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THE BOLIVIAN ECONOMIC PERFORMANCE AND INVESTMENT PROGRAM 2010 - 2015 ESTADO PLURINACIONAL DE BOLIVIA April 19th 2010 LUIS ALBERTO ARCE CATACORA MINISTER.

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Presentation on theme: "THE BOLIVIAN ECONOMIC PERFORMANCE AND INVESTMENT PROGRAM 2010 - 2015 ESTADO PLURINACIONAL DE BOLIVIA April 19th 2010 LUIS ALBERTO ARCE CATACORA MINISTER."— Presentation transcript:

1 THE BOLIVIAN ECONOMIC PERFORMANCE AND INVESTMENT PROGRAM ESTADO PLURINACIONAL DE BOLIVIA April 19th 2010 LUIS ALBERTO ARCE CATACORA MINISTER OF ECONOMY AND PUBLIC FINANCES I.The new model economic in Bolivia Diap. 2 II.Bolivian economy performance…….…..…………..Diap. 8 III.Projection – Investment program ……Diap. 59 IV.Private investment and the new state political constitution……………………………………………Diap. 73 Annexes……………………………………………….…..Diap. 77

2 I. THE NEW ECONOMIC MODEL IN BOLIVIA MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 2

3 Nowadays the world not only confronts a financial crisis and its consequences in the real sector, it also confronts: A climate crisis An energy crisis A food crisis In this context it is possible to talk about a structural crisis of capitalism THE FOUR CRISES OF CAPITALISM MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 3

4 Free market. The market is the mechanism for allocating resources and the imbalance adjustor. Hypothesis: Efficient Market The state intervenes to correct market failures (lack of redistribution of wealth and transnational monopoly of strategic companies) 1. An isolated State. The market is a self-regulated mechanism of the economic process 2. An active participation of the state in the economy. The state must intervene in the economy through its seven facets: planner, entrepreneur, investor, regulator, benefactor, developer, banker 2. Privatization, the surplus is transferred abroad and without a precautionary management policy of Natural Resources Nationalization and control of strategic natural resources 3. A Primary Exporter Development Pattern 4. A pattern of industrialization and productive development 4. 4 The Neoliberal Economic Model The Economic Social Communitarian and Productive Model

5 Preserving macroeconomic stability as a social asset and promote economic development MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS High concentration of income, sectors excluded of society 5. Redistributive State Growth depends only on the external demand Growth based on external and domestic demand 8. Investment depends on external savings, boosting debt and fiscal deficit Generation of domestic resources for investment, fiscal surpluses and lower debt 9. Stagnation, poverty, inequality of wealth and opportunity Development, redistribution and employment generation Macroeconomic stability as an end in itself 10. Economy focused on private initiative 6. The State is the sponsor of a plural economy 6. 5 The Neoliberal Economic Model The Economic Social Communitarian and Productive Model

6 Strategic sectors: Generators of Surplus Sectors that generate income and employment Hydrocarbons Mining Electricity Environmental Resources Industry, manufacturing and crafts Tourism Agricultural development Housing Trade, transport services, other services Surplus REDISTRIBUTIVE STATE MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS THE ECONOMIC SOCIAL COMMUNITARIAN AND PRODUCTIVE MODEL 6 Source: New Political Constitution of the State Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Lats update: Thursday, april 15th 2010 (Hrs. 20:06)

7 PRIVATE - Generates employment - Generates production and services -Strengthening the economic independency Promove the integration of various economic forms of production, aiming to achieve economic and social development PLURAL ECONOMY COMMUNITY - Generates production and employment - Principles of Cooperation SOCIAL COOPERATIVE - Generates production and employment -Principles of solidarity work -and cooperation STATE - Promotor - Organizer - Redistributor Complementation of individual interest with collective welfarel Role of the State ECONOMIC GROWTH WEALTH REDISTRIBUTION MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS PLURAL ECONOMY 7 Source: New Political Constitution of the State Elaborated: Ministry of Economiy and Public Finances, Fiscal Analysis Network (RAF) Lats update: Thursday, april 15th 2010 (Hrs. 20:06)

8 II. BOLIVIAN ECONOMY PERFORMANCE MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 8

9 Bolivia: Real GDP growth, (p) (In percent) (p) Preliminary Source: National Statistic Institute (INE) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 18:42) Average 1985 – (p)2007 (p)2008 (p)2009 (p) 3,004,804,566,153,4 9 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS DESPITE OF THE CRISIS, THE BOLIVIAN ECONOMY GROWS

10 Selected Latin American countries: Real GDP growth, 2009 (p) (In percent) (p) Preliminary Source: Central banks and statistical institutes in each country Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 18:42) 10 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS THE HIGHEST GDP GROWTH IN THE REGION

11 Bolivia: Real GDP composition by economic activity (p) (In millions of Bs.1990) (p) Preliminary Source: National Statistic Institute (INE) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Monday, april 19th 2010 (Hrs. 09:33) 11 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 17% 13% 11% 9% 8% 7% 5% 3% 2% 13%

12 Bolivia: GDP per capita, (p) (In USD) Average (p)2006 (p)2007 (p)2008 (p)2009 (p) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (p) Preliminary Source: National Statistic Institute (INE) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 18:42)

13 Bolivia: Real growth of households consumption and exports, (p) (In percent) 13 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (p) Preliminary Source: National Statistic Institute (INE) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 18:42) DOMESTIC DEMAND HAS SUSTAINED GROWTH

14 Bolivia: Gross fixed capital formation, (p) (In percent of GDP) 14 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (p) Preliminary Source: National Statistic Institute (INE) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 18:42) DOMESTIC DEMAND HAS SUSTAINED GROWTH

15 Mar 15 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Source: National Statistic Institute (INE) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 18:42) SHARP DECLINE IN INFLATION Bolivia: Anual inflation rate, 1985 – March 2010 (In percent) 12-Month

16 Selected Latin American countries: 12-Month inflation rate January 2005 – March 2010 (p) (In percent) (p) Preliminary Source: Central banks and statistical institutes in each country Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Friday, april 16th 2010 (Hrs. 09:05) 16 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS DECLINING INFLATION : MORE THAN IN NEIGHBORING COUNTRIES

17 Bolivia: Exports by economic activity 1985 – 2009, Accumulated January – February (p) (In millions of USD) -23% 44% 18% 43% Average (p) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Jan-Feb 20% (p) Preliminary Nota: It does not include personal effects and re-exports Source: National Statistic Institute (INE) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Monday, april (Hrs. 11:02)

18 Bolivia: Imports by economic use or destiny (CUODE) 1990 – 2009, Accumulated January – February (p) (In millions of USD) -12% 42% 23% 20% Average (p) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Jan-Feb 1% (p) Preliminary Source: National Statistic Institute (INE) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Monday, april (Hrs. 11:02)

19 Bolivia: Trade balance 1990 – 2009, Accumulated January - February 2009 – 2010 (p) (In millions of USD) -50% 50% Average MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 196% Jan-Feb (p) Preliminary Note: For the calculation, the exports include personal effects and re- exports Source: National Statistic Institute (INE) Elaborated: Ministry of Economic and Public Finances, Fiscal Analysis Network (RAF) Last update: Monday, april (Hrs. 11:02)

20 Selected Latin American countries: Nominal exchange rate index, January April 2010 (Hrs. 17:35) (January 2003 = 100) (p) Preliminary Source: Bloomberg, Central Bank of Bolivia (BCB) on information from Bloomberg, Central Bank of Uruguay Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 18:42) Venezuela Argentina, Bolivia, Brasil, Chile, Colombia, Perú and Uruguay 13Abr MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS EXCHANGE RATE STABILITY

21 Bolivia: Central Banks net international reserves 1976 – March 2010 (p) (In millions of USD) Mar (p) Preliminary Source: Central Bank of Bolivia (BCB) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 17:28) 21 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS HIGH LEVEL OF INTERNATIONAL RESERVES

22 Latin American countries: Net International Reserves (p) (In percent of GDP) (p) Preliminary Source: Central banks in each country Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 19:25) 22 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS THE HIGHEST LEVEL OF INTERNATIONAL RESERVES IN THE REGION, IN TERMS OF GDP

23 Bolivia: Net foreign direct investment, (p) (In millions of USD) Average 1985 – 2005: USD 296 millions Average 2006 – 2009: USD 393 millions MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 23 (p) Preliminary Source: Central Bank of Bolivia (BCB) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 17:28) POSITIVE FOREIGN DIRECT INVESTMENT IN 2009

24 Bolivia: Financial System deposits (1) December 2005 – March 2010 (In millions of USD) 24 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 24% 20% 28% 23% 37% 36% 4% 20% 27% 48% 4% 23% (1) Note: Corresponds to the private sector deposits Source: Financial System Supervisory Authority (ASFI) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Wednesday, april (Hrs. 20:51)

25 Bolivia: Financial System loans and non performing loans December 2005 – March 2010 (In millions of USD) 25 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 16% 14% 19% 10% Source: Financial System Supervisory Authority (ASFI) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Wednesday, april (Hrs. 20:51)

26 Bolivia: Remonetization of the Financial System deposits and loans, 1995 – March 2010 (In percent) 26 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS SHARP DECLINE IN DOLLARIZATION – REMONETIZATION OF THE ECONOMY Source: Financial System Supervisory Authority (ASFI) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Wednesday, april (Hrs. 20:51)

27 Bolivia: Fiscal balance, 1970 – March (p) (In percent of GDP) (p) Preliminary Source: Ministry of Economy and Public Finances, DGAPF, DGAT, and Central Bank of Bolivia (BCB) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 19:18) Average Mar ,0%+ 4,5%+ 1,7%+ 3,2%+ 0,1%+ 0,2% 22-Mar 2,4% 27 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS FISCAL SURPLUS SINCE 2006: FOUR CONSECUTIVE YEARS

28 28 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 40% 34% 14% Average 1987 – 2005: $us 497 millions Average 2006 – 2009: $us millions 7% Bolivia: Public investment, 1990 – 2009 (p) (In millons of USD) RECORD LEVEL IN PUBLIC INVESTMENT (p) Preliminary Source: Viceministry of Public Investment and External Financing (VIPFE) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Wednesday, april (Hrs. 15:17)

29 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Bolivia: Public investment financing 1990 – 2009 (p) (In percent) 29 DOMESTIC FINANCING OF PUBLIC INVESTMENT RISES (p) Preliminary Source: Viceministry of Public Investment and External Financing (VIPFE) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Wednesday, april (Hrs. 15:17)

30 Bolivia: Tax revenues, (p) (In millions of USD) (p) Preliminary Source: Ministry of Economy and Public Finances, VPT and National Taxes Service (SIN) y National Aduana Customs of Bolivia (ANB) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 19:18) Average MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS CONTINUOUS GROWTH OF TAX REVENUES

31 Bolivia: External public debt, 1993 – March 2010 (p) (In percent of GDP) (p) Preliminary Note: It does not incorporate FMI SDR allocations Source: Central Bank of Bolivia (BCB) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Monday, april (Hrs. 12:13) 31 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Mar DECLINING DEBT

32 Bolivia: Domestic public debt of the TGN, 1993 – Marzo 2010 (p) (In percent of GDP) (p) Preliminary Source: Ministry of Economy and Public Finances, DGCP Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Monday, april (Hrs. 12:13) 32 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Mar DECLINING DEBT

33 Bolivia: Urban unemployment rate, 2000 – 2009 (p) (In percent) (p) Preliminary (e) Estimated Source: National Statistic Institute (INE) and UDAPE Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Monday, april (Hrs. 12:13) 33 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS LOWER UNEMPLOYMENT RATE

34 Selected Latin American countries: Unemployment rates 2009 (p) (In percent) (p) Preliminary (e) Estimated Note: Urban unemployment rate, except Chile and Venezuela national unemployment rate Source: National statistic institutes in each country Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Monday, april (Hrs. 12:13) 34 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS THE LOWEST UNEMPLOYMENT RATE IN THE REGION

35 Bolivia: Moderate poverty rate, 1996 – 2009 (e) (In percent) 35 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS POVERTY REDUCTION (e) Estimated Source: UDAPE Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Monday, april (Hrs. 12:13)

36 Bolivia: Extreme poverty rate, (e) (En percent) 36 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (e) Estimated Source: UDAPE Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Monday, april (Hrs. 12:13) POVERTY REDUCTION

37 A. INTERNATIONAL RECOGNITION TO THE BOLIVIAN ECONOMIC POLICIES MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 37

38 Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Lats update: Tuesday, april (Hrs. 19:18) INTERNATIONAL RECOGNITION TO THE BOLIVIAN ECONOMIC PERFORMANCE International Organisms 38 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS FMI: Regional Economic Outlook: Western Hemisphere" presentation in Bolivia, and Article IV Consultation. The IMF described as prudent and wise the economic policy implemented in the country, for the fiscal stimulus applied in the crisis period October, 2009 October 2009 and February 2010 November, 2009 December, 2009 BID: Emphasizes the positive growth in 2009, and the least impact of the crisis in the country, in relation to Latin America and the Caribbean World Bank: Emphasizes the "appropriate macroeconomic management, and achieving the highest growth rate among countries in Latin America CEPAL: Positioned to Bolivia as the fastest growing economy in 2009 and among the principals in 2010

39 Credit Rating Agencies 39 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Fitch Rating, raised the rating to "B" from "B-, with stable outlook September, 2009 October, 2009 Moodys Investors Service, raised the rating to "B2" from "B3, with stable outlook The sustained of macroeconomic stability and favourable public and external debt ratios, international reserves accumulation and fiscal saving, supported this rating Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Lats update: Tuesday, april (Hrs. 19:18) INTERNATIONAL RECOGNITION TO THE BOLIVIAN ECONOMIC PERFORMANCE

40 III. PROJECTION – INVESTMENT PROGRAM MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 40

41 PRIORITIZED INVESTMENT MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 41 INVESTMENT PROJECTS BY ECONOMIC SECTOR (In millions of USD) (p) Preliminary Source: Ministry of Development Planning Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Monday, april 19th 2010 (Hrs. 10:35)

42 Achacachi Vinto Bermejo El Alto Caracollo San Buenaventura San José Misicuni Cbba. Corocoro Huanuni Zinc Litio Gran Chaco Rositas Santa Cruz El Mutún Rio Grande Cachuela Esperanza El Bala Miguillas Villa Tunari Challapata Carrasco Mining Lithium – Uyuni (I) Iron – Mutún (I) Zinc – Potosí, Oruro (PreI) Huanuni (I) Foundry Vinto (I) Complex Corocoro (F) Hydrocarbons Industrialization Refinement: Santa Cruz y Cochabamba (PreI) Ammonia/Urea: Cochabamba (PreI) Separation plant: Rio Grande (Santa Cruz) y Tarija (PreI) Pre-fabricated houses: Caracollo (I) Gas to liquids, GTL: Gran Chaco (San Alberto, Sábalo, Margarita) (PreI) Hydroelectric power plants For export: Cachuela Esperanza, El Bala y Rositas (PreI) Domestic Market: Miguillas, Misicuni y San José (PreI) Hydrocarbons, Mining and Energy CARTONBOL (O) LACTEOSBOL (O) PAPELBOL (O) Public Companies ECEBOL (I) Bolivian Forest Enterprise (EFB) (PreI) Bolivian Almond Enterprise (EBA) (F) AZUCARBOL (I) San Beunaventura Sugar Refinery (PreI) Pre-investment studies(PreI) Investment (I) Operation (O) PRIORITY: LAYING THE FOUNDATIONS OF INDUSTRIALIZATION MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 42

43 Potencial petroleum area Traditional area Petroleum exploration Petroleum exploitation New exploration areas Madidi, Chepite, Chispani Aguaragüe North and South Camatindi, San Telmo Production 7 wells in Margarita y Huacaya (Repsol) 2 vertical aditional wells in Incahuasi (E&P) San Alberto Plant North Fields THE CHALLENGE OF INDUSTRIALIZATION MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 43 Hydrocarbons: Exploration and production

44 Refinement Santa Cruz, Cochabamba Industrialization Ammonia/Urea: Cochabamba Provincia Gran Chaco (fields of San Alberto Sábalo, Margarita (GTL)) Separation plants Santa Cruz, Tarija Refinement and industrialization MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 44 HYDROCARBONS INVESTMENT (In millions of USD) THE CHALLENGE OF INDUSTRIALIZATION

45 Corocoro hydrometallurgical complex Inversión ( MT fin copper/year) AUSMELT VINTO Smelter New Huanunis mining refinery (3.000 TN/day) Zinc hydrometallurgical plants (Oruro / Potosí) Iron El Mutún Lithium carbonate pilot plant (40 MT/day) Large scale production of lithium carbonate ( MT/year) Lithium Chloride / Metal Lithium Lithium battery industry Electric Car Industry Mining MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 45 THE CHALLENGE OF INDUSTRIALIZATION

46 Mining MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 46 LITHIUM INDUSTRIALIZATION SALAR DE UYUNI LITHIUM PROJECT PHASES 1.Pilot plant lithium carbonate installation 2. Large scale production of lithium carbonate 3.Industrial manufacture of high tech batteries based on lithium metal PROJECT DESCRIPTION According the United States Geological Survey the lithium reserves in Bolivia are 5,4 million tonnes. Among the countries with the highest lithium demanding are United States, China, England, Germany and Japan. The price this metal fluctuates around $ per tonne World Lithium Reserve Base (1), 2007 (In millions of tons) (1) That part of an identified reosurce that meets specified minimium physical and chemical criteria related to current mining and production practices, including those for grade, quality, thickness, and depht. Source: United States Geological Survey, Mineral Commodity Summaries 2007 MINING INVESTMENT (In millions of USD) THE CHALLENGE OF INDUSTRIALIZATION

47 PROJECTS FOR EXPORT HYDROELECTRIC PROJECTS (In millions of USD) PROJECTS FOR DOMESTIC MARKET Cachuela Esperanza El BalaRositasMiguillasMisicuniSan José Energy MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 47 THE CHALLENGE OF INDUSTRIALIZATION

48 PROJECTS FOR EXPORT PROJECT FOR DOMESTIC MARKET Cachuela Esperanza El BalaRositasMiguillasMisicuniSan José Energy MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 48 ELECTRICAL ENERGY INVESTMENT (In millions of USD) THE CHALLENGE OF INDUSTRIALIZATION

49 Existing roads Perú Brazil Puerto Ustariz Yacuiba Guayaramerín Cobija La Paz Villazon Paraguay Chile S. I. Moxos Villa Tunari Government Program MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Interconnected Roads ROAD INTEGRATION 49 ROAD CONSTRUCTION INVESTMENT (In millions of USD) Chile

50 VIAL CORRIDORS Corridor 1. East - West (Bolivia, Brazil and Chile) 910 Km Corridor 2. North - South (Port Ustariz - Yacuiba) 128 Km Corridor 3. West - North (La Paz- Riberalta-Guayaramerín-Cobija) Km Corridor 4. West - South (La Paz - Bermejo-Villazón) 329 Km Corridor 5. East - West (Central- South) (Chile, Bolivia and Paraguay) 209 Km Existing roads Government Program Villa Tunari – San Ignacio de Moxos 295 Km Perú Brazil Paraguay Chile MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 50 Integrated Roads ROAD INTEGRATION

51 Oriental Railway network (Existing railway) Government Program West railway network (Interconnection zone) Ayquile Warnes Proposed railway Government Program MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 51 Trains RAILWAY INTERCONNECTION RAILWAY CONSTRUCTION INVESTMENT (In millions of USD)

52 Paved road (ESM, JSB and ABC) Puerto Suárez – Mutún – Puerto Busch Railroad Puerto Suárez – Mutún – Puerto Busch Waterway Mutún – Río Paraguay (Dionisio Foianini) WATERWAY Mutún – Puerto Busch: 110 Km Puerto Busch – Puerto Nueva Palmira: Km TOTAL:2.110 Km aprox. MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 52 Mutún – Puerto Busch waterway BOLIVIA: CONNECTED TO THE ATLANTIC WATERWAY MUTÚN – PUERTO BUSCH Investment amount (e): USD 450 millions

53 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS WHEAT (Hectares) Potential wheat production RURAL DEVELOPMENT 53 RURAL DEVELOPMENT AND FOOD SECURITY INVESTMENT (In millions of USD)

54 IV. PRIVATE INVESTMENT AND CONSTITUTION OF THE PLURINATIONAL STATE OF BOLIVIA MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 54

55 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 55 INVESTMENT: CONSTITUTION OF THE PLURINATIONAL STATE OF BOLIVIA Article I.The State recognizes, respects and protects private initiative, to contribute to the economic, social development and to strengths the country economic independency. II.It guarantees freedom of enterprise and the full exercise of the business activities, which will be regulated by law. Article I.The state will assume control and management on the exploration, exploitation, industrialization, transport and commercialization of the strategic natural resources through public cooperatives or communitarian, which entities could hire private firms and establish joint ventures. II.The state may subscribe contracts of association with legal entities, Bolivian or foreign, to the exploitation of natural resources. The economic profits must ensured to be reinvested in the country. Source: New Political Constitution of the State Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Lats update: Tuesday, april (Hrs. 19:18)

56 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 56 Article III.The management and administration of natural resources will be conducted ensuring the control and social participation in the design of sectorial policies. In the management and administration may be established joint entities, with state of the and the society representation, and be will precautionary collective welfare. IV.The private, Bolivian or foreign companies, will pay taxes and royalties when they intervene in the exploitation of the natural resources, and the collects to which they give place will not be refundable. The royalties for the utilization of the natural resources are a right and a compensation for his exploitation, and they will be regulated by the Constitution and the law. INVESTMENT: CONSTITUTION OF THE PLURINATIONAL STATE OF BOLIVIA Source: New Political Constitution of the State Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Lats update: Tuesday, april (Hrs. 19:18)

57 Gracias… 57 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS

58 ANEXOS MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 58 A.Real GDP growth by economic activity…………………..Diap. 78 B.Revenue and expenditures of SPNF……… Diap. 80 C.Government measures to confront the financial………...Diap. 83

59 A. REAL GDP GROWTH MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 59

60 60 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Bolivia: Real GDP growth by economic activity, 2009 (p) (En porcentaje) GDP Growth: 3,4% INCIDENCE 0,34 0,62 0,57 0,12 0,59 0,40 0,81 0,47 0,49 0,15 0,06 0,89 (p) Preliminary Source: National Statistic Institute (INE) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Monday, april 19th 2010 (Hrs. 09:33)


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