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THE BOLIVIAN ECONOMIC PERFORMANCE AND INVESTMENT PROGRAM

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1 THE BOLIVIAN ECONOMIC PERFORMANCE AND INVESTMENT PROGRAM 2010 - 2015
ESTADO PLURINACIONAL DE BOLIVIA THE BOLIVIAN ECONOMIC PERFORMANCE AND INVESTMENT PROGRAM The new model economic in Bolivia Diap. 2 Bolivian economy performance…….…..………….. Diap. 8 Projection – Investment program …… Diap. 59 Private investment and the new state political constitution…………………………………………… Diap. 73 Annexes……………………………………………….….. Diap. 77 April 19th 2010 LUIS ALBERTO ARCE CATACORA MINISTER OF ECONOMY AND PUBLIC FINANCES

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

3 THE FOUR CRISES OF CAPITALISM
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 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 3

4 The Neoliberal Economic Model
The Economic Social Communitarian and Productive Model 1. Free market. The market is the mechanism for allocating resources and the imbalance adjustor. Hypothesis: Efficient Market 1. The state intervenes to correct market failures (lack of redistribution of wealth and transnational monopoly of strategic companies) 2. 2. An isolated State. The market is a self-regulated mechanism of the economic process 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 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 3. Privatization, the surplus is transferred abroad and without a precautionary management policy of Natural Resources 3. Nationalization and control of strategic natural resources 4. A pattern of industrialization and productive development 4. A Primary Exporter Development Pattern 4

5 The Neoliberal Economic Model
The Economic Social Communitarian and Productive Model 5. High concentration of income, sectors excluded of society 5. Redistributive State 6. The State is the sponsor of a plural economy 6. Economy focused on private initiative 7. Growth depends only on the external demand 7. Growth based on external and domestic demand MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 8. Investment depends on external savings, boosting debt and fiscal deficit 8. Generation of domestic resources for investment, fiscal surpluses and lower debt 9. Stagnation, poverty, inequality of wealth and opportunity 9. Development, redistribution and employment generation Preserving macroeconomic stability as a social asset and promote economic development 10. 10. Macroeconomic stability as an end in itself 5

6 THE ECONOMIC SOCIAL COMMUNITARIAN AND PRODUCTIVE MODEL
Strategic sectors: Generators of Surplus Sectors that generate income and employment Surplus MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Industry, manufacturing and crafts Tourism Agricultural development Housing Trade, transport services, other services REDISTRIBUTIVE STATE Hydrocarbons Mining Electricity Environmental Resources 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) 6

7 WEALTH REDISTRIBUTION
PLURAL ECONOMY STATE - Promotor - Organizer - Redistributor ECONOMIC GROWTH WEALTH REDISTRIBUTION PRIVATE - Generates employment - Generates production and services Strengthening the economic independency SOCIAL COOPERATIVE - Generates production and employment Principles of solidarity work and cooperation Role of the State Promove the integration of various economic forms of production, aiming to achieve economic and social development COMMUNITY - Generates production and employment - Principles of Cooperation MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Complementation of individual interest with collective welfarel PLURAL ECONOMY 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) 7

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

9 Bolivia: Real GDP growth, 1986 - 2009 (p) (In percent)
DESPITE OF THE CRISIS, THE BOLIVIAN ECONOMY GROWS Bolivia: Real GDP growth, (p) (In percent) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Average 1985 – 2005 2006 (p) 2007 (p) 2008 (p) 2009 (p) 3,00 4,80 4,56 6,15 3,4 (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) 9

10 Selected Latin American countries: Real GDP growth, 2009 (p)
THE HIGHEST GDP GROWTH IN THE REGION Selected Latin American countries: Real GDP growth, 2009 (p) (In percent) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (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

11 Bolivia: Real GDP composition by economic activity
(p) (In millions of Bs.1990) 13% 2% 3% 5% 7% 8% 9% MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 11% 11% 13% 17% (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

12 Bolivia: GDP per capita, 1986 - 2009 (p) (In USD)
Average 2005 (p) 2006 (p) 2007 (p) 2008 (p) 2009 (p) 871 1.010 1.182 1.328 1.651 1.683 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) 12

13 DOMESTIC DEMAND HAS SUSTAINED GROWTH
Bolivia: Real growth of households consumption and exports, (p) (In percent) 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

14 DOMESTIC DEMAND HAS SUSTAINED GROWTH
Bolivia: Gross fixed capital formation, (p) (In percent of GDP) 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) 14

15 Bolivia: Anual inflation rate, 1985 – March 2010
SHARP DECLINE IN INFLATION Bolivia: Anual inflation rate, 1985 – March 2010 (In percent) 8.171 66 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Mar 12-Month Source: National Statistic Institute (INE) Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Last update: Tuesday, april (Hrs. 18:42) 15

16 DECLINING INFLATION : MORE THAN IN NEIGHBORING COUNTRIES
Selected Latin American countries: 12-Month inflation rate January 2005 – March 2010 (p) (In percent) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (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

17 Bolivia: Exports by economic activity
1985 – 2009, Accumulated January – February (p) (In millions of USD) -23% Average 2006 2007 2008 2009 (p) 1.138 4.088 4.822 6.933 5.366 44% 18% 43% MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 20% Jan-Feb (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) 17

18 Bolivia: Imports by economic use or destiny (CUODE) 1990 – 2009, Accumulated January – February (p) (In millions of USD) Average 2006 2007 2008 2009 (p) 1.415 2.926 3.588 5.100 4.467 -12% 42% 23% MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 20% 1% Jan-Feb (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) 18

19 Bolivia: Trade balance
1990 – 2009, Accumulated January - February 2009 – 2010 (p) (In millions of USD) Average 2006 2007 2008 2009 -201 1.306 1.302 1.958 986 -50% 50% 196% MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (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) Jan-Feb 19

20 Argentina, Bolivia, Brasil, Chile, Colombia, Perú and Uruguay
EXCHANGE RATE STABILITY Selected Latin American countries: Nominal exchange rate index, January April 2010 (Hrs. 17:35) (January 2003 = 100) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Venezuela Argentina, Bolivia, Brasil, Chile, Colombia, Perú and Uruguay 13Abr-10 (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) 20

21 Bolivia: Central Bank’s net international reserves
HIGH LEVEL OF INTERNATIONAL RESERVES Bolivia: Central Bank’s net international reserves 1976 – March 2010 (p) (In millions of USD) 2005 2006 2007 2008 2009 Mar-2010 1.714 3.178 5.319 7.722 8.580 8.447 858 2.403 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 2.142 1.464 (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

22 Latin American countries: Net International Reserves
THE HIGHEST LEVEL OF INTERNATIONAL RESERVES IN THE REGION, IN TERMS OF GDP Latin American countries: Net International Reserves (p) (In percent of GDP) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (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

23 POSITIVE FOREIGN DIRECT INVESTMENT IN 2009
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 (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) 23

24 Bolivia: Financial System deposits(1) December 2005 – March 2010
(In millions of USD) 20% 4% 24% 36% 28% 23% MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 4% 37% 48% 27% 23% 20% (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) 24

25 Bolivia: Financial System loans and non performing loans
December 2005 – March 2010 (In millions of USD) 14% 16% 19% 10% MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 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

26 SHARP DECLINE IN DOLLARIZATION – REMONETIZATION OF THE ECONOMY
Bolivia: Remonetization of the Financial System deposits and loans, 1995 – March 2010 (In percent) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 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

27 Bolivia: Fiscal balance, 1970 – March 22 2010 (p) (In percent of GDP)
FISCAL SURPLUS SINCE 2006: FOUR CONSECUTIVE YEARS Bolivia: Fiscal balance, 1970 – March (p) (In percent of GDP) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Average 2006 2007 2008 2009 22-Mar 2010 - 5,0% + 4,5% + 1,7% + 3,2% + 0,1% + 0,2% 2,4% 22-Mar (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) 27

28 RECORD LEVEL IN PUBLIC INVESTMENT
Bolivia: Public investment, 1990 – 2009 (p) (In millons of USD) 7% Average 1987 – 2005: $us 497 millions Average 2006 – 2009: $us millions 34% 14% MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 40% (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) 28

29 Bolivia: Public investment financing
DOMESTIC FINANCING OF PUBLIC INVESTMENT RISES Bolivia: Public investment financing 1990 – 2009 (p) (In percent) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (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

30 Bolivia: Tax revenues, 1990 - 2009 (p) (In millions of USD)
CONTINUOUS GROWTH OF TAX REVENUES Bolivia: Tax revenues, (p) (In millions of USD) Average 2006 2007 2008 2009 1.018 2.642 3.084 4.063 4.324 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (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) 30

31 DECLINING DEBT Bolivia: External public debt, 1993 – March 2010 (p) (In percent of GDP) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Mar (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

32 DECLINING DEBT Bolivia: Domestic public debt of the TGN, 1993 – Marzo 2010 (p) (In percent of GDP) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Mar (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

33 Bolivia: Urban unemployment rate, 2000 – 2009 (p) (In percent)
LOWER UNEMPLOYMENT RATE Bolivia: Urban unemployment rate, 2000 – 2009 (p) (In percent) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (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

34 THE LOWEST UNEMPLOYMENT RATE IN THE REGION
Selected Latin American countries: Unemployment rates 2009 (p) (In percent) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (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

35 Bolivia: Moderate poverty rate, 1996 – 2009 (e)
POVERTY REDUCTION Bolivia: Moderate poverty rate, 1996 – 2009 (e) (In percent) 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) 35

36 Bolivia: Extreme poverty rate, 1996 - 2009 (e)
POVERTY REDUCTION Bolivia: Extreme poverty rate, (e) (En percent) 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) 36

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

38 INTERNATIONAL RECOGNITION TO THE BOLIVIAN ECONOMIC PERFORMANCE
International Organisms 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 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS World Bank: Emphasizes the "appropriate macroeconomic management, and achieving the highest growth rate among countries in Latin America” October 2009 and February 2010 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 November, 2009 CEPAL: Positioned to Bolivia as the fastest growing economy in 2009 and among the principals in 2010 December, 2009 Elaborated: Ministry of Economy and Public Finances, Fiscal Analysis Network (RAF) Lats update: Tuesday, april (Hrs. 19:18) 38

39 INTERNATIONAL RECOGNITION TO THE BOLIVIAN ECONOMIC PERFORMANCE
Credit Rating Agencies Fitch Rating, raised the rating to "B" from "B-“, with stable outlook September, 2009 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Moody’s Investors Service, raised the rating to "B2" from "B3“, with stable outlook October, 2009 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) 39

40 III. PROJECTION – INVESTMENT PROGRAM 2010 - 2015
MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 40

41 INVESTMENT PROJECTS BY ECONOMIC SECTOR
PRIORITIZED INVESTMENT INVESTMENT PROJECTS BY ECONOMIC SECTOR (In millions of USD) MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS (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) 41

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

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

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

45 THE CHALLENGE OF INDUSTRIALIZATION
Mining 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 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS Iron → El Mutún Zinc hydrometallurgical plants (Oruro / Potosí) New Huanuni’s mining refinery (3.000 TN/day) AUSMELT VINTO Smelter Corocoro hydrometallurgical complex Inversión ( MT fin copper/year) 45 45 45

46 LITHIUM INDUSTRIALIZATION World Lithium Reserve Base(1), 2007
THE CHALLENGE OF INDUSTRIALIZATION Mining MINING INVESTMENT (In millions of USD) LITHIUM INDUSTRIALIZATION “SALAR DE UYUNI” 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 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS World Lithium Reserve Base(1), 2007 (In millions of tons) 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 (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 46 46 46

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

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

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

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

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

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

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

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

55 INVESTMENT: CONSTITUTION OF THE PLURINATIONAL STATE OF BOLIVIA
Article 308.- The State recognizes, respects and protects private initiative, to contribute to the economic, social development and to strengths the country economic independency. It guarantees freedom of enterprise and the full exercise of the business activities, which will be regulated by law. Article 351.- 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. 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. MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 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) 55

56 INVESTMENT: CONSTITUTION OF THE PLURINATIONAL STATE OF BOLIVIA
Article 351.- 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. 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. MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 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

57 Gracias… MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 57

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

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

60 Bolivia: Real GDP growth by economic activity, 2009 (p) (En porcentaje)
INCIDENCE 0,34 0,62 GDP Growth: 3,4% 0,57 0,12 0,59 MINISTERIO DE ECONOMÍA Y FINANZAS PÚBLICAS 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) 60


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