Agriculture and Foreign Investment in Bolivia
Bolivia is a landlocked South American nation with a total territory of over 1 million square kilometers, which equates to about three times the size of Montana. Located mainly throughout the Andes highlands at the heart of south America, Bolivia is a plurinational state with a total population of almost 11 million citizens, most of which belong to autonomous indigenous communities. With an annual gross domestic product (GDP) of approximately US$75 billion, Bolivia has experienced substantial economic growth throughout recent years upwards of 3.5% annually. The national economy is divided into 13% agriculture, 34% manufacturing, and 53% services. However, the agriculture industry utilizes about 34% of the national territory, while another 53% is forested. Similarly, the Bolivian agricultural industry employs 32% of the national labor force, while manufacturing employs about 20% and services employ another 48%.
In terms of natural resources and geography, Bolivia has tin, natural gas, petroleum, zinc, tungsten, antimony, silver, iron, lead, gold, timber, and hydropower. Furthermore, within the manufacturing industry, Bolivia produces food & beverages, tobacco, handicrafts, clothing, and jewelry. Within the agricultural industry, Bolivia’s main products are soybeans, quinoa, nuts, sugarcane, coffee, corn, rice, potatoes, chia, and coca. This article explores the status of trade, investment, and agriculture in Bolivia.
Agriculture and Foreign Investment in Bolivia
In terms of trade, Bolivia’s most important partners are Brazil, Argentina, the United States, China, and Japan. Bolivia has been a landlocked nation since losing the Atacama passage to the Pacific Ocean to Chile and Peru in 1884 after the Pacific War. Therefore, it is natural that Bolivian’s main trade partners be neighboring Argentina and Brazil to whom it sells large amounts of natural gas. In fact, natural gas makes up approximately 50% of Bolivia’s total exports. Bolivia’s other export markets are mainly located in the Pacific region given that, after decades of vindicating a maritime passage and sometimes rough diplomacy, the Chilean government allows Bolivian commerce unrestricted and duty free passage through its northernmost seaport of Arica.
Bolivia’s largest agricultural operations, about 80% of the country’s total, are located within its largest department, Santa Cruz de la Sierra. At the easternmost end of Bolivia, Santa Cruz finds itself in between the Andean highlands and the southern Amazon rainforest. Likewise, this fertile department shares a border with Brazil as well as ports connecting it to the Paraguay River. In Santa Cruz, there are almost 1 million hectares of land devoted to soybean production, which is one of the country’s leading agricultural exports. At the same time, Santa Cruz tends to receive more rainwater than the rest of the country, even though the region has experienced some severe droughts in recent years.
In terms of genetically modified (GM) crops, Bolivia currently allows the use of GM soybeans. However, growing worries about increased drought and climate variations are leading the agricultural industry to push for the approval of GM corn, cotton, and sugarcane crops. Similarly, Bolivia has witnessed an increase in locust plagues throughout its agricultural fields in recent years. Bolivia is a country with great investment and growth potential, particularly in the sectors of agricultural modernizations, supply chain integration, and mineral exploitation. However, the current government has not created a business friendly environment during the last decade. This reality could change in the next presidential elections on 2019.