Bolivia

Bolivia is a lower-middle income economy with a per-capita income of $3,530 in 2019. In recent years, Bolivia maintained a stable economic growth averaging at about 4%, which makes it one of the most dynamic economies in the region. EU imports from Bolivia summed up to €592 million in 2019. However, only a small share of imports, worth about € 84 million, currently benefits from GSP+ as most products are imported under zero most favoured nation tariffs.

What is the GSP+?

The GSP+ is a special incentive arrangement for Sustainable Development and Good Governance that supports vulnerable developing countries. Next to fulfilling the eligibility requirements of the Standard GSP, GSP+ countries are required to ratify 27 international conventions on human rights, labour rights, environmental protection and climate change, and good governance. In order to ensure effective implementation of the conventions as well as compliance with reporting obligations, the EU engages in monitoring activities with the GSP+ countries. GSP+ beneficiaries can benefit from complete duty suspensions for products across approximately 66% of all EU tariff lines.

At a glance: GSP+ beneficiaries' preferential imports to the EU

group

11.25 million

Population

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Presidential Republic

Government

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2.8%

GDP Growth

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1.8%

Inflation

money

$ 40.9 bn

GDP

Facts about the Bolivian economy

Export Products

Bolivia's exports are heavily dependent on primary commodities, like natural gas, gold, zinc ores and other mineral products as well as agricultural products like nuts, quinoa, and soybean products.

Resource Wealth

Bolivia is a resource rich economy and can benefit from a favourable climate for agricultural production and large mineral reserves. For example, Bolivia possesses the world's largest lithium reserves as well as considerable deposits of zinc, silver, lead, tin, and gold. Furthermore, Bolivia is the world’s largest producer and exporter of Brazil nuts, the second largest exporter of quinoa and also contributes significantly to the world market’s supply of soybeans.

Trade Partners

Regional trade with its neighbouring countries - Brazil and Argentina - accounts for almost 30% of Bolivia's total trade. These two countries are the most important destination for Bolivia's export products, while most of the country's imports (22%) originate from China.

Economic Structure

Bolivia's economy is based on the country's substantial resources, both mineral and natural. Bolivia has substantial petroleum and natural gas reserves and good conditions for agricultural activities including forestry and fishing. The main cash crops are Brazilian nuts and soybeans. The industrial sector remains small and mainly focusses on the processing of the mineral and agricultural products. Other industries include the manufacturing of textiles from locally grown cotton and alpaca wool as well as the manufacturing of gold jewellery.

Usage of GSP+ Preferences

Bolivia makes considerable use of the preferences granted under GSP+. More than 94% of eligible EU imports from Bolivia utilise GSP+ duties.

Trade with the EU

Bolivia's total trade with the EU amounted to € 1.2 billion in 2019. With a share of almost 10% in Bolivia's total trade, the EU is the fourth most important trading partner.

Bolivia and the EU

Imports from Bolivia by product section

Imports from Bolivia over time (in € m)

BOLIVIA AND THE EU’s GSP

Economic Impact

Bolivia's economy can be considered highly vulnerable and lies noticeably below the threshold of 7.4%. In 2019, Bolivia's vulnerability score stood at 0.1%. This also relates to Bolivia's rather low degree of diversification, which stood at 94.7% (2019). The minimum threshold currently stands at 75%.

15%

A relatively small share of Bolivia's current exports to the EU are eligible for tariff reductions under the GSP.

94%

Bolivia makes considerable use of the tariff reductions under GSP+. 94% of eligible exports make use of GSP preferences.

Preference utilisation and export diversification

Bolivia's imports to the EU

Preference Utilisation vs. total eligible imports

Bolivia's preference utilisation rate remained comparatively stable between 2011 and 2018. Overall, Bolivia makes considerable use of its preferential access to the European market. On average, about 94% of eligible imports make use of the reduced tariffs that apply to GSP+ beneficiaries. Particularly the dominant import groups - Cereals, grains and seeds and food and beverages - make considerable use of the preferential market access and more than 97% of imports in these sections use the reduced duties. Despite an increase in total imports from Bolivia, imports using GSP+ preferences and GSP+ eligible imports declined. This can be attributed to a significant decline in food and beverage imports in 2018.

The largest product sections under the GSP+

The majority of preferential imports, just above 50%, from Bolivia under GSP+ is accounted for by cereals, grains, and seeds. Food preparations follow with a share of about 22%. The other product categories remain rather small. This indicates that Bolivia should further aim at diversifying its exports to the EU, away from primary commodities into products with a higher value added to take full advantage of the preferences granted under GSP+. This is supported by data on the preference utilisation on individual product sections, which shows that the dominant import sections already make considerable use of the duty reductions.

SUSTAINABLE DEVELOPMENT AND MONITORING PRIORITIES

Bolivia ratified 27 core conventions on human rights, labour rights, environmental protection, and good governance and maintained their ratification over the reporting period 2018-2019. Overall, Bolivia complies with the reporting obligations under the different conventions. On the environmental conventions, including the Cartagena Protocol and the UN Framework Convention on Climate Change, a number of reports are overdue.

Monitoring priorities during the reporting period 2018-2019

Prison overcrowding and overuse of pre-trial detention

Violence against women

Marginalisation of indigenous women

Child labour

Freedom of association and collective bargaining

Over the reporting period 2018-2019, the EU has focussed its monitoring activities in Bolivia on five priority areas. Bolivia has made progress in addressing poverty, and particularly improved the access to education, health care and housing. The country has made efforts to align its labour legislation with international conventions. Further action is needed to address violence against women, the overcrowding of prisons and child labour.

1. HUMAN RIGHTS

The level of ratification of core human rights treaties is very high and goes beyond what is required under the GSP+ regulations. Bolivia has ratified all human rights treaties covered by GSP+ and three additional conventions on the rights of migrant workers and people with disabilities as well as the convention on the protection of people from enforced disappearances. Over the reporting period, Bolivia has taken additional measures to ensure the effective implementation of these conventions and facilitated the access to education, health services, food, and housing. Nonetheless, violence against women remains an important problem and the current legal framework does not sufficiently address this problem. In 2019, Bolivia established the Plurinational Service for Women and Depatriarchalization which could improve the situation. Likewise, indigenous people and Afro Bolivians continue to face racism and discrimination. The government aims to further address this issue with a number of initiatives and in close cooperation with civil society. Furthermore, the overcrowding of prisons as well as the overuse of pre-trial detention will need to be addressed. The government is aware of the systemic weaknesses and has taken steps to address them. Another area which needs to be addressed is verbal and physical violence against human rights defenders and journalists. A strong legal basis is lacking to effectively ensure their protection.

Ratified

2. LABOUR RIGHTS

Bolivia has ratified all eight ILO conventions covered under GSP+ and has additionally ratified three of the four ILO priority conventions on labour inspection, labour inspection in agriculture and employment policy. Overall, Bolivia's national legislation is compliant with the provisions under these conventions. In addition, the government made efforts to address child labour through the modification of the Child and Adolescent Code and through taking a sectoral approach. Further progress is required to better accounting for the ILO comments on freedom of association and collective bargaining.

Ratified

3. ENVIRONMENTAL PROTECTION

Bolivia faces a number of serious environmental challenges such as water and air pollution, soil erosion and deforestation. Furthermore, the country is vulnerable to natural disasters such as for example floods and landslides. Bolivia maintained ratification of all conventions required by GSP+. However, a strengthening of the institutional framework would facilitate their effective implementation as well as domestic cooperation. Furthermore, Bolivia has not yet publicly defined national CO2 reduction targets which are required by the UN Conventions on Climate Change.

Ratified

4. GOOD GOVERNANCE

Bolivia cooperates closely with the EU in combating illicit drugs and drug trafficking with neighbouring countries. The country is the third largest producer of coca leaf and cocaine. The government has recently made an effort to enhance controls of precursor chemicals and monitor the coca cultivation, which is permitted as the chewing of coca remains a traditional practice in the country. In addition, the government stepped up its engagement on addressing corruption and has passed a law that establishes a number of transparency and anti-corruption units at all state levels. Further action is required to address corruption in the private sector.

Ratified

EU-Bolivia Bilateral Development Assistance

€281 million

The EU assisted Bolivia with approximately €281 million for the 2014-2020 period. The funds were dedicated to support the justice reform, to enhance the fight against illicit drugs and to assist integral water management.

Opportunities in Bolivia

  • Steady economic growth and overall stability of the macroeconomic environment
  • Large unexploited mineral deposits and further potential to increase efficiency of extraction and processing
  • High potential for renewable energies, which until now only contribute a small share to the country's energy supply
  • Monetary stability as the boliviano is pegged to the US Dollar

Most recent events

Date Event
2020‑05‑03 The EU deploys an Election Observation Mission (EOM) to observe the first round of Presidential elections and legislative elections
2019‑01‑21 Last GSP+ monitoring mission to Bolivia

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