifted increasingly to the production of oilseeds and cotton. Bolivia exports soy products principally to Brazil and Argentina along the Rio Paraguay, where it is processed for export to world markets. Growth in output should continue for several years, as many new investors -- many Brazilian-based -- enter the sector and both bring more land into cultivation and apply improved technology. The agriculture sector -- principally in the Santa Cruz region -- has enjoyed annual growth rates of over 10% over the last five years.

 

Government Role in the Economy

Total Government expenditure will account for 39% of GDP in 1998, of which about 9% will be spent on investment. The capitalization program significantly reduced the Bolivian Government's presence as an economic player: as recently as 1995, total Government expenditure equaled 46% of GDP. The Bolivian Government increasingly sees its role as a provider of general guidelines and the overseer of economic activities. In the future the Government will be increasingly focused on addressing the severe deficiencies Bolivia faces in such public services as education, health and the maintenance of road infrastructure.

 

In 1994 the Bolivian Government launched the "popular participation" program, which requires that a fixed percentage of federal revenues be passed with relatively few conditions to the country's 311 municipalities. Now municipalities -- many of which prior had received little support of any kind from the central government -- have control over spending decisions that immediately affect their citizens' lives. The challenge today is developing the managerial skills of the municipalities so that they are better able to handle these monies effectively and to address issues that have a lasting impact on their communities.

 

Balance Of Payments Situation

The goods trade deficit rose to about US$660 million in 1997, roughly double that of 1995. Of the total FOB value of 1997 exports of US$1.2 billion, minerals accounted for US$488 million; natural gas and crude oil exports, US$98 million; and non-traditional exports, US$550 million. Total 1997 imports CIF of US$1.8 billion included: consumer goods, US$375 million; raw materials and intermediate goods, US$701 million; and capital goods, US$733 million. (The importation of contraband and the export of illegal drugs do not figure in these data.)

Bolivia's current account deficit in 1998 is projected to reach US$680 million and will be offset by a capital account surplus of about US$890 million, mostly the result of direct investment. These projections project an overall deficit for all of 1998 of only US$25 million and for 1999 of US$55 million. The Central Bank reports that its net international reserves increased to US$1.07 billion as of end-1997, from US$950 million at end-1996.

In 1996 the Paris Club agreed to forgive US$629 million of its members' bilateral debt with Bolivia. In 1997 the boards of the IMF, the World Bank (IBRD) and the Inter-American Development Bank (IADB) approved Bolivia's inclusion in the HIPC program, which also involved further debt relief by Bolivia's bilateral and other official donors.

 

The total debt of the Bolivian Government at end-1997 stood at US$4.2 billion, of which US$1.5 billion was owed to governments, US$2.7 billion to multilateral development banks and US$29 million to private banks.

 

Infrastructure

Bolivia's poor infrastructure -- particularly its lack of adequate transportation links -- figures prominently among the obstacles the country faces to increasing its pace of economic growth.

 

There are various road projects under development or construction, principally in the Departments of BENI, Santa Cruz, Potosí, La Paz and Tarija, with estimated total investment of US$986 million, for which only US$751 million in financing has been committed to date. In 1998 the Bolivian Government passed a law authorizing the granting of concessions for public works, with an eye principally to creating unconventional means to finance new road projects. The Government can now grant concessions to local or foreign contractors for up to 40 years.

Bolivia's installed electrical power generating capacity is rated at 787 megawatts (MW). ENDE -- the former parastatal generating company -- had an installed generating capacity of 497 MW, all of which was purchased in 1995 in three units through the capitalization program by three U.S. consortia. Energy initiatives purchased the Guaracachi thermo-plant (248 MW) located in Santa Cruz for US$447 million. Dominion Energy purchased the Corani (54 MW) and Santa Isabel (72 MW) hydroelectric plants, both located in Cochabamba, for US$59 million. Constellation Energy purchased the Valle Hermoso thermo-plant (87 MW) located in Cochabamba for US$34 million. A U.S.-based group already owned the Bolivian power company (COBEE) which supplies the La Paz area and has 160 MW installed generating capacity; COBEE has plans to add another 66 MW by the end of 1998.

 

The company offering long-distance and international telephony -- ENTEL -- was purchased by the Italian firm Stet International for US$610 million in 1995. ENTEL enjoys a monopoly on long-distance/international service through 2001, and rates have remained high by international standards. Local telephony within cities is controlled by independent cooperatives which also enjoy a monopoly on wired service through 2001. While ENTEL has invested in fairly sophisticated switching systems, the cooperatives generally have not been able to modernize their systems, due to the lack of financing opportunities. Thus local service tends to be poor. The three largest cooperatives (COTAS, COMTECO and COTEL, in Santa Cruz, Cochabamba and La Paz, respectively) control almost 85% of the country's local telephony. In the coming years we expect many of these cooperatives to seek strategic partners and otherwise change their legal status to improve their access to new technologies and financing.

 

Cellular phones have proven to be very popular in Bolivia, as aggressive competition has resulted in consumers enjoying some of the lowest prices offered in the hemisphere. The two providers are ENTEL and Telecel, a subsidiary of U.S.-based MIC (USA).

Two airlines -- American Airlines and Lloyd Aereo Boliviano (LAB) -- offer daily non-stop service to Miami. The Brazilian airline VASP purchased half of LAB when it was capitalized in 1995. (The Embassy recently announced that for a variety of reasons it considered LAB's domestic service to be sufficiently dangerous to warrant advising U.S. travelers to avoid using it when possible.) A second domestic carrier is Aerosur. Challenge Air (a U.S.-based cargo carrier) also services Bolivia. A variety of airlines offer flights to neighboring countries, most on a daily basis.

The national railroad system was capitalized in two sections in 1995. Cruz Blanca of Chile was the only firm to submit a qualifying bid for both and now owns 50% of these systems. The system which Cruz Blanca owns shows the signs of years of insufficient investment. Its hauling capacity is also limited by Bolivia's challenging geography and the narrow gauge track built to the British standard at the turn of the century. The rail system consists of two independent lines that are separated by the eastern Andes. The western line connects the cities of La Paz, Cochabamba and Oruro with both northern Argentina and the Chilean ports of Arica and Antofagasta. The eastern line connects the city of Santa Cruz with western Brazil and northern Argentina. Rolling stock (55 locomotives and 2000 railway cars) can be transferred between systems only through northern Argentina. The lack of adequate rail transport capacity is of special concern to the booming agricultural export industry around Santa Cruz.

 

Bolivia has just begun to enter the computerized age. Many smaller businesses are still making the change from ledgers to spreadsheets. To a certain extent this may prove to be a blessing, helping the country avoid the "year 2000 problem." The Superintendent of Banks has asked for donor support in ensuring that Bolivia's banking system handles the Y2K problem in time to avoid financial chaos. The country as a whole is likely to find that there will be areas in which it has done too little; hopefully, given Bolivia's low level of development, the disruption will not be too great.

 

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<NREC>Bolivia03 Bolivia: Political Environment <A>=Bolivia

 

 

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III.  POLITICAL ENVIRONMENT

 

Nature of the Political Relationship with the United States

The United States remains Bolivia's largest provider of foreign aid, its principal trading partner and the largest source of foreign investment. The United States today enjoys considerable influence at nearly all levels of Bolivian politics, society and culture, despite Bolivia's past reputation as a hotbed of anti-"yanqui" sentiment.

 

U.S.-Bolivian relations are very good. Both countries share a strong commitment to fostering and strengthening democracy, to combating terrorism, to fomenting sustainable economic growth and to fighting the common threat posed by drug trafficking. Regular high-level visits help maintain strong ties which exist between the leaders of both governments.

 

Major Political Issues Affecting the Business Climate

Counternarcotics issues remain the most difficult feature of the bilateral relationship. The newly installed Banzer Administration has committed itself to removing Bolivia from the "coca/cocaine circuit" within five years. In its first year in office it has demonstrated a willingness to push for accelerated eradication, both through what it has accomplished on the ground and what it has committed to achieving in the coming years. The U.S. Government will work closely with the Bolivian Government to achieve this goal.

 

Under the direction of President Sanchez de Lozada, Bolivia pursued a forward-looking foreign policy, seeking to expand markets in Europe and Asia and to promote hemispheric free trade. During his tenure, Bolivia became a member of the World Trade Organization (1995) and an associate member of MERCOSUR (1997). Bolivia has also long been a member of what is now known as the Andean Community. We expect that the Banzer Administration will continue these policies.

 

While Bolivia hopes eventually to reduce its dependence of foreign aid, it will require concessional assistance for many years to come to allow it to fulfill its economic and social development goals. As U.S. development assistance levels decline, Bolivia has increasingly come to rely upon the IFIs -- principally the IBRD and the IADB -- to fund its investment priorities. Given Bolivia's increasing level of per capita GDP, it will likely be obliged to accept mixed financing -- i.e., loans which enjoy a lower level of concessionality -- at some point in the coming decade.

 

Sustained improvement in the natural alternatives to foreign assistance -- increased trade and investment -- will only come about once Bolivia reforms its non-transparent judicial system, reduces bureaucratic impediments and fully implements the various economic reforms envisioned by several administrations. The Bolivian Government's signing of a Bilateral Investment Treaty with the U.S. Government in 1998 and its progress in implementing a judicial reform program, which has spanned several administrations, both auger well for creating an environment conducive to foreign investment and the additional exports it creates.

 

Synopsis of Political System

Bolivia held free and fair Presidential elections on June 1, 1997. A plurality was won by former de facto President Hugo Banzer (of the center/right ADN party, polling around 23% of the popular vote in a field of ten candidates), who assumed office on August 6, 1997. (The candidate of the MNR, the former ruling party, finished second.) This was Bolivia's fifth successive democratic transfer of power, a clear indication of the maturation of the country's democratic institutions. Once known for political instability and a dizzying string of military coups, Bolivia is now among South America's leaders in building democratic political institutions and a sustained system of market-oriented economic policies.

 

President Sanchez de Lozada interpreted his 1993 electoral victory as a mandate to implement sweeping economic and political change and embarked on an ambitious program which included capitalization, pension reform, educational reform and electoral reform. The slow implementation of these programs, coupled with continued high levels of poverty and unemployment, led to significant voter frustration, which was reflected in the 1997 election results. Accordingly, while the Banzer Administration will need to maintain the pace of economic and political reform, it will perhaps be judged even more closely on how it addresses social issues and the all-important issue of job creation.

Bolivia's plurinominal electoral system (which mixes proportional representation in Congress with direct elections) encourages multiple parties and makes it very difficult for any one party to gain a legislative majority. Consequently, coalition governments are the rule. Following his election as President, Banzer announced the formation of a coalition with inter alia the populist CONDEPA, the leftist MIR and the centrist UCS parties. Although the presence in Banzer's "mega-coalition" of parties with leftist economic beliefs or one whose leaders have been associated with narco-traffickers aroused some concern, Banzer has shown no sign of a lessened commitment to either preserving Bolivia's open economy or fighting the coca/cocaine culture.

While the "mega-coalition" enjoys a large congressional majority, Banzer may well have a difficult time convincing this ideologically disparate group to act in concert. We expect that CONDEPA and the MIR will push to put a more "human face" on the on-going process of economic and political reform, while also attempting to position themselves advantageously for future elections. Although we believe that major changes in the package of policies which this administration inherited from its predecessor are unlikely, the need to placate such disparate coalition partners could well complicate this administration's push to achieve significant progress in key areas of reform.

 

Outline of the Political System

Executive: the Cabinet includes the President, Vice President and 14 ministers. The President and Vice President are elected to a five-year term (as of the 1997 election); neither can serve consecutive terms in either capacity. If no candidate wins an absolute majority of the popular vote, the President is elected by Congress from among the two candidates who polled the highest plurality.

 

The Bolivian Cabinet as of July 1998, with Party Affiliation 

President                      Hugo Banzer Suarez (ADN)

Vice President                 Lic. Jorge Quiroga Ramirez (ADN)

Foreign Minister               Dr. Javier Murillo de la Rocha

                                (AND)

Minister of Government         Lic. Guido Nayar Parada (ADN)

Minister of Defense            Lic. Fernando Kieffer (ADN)

Minister of the Presidency     Lic. Carlos Iturralde Ballivian

                                (AND)

Minister of Finance            Lic. Edgar Millares Ardaya (ADN)

Minister of Economic Development Lic. Jorge Pacheco (UCS)

Minister of Justice and Human Rights Dra. Ana Maria Cortez de+

                                Soriano (ADN)

Minister of Education, Culture

  and Sports                   Lic. Tito Hoz de Villa Quiroga

                                (AND)

Minister of Health and Social

  Prevision                    Dr. Tonchy Marinkovic Uzqueda

                                (MIR)

Minister of Labor              Arq. Leopoldo Lopez Cossio (MIR)

Minister of Agriculture and Rural

  Development                  Lic. Oswaldo Antezana Vaca (ADN)

Minister of Housing and Basic Services (vacant)

Minister of Sustainable Development

  and Planning                 Dr. Erick Alberto Reyes Villa

                                (NFR)

Minister of Foreign Trade and

  Investment                   Lic. Jorge Crespo Velasco (MIR)

Legislative: a two-chamber Congress includes a 27-member senate (chosen by party slate; three per department) and a 130-member Chamber of Deputies (half elected directly, and half from party slates; apportioned roughly by population). Senators and deputies serve five-year terms and may be re-elected consecutively.

 

The Major Parties Currently Represented in Congress are: 

the "Mega-Coalition" ADN: National Democratic Action (center-

                        right)

                   UCS: Civic Solidarity Movement (populist)

                   MIR: Movement of the Revolutionary Left

                    (center-left)

                   CONDEPA: Conscience of the Fatherland

                    (populist)

                   NFR: New Republican Force (center)

                   PDC: Democratic Christian Party (center)

the Opposition:    MNR: Nationalist Revolutionary Movement

                    (centrist)

                   MBL: Free Bolivia Movement (leftist)

                   IU : United Left (far-left)

Judiciary: the judiciary consists of the Supreme, Departmental and Lower Courts. The 12 Supreme Court Justices are nominated by the President and elected by the Congress (with two-thirds approval); they serve one ten-year term. The Attorney General is independent from the executive branch; he is also appointed by the President, confirmed by the Congress and serves one ten-year term.

 

Suffrage is universal and compulsory at age 18. An estimated 2.3 million voters were registered for the 1997 elections. The next national elections will be held in 2002.

 

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<NREC>Bolivia04 Bolivia: Marketing U.S. Products and Services <A>=Bolivia

 

 

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IV.  MARKETING U.S. PRODUCTS AND SERVICES

 

Distribution and Sales Channels

There are four basic means by which one can market imports coming into Bolivia:

 

By commissioned or independent sales agents or representatives; Through import houses; Via subsidiaries of foreign firms; and By direct importation by government agencies.

 

Firms that have enjoyed the greatest success in Bolivia have selected the type of distribution system most suitable to their product and appointed an experienced, aggressive and financially solvent representative to handle their local affairs.

Most heavy equipment, machinery and general merchandise must be delivered through seaports in Peru, Chile, Brazil or Argentina. On occasion bad weather, road blockages, port congestion and other factors can block these channels. It is important to cooperate closely with your Bolivian clients to arrange the proper mode of transportation and to prepare and submit shipping documents in a timely manner. Given the possible complications inherent in land delivery, air cargo transport may prove to preferable even for heavy items.

 

Use of Agents and Distributors - Finding a Partner

Most of the numerous agents, distributors and representatives active in Bolivia are competent in dealing with government agencies, as well as with private industry.

Commission agents take orders on a direct-shipment basis. Some specialize in certain products or in supplying customers engaged in specific activities. These agents and representatives usually do not maintain inventories.

 

Agents are required to have a minimum paid-in capital of US$2,000 to initiate a business transaction in Bolivia. Agents must also meet certain other requirements and register with the National Chamber of Commerce, the Internal Revenue Service, the Vice Ministry of Industry and Commerce, the National Directory of Commerce and the municipality in which they are based. To register, agents and representatives require a letter or agreement from a firm appointing them as its agent or representative. This document should clearly indicate the contract's period of validity, the sales area covered by the agent (be it national or regional), the financial terms and whether the exporting firm has the right to appoint other agents in other areas of the country. Legal counsel is recommended in drawing up the contract, which enables the agent to act on behalf of the foreign firm in government tenders. The usual commission in Bolivia varies from 5 to 10%, depending on the product, the amount of the transactions and other factors.

 

Import houses in Bolivia are normally relatively large, although there do exist some small, well-established importers. These firms import for their own use and also represent foreign firms on a commission basis. Many operate general merchandise outlets. Larger importers have subsidiaries and branches throughout the country, as well as sub-distributors and a sales force to canvass retailers, wholesalers and consumers. This method offers the U.S. exporter a degree of financial security, as the importer normally stocks products and assumes the risk of importing general merchandise. More importantly, U.S. exporters -- via their agents -- are also allowed to sell to government agencies in response to tenders.

 

Hundreds of thousands of Bolivians are engaged in merchandising, usually in small facilities or as street vendors. Although many goods are available through legitimate wholesalers, a significant percentage also enters the country as contraband. In addition, many wholesalers import directly and then distribute goods through their own retail outlets in major cities and through other firms. Many retail establishments are small operations, often family-owned; others are direct outlets run by local producers.

 

The main distribution center is La Paz, Bolivia's largest city and the seat of government. Traditionally most import houses, distributors and agencies use La Paz as their major central outlet, with branches in Cochabamba and Santa Cruz. Santa Cruz -- Bolivia's fastest growing city and the country's economic center -- might prove in the future to be an attractive base from which to market in Bolivia.

 

Franchising

Although Bolivia has no specific legislation regarding franchising, there are clear rules governing its operation. A foreign-based company wanting to grant a specific franchise in Bolivia must first register the brand name with the Office of Industrial Property, which presently is controlled by the Vice Ministry of Industry and Commerce but will soon form part of an independent National Intellectual Property Service. Once the brand name is registered, the foreign company may grant the local company a franchise through a contract specifying the terms of mutual agreement.

 

Direct Marketing

Establishing a local branch or subsidiary provides an edge when selling to or servicing machinery of government agencies or private businesses.

 

Joint Ventures/Licensing

Joint venture operations are ruled by the Investment Law, and its implementing regulations are laid out in Supreme Decree 22526 (June 13, 1990).

 

A joint venture in Bolivia is defined as a specific business venture carried out by two parties with separate legal licenses. Once the objectives are clearly defined, a contract is signed between the parties, and each party becomes liable for debts according to the percentage each owns. The separate business interests of any party are not affected by the joint venture's activities, unless specifically stated. Corporations and/or individuals (foreign or domestic) may enter into joint venture agreements. While foreign companies are not required to possess a local legal license in advance, they must be able to demonstrate their legal status in their country of origin.

 

Steps to Establishing an Office

Foreign investments are welcome in Bolivia. Although there are specific laws designed to minimize the bureaucratic hurdles to establishing an office in Bolivia, we strongly suggest that companies hire the services of a local attorney to avoid unnecessary delays and pitfalls.

 

Under Bolivia's commercial code, business can be conducted under the following types of business entities:

 

Corporation (Sociedad Anonima, or S.A.) - owners of capital are described as shareholders;

Private Companies (Sociedad de Responsabilidad Limitada, S.R.L.) - owners of capital are described as quota holders and have limited liability;

General Partnership (Sociedad Colectiva, S.C.) - participants are described as partners, who are responsible for joint and individual liability;

Limited Partnership (Sociedad en Comandita Simple, S.C.S.) - participants are described as partners. There are two types of partners: General Partners (Socios Colectivos, who have unlimited liability) and Limited Partners (Socios en Comandita, who have limited liability);

Limited Partnership Company (Sociedad en Comandita por Acciones, S.C.A.) - owners of capital are described as shareholders and partners;

Branch of a Foreign Company;

Sole Proprietorship.

The corporation, private company and branch are the most common vehicles for foreign investment.

Taxation on foreign companies is similar to that applied to local companies. Since 1995 all companies face a tax equal to 25% of profits. U.S. companies can use the tax paid in Bolivia as a tax credit in the United States under the world-wide income taxation system. Companies should consult a knowledgeable accounting firm in Bolivia for more detailed information.

 

Selling Factors/Techniques

It is essential that U.S. firms be formally represented in Bolivia through import houses, commission or independent sales agents, local distributors or local subsidiaries. Periodic visits by representatives of U.S. suppliers are likewise essential in order to provide training and assistance to the distributor or agent and to establish personal contact with customers.

 

Advertising and Trade Promotion

The Bolivian advertising industry has become increasingly professional and competitive over the years. The tremendous increase in private television ownership in recent years has prompted the industry to devote special attention to TV commercial spots.

 

La Paz remains the principal advertising center. Nineteen advertising agencies operate in La Paz, of which Contacto Ltda., Prisa Ltda., Avila Publicidad and Multicomunicacion are the leaders. All 19 are members of the Chamber of Advertising Agencies. The chamber can be contacted at:

     Camara Pacena de Agencias de Publicidad

     Casilla 10602

     Calle Potosi, 1136 - Piso 5

     La Paz, Bolivia

     Contact: Edgar Aguirre, President

     Tel: (591-2) 392426; Fax: (591-2) 392432

Advertising agencies usually charge a 15% commission, although this percentage is negotiable.

 

Television is the principal form of advertising, followed by newspapers and radio. According to the latest statistics supplied by the Association of Advertising Agencies, television advertisements now account for 80% of all advertising expenditures, while 8% goes for newspaper and magazine ads and 7% for radio spots. Other media -- such as movie theaters, neon signs, billboards and direct mailing -- account for the remaining 5%.

 

- Television -

All TV stations are in private hands except for one government-owned national broadcasting station and eight stations belonging to the major state universities.

While several networks of stations broadcast common programming throughout the country, only the government station is considered to be truly "national" since it alone transmits to all areas of Bolivia. The other "networks" beam their signals to the major cities via microwave re-transmission, although most have plans for full satellite transmission. The regional TV stations owned by the universities and the private sector rent an interconnection system from ENTEL to broadcast nationally. There are also nine private cable TV systems in the cities of La Paz, Cochabamba and Santa Cruz.

 

The industry is regulated by the Superintendencia de Telecomunicaciones (Superintendent of Telecommunications). The Superintendent controls the hours of broadcasting but sets no price controls on commercial time.

 

La Paz, Santa Cruz and Cochabamba as a group have 30 of the country's 84 broadcasting stations, 74 of which are VHF. All TV stations have color transmission using the U.S. system (NTSC) using 525 lines and 50 cycles. In 1997 there were approximately 150,000 black-and-white and 700,000 color TV sets in use throughout the country.

 

- Radio -

All but two of Bolivia's radio stations are in private hands (one public station belongs to the military; the other to the central government). Radio is very popular here, mainly because radios are cheap and can bring entertainment and news to even the most humble sectors of the society, whose homes often lack electricity. It is also effective in reaching the country's illiterate, about half of Bolivia's total population of 8 million.

 

There has recently been a significant increase in FM stations broadcasting throughout the country. La Paz, Santa Cruz and Cochabamba account for 190 of the country's 300 legal stations. Nearly half of the stations -- 140 -- are AM, 70 are short-wave and 90 are FM. Many stations lack proper licenses and may be cut off in the near term as the government gains the ability to enforce its band-spectrum management more aggressively.

The approximately 3.6 million radios in Bolivia reach an audience of some 4.5 million people. Radio stations are very effective in reaching rural populations, particularly given the proliferation of programs in the two dominant native languages, Aymara and Quechua.

 

- Newspapers -

Newspapers are the second most important advertising vehicle. The five newspapers in La Paz have a daily circulation of between 30,000 and 80,000 copies. The major La Paz newspapers are: La Razon, El Diario, Presencia, Ultima Hora and Hoy, all of which circulate nationally. The major newspapers from Santa Cruz (El Deber and El Mundo) and from Cochabamba (Los Tiempos) are also sold nationally.

 

- Theaters -

There are about 25 motion picture theaters in La Paz, with an estimated total seating capacity of 20,000.

 

- Market Research -

Bolivia's two major market research firms are Price Waterhouse/Lybrand and KPMG; another ten Bolivian market research firms represent other foreign consulting companies. Most of these firms also provide engineering and industry feasibility studies. An updated list of consulting firms and their services is available in the Commercial Library of the U.S. Embassy in La Paz.

 

All market research and consulting companies are required to register with the National Chamber of Consulting Companies. All correspondence to the association may be addressed as follows:

     Maria Eugenia Leon, Executive Secretary

     Camara Nacional de Empresas Consultoras (CANEC)

     Casilla 8560

     Edif. El Alamo, Piso 1, Oficina 1

     La Paz, Bolivia

     Tel: (591-2) 324532; Fax: (591-2) 314407

 

Pricing Products

Bolivia's government does not impose price controls on most products. There remain two significant exceptions to this general reliance on market forces: petroleum products (whose price is set by the Superintendent of Hydrocarbons) and the most commonly sold bread rolls, whose prices are set by the respective municipal governments.

 

Sales Service/Customer Support

The competitive advantage of U.S. products against similar European and Japanese products is in price, quality, reputation and customer support. Service and maintenance provided by local agents of U.S. companies are probably the most important competitive factors which win repeat business. U.S. suppliers have traditionally provided after-sales service by training their local agents.

Selling to the Government

Even though by 1998 the control of the most significant entities once owned by the Bolivian Government have been transferred to private (mostly foreign) hands, government expenditures still account for a significant portion of Bolivia's GDP. The central government, the regional governments (the prefectures and municipal governments) and other government agencies remain important buyers of machinery, equipment and materials, as well as of other products and services. They are legally required to call for bids when proposed purchases are above 100,000 Bolivianos. ("Bolivianos" are usually noted as "Bs," and at mid-1998 the exchange rate was 5.5 Bs per US$1.) Although any local or foreign firm can present proposals for government bids, only those firms legally established under Bolivian law may sign contracts for government purchases.

 

The Bolivian Government decreed in 1995 -- per D.S. 23981 and Supreme Resolution 216145 -- that all public entities interested in purchasing goods or contracting services have a variety of options from which to choose, based on the amount of the transaction:

 

Small Purchases: each institution may purchase directly from its own budget without calling for bids, if the purchase does not exceed 20,000 Bs (about US$3,610);

Direct Invitation: when the purchase is above 20,000 Bs but does not exceed 600,000 Bs (about US$108,500);

Exceptional Contracts: purchases of national security items for the armed forces or any other products or services of national interest, with no limit in value;

Public Bid: purchases above 600,000 Bs.

Bid specifications containing technical and commercial requirements are made available through the relevant government entity and will be published over three consecutive days in the local media at least 30 days before the bid deadline. The qualifying procedure and the awarding decision is entirely in the hands of the chief executive officer of the public entity involved. The CEO may delegate this decision to a four-member qualifying commission, composed of high-ranking executives and the technical staff from the entity. Domestic goods and services receive a 10% preference in any bidding in order to encourage local procurement.

 

When a project is financed by a development institution such as the IBRD or IADB, the bids follow that institution's rules.

The proposals must be presented in Bolivian territory. Bolivian law specifies that U.S.-based or other foreign firms interested in providing goods and services to the Bolivian Government must have a local address in Bolivia and a legal representative or a local agent in order to sign the contract, if awarded.

Bid specifications will include specific instructions on how to present the offer. Tender terms vary according to the requirements of the government agency issuing the tender. Both the price and the quality of the product/service will be considered when awarding the contract.

 

Protecting Against IPR Infringement

A foreign company wishing to protect its product, trademark or name in Bolivia must first register with the Office of Industrial Property, whose address is provided in Appendix E. Although the protection of all types of intellectual property in Bolivia is improving, companies should be prepared to protect their IPR rights aggressively. (The Office of Industrial Property will soon be subsumed into the National Intellectual Property Service, which will be established in late 1998.)

 

Need for a Local Attorney

You will need a local attorney to establish a company in Bolivia or to register a brand name with the Office of Industrial Property. A complete list of patent and commercial attorneys, as well as of general practice attorneys, is available in the Commercial Library of the U.S. Embassy in La Paz.

 

Performing Due Diligence/Checking Bona Fides

"Foreign Service Posts: a Guide for Business Representatives" is available for sale by the Superintendent of Documents, U.S. Government Printing Office, Washington DC 20402, Tel: 202/512-1800; Fax: 202/512-2250. Business travelers to Bolivia seeking appointments with officials of the U.S. Embassy-La Paz should contact the Commercial Section in advance. The Commercial Section can be reached at (591-2) 430251 or by fax at (591-2) 433710.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Bolivia05 Bolivia: Leading Sectors for U.S. Exports & Investments <A>=Bolivia

 

 

----------------------------------------------------

V.  LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENTS

 

Best Prospects for Non-Agricultural Goods and Services

Rank 1 - Hydrocarbons Sector (OGS)

Narrative: the chief potential trade opportunity in the hydrocarbons sector is related to the completion by end-1998 of the US$450 million gas pipeline which will reach 488 km across Bolivia and join the Bolivian gas fields to the major markets of southern Brazil. This project creates demand on a scale never before seen in Bolivia, and there is extensive exploration underway to discover new reserves to service this demand. In 1996 the Bolivian Government enacted a new Hydrocarbons Law which set the stage for the capitalization of Yacimientos Petroliferos Fiscales Bolivianos (YPFB) and facilitated the offering of concessions to develop new gas sources to feed the pipeline.

YPFB acts as the agent of the Bolivian Government in granting concessions. In 1997 another 20 concessions were granted, and 40 joint ventures contracts were signed -- worth about US$450 million in all -- for exploration, exploitation and development rights in new tracts. Further concessions will be granted in late 1998. Contracts are held by firms based in the United States, Argentina and Brazil.

The capitalized upstream units are currently the largest users of oil and gas equipment. Exploration and exploitation by private companies are increasing, and thus their need for drilling machinery equipment, pipelines and services will expand rapidly as new oil or natural gas fields are discovered. The Bolivian-Brazilian gas pipeline project has generated a tremendous demand for pipeline goods; other pipelines are expected to be developed in the coming years, some feeding the major pipeline, others feeding new markets.

                             1996      1997      1998

Total Market Size            545       527       590

Total Local Production       677       642       710

Total Exports                223       116       120

Total Imports                0         0.1       0.1

Imports from the U.S.        0         0         0

Data are unofficial estimates, in US$ millions.

 

Rank 2 - Mining Sector (MIN)

Narrative: although not as important as it once was, mining remains one of Bolivia's most important sectors for development. It still generates almost 50% of Bolivia's foreign exchange, and recent announcements of new discoveries suggest it could keep pace with the gas exports once they begin in earnest. The Bolivian Government has asked the U.S. Geological Survey to update the survey the USGS last performed in 1975, cataloguing the country's known deposits and estimating its potential. Meanwhile, the Government also seeks to privatize in one form or another the Vinto-ENAF smelters and two large tin producing mines now owned by COMIBOL, the state mining company.

Historically, the Government was once the main purchaser of mining equipment. Now that its operations are bankrupt (or verging on it) virtually all imports by this sector are made by the private sector.

The best immediate sales prospects for mining equipment are in supplying the needs of medium-sized open pit mines and heap leaching operations and small-/medium-sized alluvial gold mining cooperatives. For medium-sized open pit operations, the best prospects include drills used in open pit production, crushers and pulverizers, conveyors, compressors, front-loaders, bulldozers, 15- to 30-ton heavy-duty trucks, gravimetric or flotation concentrators and pumps. In the small-scale sector, the best prospects include small jack-leg drills, front-loaders, crushers, concentration tables, flotation concentrators, hand tools and explosives. New developments -- particularly in southern Potosí by Andean Silver, of the Soros Group -- are extremely promising and should lead to enormous investments based on significant levels of imports of mining equipment.

                             1996      1997      1998

Total Market Size            20        50        20

Total Local Production       494       519       530

Total Exports                469       493       510

Total Imports                0.1       0.1       0.1

Imports from the U.S.        0         0         0

Data are unofficial estimates, in US$ millions.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Bolivia06 Bolivia: Trade Regulations & Standards <A>=Bolivia

 

 

----------------------------------------------------

VI. TRADE REGULATIONS AND STANDARDS

 

Trade Barriers, Including Tariffs and Import Taxes

The following list describes the charges imposed on imports in Bolivia, including the customs tariff, domestic taxes and customs fees. Bolivian import charges are more cumbersome than costly, and most import charges -- including domestic taxes (most of which are creditable) and fees -- range from 30-45%, bringing the effective cost of imports considerably higher than the stated 2, 5 or 10% tariff. Later we provide an example of how these charges are applied to an imported car, as an illustrative case of how the system works.

The various components of the landed cost of an import to Bolivia include:

1. Cost, Insurance and Freight (CIF): the value at the border of the imported product.

2. Inspection Company Fees: SGS or Inspectorate (the inspection companies appointed by the Bolivian Government) charge 1.92% of the FOB cost of the imported product or US$52 if the cost is less than US$1,000.

3. Custom Tariff: a 10% flat rate is applied to (1) unless the product is classified by Supreme Decree as a "capital good," in which case the rate is 5%; books and publications pay only 2%.

4. Customs Warehouse Fee: the Bolivian Government customs warehouse (AADAA) operates in Bolivia's main port of entry, Arica (Chile), and several other smaller ports (listed below); all other customs warehouses have been privatized. A 0.5% fee is charged on (1) if products remain in the warehouse over 30 days, a 2% demurrage fee is charged on (1) for up to 360 days. There are also private customs warehouses in operation at the airports in El Alto (La Paz), Cochabamba and Santa Cruz, all of which allow a five-day grace period and base their rates on volume, weight and value.

5. Internal Revenue Service Fees: the value-added tax (IVA) is 13%; added customs fees bring the effective rate to 14.94%, which is charged on the accumulated base (items 1+2+3+4+7+8a+8b+9). (This tax can later be offset against the importer's value-added tax liability upon resale.) Using the example of the imported car described below, if the importer retails the car for US$18,000, he is obliged to pay 13% of that amount, US$2,340, to the government as a value-added tax. Yet that amount can be reduced by the US$1,723.80 of value-added tax paid at the time the car was released from customs.

A problem can arise if the importer does not sell a product domestically, as is the case for petroleum companies in the exploration phase. This applies to the equipment imported by the oil companies that are "consumed" in the process of development and cannot be re-exported, like pipe and drill bits. Machinery that will be re-exported, such as helicopters and seismic equipment, can be imported free of duty and taxes under the RITEX system, which allows for the temporary importation of equipment.

6. Specific Consumption Tax (ICE): the ICE is charged at an additional percentage rate on the accumulated base (items 1+2+3+4+7+8a+8b+9) if the product is defined as a "luxury good." It affects such product lines as automobiles (18%), perfumes (20%), cosmetics (30%), liquors (50%), cigarettes (50%) and beer (60%).

7. Customs Forms and Fees: the Bolivian customs office charges from US$50 to US$60 for the forms and fees required for its processing of each shipment.

8. Customs Broker Charges: the following rates are applied to (1) for land cargo and CIF airport value for air cargo, as customs broker fees:

From US$:       1     to     10,000       2.0%

           10,001     to     20,000       1.5%

           20,001     to     30,000      1.25%

           30,001     to     50,000       1.0%

           50,001     to    100,000      0.75%

          100,001    and      above       0.5%

In addition, customs brokers charge 17.65% on the value of their bill to cover their own IVA tax liability.

9. Chambers: such groups as the Chambers of Commerce, Industry and Construction charge an additional fee of between 0.03 and 0.04% of (1).

 

Customs Valuation

Because of the complexities of working the Bolivian customs system, we urge U.S. exporters to verify the real amount of total duties payable to enter Bolivia. The Economic/Commercial Section of the U.S. Embassy in La Paz can provide a list of reliable customs brokers who can handle the related paperwork.

The following is a practical example of how Bolivia import charges are imposed on an automobile with an FOB price of US$9,000 and a CIF border value of US$10,000:

 

 Structure of Import Charges

CIF border value                                US$ 10,000.00

Inspection company fee = 1.92% of US$9,000      US$ 172.80

Custom tariff = 10% of US$10,000                US$ 1,000.00

Customs Warehouse = 0.5% of US$10,000           US$50.00

Value-added tax (VAT - 13.33%) plus fees = 14.94% of

  US$11,538.10 ($10000+$172.80+ $1000+ $50+$50+$200+$35.30+$30)                                                US$1,723.80

Specific consumption tax (ICE) = 18% of US$11,538.10

  ($10,000+$172.80+$1000+ $50+$50+$200+$35.30+$30)US$2,076.86

Customs forms                                   US$50.00

Customs broker fee = 2% of US$10,000            US$200.00

Customs broker charge = 17.65% of US$200        US$35.30

Specific chambers = 0.03% of US$10,000          US$30.00

Total tariff, taxes and fees to withdraw car

  from customs                                  US$5,338.76

(or 44.15% of CIF value)

The US$1,723.80 in VAT paid by the importer reduces the importer's tax liability when the car is resold. Subtracting that amount means the actual import tariff and fees amount to US$3,614.96 or 36.14% of the CIF value.

 

Import Licenses

Import licenses are only required for firearms and certain chemical products. Pharmaceutical products must be approved under World Health Organization guidelines and registered with the Vice Ministry of Health. Insecticides require an import permit and a "free sale" certificate from the Ministry of Agriculture.

Import permits from the Vice Ministry of Industry and Commerce are required for used clothing and rags. The permit must be obtained prior to shipping. These items must also have a sanitary certificate from the proper health authorities in the exporting country.

There are no other special non-tariff requirements which affect the import of used goods. The import of "transformed" cars from Japan and other right-hand drive countries will be banned as of end-1998.

 

Export Controls

In order to become a legal exporter from Bolivia, the interested company must obtain a legal solicitorship. Once the solicitorship is obtained, the local company must register with SIVEX, the exporter's "one stop" system (Sistema de Ventanilla Unica del Exportador) at the Vice Ministry of Industry & Commerce.

In order to export, the exporter must first present the following documents: a commercial invoice, a packing list and a certificate of inspection issued by one of the two government-contracted inspection companies. Next customs issues an exporter's bond. If the exported product is animal or vegetable, a sanitary certificate must be obtained from the Vice Ministry of Agriculture.

SIVEX then grants the certificate of origin which makes the exporter eligible for duty-free treatment in countries offering Bolivia duty-free benefits.

 

Import/Export Documentation

The following five documents should be presented to customs for all shipments into Bolivia. It is not necessary to present these documents to a Bolivian Consulate in the United States.

1. Seller's Commercial Invoice: this invoice may be completed in either Spanish or English on the shipper's letterhead. The invoice must include a detailed description of the products by item, the unit price and the total FOB price. The invoice must also include the freight costs (either air or surface) and the cost of insurance to the port of destination. If the invoice does not include insurance and freight, Bolivian customs will charge a flat 5% of the FOB price. This is necessary because the value-added tax is calculated on the basis of the CIF price.

2. Bill of Lading or Airway Bill: the bill of lading must be presented with two original bills -- both signed and sealed by the freight forwarder -- and two non-negotiable copies. One of the bills of lading, or a copy, should accompany the original bill and the commercial invoice. Bills of lading may not be drawn to the order of the shipper. They can be drawn to the order of the consignee, who is permitted to endorse it over to a third party. For air cargo, the airway bill is the bill of lading.

3. Insurance Policy: customs requires a copy of the insurance policy to calculate the value-added tax.

4. Packing List: the packing list facilitates customs inspections and is beneficial to the importers in case of loss.

5. Inspection Certificate: pre-shipment inspection is required on imported products with an FOB value of US$1000 or more. Overseas agencies are under contract to the Bolivian Government to administer the program. Inspections may be performed in the port of origin or in Bolivia, by SGS Control Services of New York (212/482-8700), SGS Government Programs of Miami (305/592-0410) or Inspectorate of Miami (305/599-1124).

 

Special Documentation

Sanitary and Purity Certificates: certificates of origin indicating the livestock's state of health are required for the import of live animals. Purebred livestock imported for breeding purposes also require a pedigree certificate. Live plants and all seeds, except for vegetable and flower seeds, require sanitary certificates.

Pharmaceuticals are subject to strict quality control regulations. Imports must be accompanied by a certificate of analysis in Spanish, which may be issued by a reliable manufacturer. This certificate must include expiration dates. The FDA certificate fulfills the requirements of Bolivian authorities.

Labels on pharmaceutical products should be in Spanish. In addition, pharmaceuticals must be registered with the Vice Ministry of Health before they are imported.

Prior to import or sale, all insecticides must be approved by the Ministry of Agriculture and Cattle (MAG). The MAG will issue a sale permit certificate for products which were previously approved in their country of origin.

Food shipments require a sanitary certificate issued by the pertinent authority of the exporting country -- e.g., from the U.S. Department of Agriculture. Foodstuffs may be subject to analysis by an official entity in Bolivia, and most food and beverage labels must be registered in Bolivia. Exporters are encouraged to check with importers regarding relevant policies prior to shipment.

For specific information regarding existing foreign agricultural standards and testing, packaging and certification systems, please contact:

     Technical Office for International Trade

     U.S. Department of Agriculture

     Building 1072, Barc-East

     Beltsville MD 20705

     Tel: 301/344-2651

For more information on procedures relating to animals and plants, and their by-products, please contact:

     Animal and Plant Health Inspection Service (APHIS)

     U.S. Department of Agriculture

     6505 Beltcrest Road

     Hyattsville MD 20782

     Tel: 301/436-8590 (veterinary services);

     301/436-8537 (plant inspection)

APHIS maintains a service office in the U.S. Embassy in Lima, Peru (Tel: [511-2] 211202; Fax: [511-2] 334635).

- Air Cargo -

Air cargo shipments require airway bills instead of bills of lading. Follow IATA or ICAO rules governing labeling and packaging of dangerous and restricted goods. Check with your air carrier for further information and the appropriate forms.

- Parcel Post -

An authorized customs broker must intervene for parcel post shipments valued at over US$100. A private person may receive parcel post valued up to US$100 without the intervention of a customs broker just by filing out a customs form at the post office.

 

Entry and Warehousing

Bolivia is a landlocked country which uses ports of entry in Chile, Peru, Brazil, Argentina and Uruguay (by river) through free transit agreements with these countries. Arica (Chile) is generally considered to be the best port of entry. Other main ports are Antofagasta (Chile); Matarani and Ilo (Peru); Santos (Brazil); and Rosario (Argentina).

Bolivian customs maintains warehousing facilities in each of these ports, where incoming goods may be stored for 90 days. The charge for customs storage is 0.5% of CIF for each 30-day period or fraction thereof. Once clearing documents are signed, goods must be removed from storage within eight days to avoid an additional charge of 2% of CIF.

Imported merchandise may be considered abandoned either by an explicit request or by failure to claim it within the required 90 days. By law such goods are subject to public auction, the proceeds of which go to the interested party after expenses are deducted.

If importers wish to remove their merchandise after the 90-day period but before the auction takes place, they must pay a 5% charge over the customs tariff plus 2% of CIF. Due to the expense and time involved in reshipment, U.S. exporters usually prefer to sell refused goods in Bolivia.

 

Temporary Entry

Manufacturers may distribute products through international trade fairs. When this channel is used, capital goods destined for the productive sector enter under temporary import permission for an exhibition period of 90 days, with a bank guarantee note equal to 1% of the CIF value. Within this period the goods may be nationalized or re-exported. If nationalized, duties for certain capital goods may be discounted by 50% under the preferential customs policy granted to international trade fairs.

A Temporary Importation Permit (TIP) can be issued by customs for goods intended as samples, exhibitions, natural disaster relief machinery and equipment, equipment and apparatus for testing and scientific research, aircraft and vehicles for tourism, equipment for petroleum exploration and exploitation and other similar items intended for re-export. These goods are allowed entry without payment of duty under a bank bond covering all duties and customs fees and the guarantee of a local customs brokers.

A TIP is allowed for a period of 90 days, which can be extended only once for an additional 90-day period. If a longer period is required, the local customs broker must obtain a special permit from the Ministry of Finance valid for one year on behalf of the importer. In order to obtain the one year special permit, the importer must have a contract to justify the temporary admission.

 

Labeling, Marking Requirements

Bolivia does not require special labeling indicating origin and type of merchandise. Retail packages must show weight or measure of contents in metric units.

Special regulations govern the importation of cigars, cigarettes and tobacco.

All goods coming by ship to Bolivia transit through foreign ports of entry. Packages and containers should clearly indicate gross weight in kilograms, serial numbers and the words "en transito a Bolivia." For Chilean ports, markings must be stenciled.

 

Prohibited Imports

Prohibited items for import include:

Firearms and other weapons without special permission from the Ministry of Defense;

Pharmaceuticals and drugs not registered in the country;

Spoiled or adulterated beverages and food products, or products that contain noxious substances;

Selected liquors, such as pisco and similar products;

Diseased animals;

Plants, fruits, seeds and other vegetables that contain parasites and germs or plants that are declared harmful by the Vice Ministry of Agriculture;

Foreign lottery bills;

Advertisements imitating money or bank certificates, postage stamps and other government-valued papers;

Pornographic books, booklets, paintings, engravings, figures and other obscene objects;

Roulette machines and devices used for gambling;

Merchandise with the same registered trademark as a product made in Bolivia;

Used clothing without a sanitary certificate from the country of origin (except in personal baggage);

Used hats and shoes (except in personal baggage);

Vicuna skins, hair and products; and

Certain chemical products lacking an import permit.

 

Free Trade Zones/Warehouses

Bolivia has established nine free trade zones (FTZ), six of which are now in full operation:

1. El Alto (serving La Paz)

2. Puerto Aguirre

3. Cochabamba

4. Santa Cruz

5. Oruro

6. Desaguadero (near La Paz, on the border with Peru)

Two others -- in San Matias in the Department of Santa Cruz and Guayaramerin in the Department of Beni -- are not yet fully operational. Another -- in Cobija, in northern Bolivia -- has not proven to be attractive to investors, because of the lack of roads and other basic infrastructure.

Bolivian FTZs are regulated by the National Council of Free Trade Zones (CONZOF), which was created by the 1990 Investment Law. FTZs are operated by private companies selected by the government through public bids. There are special procedures which must be followed to obtain approval to operate in these zones. Export processing zones have up to 180 days duty-free treatment (RITEX) to assemble kits and produce parts for re-export.

 

Special Import Provisions

Samples and advertising materials are usually subject to regular duty rates, except those articles specifically prepared as samples -- for example, shoes cut in half, small patches of fabric and pharmaceutical products and liquors contained in small bottles clearly marked "free sample" ("muestra gratuita"). If commercial samples do not exceed US$25 in value, they do not require commercial invoices.

 

Duty Exemptions and Reductions

Either exemptions or reductions are permitted for:

Imports made under current international agreements and government contracts;

Imports under intra-regional agreements that specifically provide for duty exemptions;

Imports made by the diplomatic and consular corps;

Travelers' personal effects not exceeding US$300; and

Imports of gold, except jewelry.

 

Membership in Free Trade Arrangements

Bolivia signed a Free Trade Agreement with MERCOSUR (Brazil, Argentina, Paraguay, Uruguay and Chile) which became effective on March 1, 1997. Under this Agreement, Bolivia became an associate member of MERCOSUR, just as Chile is. In March 1997 more than 30% of all products traded between Bolivia and the four full MERCOSUR members became tariff-free, and the vast majority of the remainder will enjoy zero tariffs after ten years. (Some sensitive products will not become tariff free for up to 18 years.)

At the same time, Bolivia intends to continue as a member of the Andean Community (with Colombia, Venezuela, Ecuador and Peru), which has removed all internal trade barriers. Bolivia has also signed Bilateral Trade Agreements with some South American countries which eliminate or reduce tariffs on explicit lists of products. Bolivia signed a Free Trade Agreement with Mexico in September 1994. The European Union, Japan and the United States all allow most Bolivian exports to enter their markets at either duty-free or reduced duty rates.

Bolivia acceded to the GATT in 1989 and ratified its membership in September 1990. The Bolivian Congress subsequently ratified Bolivia's membership in the World Trade Organization (WTO) in 1995.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

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<NREC>Bolivia07 Bolivia: Investment Climate <A>=Bolivia

 

 

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VII. INVESTMENT CLIMATE

 

Openness to Foreign Investment

Successive Bolivian Governments have avidly sought to attract foreign investors to augment the country's asset base. These governments have been aware that large infusions of foreign direct investment are necessary -- but not sufficient -- if Bolivia is to achieve significant per capita growth. The capitalization program was the centerpiece of the previous government's investment strategy; today, the investments of the capitalized firms, plus investment in the agricultural zones of eastern Bolivia, are the foci of the future.

Foreign-ownership is allowed virtually throughout the economy, with no requirement to register foreign direct investment separately. The constitution restricts investments by foreigners in mining operations along the border areas. Foreign investment is neither screened nor treated in a discriminatory manner.

Since 1990 successive governments have passed laws which set clear "rules of the game" governing private investment of all types. The Investment Law (1990) guaranteed foreign investors would receive national treatment, have access to free currency conversion, unrestricted remittances and enjoy the right to international arbitration in most industries. New laws governing activities in the mining (1997) and hydrocarbon (1996) sectors authorized joint ventures with state-owned corporations and modified the tax system to allow foreign firms paying taxes in Bolivia to obtain foreign tax credits in their home countries. The Mining Law also allowed foreign firms to operate within 50 kilometers of international borders through joint ventures or service contracts with Bolivian mining companies, with the exception of firms which are resident of the country adjacent to the affected border. The Hydrocarbons Law mandated settlement of disputes through arbitration. The Arbitration and Conciliation Law (1996) provided procedures and enforcement mechanisms for international arbitration.

New laws regarding banking and exports were passed in 1993. The Banking Law clarified the legality of such activities as factoring, leasing and foreign currency hedging. It also allowed banks to maintain accounts in foreign currencies, clearly a popular development: today over 95% of all deposits in the Bolivian banking system are denominated in U.S. dollars or held in dollar-pegged accounts. The Banking Law also clarified the roles of the Central Bank and the Superintendent of Banks and redefined capital and reserve requirements. The Export Law sought to make the tax system neutral vis a vis exports and granted tax rebates to exporters.

Bolivia has no laws that directly govern competition, such as our own anti-trust laws. Instead, articles regulating unfair competition are scattered throughout the country's laws governing activity in the various economic sectors. In fact, several permanent and temporary monopolies exist in Bolivia; five temporary monopolies were transferred to private control through the capitalization program in 1996-97.

The Government created the Sectoral Regulatory System (SIRESE) partly in order to balance the potential market power of these monopolies. SIRESE is an autonomous regulatory body made up of a general superintendent and five superintendents which regulates many aspects of business in the telecommunications, electricity, transport, hydrocarbons and water sectors. The period that these firms will enjoy a temporary monopoly was established in their respective capitalization contracts, and each sector will eventually be completely liberalized (albeit regulated).

The national government controls the prices for most petroleum products and for some types of bread; all other prices are set by the market. Pricing of most public utilities are reviewed by the respective superintendent. Municipalities set the local rates for water, garbage collection and inter-city public transportation.

All future oil exploration activity will be carried out via joint venture contracts, which YPFB administers. Although most of the mines currently owned by COMIBOL (the state-owned mining company) cannot be purchased outright, they can be operated in a joint venture or under a leasing contract with COMIBOL.

The Bolivian Government enacted an Agrarian Law in 1996 which set out the rights and obligations of land ownership, incorporated the concept of sustainable development, established a new institutional framework for the development of land use and created an independent Agrarian Superintendent to administer the law's provisions. A definitive registry of land titles -- essential to the provision of credit -- has been financed by the European Union and is underway.

Foreign firms are able to participate in government research programs, although few (if any) programs exist. Work permit, visa and residence requirements are non-discriminatory. There exist no special incentives for investment.

The Government sets a minimum monthly wage each year; currently it is about US$55. Although nearly all workers in the formal sector earn more than the minimum wage, its value is significant because various benefits -- such as pensions -- are calculated as multiples of this standard. On average, factory workers earn the equivalent of US$100 per month plus benefits.

Although some bureaucratic procedures have been reduced, plenty of red tape and archaic policies remain at all levels of Bolivian Government. The Banzer Administration has vowed -- as have many before it -- to "de-bureaucratize" the government and reduce the opportunities for corruption. The sheer scale of corruption in Bolivia was reduced significantly by the capitalization program, which passed control of the largest state entities to private hands. Until dramatic changes are undertaken, bribes will continue to be paid by hapless and/or conniving businesses to move their paperwork faster through the bureaucratic maze or to gain contracts, and evasion of taxes and duties will remain a common practice.

 

Right to Private Ownership and Establishment

Foreign and domestic entities share the same rights to establish, acquire and dispose of interests in business enterprises, as well as to engage in remunerative activity (with few exceptions, as noted above). All private enterprises enjoy the same access to markets, credit, licenses and supplies as public enterprises, given the exceptions noted above regarding the legal sanctioning of certain monopolies.

 

Protection of Property Rights

In general, Bolivian law guarantees property rights. Both chattel and real property rights are recognized and enforced. Mortgages exist and can be obtained through the local financial system. The Office of Property Registry provides a means to protect and facilitate acquisition and disposition of property rights for land, real state and mortgages.

Successive administrations have sought to improve the enforcement of private property rights, with varying degrees of success. The Sanchez de Lozada Administration enacted the Agrarian Law to reform the National Service of Agrarian Reform and the Institute of Colonization, both of which handled land registry. The Banzer Administration is preparing new chattel mortgage legislation to facilitate financial institutions accepting chattel as collateral.

Bolivia's existing legislation governing protection of intellectual property rights (IPR) is weak, and enforcement efforts have been largely ineffective. The only way one can currently ensure the effective protection of trademarks or other intellectual property is to hire a local attorney to chase down offenders and to take them to court.

The Government is undertaking halting steps to modernize both its legislation and its implementation capabilities regarding the protection of IPR. It has agreed to a modification of Andean Community Decisions 313/344 which inter alia increases patent protection from 15 to 20 years, offers parallel protection and grants patent protection to plant species. The Government will use Decision 344 as a guide in drafting new legislation to improve its protection of IPR.

The Bolivian Government is in the process of establishing an independent IPR national service which will unite the formerly disparate offices which enforced industrial rights and the rights of authors under one authority. In May 1998, the Banzer Administration enacted Supreme Decree 25055 which sets general guidelines for this national service; we expect the service itself will be established by end-1998. This effort should bring new coherency to government efforts to protect IPR effectively. Bolivia has joined the World Intellectual Property Organization, and the Congress has approved its accession to the Paris, Geneva and Bern Conventions. Under the terms of a side letter to the recently signed Bilateral Investment Treaty (BIT), Bolivia has committed to bringing itself into full compliance with the WTO'S TRIPS by April 1999; the BIT will not come into force until this is accomplished.

Presently, patent registration requests are reviewed by clerks for form rather than for substance. A notice of the proposed patent registration is then published in the official gazette. If there are no objections within 50 days, a patent is granted for a period of 15 years. The patent must be used in Bolivia within two years to preserve its validity.

The registration of trademarks parallels that of patents, except that the period for objections to a trademark registration is 18 months after publication. Once obtained, a trademark is valid for a ten-year period which is renewable. It becomes null if not used over an 18-month period.

There are presently no laws protecting either trade secrets or computer maskworks.

The 1992 Bolivian Copyright Law provides IPR protection for literary, artistic and scientific works for the lifetime of the author plus 50 years. It protects the rights of Bolivian authors, of foreign authors domiciled in Bolivia and of foreign authors published for the first time in Bolivia. (Foreigners not domiciled in Bolivia enjoy protection under the Copyright Law to the extent provided in international conventions and treaties to which Bolivia is a party.) Bolivian copyright protection includes the exclusive right: to copy or reproduce work; to revise, adapt or prepare derivative works; to distribute copies of the work; and to communicate the work publicly. Although the exclusive right to translate the work is not explicitly granted in the Law, it does prevent unauthorized adaptation, transformation, modification and editing. The Law also provides protection for software and databases.

The 1991 Bolivian Film and Video Law also contains elements of IPR protection. The Law created a national movie council (CONACINE) to coordinate, control and carry out various activities related to the movie industry. The Law also requires that all films and videos shown or distributed in Bolivia be registered with CONACINE.

Television stations are among the worst IPR violators in Bolivia, often showing films that are still in cinemas, thus siphoning off business from the normal cycle of cinemas, pay-for-TV/cable, home video and network TV. Many stations do not pay rights to broadcast TV programs. The Superintendent of Telecommunications has implemented some measures designed to ensure that only licensed material is televised, but these actions have been limited, and TV piracy continues to thrive.

 

Foreign Trade Zones/Free Ports

The Bolivian Government created free trade zones through two Supreme Decrees (D.S. 22410 and D.S. 22526) which established the legal framework for their establishment and operation. All free trade zone operations must be authorized by the National Council on Free Trade Zones (CONZOF), which coordinates, sets and controls all the industrial and commercial free zones. Currently free trade zones exist in the cities of El Alto (the Department of La Paz), Santa Cruz, Cochabamba, Puerto Aguirre (Santa Cruz), Oruro, Desaguadero (La Paz) and San Matias (Santa Cruz).

 

Performance Requirements/Incentives

The Bolivian Government does not impose any performance requirements as conditions for establishing, maintaining or expanding an establishment. Nor does it provide tax or investment incentives which discriminate against foreign investors.

 

Transparency of the Regulatory System

The Bolivian Government created a sectoral regulation system (SIRESE) in October 1994 to control and supervise the activities pertaining to the sectors of electricity, telecommunications, hydrocarbons, transportation and water according to legal norms. The five superintendencies are autarchic and autonomous institutions whose activities are financed through the assessment of rates on firms operating in their respective sectors. SIRESE is led by a superintendent general whose office forms the first instance of appeal to the decisions handed down by the individual superintendents. The superintendencies are each managed and represented by an individual superintendent who is independent of the superintendent general. Concessions of public services and licenses are granted by administrative resolution issued by the respective superintendent.

The SIRESE Law establishes general principles governing anti-competitive practices. Specifically, companies engaged in regulated activities are forbidden from participating in agreements, contracts, decisions and/or practices whose purpose or effect is to hinder, restrict or distort free competition.

A group of individual laws formed the legal framework for the capitalization of various formerly state-owned entities. The Electricity Law (1994), the Telecommunications Law (1995) and the Hydrocarbons Law (1996) defined the functions and attributions of their respective superintendents.

A similar system has just been created for the financial sector. The Superintendent of Hierarchical Resources is the first instance of appeal to the Superintendents for Banking and Non-banking Services.

 

Corruption

Corruption is present throughout Bolivia's political structure, with greater incidence occurring at lower levels of government and throughout the judiciary. For example, two Supreme Court judges -- including the Chief Justice -- were removed in 1994 after they were found guilty of soliciting and accepting bribes. Although there is no overt government interference in the court system, judges in Bolivia are political appointees and responsive to political pressure.

The ever-present threat of corruption complicates the activities of U.S. firms who have invested in or who trade with Bolivia. The most egregious cases have involved individuals employing the legal system to harass firms or to exact exorbitant payments through judgements by corrupted judges. There have even been cases of representatives of U.S. firms being jailed or threatened with jailing for a trumped up charge of "sabotage."

Despite the existence of extensive corruption, in the past there have been too few cases of government or judicial officials being successfully prosecuted for their crimes. Certain acts of corruption are illegal under specific provisions of laws, and laws and institutions are being strengthened to improve upon this dismal record.

The judicial system's weaknesses are well-known, and the last three administrations -- headed respectively by presidents from the MIR, MNR and ADN parties -- have worked consistently towards the goal of reforming the system. The first fruits of this multi-party effort are just now being seen, with new institutions being created which will fundamentally change how justice is provided in Bolivia. The situation should improve markedly in the coming five years, as these changes make themselves felt.

Additionally, the Banzer Administration is working with the IMF to cleanse the customs administration from top to bottom and with the IBRD to implement a wider-ranging reform to address corruption within the bureaucracy of the national government. There is no move afoot to extend these reforms to the bureaucracy of departmental or municipal governments.

 

Labor

Bolivian Government data show that, of the 5.8 million inhabitants who were of working age in November 1997, 3.6 million were economically active and only 75,424 were "unemployed." Since many of working age were not seeking work, the official "open" unemployment rate was 2.07%, up somewhat from the 1996 level. We note that official labor statistics undercount the number of Bolivian workers seeking work and greatly understate the real levels of unemployment and underemployment. For example a part-time street vendor is considered "employed" for purposes of the official unemployment rate, suggesting that the data is unreliable.

According to a recent survey of commercial establishments in the urban areas, approximately 55% of employees work for companies or the government, while 45% work independently or without a formal employer/employee relationship.

Foreign investors have found the labor force to be stable, with low rates of turnover and with high levels of manual dexterity. The country's generally low levels of education and literacy tend to limit the productivity of Bolivia's labor, in line with its low cost.

The average wage for a factory worker is about US$100 per month. Benefits -- including a Christmas bonus ("aguinaldo") equal to one month's salary, as well as retirement payments -- can add another 30% to the wage bill.

Bolivian labor law guarantees workers the right to organize and bargain collectively. Most companies are unionized. Nearly all unions belong to the Confederation of Bolivian Workers (COB), a militant organization whose calls for strikes often go unheeded. In fact, extensive labor unrest is not that common in Bolivia, and most foreign firms active here enjoy positive relations between labor and management.

Bolivian labor law guarantees workers the right of association, restricts child labor and provides for worker safety. Effective enforcement often proves to be lacking.

 

Efficient Capital Markets and Portfolio Investment

Historically, Bolivian commercial banks were closely held operations that lent only to persons or firms well known to the bank. Now these same banks are under increasing pressure to reform, generated by both new foreign entrants to the market and the existence of massive amounts of resources to loan and of insufficient collateral available to back these loans. As a result, Bolivian bankers are slowly developing in-house capabilities to adjudicate credit risk and to evaluate expected rates of return according to international norms. Continuing buyouts of local banks by foreign interests in the coming year are expected to compel all banks to refine this basic ability in the shortest possible period.

In the interim, foreign investors may find it difficult to qualify for loans from local banks due to their continuing requirement that domestic loans only be made against domestic collateral. Since commercial credit is generally extended on a short-term basis at fairly high interest rates, most foreign investors prefer to obtain credit offshore.

Another option available to established Bolivian companies is the issuance of short- or medium-term debt in the local securities exchange. Currently, the principal activity of the exchange is to provide a secondary market for Central Bank certificates of deposit. It seeks, however, to increase its handling of local corporate bond issues, and the passage of the Securities Law (1998) provides the groundwork for creating a truly modern exchange. The Securities Law also established a Securities Commission which has already approved the establishment of several Bolivian mutual funds. Unfortunately, few local companies issue stock, making the choices for these funds quite limited.

Bolivian accounting principles are not in line with world standards. It is common for Bolivian firms to maintain various sets of books: one set for the tax authorities; another for its bankers; and another for the management's own use.

Due to the lack of prompt, effective and impartial judicial decisions, lenders often have great difficulty in foreclosing. Also the registry for creditors to record liens has proven to be deficient and incomplete.

 

Conversion and Transfer Policies

There is free currency conversion at local banks and exchange houses. The official exchange rate is set by a daily auction of dollars managed by the Central Bank. The Central Bank offers a given amount of U.S. dollars each day but sets an undisclosed minimum floor price. In this way the Central Bank has managed a steady depreciation of the local currency, the Boliviano, in line with the rate of inflation since 1985. The parallel rate has tracked the official rate closely, suggesting that the market finds the Central Bank's policy acceptable. There are no restrictions on any kind of remittances.

 

Expropriation and Compensation

Article 22 of the Bolivian Constitution provides that property may be expropriated for the public good or when the property does not fulfill a "social purpose"; it also stipulates that just compensation must be provided. The Mining and Hydrocarbons Laws provide the means to expropriate land needed to develop the underlying concession.

The last expropriation in Bolivia occurred in 1969, when the Government nationalized the petroleum concessions granted to the local branch of Gulf Oil. Although the compensation agreement allowed for a 30-year payment period, the entire compensation due to Gulf Oil was paid off in seven years.

While there have been no cases of discrimination in expropriation targeting U.S. companies, there is currently a dispute between an U.S.-based provider of cellular phone services and the Bolivian Government in which the government's actions have robbed the company of its ability to provide a service for which it had long-standing permits provided by the proper authorities. Although there is no final settlement as yet, we are hopeful that a just settlement will be reached shortly.

 

Dispute Settlement

Property and contractual rights may be enforced in Bolivian courts, but the legal process at best is time-consuming and at worst can be subject to outside influences. For that reason, the National Chamber of Commerce -- with assistance from the U.S. Agency for International Development -- has established a local arbitration tribunal. The Investment Law provides that investors may submit their differences to arbitration in accordance with the constitution and international norms. Our recently signed Bilateral Investment Treaty will extend these rights even further for U.S. investors when it comes into force.

The Bolivian Government accepts binding international arbitration in all sectors. The 1997 Arbitration and Conciliation Law created an alternative means by which businesses can resolve commercial legal disputes and provided a more comprehensive framework for national and international arbitration. This Law stated that international agreements, such as the New York Convention of 1958 on the recognition and enforcement of foreign arbitral awards, will be honored. It also mandated the recognition of foreign decisions and awards and established procedures for the Supreme Court to execute any such decision/award. (We note that the decisions of the Supreme Court in the past have been influenced by outside factors, throwing into doubt a company's ability to enforce these decisions effectively.)

Bolivia has a functional commercial code whose roots date from 1939. Since there is no bankruptcy law, most (if not all) loans are secured with collateral. Although imprisonment for debt has been abolished, creditors have been known to press trumped-up criminal charges against debtors in commercial matters, with the cooperation of corrupted court officials. Property interests are recognized and enforced.

 

Political Violence

Bolivia has a relatively non-violent past, and political violence per se has been limited to rare and isolated incidents. The most dramatic instance in recent years was the physical seizure of two Potosí mines -- in Capacirca and Amayapampa -- by their miners in December 1996. The protests were related inter alia to local factors, as well as to the manner by which COMIBOL (the state-owned Bolivian mining company) awarded mining concessions and the increasingly desperate situation faced by mining cooperatives throughout Bolivia. The Bolivian army was sent to retake the mines, and in the ensuing confrontation there were several deaths.

Some more recent incidents of violence have been related to the government's on-going efforts to curtail the production of illicit coca and cocaine. The Banzer Administration has committed itself to removing Bolivia from the "coca/cocaine circuit" within five years. After some delay it has demonstrated a willingness to push forcefully for accelerated coca eradication. Localized confrontations in early 1998 led to blockages of the country's principal transportation link, the highway between Cochabamba and Santa Cruz. The efforts by security forces to clear this blockage led to a first round of serious confrontations. Subsequently, there have been deaths among coca growers and the security forces in related incidents.

 

Bilateral Investment Agreements

Bolivia has signed Bilateral Investment Agreements with Argentina, Belgium/Luxembourg, China, France, Germany, Italy, Mexico, the Netherlands, Peru, Romania, Spain, Switzerland, the United Kingdom and the United States.

 

OPIC and Other Investment Insurance Programs

An Investment Insurance Agreement signed in 1985 by Bolivia and the U.S. Overseas Private Investment Corporation (OPIC) provided for a full range of OPIC programs, including insurance, financing and use of OPIC'S opportunity bank. OPIC provides financing assistance through direct loans and through guarantees of loans by private U.S. financial institutions for investments by U.S.-based firms in Bolivia. OPIC has worked with a growing number of new investors -- particularly in providing insurance against inconvertibility, expropriation and political risk -- and is eager to do more business in Bolivia.

The IBRD'S Multilateral Investment Guarantee Agency (MIGA) has offered a complete line of investment guarantees to foreign investors in Bolivia since October 1991.

In 1993, the U.S. Export-Import Bank (EXIM) increased its exposure in Bolivia. At that time it entered into a series of credit guarantee facilities with local banks, with terms of up to five years. EXIM is also willing to work directly with qualified private companies on providing loans and insurance. EXIM will also consider individual transactions with Bolivian banks that do not yet have sufficient net worth to qualify for the establishment of a credit guarantee facility.

 

Major Foreign Investors

The Ministry of Foreign Trade and Investment reports that U.S. companies as a group were the largest source of foreign direct investment (FDI) in Bolivia in 1997, totaling US$308 million or 49% of the approximately US$633 million invested. (Given this data, total FDI was equivalent to about 17% of GDP in 1997.) Most foreign direct investment is in the mining, telecommunications, electricity and hydrocarbons sectors (in the last three instances largely the result of the capitalization program).

Of the total U.S. investments, US$202 million went to the hydrocarbons sector, US$75 million to commerce/services, US$19 million to mining and US$11 million to agriculture and industry. Details of total investment are given in the table below:

 

     Private Foreign Direct Investment Flow - 1997

     (In US$ millions)

     Hydrocarbons       322.4

     Mining             42.9

     Industry           21.1

     Commerce/Services  247.0

     Total              633.4

There are no registration requirements for foreign direct investors in Bolivia, so there is no reliable data on either the total stock of FDI or "who is doing what where." We agree with the Bolivian Government's assertion that the sum of holdings by U.S. investors probably exceeds that of any individual country, mainly the result of U.S. purchases of assets during the capitalization program. There is also ample anecdotal evidence that there have been many investments (albeit on a smaller scale) made recently throughout the economy by investors from Brazil, Argentina and Chile.

Cumulative FDI flow - 1993/97

(In US$ millions)

     United States      607.0

     Chile              178.9

     Italy              130.7

     Canada             107.8

     Argentina          102.7

     Brazil             83.7

     Australia          45.6

     Spain              39.3

     Colombia           35.7

     Peru 20.9

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Bolivia08 Bolivia: Trade and Project Financing <A>=Bolivia

 

 

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VIII.  TRADE AND PROJECT FINANCING

 

Description of the Banking System

The Central Bank and 13 privately owned banks comprise Bolivia's banking system. Commercial banks account for over 85% of the deposits and loan portfolio of the formal Bolivian financial system. The remaining 15% had been concentrated in savings and loans, credit unions and other financial institutions. As of May 1998, total deposits in the banking system were US$3.4 billion, of which over 90% were in U.S. dollar-denominated deposits.

Citibank is presently the only U.S. bank with an interest in a local bank. This bank -- formerly known as BHN/Multibanco -- was just renamed "Citibank SA" and now is 100% owned by Citibank.

All commercial banks provide regular banking services, accepting deposits for both checking and savings accounts and offering short- and medium-term loans. Local banks are authorized to hold U.S. dollar-denominated time deposits.

The 1993 Banking Law was a first step towards modernizing the Bolivian banking system. The new Law addresses such emerging areas as establishing rules governing factoring and leasing and set parameters for bank holding companies. The 1995 Central Bank Law refined the BCB's controls over the banking sector, setting higher reserve requirements and eliminating the insider lending that has been the bane of Bolivian banks and has led to the collapse of many.

The Banzer Administration has recently enacted additional changes to the regulatory financial framework. The Law of Property and Popular Credit (1998) modified the regulatory system governing the non-banking financial system. It created a Prudential Norms Financial Committee (CONFIP) which will issue financial regulations for the whole financial system without interfering in currency exchange and monetary policies, which remain the purview of the BCB. The Law also created the Superintendent of Appeals that forms the first instance of appeal to decisions made by the Superintendent of Pension, Insurance and Securities. The new Law also authorized the creation of private financial funds, savings and loans cooperatives and non-governmental organizations that can grant credit, in an effort to promote better access to credit and other financial services throughout the country, much of which has no banks.

 

Foreign Exchange Controls Affecting Trade

Bolivia places no controls on foreign exchange transactions, beyond those that intended to curb money laundering. (See the section entitled "Conversion and Transfer Policies" for more details.)

The Boliviano ("Bs") is divided into units of 100 centavos, although coins in denominations of less than 50 centavos are rarely used. Travelers checks, dollars and currencies can be readily exchanged in exchange houses, banks and major hotels. It can be difficult for non-residents to cash personal checks in Bolivia. The Boliviano is freely convertible for all transactions; the U.S. dollar can also be used as legal tender in the country. As of end-July 1998, the rate of exchange was 5.55 Bs per one U.S. dollar.

Several money exchange houses legally operating in Bolivia offer prompt conversion of several currencies at legal rates, in addition to providing transfers.

Consult the financing guide published by the U.S. Department of Commerce's Latin American/Caribbean Business Development Center for more detailed information on Bolivia's financial system, including information on securities exchanges, debt-equity investment bonds, export financing lines for Bolivian exporters, project facilities and financing for private enterprise development.

 

General Financing Availability

Credit is generally difficult to obtain in Bolivia without using unencumbered local assets as collateral. Even with this, credit is generally extended on only a short-term basis. Collateral requirements for all but the most valued clients are very high. Interest rates are influenced by the Central Bank's certificate of deposit rates, as well as by high administrative costs resulting from the general operational inefficiency seen throughout the local banking system. Although there are no formal restrictions on foreign companies borrowing through the local financial system, few do.

 

Available Export Financing and Insurance

International and bilateral financial institutions provide some credit lines at lower-than-market interest rates. These lines are granted by the IADB, the World Bank and the Andean Development Corporation and are usually channeled through the Central Bank for on-lending via private Bolivian banks. OPIC and EXIM also offer insurance and/or financing products to the private sector.

 

Project Financing

Interested parties should consult the private lending offices of the IADB, IBRD and CAF. OPIC, EXIM and the U.S. Trade and Development Agency (TDA) can also be consulted.

 

List of Banks with Correspondent U.S. Banking Arrangements

The following banks have correspondent banking arrangements with U.S. banks:

  Banco Boliviano Americano (BBA)

  Banco de Crédito de Bolivia

  Banco de la Nación Argentina

  Banco de La Paz

  Banco de la Unión

  Banco Económico

  Banco Industrial SA (BISA)

  Banco Mercantil

  Banco Nacional de Bolivia

  Banco Real

  Banco Santa Cruz

  Citibank

Interested parties should consult ASOBAN, the local association of banks, for the most up-to-date information on activities in this sector. The Commercial Section of the U.S. Embassy in La Paz can provide a current listing of bank officers, addresses, phone and fax numbers.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>Bolivia09 Bolivia: Business Travel <A>=Bolivia

 

 

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IX.  BUSINESS TRAVEL

Business Customs

Most members of Bolivia's private sector are experienced entrepreneurs with ample direct exposure to U.S. and European business customs and procedures. Visiting U.S. travelers will find that their Bolivian counterparts for the most part are adept and sophisticated in their respective field of interest.

The local representative is a vital component in the successful operation of foreign-based firms. A local representative is required by law in the case of investment contracts, direct sales for major projects and all government agency purchases.

Bolivia's small market requires that most agents represent more than one line of merchandise with regard to product promotion and distribution. The amount of effort given to promoting a particular product line is determined in part by the interest and support expressed by the supplier, as well as by the agent's ability and interest.

The importance of occasional personal visits from company representatives, as well as prompt, responsive handling of communications, cannot be overstated, given the key role played by local representatives. After a business relationship has been established, local distributors and agents generally expect to receive an offer to visit the foreign company's plant facilities and head offices in order to become better acquainted with the company's personnel and its operating techniques.

Although capitalization and privatization have placed most of the former government-owned enterprises in private hands, Bolivia's economy still remains highly influenced by decisions taken in the public sector. Businesses should be prepared to deal with government officials and their at-times convoluted procedures. U.S. exporters or shippers should adhere closely to the instructions of the Bolivian importer, as well as to the instructions laid out in the "Trade Regulations" section of this report, regarding shipment of goods in order to avoid difficulties and customs fines.

Regretfully standard business practices in Bolivia in both the governmental and local business sectors can involve different sets of ethics than are common in the United States or that might be legal under U.S. law. U.S. companies should exercise the utmost care and discretion in their business dealings and come to the embassy for advice on how to proceed if confronted with corrupt practices.

 

Travel Advisory and Visas

Any foreigner wishing to work in Bolivia must first obtain a permit ("carnet laboral") from the Ministry of Labor. To obtain this permit, the foreigner must present a legal request and a passport with a valid visa. The Bolivian Government has three different non-immigrant categories for the entry of any foreigner into Bolivia. These are:

1. Tourist Visa, which is free of charge and valid for 30 days. This visa is valid for business purposes and may be extended for another 30 days, upon the payment of US$30 in the Offices of the Immigration Service.

2. Temporary Residence Permit, which costs 750 Bs (US$135) and is valid for up to two years. To secure this visa, the traveler must have the following: a valid passport containing a specific-purpose visa (for any purpose other than tourism); a legal petition addressed to the Director General of Immigration requesting temporary residence; a work contract legalized by the Ministry of Labor specifying the duration of the contract; a certificate from the institution for which the person is going to work (or for students, a certificate of studies); a police security clearance issued by the Bolivian police; a legal address registered with the Bolivian police; a temporary residence request form; and a change of visa request form (required even if this is their first visa). The Bolivian Government reserves the right to accept or deny the temporary residence of foreigners in Bolivia.

3. Indefinite Residence Permit, which costs US$50. To secure this visa, the traveler must have the following: a valid passport containing a two-year temporary residence visa; a legal petition addressed to the Director General of Immigration requesting indefinite residence; a medical certificate issued by the National Institute of Employment Health; a police security clearance issued by Bolivian police; a legal address registered with Bolivian police; a birth certificate legalized by a Bolivian consulate; a police security clearance issued in the country of origin and legalized by a Bolivian consulate; an indefinite visa request form; a change of visa request form; and a work contract legalized by the Ministry of Labor. The Bolivian Government reserves the right to accept or deny the indefinite residence of foreigners in Bolivia.

The above categories cover principals, managers and trained- and specially qualified-employees who might be involved in the company's operations.

No special qualifications are required to secure entry. The individual is not limited in the type of work one can perform once a visa is granted. There are no requirements on the amount of money invested to qualify for entry.

There are no specific restrictions on an investor wishing to live and work in Bolivia once a visa is granted. The spouse and children of the visa holder are entitled to enter the country with the visa holder, if their names are included in the legal petition presented to the Director General of Immigration.

The head of immigration is:

     Dr. Luis Alberto Gamarra, Director Nacional

     Servicio de Migracion

     Ministerio de Gobierno, La Paz

     Tel: (591-2) 359684; Fax: (591-2) 370615

 

Holidays

National Holidays:

     New Year's Day      January 1

     Carnival            varies

     Good Friday         varies

     Labor Day           May 1

     Corpus Cristi       varies

     Independence Day    August 6

     All Saints Day      November 1

     Christmas Day       December 25

 

Departmental Holidays:

     Oruro Day           February 10

     Tarija Day          April 15

     Sucre Day           May 25

     La Paz Day          July 16

     Cochabamba Day      September 14

     Santa Cruz day      September 24

     Pando Day           September 24

     Potosí Day          November 10

     Beni Day            November 18

 

Business Infrastructure

Transportation is hindered by a lack of developed infrastructure. Bolivia has 52,216 km of roads, of which only 2,871 km are paved. There are paved roads from La Paz to Desaguadero (at the Peruvian border, on Lake Titicaca), Arica (Chile), Cochabamba and Oruro. The road between Cochabamba and Santa Cruz is also paved. Many are impassable from time to time due to natural disasters and poor maintenance.

The national railroad system, which is now controlled by Cruz Blanca (Chile), has a total of 3,651 km of track, divided into two non-connecting segments. The western segment of 2,274 km is the longest and serves the Pacific ports of Arica and Antofagasta (Chile), as well as the lake port of Guaqui and the major cities in the Altiplano and the valleys. It connects with the Argentinean rail system. The eastern segment of 1,377 km links Santa Cruz with Brazil and Argentina.

Airline connections to other Latin American countries and to Miami are reasonable.

Utilities throughout the country are good, with reliable electric power in the major cities. Residential current in La Paz is 110 and 220 volts, 50 cycles. Cochabamba, Santa Cruz and most other cities operate on 220 volts, 50 cycles. Water shortages may occur in the dry season in various parts of the country, including La Paz and Cochabamba. Water is not potable by U.S. standards in any Bolivian city, although the major cities have improved the quality of their water supply systems in recent years.

Spanish is both the official language and the language of commerce in Bolivia. Although Aymara and Quechua are also spoken extensively, Spanish is understood in all but the most remote parts of Bolivia. English is also widely spoken among business leaders and public officials, but most prefer to speak Spanish.

Office hours are the same throughout the year, but vary somewhat from city to city. In La Paz and Cochabamba, hours are generally from 9 A.M. to 12 noon and 2:30 P.M. to 6:30 or 7P.M. In Santa Cruz, the tropical climate demands that work begin and end earlier, beginning at 7 or 8 A.M. and ending about 4:30 P.M., with a two-hour lunch break in the middle of the day. There is a move afoot presently to shift to the "hora continua," in which the lunch break is reduced to one hour, bringing the end of the day correspondingly earlier.

La Paz's altitude can cause headaches or more serious health problems for individuals with heart or lung ailments. It is a good idea to consult a doctor before visiting. Recent arrivals are advised to limit their activities until they acclimate, which can take from hours to days.

Sanitary conditions throughout the country are such that it is advisable to boil water at least 20 minutes or to consume only bottled water. Even the best restaurants in the major cities can serve tainted food. Hepatitis, rabies and yellow fever are endemic in Bolivia, although with proper caution both can easily be avoided. Malaria is prevalent in the jungles in Bolivia's northern and eastern regions.

National and international telephone and cable services are available in La Paz and other major cities. Direct dialing is available throughout the country. Most business establishments have fax and telex machines, with the electronic mail still rare but becoming increasingly popular. The internet has been operational in Bolivia since 1996.

Taxi fares from the El Alto airport to La Paz generally run 50 Bs. Within the city, fares average between 6 and 12 Bs, depending on the length of the trip, with small additional charges for extra passengers and for travel after 10 P.M. Rental cars are also available but quite expensive; frequently you are obliged to hire a driver as well. U.S. drivers licenses are valid in Bolivia for 90 days after arrival.

All of Bolivia experiences a rainy season during the summer months (December-March). In La Paz the average daytime temperature is 60 degrees Fahrenheit for most of the year, with temperatures dropping quite a bit after darkness falls. Santa Cruz is a tropical city, generally hot and humid, while Cochabamba has a climate similar to and slightly warmer than that of La Paz.

There are several good, comfortable hotels in La Paz, where single rooms range between US$35 and US$120 a night, including taxes. The better hotels include the Radisson Plaza, the Hotel Plaza, the Hotel Presidente and the Europa, as well as such apartment/hotels as the Ritz Apart-Hotel and the Camino Real Apart-Hotel. There are several good hotels in Santa Cruz (including Los Tajibos, Yotau and La Quinta) and in Cochabamba (Hotel Portales, Gran Hotel Cochabamba and Aranjuez).

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>BoliviaA01 Bolivia: Country Data <A>=Bolivia

 

 

----------------------------------------------------

X.  ECONOMIC AND TRADE STATISTICS

 

Appendix A - Country Data

Population (a): 1996    7,588,391

               1997    7,767,059

               1998    7,949,933

               2000    8,328,700

Population growth rate, 1998-2002 (a): 2.01%.

Distribution: roughly 59.5% of the population lives in urban areas, and 50% are men.

Religion: Catholicism is the dominant religion; freedom of religion exists.

Government System: representative democracy. Executive, legislative and judicial branches are separate. The President is elected every five years; the upper and lower houses of the bicameral Congress are elected every five years; the judiciary is appointed by executive branch, with Supreme Court judges appointed for ten years.

Languages: Spanish (official), Aymara, Quechua and other native tongues.

Business Week: Monday through Friday, 9 A.M. -12 noon, 2:30 P.M. - 6:30 P.M. See "Business Customs" above for more detailed information.

Source: (a) National Institute of Statistics (INE).

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>BoliviaA02 Bolivia: Domestic Economy <A>=Bolivia

 

Appendix B - Domestic Economy

                                           1996  1997  1998

     GDP (US$ million)                     7355  7647  8213

     GDP growth (percent)                  4.1   4.2   4.7

     GDP per capita (US$)                  935   969   1033

     Government spending as pct of GDP     39    37    39

     Inflation (consumer prices; pct)      8     7     6

     Unemployment rate (b)                 4.1   5.0   5.6

     Public sector external debt (US$ bill) 4.9   4.6   4.8

     Debt service/exports ratio            26.8  25.4  27.2

     Debt service/GDP ratio                4.5   4.7   4.5

     U.S. assistance to Bolivia (US$ million)

     - Economic                            57.0  86.4  n/a

     - Military                            0.5   0.5   n/a

     - Counter-narcotics                   16.5  24.7  n/a

     - Peace Corps and others              1.6   1.7   n/a

Notes: (b) based on surveys of urban areas; data does not consider underemployment.

Sources: National Institute of Statistics (INE); Central Bank of Bolivia; U.S. Embassy, La Paz.

 

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>BoliviaA03 Bolivia: Trade <A>=Bolivia

 

 

Appendix C - Trade

     (In US$ million)                  1996    1997   1998

     Bolivian exports FOB              1132    1153   1220

     Bolivian imports CIF              1578    1853   1830

     U.S. exports to Bolivia           269     295    n/a

     U.S. imports from Bolivia         275     223    n/a

Source: Central Bank of Bolivia and INE.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>BoliviaA04 Bolivia: Investment Statistics <A>=Bolivia

 

 

Appendix D - Investment Statistics

                                      1996    1997   1998

     Foreign investment (US$ million)  456     599    633

     Foreign investment (as % GDP)     6.1     7.8    7.8

Source: Central Bank of Bolivia.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>BoliviaA05 Bolivia: U.S. and Country Contacts <A>=Bolivia

 

 

Appendix E - U.S. and Country Contacts

Ministry of Foreign Relations and Worship

 

Dr. Javier Murillo de la Rocha

     Minister

     Plaza Murillo, esq. Ingavi

     Tel: (591-2) 371150, 371151; Fax: (591-2) 371155

 

Lic. Ana Maria Solares

     Vice Minister for International Economic Relations

     Plaza Murillo, esq. Ingavi

     Tel: (591-2) 369824; Fax: (591-2) 371155

 

Ministry of Government

 

     Lic. Guido Nayar Parada

     Minister

     Av. Arce, esq. B. Salinas

     Tel: (591-2) 431708, 431851; Fax: (591-2) 371334

 

Ministry of National Defense

 

     Lic. Fernando Kieffer Guzman

     Minister

     Plaza Abaroa

     Tel: (591-2) 431183, 431364; Fax (591-2) 433159

 

Ministry of Justice and Human Rights

 

     Dra. Ana Maria Cortez de Soriano

     Minister

     Edif. Ministerio de Justicia - El Prado

     Tel: (591-2) 368973, 361083; Fax: (591-2) 371376

 

Ministry of Agriculture and Rural Development

 

     Lic. Oswaldo Antezana Vaca

     Minister

     Av. Camacho, 1471 - Piso 2

     Tel: (591-2) 361348; Fax: (591-2) 359480

 

Ministry of Finance

 

     Edgar Millares

     Minister

     Palacio de Comunicaciones, Piso 19

     Tel: (591-2) 392220, 377234; Fax: (591-2) 359955

    

     Ruben Dario Castedo

     Director General of Customs

     Calle Potosi, 940

     Tel: (591-2) 392508, 371378; Fax: (591-2) 392505

 

Ministry of Economic Development

 

     Lic. Jorge Pacheco

     Minister

     Palacio de Comunicaciones, Piso 20

     Tel: (591-2) 356741, 375000; Fax: (591-2) 375000

 

     Lic. Carlos Alberto Lopez

     Vice Minister for Energy & Hydrocarbons

     Palacio de Comunicaciones, Piso 12

     Tel: (591-2) 374050; Fax: (591-2) 392758

 

     Ing. Adan Zamora Estrada

     Vice Minister for Mines & Metallurgy

     Palacio de Comunicaciones, Piso 14

     Tel: (591-2) 371184, 374124; Fax: (591-2) 391241

 

     Ing. Ramon Prada Vaca Diez

     Vice Minister for Transportation, Telecommunications & Civil Aviation

     Palacio de Comunicaciones, Piso 15

     Tel: (591-2) 377238; Fax: (591-2) 371395

 

     Lic. Jorge Valda

     Vice Minister for Industry & Commerce

     Av. Camacho, esq. Bueno, Piso 1

     Tel: (591-2) 372041, 372542; Fax: (591-2) 358831

 

Office of Industrial Property

 

     Vice Ministry for Industry & Commerce

     Av. Camacho, esq. Bueno, Piso 3

     Tel: (591-2) 372046, int. 135; Fax: (591-2) 372047

 

Please contact the Commercial Library of the U.S. Embassy in La Paz for a complete list of all ranking officials. All phone/fax numbers use country and city code for La Paz (591-2) unless otherwise noted. All addresses are in La Paz unless otherwise noted; "casilla" means P.O. box.

 

Other Important Contacts:

Empresa Nacional de Television Boliviana

     (Bolivian National Television Company)

     Lic. Javier Viscarra, President

     Casilla 900

     Tel: (591-2) 376356; Fax: (591-2) 392291

 

Banco Central de Bolivia

     (Central Bank of Bolivia)

     Dr. Juan Antonio Morales, President

     Casilla 3118

     Tel: (591-2) 374151; Fax: (591-2) 392398

 

Country Trade Associations/Chambers of Commerce:

Camara Americana de Comercio de Bolivia

     (American Chamber of Commerce of Bolivia - AMCHAM)

     Ana Maria Galindo de Paz, General Manager

     Casilla 8268

     Tel: (591-2) 432573, 430674; Fax: (591-2) 432472

 

Confederacion de Empresarios Privados de Bolivia

     (Confederation of Private Entrepreneurs)

     Jose Luis Camacho, President

     Casilla 4239

     Tel: (591-2) 377551; Fax: (591-2) 379970

 

Camara Nacional de Comercio

     (National Chamber of Commerce)

     Alejandro Yaffar, President

     Casilla 7

     Tel: (591-2) 378603; Fax: (591-2) 391004

 

Camara Nacional de Industrias

     (National Chamber of Industries)

     Lic. Jose Luis Galleguillos, President

     Casilla 611

     Tel: (591-2) 374476; Fax: (591-2) 350620

Camara Boliviana de la Construcción

     (Bolivian Chamber of Construction Companies)

     Ing. Antonio Salinas, President

     Casilla 3215

     Tel: (591-2) 370981; Fax: (591-2) 370981

 

Camara Nacional de Minería

     (National Chamber of Small Mining Firms)

     Srta. Maria Rene Rodriguez, President

     Casilla 2022

     Tel: (591-2) 350623; Fax: (591-2) 379651

 

Asociación Nacional de Mineros Medianos

     (National Association of Medium-sized Mining Firms)

     Raul Espana-Smith, President

     Casilla 6190

     Tel: (591-2) 412232; Fax: (591-2) 414123

 

Camara Agropecuaria del Oriente (CAO)

     (Eastern Agricultural Chamber)

     Walter Nunez, General Manager

     Casilla 116, Santa Cruz

     Tel: (591-3) 522200; Fax: (591-3) 522621

 

Asociación de Bancos Privados de Bolivia

     (Bolivian Private Bankers Association - ASOBAN)

     Ing. Fernando Kempff, Executive Secretary

     Casilla 5822

     Tel: (591-2) 321379; Fax: (591-2) 391093

 

Asociación Nacional de Industriales Textiles

     (National Association of Textile Firms)

     Javier Asbun, President

     Casilla 984

     Tel: (591-2) 331017; Fax: (591-2) 331017

 

Country Market Research Firms:

All market research and consulting companies are required to register with:

     Lic. Maria Eugenia Leon, President

     National Association of Consulting Companies

     Casilla 8560

     Tel: (591-2) 324532; Fax: (591-2) 314407

 

Commercial Banks:

Banco Boliviano Americano

     Loayza, esq. Av. Camacho

     Casilla 478

     La Paz, Bolivia

     Tel: (591-2) 314111; Fax: (591-2) 359874

 

Banco de Santa Cruz de la Sierra

     Junin 154

     Santa Cruz, Bolivia

     Tel: (591-3) 369911; Fax: (591-3) 350114

 

Banco Mercantil

     Calle Ayacucho, 277

     Casilla 423

     La Paz, Bolivia

     Tel: (591-2) 352891; Fax: (591-2) 392442

 

Banco Nacional de Bolivia

     Av. Camacho, esq. Colon

     Casilla 360

     La Paz, Bolivia

     Tel: (591-2) 354616; Fax: (591-2) 390879

 

Banco Real

     Av. 16 de Julio, 1642

     Casilla 10008

     La Paz, Bolivia

     Tel: (591-2) 366603; Fax: (591-2) 391413

 

Banco Ganadero

     24 de Septiembre, 110

     Santa Cruz, Bolivia

     Tel: (591-3) 361616; Fax: (591-3) 361617

 

Banco Industrial

     Av. 16 de Julio, 1628

     La Paz, Bolivia

     Tel: (591-2) 323343; Fax: (591-2) 392013

 

Banco de la Nación Argentina

     Av. 16 de Julio, 1486

     La Paz, Bolivia

     Tel: (591-2) 359214; Fax: (591-2) 391392

 

Banco de La Paz

     Av. 16 de Julio, 1473

     Casilla 6826

     La Paz, Bolivia

     Tel: (591-2) 390991; Fax: (591-2) 8112875

Banco de Crédito

     Calle Colon, 1308

     Casilla 907

     La Paz, Bolivia

     Tel: (591-2) 360051; Fax: (591-2) 391044

 

Citibank SA

     Av. Arce, esq. Rosendo Guitiérrez

     Casilla 4824

     La Paz, Bolivia

     Tel: (591-2) 433167; Fax: (591-2) 8112894

 

Banco Económico

     Av. Camacho 1245

     Santa Cruz, Bolivia

     Tel: (591-3) 361176; Fax: (591-3) 361184

 

Banco Unión

     Av. Camacho, 1416

     Santa Cruz, Bolivia

     Tel: (591-3) 366869; Fax: (591-3) 340684

 

Banco de Brasil

     Av. Camacho, 1468

     Casilla 1650

     La Paz, Bolivia

     Tel: (591-2) 377272; Fax: (591-2) 391039

 

Multilateral Development Banks:

World Bank (IBRD)

     Deborah Bateman, Representative

     BISA Building, El Prado, Piso 9

     Tel: (591-2) 356844; Fax: (591-2) 391038

 

Inter-American Development Bank (IADB)

     David Atkinson, Representative

     BISA Building, El Prado, Piso 5

     Tel: (591-2) 351221; Fax: (591-2) 391089

 

Corporación Andina de Fomento (CAF)

     (The Andean Development Corporation)

     Jose Vicente Maldonado, Representative

     Edif. Multicentro - Bloque B, Piso 9

     Tel: (591-2) 431333; Fax: (591-2) 432049

 

U.S. Embassy Trade Personnel

Incumbent

     Title

     Percentage of Time Spent on Commercial Work

     E-mail

 

Donna J. Hrinak

     Ambassador

     15%

 

George C. Lannon

     Deputy Chief of Mission

     10%

 

Scott Danaher

     Political/Economic Counselor & Commercial Attaché

     85%

     danahers@lapazwpoa.us-state.gov

 

Ramiro Alborta

     FSN-Senior Economic Specialist

     15%

     albortar@lapazwpoa.us-state.gov

 

Jaime Bilbao

     FSN-Senior Commercial Specialist

     100%

     bilbaoj@lapazwpoa.us-state.gov

 

Luisa San Martin

     FSN-Commercial Secretary

     90%

     sanmartinl@lapazwpoa.us-state.gov

 

Washington-Based U.S. Government Contacts

Trade Information Center

     U.S. Department of Commerce

     Tel: 800/USA-TRADE

     Email: tic@ita.doc.gov

 

Bolivia Desk Officer

     U.S. Department of Commerce

     Tel: 202/482-0475; Fax: 202/482-0464

     Email: welch@usita.gov

 

Office of the Coordinator for Business Affairs

     U.S. Department of State

     Tel: 202/746-1625; Fax: 202/647-3953

 

Bolivia Desk Officer

     U.S. Department of State

     Tel: 202/647-4193/-3360; Fax: 202/647-2628

     Email: markeyjp@araexwpoa.us-state.gov

 

Trade Assistance and Promotion Office

     Foreign Agricultural Service

     U.S. Department of Agriculture

     Tel: 202/720-7420; Fax: 202/205-9728

     Website: www.fas.usda.gov

 

Bolivian Government Representation in the United States:

Embassy of Bolivia

     3014 Massachusetts Ave. NW

     Washington DC 20008

     Tel: 202/483-4410; Fax: 202/328-3712

     Email: bolembus@erols.com

 

- Consulates General -

 

Washington D.C.

     3014 Massachusetts Ave. NW

     Washington DC 20008

     Tel: 202/232-4828: Fax: 202/328-3712

 

Florida

     9100 S. Dadeland Blvd., Suite 403

     One Trade Center

     Miami FL 33156

     Tel: 305/670-0709; Fax: 305/670-8636

 

New York

     211 East 43rd ST., Room 702

     New York NY 10020

     Tel: 212/687-0530/31; Fax: 212/687-0532

 

California

     870 Market St., Room 255

     San Francisco CA 94102

     Tel: 415/495-5173; Fax: 415/399-8958

 

- Honorary Consuls -

 

Beatriz Arauco de Kavlin

     7710 Carondelete Ave.

     St. Louis MO 63105

     Tel: 314/725-9466; Fax: 314/725-9103

William R.H. Ljoycejs

     4339 Garfield St. NW

     Seattle WA 98188

     Tel: 206/298-7133; Fax: 206/298-7348

 

Ricardo Antezana

     5200 South Center Boulevard, Suite 25

     Seattle WA 98188

     Tel: 206/244-6696; Fax: 206/244-3795

 

David C. Mitchell

     5500 Napheridge Dr.

     Cincinnati OH 45262

     Tel: 513/271-8189; Fax: 513/271-5381

 

Jaime R. Escobar

     1200 W. Superior St., Suite 101

     Melrose park IL 60160

     Tel: 708/343-1234; Fax: 708/681-0151

 

Jorge Gelatoire

     800 W. Sam Houston Parkway, Suite 103

     Houston TX 77042

     Tel: 713/977-2344; Fax: 713/977-2242

 

Eduardo del Castillo

     2345 University Dr.

     Phoenix AZ 85034-6821

     Tel: 602/231-9000; Fax: 602/278-8593

 

Glooria Stein

     20550 Hackamore Rd.

     Hamil MN

     Tel: 612/478-9495; Fax: 612/478-6631

 

Russell David le Blanc

     85 Devonshire St., Suite 1000

     Boston MA 02109

     Tel: 617/742-1500; Fax: 617/742-9130

 

Bolivian-American Chamber of Commerce of Florida

     Roberto Cozzi, President

     7136 SW 47th Street

     Miami FL 33155

     Tel: 305/663-8821; Fax: 305/663-9560

     Email: ardeprint@man.com

 

Reports on Commercial and Economic Conditions in Bolivia

Below is a current list of selected reports available from various sources:

U.S. Department of Commerce Publications: some of these reports were prepared within the Office of Latin America, while others were submitted by the U.S. Foreign Commercial Service and the Economic/Commercial Section of the U.S. Embassy in La Paz.

These reports and those of the Department of State are generally available through the U.S. Government Printing Office (Tel: 202/783-3238) unless otherwise indicated. The reports are also available on the National Trade Data Bank (NTDB, Tel: 202/377-1986) which may be accessed at most local or university libraries. In addition, there are a number of valuable reference works and periodicals, the most important of which are listed below. The best way to obtain guidance on using these information resources is to contact the Bolivian desk officer, U.S. Department of Commerce, Washington DC 20230, Tel: 202/377-1659.

U.S. Exports/World Areas by Schedule & Commodity Grouping Report, FT 455; Annual

- Agricultural Outlook

- Industrial Outlook Report: minerals; annual

- Industrial Outlook Report: petroleum; annual

- Financing Guide and the Guidebook to the Andean Trade Preference Act (both available free of charge from the Latin America/Caribbean Business Development Center, U.S. Department of Commerce, Tel: 202/377-0703, 202/377-0841)

- U.S. Department of State Publications -

- Background Notes: Bolivia, available periodically from the Department of State, Office of Public Communications, Bureau of Public Affairs, Washington DC 20520. Background Notes provides political and other background information on Bolivia. (Annual subscriptions to the Background Notes series may be purchased by contacting the Superintendent of Documents, Government Printing Office, Washington DC 20402)

- Area Handbook for Bolivia; periodic

The Commercial Section of the U.S. Embassy in La Paz (Tel: (591-2) 430251; Fax: (591-2) 433710) can provide a list of publications related to Bolivia, including those published in Bolivia.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>BoliviaA06 Bolivia: Available Market Research <A>=Bolivia

 

 

Appendix F - Market Research

- Computers and peripherals sector, April 1995

- Telecommunications industry sub-sector analysis, June 1998

- Environmental legislation, June 1997

- Environmental monitoring and pollution control equipment, June 1997.

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES

 

<NREC>BoliviaA07 Bolivia: Trade Event Schedule <A>=Bolivia

 

 

Appendix G - Trade Event Schedule

"Marketing USA 98" - multi-state/catalog exhibition, La Paz (August 1998).

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND

U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF

THE UNITED STATES