Bolivia - The economy

..- -7 C T nr 1 K Tl1: R-U I %J EN L. %) I~ n I I. LL Wr ITHIN 1 % Report No. WH-11Za 1 ONE WEEK - This renort was arenared for use within the Bank It mav not be nublishe nor may it be quoted as representing the Bank's views. The Bank accepts no responsibility for me accuracy or completeness of the contents of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT THE ECONOMY OF BOLIVIA September 12, 1961 Department of Operations Western Hemisphere CURPRETCV EQnTTVAENTSTQ US$ 1 = 1 1. 375 Bolivianos million Bolivianos = US$ 84. 14 TABLE OF CONTENTS B~AQT0 T)AMA' QTThiMnADTV ATTT) f1r)TMTTTTrr)T AMUJE.J.i.A.J. .t.L. . .. . .. .. ...iL .rAIM nf-NT T 0- rr Tr MT A. Gross National Product, Consumption and Investment ................... B. Agriculture .......................... 5 C. Industry ................ 8 D. Mining .............................. 9 E. Petroleum ............................ 11 F. Electric Power ....................... 12 G. Transportation ...................... 13 II. FINANCIAL SITUATION A. Introduction ......................... 15 B. Money and Credit ..................... 15 C. Price and Wage Policy .... ..... 16 D. Public Finance ....................... 16 1. Central Government Budget ....... 17 2. Comibol Budget .................. 18 3. Other State Enterprises ......... 18 E. The United States Aid Program to Bolivia ........... ............... 19 F. Balance of Payments .................. 20 III. 'PUBLIC INVESTMENT AND ITS FINANCING ...... 20 IV. GROWTH AND BALANCE OF PAYMNTS PROSPECTS.. 23 V. EXTERNAL PUBLIC DEBT, DEBT SERVICE AND CREDITWORTHINESS ... ............. 2 Following Page No. STATISTICAL APPENDIX ..................... 25 i BASIC DATA Area: bl99470 square miles Population (1960 estimate): 3.8 million --- ___niin -rn.= nf inr-7-i-7 prices), 1959: 3344.7 billion bolivianos % originating in agriculture 34.4% d * -4.. -- - --- - - In *? Cf Average annual rate of increase in real terms 1950-59 0.2 GNP per capita in 1959 (1958 prices) 94.0 US$ Cost of Living (1953=100): 3350 (1960) Average rate of increase: 1953-1957 119% 1957-1960 11% Exports (c.i.f.), 1960: US$ 67.8 million Tin US$ 42.9 Other M1inerals US$ 17.0 " Petroleum and Other US$ 7.9 " Exports (f.o.b.) as % of GNP (1959) 16% Balance of Payments (in millions of US$): 1948 1955 1960 Exports f.o.b. 100.3 83.6 54.6 Imports f.o.b. -72.2 -77.6 -67.3 Investment Income -20.6 - 4.1 - 1.2 Other- inrl- nrivntpe- donition -21.7 -2.1 -11-1 Balance on goods and services -16.2 -22.2 -27.0 T. S- GnvPrnmnt Aid 0 19.q 1.8 Official International Reserves: Amount at end of April, 1961 US$ 7.1 million % of 1960n iTnn.or--ci -f- 05 Public Finances: Central Govt. Revenues 1960 266.0 billion bolivianos E of GNP 6.5% Bolivian Mining Corp. receipt, '60 517.0 billion bolivianos i of rNP 1LO Govt. Petroleum Enterprise Receints- 1960 152.h billion bolivianos % of GNP 3.5% External Public Debt: Amount at end of 1960 US$ 170 million Serv-ce in 1961 as ,' of exports 1960 29% BOLIVIA POPULATION AND AGRICULTURE __7' Rpr7atA Feneran c t A T ITDEcetr de ~~~,p-ai-,tc tnIaj diatribution *valt pi - - -- o--o------o--o Marshes and swamps -_ •6 , 56 2so00o 0 AUGUST..961...RD-.8 . ... ... ...... ......... 0f~ 1ry\0 .0 15 200 ,co so 0i ha00., *b AUGUS 1961, ~z - ii - SUMMARY AND CONCLUSIONS 1. Bolivia, iith land area of 420,000 sqaure miles and 3.8 million DeoDle. is the least densely nonulated country in Latin America. However,. much of the population lives in the Altiplano, where conditions are not nrnni+inii I'nr niiItmrnI rPvPnrmPnt. Althoiiph richir Pnrlowel wi.th natural resources, such as minerals, fertile land and hydroelectric power pn+oe+nIl thea geogr-rapi locnAin anndl phyicanl connfigmrat.ion haqve re.t_qrrPd economic development. Bolivia has for centuries been dependent on minerals as so,r~ urce of ,, foreig exha1g eafl nng' and ele toft- -- --val s a ecnt n for more than 90% of total exports. Large quantities of mineral have been -b4re-- - - 1,, Oal - __.- - M -1-6 IM S 110 C- -' -. -- - -,, r,+ , n- .- ,+l. -~ - _ -1 rv - - development of the economy: Bolivia remains a poor and underdeveloped WAt, ,,, -N .,~ over It , / ,.A 4,., JLt. ;V)U_, L l ont J+1 0 n a e i n m -4- mosr", on a pri.4m-it-rr,e ,,k ~ ence basis. The rate of illiteracy is high (62%) and the per capita income -Z ,- . I _L.. 1 - j. J- T - .. - ..A LO CILU~.LIr, LAIC: -LVUOU 1 LLIJ IULI iLI~± ine Revolution in , particularly the subdivision and airi- bution among the rural population of the great agricultural properties, eliminated certain institutional obstacles to economic development but gave rise to other obstacles. Difficulties in adjusting the economy to tne changes produced by this revolution, particularly the nationalization of the tin mines, have resulted in a general economic stagnation. Total production was virtually the same in 1960 as a decade earlier. Increases in agriculture, transportation and petroleum were offset by reductions in mining and manufacturing. Despite a substantial decrease in exports, imports were maintained, due mainly to large economic and financial assist- ance from the United States. Together with a possible decline in public consumption, this assistance has made possible nearly unchanged per capita private consumption, despite a standstill in total output and rising population. A relatively high investment rate, 15%, has been maintained because of the external assistance and, more recently because of direct investment by foreign oil companies. The investments have mainly been in fields which have given a low immediate return (road-building, oil exploration). 3. Failure of investment to lead to rising output and incomes over the past decade is closely linked with political difficulties since the Revolution. Although the party in power has had over overwhelming support in elections, the political situation is still unstable so long as the power of the labor unions, influenced as they are by irresponsible elements, is not curbed or the leadership of the labor unions changed. The unions' pressure for higher wages, more men in the mines and for maintenance of employment in the face of declining output, together with frequent strikes and interference in manaerial decisions, have made rationalization of the state enterprises difficult. The result has been not only a reduction in tin output and increasinE financial strains in state enterprises, but also a sense of frustration among private enterprise generally, particu- larlv in the mining and manufa-turing industries. PRecentlv speuriz.d tech- nical and financial assistance from abroad for the mining and oil iii sectors was designed to strengthen the President's position viz-a-viz the irresponsible elements in the unions. It is still too early to judge whether the improvement in the field of labor relations and in the political climate generally resulting from these moves will be sufficient to raise mining output, restore confidence in the economy and stimulate a general economic revival. 1. Since 1956 the government has succeeded. in the face of con- siderable opposition, in adhering to a policy of monetary restraint, thereby halting the hvnerinflatin which had develoned. Tn fact. Drice increases over the past 12 months have been less than 6%. The stabiliza- tio-n p-rogram int.rlroued in 1956( nni. qt.ript ,1-.ii+.q-tinn.q nn hqnk nrpdit 1. and abolished the system of multiple exchange rates, import and export niceningr tand pnric co nntr.YI- Theb1ud1etqar nPrforTmnnanc hasz inm-rn%rPr owing to a broadening of the tax base and more effective tax collections, somen n-l, An, 1- -, t end4tu+,r- and t he ch -e J a n "Ovn-tt ent'rt -1 J "i aa -a4 cli led to the emergence of counterpart funds as a source of finance. However, *the. UCet-Lia . . A L iI- Vs 1-0a LJUU UC L UCi LA.0 L .1. %LALJ U Y ,LJ. U -LL itl'- i JJ proportion of current expenditures covered by tax revenues. Current rates has contributed to the financial difficulties in the state petroleum [mpany anu private puwer compaLes. IT is ha ijvL LO U rLJU1CC1OJ_u1G short-term borrowing, non-payment of supplies, wages and salaries, and posiby somei re'--c'*-inpblc--~meu As a result, credit expansion to the public sector has slowed down but not been stopped and the public sector has not been able to reduce substantially its dependence upon emergency assistance from abroad. While there was some decline in the absolute amount of U.S. aid.for non- investment purposes, especially from the peak level 1956/57, U.S. grant allocations for 1961 are again at a higher level and very substantial additional assistance for development service purposes is now being provided in order to stimulate an economic revival. 6. The manufacturing sector of the economy, strongly stimulated by the run-away inflation and multiple exchange rates in the first year after the Revolution, suffered a sharp contraction when it was exposed again to normal competition from abroad with the introduction of the stabilization program and unification of exchange rates. A credit squeeze on the private sector made necessary by the continued expansion of credit to the public sector, has also impeded a revival. Prospects for expan- sion in manufacturing are fairly limited in the short- and medium-term. Agriculture, on the other hand, appears to have more favorable prospects Some progress has been made in expanding output of commodities previously imported on a substantial scale. The opening up of new lands has stimu- lated commercial agriculture in several areas, particularly in the Santa Cruz area. 7. While auricultural exoansion at a fairly hiEh rate is feasible. prospects for changing the miserable lot of the great majority of the iv farmers are not so favorable. The task of relieving the population pressure in the old settlements in the Altiplano and high valleys is very difficult in view of the low level of education and technical skill, and the tradition and outlook of the people. To tackle this problem on a substantial scale would require rural education programs, agricultural research and extension services, building of feeder roads, capital for colonization projects and agricultural credits of a magnitude which would clearly be beyond the financial and administrative capacity of the Bolivian government for many years. 8. Foreiwn assistance has now been obtained to assist the Bolivian government over a wide range of economic activities. The projects for which foreign finance has been earmarked seem, on the whole, to have high priority, and available funds should cover most of the immediate need for forpian apital. Primary pmnhAqi. i. heinC nlq!ed on thn mining and petroleum sectors, whose rehabilitation is essential for the revival of +.the Pnnnmr nq whole. The ennomic overhan are fairly wll tkPn care of in the aid program already arranged, although some additional assistance- mayi be requii-redI in eliect-ric powe=,r nilways.Nm P-rmri-:in ic made for increased agricultural and industrial credit. Some assistance to colonization is n1reAdriT y,vi '-rr A 0, ~+k. + + ~ ~ ~ ~ v +n~limn+~-~.~1~n ++ + hc mining industry are successful, economic expansion at a rate of about $' per yerapasto be feasible o-ver the neXt '14 to 5 yrears. 7k Thega between exports and non-investment (net) imports is roughly estimated at be accompanied by a somewhat lower rate of growth in imports, if proper Pol.LUIt: al PUI-,jLUU LU .Ls UoUU.U± LL UUCtu I£UJ.LV.LC IVL..L Ue cLU_LI:_ UV'=I UI'RI next five years to reduce her dependence on foreign aid by more than $l0 million. Foreign aid will thus contnu t o be ny to cover svme part of tne non-investment imports required by an expanding economy even if the capital goods imports required for such expansion are exclusively foreign financed. 10. Most of the external assistance, whether for current purposes or for investment purposes, will nave to be provided in a form which imposes little, if any, burden on the balance of payments or on public finance. Servicing obligations on existing debts, exclusive of payments of past arrears, are equivalent to about 30% of foreign exchange earnings in 1961 and to about 20% in the following four years. Bolivia has in fact suspended service payments on a large part of its external public debt. Even if agreements are reached with foreign creditors involving reduced debt servicing obligations, debt service will continue to weigh heavily on the economy, in view of the weak economic and financial posi- tion. Only when the expectation for economic revival and continued growth rests on firmer ground would it be prudent to consider a resumption of borrowing on conventional terms. INTRODUCTION A. Physcal Settinr nd nrq .ra Resources seacoast. It is located in the middle of the South American continent, south, and Peru and Chile on the west. The country is fairly rich in natLural resur es bu sVUU -Lct P Lju u _L u ~ ±0 L.~UUL J ond. L13iO_L_;cL_ U IU 0~UcLU UUJ.Ut'U population makes economic development difficult and expensive. With a lad[I- ar±ea o'L t[.UA±nte.~.L sAL -dmit O.LZt_ c±to V ud.Ilu u Opa- Ui culu _)*u million people, it is thinly populated. The country may be divided into nrue u mjor paysiographc regionrlz: the niglandsu 6 o thLU ne area), te llanos, or great plains, of the north and east (70%) and the intermediate zone comprising the eastern slope, and valleys (147). Ine highlands are made up of two great mountain chains, the Western and Eastern Cordilleras and the high plateau known as the Altiplano enclosed by the mountain ranges. The Altiplano, which extends from Lake Titicaca at the Peruvian border to the Argentine frontier, is a cold, semi-dry region, having a general elevation of 12,000 to 14,000 feet above sea level. 2. For centuries the highlands of Bolivia have been famous for their mines, particularly tin. Present known deposits are relatively small and the ore is rather complex and usually of low grade. However, experts believe that there are large mineral deposits in the so-called tin belt along the Eastern Cordilleras. A sub-Andean petroleum bearing belt is believed to exist, running from the Peruvian border in the north to the Argentine border in the south. The hydroelectric power potential is very great, with resources close to consumer and distribution centers. Bolivia possesses large agricultural potentialities and vast areas of forests in the northern and eastern part of the country. Because of the distance from the population centers in the Altiplano and the difficulties of transport through the eastern barriers of the Andes, only a very small nart of this potential has so far been exploited. and less than 10% of the population has settled in this part. More than 2 million inhabitants are concentrated in the Altiplano. while another one million live in the high valleys.. About one quarter of the population is urbanized, living in towns with more than 5,000 inhabitants. 3. About 60% of the inhabitants are Indians. most of whom earn a poor living by subsistence farming. They live in small clusters isolated one from the other not only by nhysical barriers but also by language and tradition. About two-thirds of the population over 15 years of age are illiterate. Althonuah hPalth conditions are nrtcarious and the mortality rate is high, population growth is estimated at more than 20 a year. The n P-,n'o nf +.ho - i c-n n a nr\i i1 nn -i co a nl Iv- fo1 +. i n +ho 6I+.in1 nnn region. Before the Revolution, freedom of movement of the Indians was n'h 4+ne I1rV+l 1i 'kr + n4 e c+ + ^-Pf A n n-r1nn^n~,- +henn 1A I n,,nrl by their ignorance and passivity. The change in the economic and political kuuledge concerning better living condioL n ULI, urb.La are.a a knowledge concerning better living conditions both in urban areas and I -LOW -Lands hacve; lite bY LitU te enhaced;U LU11_ th moiiy ofL the1 IndiancU1. - 2 - h. Even if Bolivia's resource potential provides large scope for economic expansion, the country is seriously handicapped by natural barriers. hining takes place mostly at very high altitudes (up to 18,000 feet) where economic and human costs of excavating minerals are high. Moreover the physical configuration makes the transportation within the country. as well as with otner iintri q very onqtiv- The high transport cost of imports constitutes a natural protection for domestically p-roducedr goodsiq buit. t.rn distannce bPetween t.he agriei.iculur suvrplus, areasc and the main consumer centers often eliminates these advantages. Last but communication extremely high. B. Structure of Economy and Role of Government 5. With minerals contributing more than 90% of its export earnings, n _-I . Z._. - - - .. . I _ ' 1_ _ _ 3-. - - .2 -2 - - _ - __.T __4 z --_ --_ __ ou-.VIC Lj ud-LLy rugarutU a a iUiIg coUUL,VY. i1UWVUr, mning conIrIH- butes at present only 11% to the gross national product (18% during the export boom in the early 195u's and provides employment for only 370 of the working population. Bolivia is still a predominantly agricultural economy with more than 707 of the population engaged in agricultural ana livestock raising. Productivity is very low and agriculture contributes only one-third of the gross product. With most of the farming on a subsistence basis, less than one-third of the total population is totally integrated into the money economy, About ,% of the labor force is occupied in manufacturing industry and handicraft and these industries produce at present about 110 of the gross production. These industries have been obliged to maintain their labor force despite a substantial fall in output. 6, The public sector controlled before the Revolution the petroleum industry and a large part of the transportation and communication sectors. Since the Revolution the government has assumed much wider economic, finan- cial and administrative responsibilities wita respect to mining and agri- culture, as well as social and educational tasks. At the same time, the Government's financial capacity to discharge these responsibilities has not grown apace. The large loss in Government revenues resulting from the declining mining output nas only partly been compensated by an increase in other taxes. The United States has given Bolivia large budget support, wiich in recent years has represented about 35% of the total revenues. Despite this support and other forms of United States aid, public invest- ments nave decreased and a decapitalization has occurred in some of the state enterprises, notably the mining corporations and railroads. A runaway inflation in the first four years of the new regime and the credit saueeze on the private sector in the stabilization period since 1957 has not been conducive to development of the private sector. Although the Revolution has Pliminated cort.in instAt.iuionI obtPn to P.nnnnmir- development, the general economio structure has not improved appreciably qi n n +Iin -irn'i+iny - 3- C. Political and Social Structure 7. Before the Revolution in 1952, the political and social struc- ture in Bolivia was of a basically medieval character; a system of serfdom existed on the large latifundas, comprising 97% of the cultivated land, and most of the mines were in the hands of a few big mine owners, who contributed relatively little to general economic expansion. Little attention was paid to the question of developing domestic industry or encouraging agriculture. Political life was dominated by a relatively small proup of people heavily influenced by the big mining companies. With the support of the army, the government often ruled the country on a dictatorial basis. 8. The Revolution in 1952 caused a orofound chanee in the social. economic and political basis. The Revolution, mainly brought about by the miners and the lnd 1,qohrP.r was banked by an overwhelming malority of the population. It was followed by two important measures: nationaliza- t.iomn- of g th+arescl .in mnines andi subdiivisqion andl is.tribhution amng the rural population of the great agricultural properties. These acts were~ rgrded- n,: ~nono<nTr +.n~ qne-i_n 1 n r nrl ii1 +.iTnn.P' r%l1i+.in_q integration. However, the government has in the 8 years since the Revolu- trative responsibilities, and the economic difficulties of the country LiVt ..iUvL a,eUOU ±lilt a&-lJc l 1_.LUllL UI U U1 ULU U0 LoUUstUJ.L CLU artifically low prices led to some decline in total farm production in the first years after the Revolution. Apart from adverse factors, such as the fall in tin prices, the advanced state of decapitalization in the mines at the time of nationalization and the inevitable loss of foreign technicians, the government's endeavors to further economic development have been seriously hampered by the lack of cooperation from the trade unions and by the government's inability to make arrangements for effective management of the tin mines. The economic influence of the trade unions, one of the key forces in the Revolution, resulted in strong pressure on the e:overnment for higher wages and more men in the mines and for prohibiting discharge of men in the face of the declining output. This pressure, which has been accompanied by frequent strikes and interference in managerial decisions, has made rationalization of the state enterprises difficult and also engendered a sense of frustration among private enterprises especially in mining and manufacturing industries. 9. The present President was elected last fall by an overihelming majority. The right-wing opposition is powerless, with most of its leaders in exile, and the army is now small and not considered to be a factor capable of influencing politics. However, relatively large privately armed groups among the miners and farmers and a relatively small police force make difficult the establishment of an orderly government. The main source of political instability is to be found in the power of the labor unions, influenced as they are by irresponsible elements. An attempt by extremists to overthrow the government in June this year, was thwarted and same of the leaders put in prison. Whether the President will be successful in nutting moderates into control of the unions remains to be seen. Forthcoming international technical and financial assistance to rehhi1it.t.t the .ai entqririss dh_ld. however. strPnthn the President in his struggle against the irresponsible elements, A. Gross National Product, Consumption and Investment 10. The gross national product fluctuated during the past decade around the 1950 level and was at the end of the period only a few percent higher than at the beginning. From 1950 to 1959 output in the mining industries fell by nearly 30% and in manufacturing industries by 14%. The fall in these sectors and possibly in public administration was offset by increases in agricultural production (12%), in transportation (57.) and in the petroleum industry (45%). With an estimated growth of the population of about 2% per year, the standstill of total output implied a reduction in gross product per capita of more than 20% in this period. 11. Owing to a sharp reduction in internal saving and possibly in public consumption, the decline in output per capita has not led to a corresponding decrease in private consumption. Domestic gross savings have probably on the average not exceeded 5-6% of the gross national product since the Revolution, as compared with a level of probably 15-16% in the previous years while the rate of public consumption seems to have fallen by 4-5% since the Revolution. Consequently, the per capita private con- sumption of the urban and mining population has not decreased appreciably since the Revolution. The rate of domestic investments has not changed significantly due to large-scale aid from the United States and,in recent years. substantial foreign orivate investment in oil exnloration. 12. Investments have nrobablv renresented about Tql of the cross national production in 1952-1960, while net capital imports have been eoual to about 9% whinh imnlies very low or neantive dme.tin net savings; An investment rate of 15% should normally be accompanied by some econamic arvt-h- Thp nbRnnpn-f nnx arnw+h nvPrnIl Aniina thp ln.- ApnnAp in Inlivin can probably be attributed in part to the relatively high replacement reouirenents and to the nredominancA of investment in direntions which give low immediate returns (oil exploration, transportation). Misinvest- ment in manufacturing industries is reflected in 1rla Pr-Asc nananity in this sector. In recent years, the camaodity-producing sectors have suffered from a short..=ag n-Ait for wmrin arnin1 TnvPqnnn+. oil M1Pora. tion by private petroleum companies, accounting probably for as much as one=fi+th of the goss investments, ha_ -_ -_ nlyj a- ml e -tnt increased this sector's productive potential. On the other hand, inadequate noe+Tn p+ a Mn= m,annu,nn+ n nA I ,hn -nl +4n 4. +V-a 4 n 4"Ai q+w r and railroads have led to decapitalization and declining output in these last ten years as compared with other countries in Latin America, most of VVLI_ LI IiCa.vW C,4I. iC~~L. ~LI,a J. JIlkorctoq--, "IL Pt:;.L UOLJJ. LUICL U J_IfUIM* VV. L11 an average income of less than $100 per capita per year, Bolivia has now one U the 1 lwet tandarubs f iving in the Wetern nteispere. B. AgricuLture 13, Bolivian agriculture is characterized by a large number of small farms- most of which are too small to Live full emnloyment to the owners and their family. Metaods of cultivation are very primitive, most nf t.hr land in thp Altinlano and th 'high vallevs is noor- and climatic conditions on the whole are unfavorable. Large areas of good fn-rm 1-nna ith f'vxr.M1blP e-1im+.ie tnnA+.ir)n- Pv-i +. in f.hn nr)rt.hrn nd eastern lowlands, but only a small part nas so far been exploited. 14. In the first years after the Revolution the agrarian reform in total farm production. The excaange reform and tne stabilization pro. a U . i n . LL £7:)v L'dA u a s UL1U CL.LL18, t±±-L._, 1~ UJl lo L~ ±.L-tU_tr VJ. C .LA.A%LU.LULL m.L . goods. Improvement during the 1950's of the road system and building of penetration roadS uave maue existiLg ceuters of produCtion moMr acreeu to markets and opened up potential rich agricultural areas in the interior, especially in the Santa Cruz and Beni areas. It is estimated ThaT the gross production in agriculture fell by about 12% from 1950 to 1955, but has since gradually increased to about 1Mu above the 1950 level in 1959 (Table 3). 15. A substantial increase in output of sugar and rice, the only crops for which fairly accurate data are available, has taken place in recent years. From 1955 to 1960 sugar production nearly doubled, while rice production rose by more than 50%. This remarkable expansion can mainly be attributed to the extension of the acreage on the large mechan-- ized farms in the Santa Cruz area. Cotton growing started some years ago and has shown encouraging results. Output of most of the main crops, particularly potatoes, barley, yucca and corn, has increased appreciably in tie last 5 years, mainly in the "old" agricultural regions, while wheat production has decreased mainly as a result of cheap imports of wheat under the foreign aid programs. On the whole, the land reform has probably encouraged some intensification in cultivating the "old" regions, but natural conditions set rather narrow limits for further expansion. Because of a reduction in the livestock population in the Beni area, meat production has shown small increases. There is some production of co=ae, coca cocoa, peanuts, citrus fruits and sunflower seed, especially in the-' Yungas, a tropical area north-east of La Paz, but the output has risen little during the last 5 years. In tne nortnern part there is some harvesting of Brazil nuts and natural rubber from wild trees. 16. The objective of the government's agricultural policy since the Revolution can be summarized as follows: (1) to create a rural structure based on family-sized farms; (2) to make Bolivia as far as possible self-sufficient in food and fibres; (1) to nromote nronrtion of troninal nrons. P.noiq1lv coffee and cacao for exports. - 6 - So far real progress has been made only with respect to the second objective. 17. Although the agrarian reform brought about a destruction of the feudal system and a more equitable distribution of land, the government has so far not been able to solve the problem of too little land for too many people. The magnitude of this problem is immense. It is estimated that in order to relieve effectively the population pressure on the Altiplano and in the Valleys, some 30,000 families have to be moved away. In addition, population in the Altiplano increases by about 40,000 people a year. No estimate exists of the present rate of emigration, but it is probably a very small fraction of what is required if the situation in the old settlements is to improve materially. 18. Efforts have been made to get mass emigration from the highlands to the lowlands in motion. but the colonization plans have had little success, partly because of inadequate preparation, partly because of too costly and elaborate procedures. Snontaneous migration and settle- ments of special groups (Okinawans, Japanese and Yennonites from Paraguay) have been the moqt 1neesqful. Rerent1v there has been a fnirly large spontaneous migration to the Upper Beni area, which, because of its nrcy.irrvi+.-ir +x%~ +ho A1 +in1nr% qpprnq +-n li-nu I)+.+ov- t-hnr-o' n-r an more -rnir settlement -than other more distant regions. The government has recently adopted a more realistic policy ,Toiding ry esserpqntial qasistncen MnA services in those new colonization areas which have already proved to he 'I++ ere+ supply of food and fibres, as is evidenced by the substantial increases 4-± - A -4-4 - --PJt --A -U 4-- 4-l ar a P--eL~~ UV_ __ 4 ±4J 4LV , ment on roads. The government also supported this expansion by credits Iiunr ugh Ul[u 1%~L.Lk.UUIUU.L..L OaIA, LUU U~ LI CE Vt:.- lijut:;: jk.;CLkt . LI 1-L-i capital of this bank was sharply reduced owing to the runaway inflation anu u utlauts Uy Lus uevi,urs. n-Ly uy lcortibuuions Irom tne Unitea States under the supervised Agriculture Credit Program has the bank been .L -a.in 4-si4 operatL £ ~U. 11t, U)ULLVU U1 LEL;:ULL1V[± 1J1UUULU±ULi . Ll t:AJJUIUtf 1L L~~ remote at present. Production costs for various crops in Bolivia do not in general compare favorably with costs in the world market at present exchange rates. While estimates of costs are not available, sugar, rice and corn prices are from 2>% to >>7 higher than imported goods, Tnile only cotton prices are somewhat lower. Although increased mechanization, careful selection of sites suitable for different crops and use of fertilizers should in general provide possibilities for.reducing costs per unit, it seems rather unlikely that actual costs can be reduced so much as to enable these crops to compete on the world market. The high transportation costs from the main agricultural centers in Bolivia to the Pacific coast, even with improved roads, imply that costs in Santa Cruz of, for example, sugar, would have to be 50% below world market prices. Only for a few crops, where the value is comparatively high in relation sizeable increase in exports on a profitable basis. The present exports £. L L u. O.. k.0Al&l.L U UL.L L Ij J .L4L I U, Li _J L . I U U .L, V.LUULL1a, wool, coffee, and cacao, are very small, amounting to only 4.5 million C.JL. 1heL prospjects LIor agiLLLULLICLA t:AYCtLIZJLULI1 L DU±.LV.Lct Ult- _LL1- mately related to the development of new agricultural areas. In agricul- uura.L _VU1i Ul Lne AbpLan1o,ne u[ga5 aUa LUer-Auu[ 1 vaLLeys, land resources are almost fully exploited and application of more intensive methods of cultivation will at best yield a very low return. The south- eastern lowlands, although comprising large areas of fertile soil, have only limited possibilities for agricultural development, because of their very dry climate and distance from markets. 22. The most promising regions are the Santa Cruz, the Upper Beni and the 2eni: (a) It is estimated that only about20% of the arable land now within reach in the Santa Cruz area is cultivated. Further development of this area depends partly on the construction of additional feeder roads and large-scale land clearing, partly on inducing people to move into this area. The flat land, the soil and the climate are well suited for produc- ing sugar cane, rice, corn and cotton and semi-hard fibres on a mechanized basis. In 1960, the proportion of domestic requirements met by local production was 40% for sugar, 80% for rice and 25% for cotton, and 100% self-sufficiency of these crops seem feasible in some years. Production of kenaf and jute is still in the experimental stage, but the results have been highly satisfactory. With some preparation such as building of a plant for processing of fibres and weaving of burlap, possibilities exist for a substantial production, which eventually can be exported at profit- able prices. The Santa Cruz area has also shown favorable prospects for growing oil crops (peanuts and soy beans), but low cost production will depend on fairly mechanized cultivation methods. (b) The Upper Beni area is about to be opened by penetration roads now under construction. It is situated north and east of the Yungas and has a hiah soil fertility and near-tropical climate. The area has a good potential for growing a wide range of tropical crops, such as rice, bananas, coffee. citrus fruits. cacao and sugar cane. Upper Beni is relatively near to the densely populated areas of the Altiplano and with some exten- sion of nenetration roads together witf a system of feeder roads. this region might become the most important agricultural area of the country. (c) Further east comes the Beni region, which has immense areas of natural grazing landi nndri o icalnn climTe wit.h prnncnn ly-ir nne win+. seasons. It has no surface communication with the rest of the country, under construction could end this deficiency. Beni is the principal source of meat supply for La Paz and the mining centers. The cattle population was sharply reduced in the mid-195O's, but could without majcr capital investment be gradually increased from 0.8 million to two million head. With some improvement in livestock and investment in fencing, land clearing and pasture improvement, meat production can be increased substan- tially. Scarcity of labor and unusually high wages, coupled with large capital requirements in connection with investment in rubber plantations, are likely- to narrow the possibilities for increasing production and export of rubber and Brazil nuts. 23. A further development of agriculture in Bolivia seems primarily to depend on private initiative. This will, however, require a continua- tion of the activity now performed under the U.S. technical assistance program, such as research and extension services, experimental stations and soil surveys. ibreover, to enable farmers to develop their full potentials, to accelerate investment in the most promising directions and to make a fuller use of areas opened up by penetration roads recently completed or under construction, there is also urgent need for credit to agriculture. Construction of feeder roads in connection with exi-ting penetration roads seems also to have high priority. With present very limited.r financial -resorcenP, it. seems ise.q for thei an-tr-ynt .c nnuen its policy of providing only essential assistance to the colonization of M~ ~ ~ ,mi~v 4- n ^1-;r-4n 1,n a 1as -n 14"+r ,, -- Ahr +Inn small market, shortage of raw materials, fuel and power and the general and management group. Industry plays a small role in the economy. Fac- U~J. J .Jj~.L~. 4.ALtD OW,1L.1 UJILJJ_L Y -LU.OD ULLLI IJCZLj- UII _ _ U.LII1cLiUU _L LI.U U .LcX_L labor force and are largely based on processing imported raw materials Uo ouver U.011eS unleud. I1ULUUdzu ne a vr .uw prouuevIV±Uy, worYLi[tg with a very limited capital and skill, and produces mostly textiles, cloth, important industries, with about one-third of the total employment in ma nufCactVUr'Ingt,. Afood-and1 drU.LIk- YUtogeter1.LI wth glas-Zcj-, , leth:1jer and tanning-industries, make up for most of the remaining part. Since l9>f a mate lactory, two cement plants and a meat processing plant, all government-owned, have been constructed. Sugar refining has been expand- Ing, and with the completion of some new investment, crushing capacity is likely to be sufficient to cover the domestic market. 25. Manufacturing, stimulated by a subsidy to imported raw materials effected through a multiple exchange rate system, (the rate applicable to imported raw materials was in 1955 only somewhat above the official rate of Bs. 190 to one US"i while the free rate was 4UUU) increased its production from 1950 to 1955 by some 15% but with unification of the exchange rate output fell sharply in the next two years (-37%). Although some recbvery took place in the following years, manufactur- ing has since been in a generally depressed - 9 - state. This situation seems mainly to reflect a change in the structure of demand following upon the stabilization of the economy and keener comnetition from abroad as artificial Drotective measures were modified. Although industry continues to be protected by fairly high import duties, a rather large contraband imnort has to some extent made even this nro- tection illusory. Manufacturing has also been handicapped by emigration nf +PPhnitinn nnd +he fp- t t.hq. nn rAiunt.inn in t.hp 1nbor fnrnp wan possible because of trade union and government pressure. This latter f actor caused severe losses b-y- many enterpri ses, especial n1I Jn the firnqt years after the stabilization, and led to a drastic reduction of working cf-. + n I T-, irnmv%vvi +I5 1, ^ lrs oyn m - aiia - viivmf"civ-4m,* 4n has been made less acute by the natural retirement of workers. At present it. ueemsthat M- Afst ow fn tv, 14.._*nJv .r p. riSe Sa a, 'o I~.' e "-_ ?m a t a t a I D -a"aA-,t _a. at a small surplus. However, the shortage of capital persists, mainly as a coseranc of J the .~ unetin pliic.LLf Sd. J UC%V.LVL1 L11VVUL.LJrJ LLDZ%. %J.L nationalization and abrupt changes in the exchange rates, which has tended L,L UJuu.-de ±Le±,I UL 1,Cp.L! J.11V'=L1LLJU LL rV.Lllr, C LJU LUU encourage sending industrial profits abroad. Available capital in domestic credit institLUtions1J ib Verly Li1iLted ad.J wte ceit::_ market is U.tght, Withl interest rates for short-term loans of more than 25% per year. Some credit has been made available under the industrial creadt program, super- vised by the U.S. Mission. 26. Under present circumstances of general economic stagnation, the scope for expansion of domestic industries is on the whole limited to a further substitution of imports of manufacturing goods with domestically produced goods. Present excess capacity permits such expansion, which seems to depend mainly on some further cost reduction, better control of contraband imports and some increase in available credits. 27, Expansion of manufacturing over the longer term will depend on a general expansion of the whole economy and on an improvement of the economic and political climate for private enterprises. Possibilities exist for a wider diversification of industry, especially in processing domestically produced raw materials, such as sulphur, gas, jute, kenaf, peanuts, soybeans, etc. Project studies have been undertaken by the Supervised Industrial Credit Office under the U.S. Point IV Program and the Bolivian Development Corporation in cooperation with the Planning Board, a joint institution of Bolivian and U.N. experts. Such studies are unlikely to have any significant effect in the short run, but these efforts must be continued and expanded so that the government will be in a position to stimulate industrial development at a later date. D. Mining 28. In 1952 the three largest mines, contributing about 70% of the total value of mining production, were nationalized. A state enterprise, the Bolivian Mining Corporation (Corporaci6n Minera de Bolivia. Comibol) was entrusted with the operation of the nationalized mines. In the first - 10 - mears after the Revolution the remainina private mines were obliged to sell their minerals to and buy machinery, equipment and raw materials from the Bolivian MininE Bank. Since 1959 the larger private mines (medium-sized mines) have been allowed to sell to and buy directly from foreign comnanies. 29 Ouitpuit. fronm fhem miningr indus.tr-y has eptlinned contilnlsly from 1952 to 1959. A small increase took place in 1960 when a rise in nriar+. mining more +.han offo+. fall in 1nmibol s o unit (Tnhm 9). The volume of mineral exports was in 1960 only about two-thirds of the 19 eIrl- The fPll n ou++ n n be at+rihtA + the near eaionAn of known ore reserves, declining ore grade, outdated and insufficient worl t ket for the principal minerals, and the breakdown of mana."e-mqnt 30. The breakdown of management authority as a result of trade un"Uon Jp±-U U.I- cLIJU McUt CLad a .ZU:,1L,L e.L.Luvu U. U1-VZ;_UPJ11,jI and exploration and a consistent program for renewing old machinery and equipment very U1ncuLT,. rurtnermore, the mines, ebpecla.ly the nauLQuctL- ized mines, were obliged to increase the working staff during the first years after 1952, and although some reduction occurred in 19,5o/195, the number of workers and employees is today about the same as in 1952. The financial situation in the state mines has become steadily worse,in part-Lcu- lar during the past four years. Despite virtually no payment of royalties, export taxes and import duties, failure to replenish stocks of spare parts and tools and insufficient maintenance of machinery, the debt to suppliers, railroads and power companies has been growing. 31. As tin is shipped in the form of rather low concentrate and the ore is very complex, the realization costs of the Bolivian minerals are rather high, representing about 25% of the f.o.b. value. Due to lack of concentration plants, about one-third of the tin ore is shipped in concentrates as low as 30% (hand-picked ore) and there is a need for more mechanical concentration plants. Chemical processing of the ores for extraction of almost completely pure tin has been successful, but this process is still in the experimental stage. 32. An agreement has now been concluded to provide Comibol with foreign technical experts and financial aid totalling up to $38 million over a three-year period. The lending group, consisting of the U. S. Government, the Government of the Federal Republic of West Germany, Argentina and IDB, will in the first phase contribute $14.50 million which includes $1.4 million from a line of credit of $2.8 million equiva- lent from the U.S. counterpart funds, for indemnification payments to workers to be dismissed from Comibol. The success of the operation, known under the name of "Triangular Operation". depends to a large extent on the Bolivian Government taking effective measure to restore the authority of management and discipline of the working staff. It also hinges on reducing the number of excess workers. A 10% increase per year in total output is envisaged as a result of the oneration, with the nossibility of beginning to earn some return on the investment when production has tin prices decline from their present high levels to about l.00 per pound. 33. As mentioned, private mining has in recent years shown trends more favorable than those e-O tle [nanesiL1Uea ueV. iUe pr : vue1 in1Z share of exports of minerals has increased from about 25% in 1953 to about 307o in IYou. Whereas tne UoMoo1 mines nave Ueen ru1rii1g d _W6Ub t4UL- valent on an average in 1960 to about 23% of total cost (Table 21), it seems that private mines generally have been able to operate at a surplus, probably because of a somehat better management, higher ore grade and the fact that there is less excess labor in the private mines than in the state mines. 34. There exist good possibilities for expansion of the output from the private mines of both tin and other minerals. The mines are, however, handicapped in their expansion plans by the virtual absence of production credit, partly due to the unsatisfactory situation of the Mining Bank., The lack of proper mining legislation together with the uncertain political situation had made foreign capital very difficult to obtain. The IDB has recently lent $1.6 million to private mining through the Mining Bank, and additional funds might be made available if it is determined that greater sums can be effectively employed in this sector. 35. In the next few years, the principal limiting factor on Bolivia's exports of minerals lies on the production side. With some further investment in machinery and equipment. output from the private mining industry is likely to continue to increase. Expansion by 5-10% a year should be feasible. The impact of the triangular oneration on government mining is difficult to ascertain. Output in 1961 may not increase. but with determined effort to put the nationalized mines on a sound basis, an increase of 5 - 10% per year in the following years should also be within reach. E. Petroleum 36. Exiloration for netroleum in Bolivia started in the inter-war period by American oil companies. In 1937 the properties of these compa- nies wArs AwnronriatAd and thp indntry w;as taken over hv th GnVr-nmPnt. Petroleum Enterprise (Yacimentos Petroliferos Fiscales Bolivianos - YPFB). A new nPtrolnim norp whinh was nromAgated in lCA enea the monooly no the state enterprise and once again permitted foreign companies to enter Rolivia on the haInf nonnrionq n- non+.Vrats lith YPVnB 37. After Wrnld Ar TT r1illing h VPby rna intensrii and petroleum production rose significantly. Production of YPFB increased frnm OR,n00 mO in 4 O 10 on .r,OA m3 in O107 bu+ hn since d-eCrsed to 495,O00 m3 in 1960 (Table 11). The decline may be attributed to the Ad nvesnt n mafir s f an e , fo l extractin,, i- reen and investment in machinery and equipment for oil extraction in recent years* 38, Over the next two years, the YPFB plans to invest $10 million, which will be directed to reconditioning and deepening of existing wells and to new exploration. In May this year the United States Government extended YFB a credit of $6 million, which will finance investment expenditures during the first year. Although it is unlikely that the new investment will affect significantly total output in 1961, a yearly rise of 10% for several years envisaged by the YPFB seems feasible. 39. Private foreign oil companies started operations in Bolivia in 1957 and they have since made investments totalling between 80 and 90 million dollars. The Bolivian Oil Company started production in May 1960 and produced about 70,000 m3 that year, but the rate of output has declined in 1961. Another company, the Bolivian Gulf Oil Company dis- covered recently several wells which seem quite promising, but they have so far not been put into regular production. The foreign oil companies plan to continue exploration for petroleum in Bolivia at least at about the present scale for some time to come, because they still feel that the possibilities are favorable for finding new wells. 4O. Existing oil refineries have sufficient capacity to meet the domestic demand and to export. A 1,830 kilometer network of oil pipelines has been built. It joins the present production center in the southeastern part of the country (Camiri) with the refineries and main consumotion centers of other parts of the country and also with a port (Arica) on the Pacifin Onean. Ml 'innp f.h e-ainnina rif 1- P-nliv-in h- hPPn qlf_.qffiint._ and since 1955 has been an exporter of petroleum. Exports of petroleum, mni n-r +.n yc Aypo+An+nn -ron e'chdn +-odw ma v i mYm rn 1Q Tnri ibi +hIw vomRncn+cA 8% of total exports, but have declined in recent years. With an expected rn c , n Anme+'~n ar t--rv+, -F---r. VDL"Q mn-t +I,- Do.1 4-; 0r , f4 1 Company alone should reach the 1958 level in the mid-1960's. By that time ~-J..W.LuI .ll Lk4.Ltd11.LJ 0 LL..L C;A.JJ. db±_LJ, J J.LU0J)Jt=~LUD 0-etelml fLavora Le- fOr a substantial export also from the other private companies. F. Electric Power 42. Bolivia has been suffering from a power shortage for a number I years and power rationing has been necessary from time to time in many of the main consumption centers. Furthermore, a large part of the popula- tion has no acces to electrical power, and there is no uniformity of distribution frequencies and voltages. There is no general legislation regarding electric energy, nor is there a national organization to deal with electrification problems. For the country as a whole, unsatisfied demand for electric power is estimated at more than 20% of present power production. The annual growth of actual consumption has been 8-10o. Although the need for industrial electric power does not seem to be acute at present (Table 8), the shortage of power or its unreliability constitutes a major factor in hindering industrial growth in the long run. - 13 - 43 Bolivia's total installed generating capacity was in 1960 about 125,000 kw., of which about three-fourths was hydroelectric. The Canadian-owned Bolivian Power Company, which supplies the cities of La Paz and Oruro, including the Oruro mining district, accounts for approximately half of the total, while 30% belongs to the mines and 9% to the communities of Cochabamba, Sucre, Potosi and Santa Cruz. 44. The financial position of the private power companies operating in Bolivia has deteriorated seriously in recent years. Rates have not been adjusted to the rise in prices, and investments in improvement and new installations have been small. If power rates were increased to a more satisfactory level, the Bolivian Power Company would build an addi- tional power station, with a capacity of 10,000 kw, which presumably would cover the need for the La Paz area in the next five years. The costs are estimated at about $5.5 million, of which about half will be in foreign currency. Foreign finance will be sought to cover the foreign exchange component of the costs. h[. Other projects are under consideration. At the Corani hydro- electric project, which has a potential of 48,000 kw., an access road and a camn have already been built. This proiect could sunolv the nower deficit of Cochabamba, and also replace expensive thermal plants serving the nit. the oil refinery lontpr here. as well as (by trnnsmission lines) the mining areas of Oruro. However, the cost of the project is relatively high, espially for the first stage of mf0 k8n wGhich woun1d suffice to cover the need in Cochabamba for the next few years. C. Transportation 46. Transportation has expanded substantially in the last decade A LJ~4 ~~1CL~ UII shr o. -theU gr s produc has riseni L.L Ill L4.L/L./D UU~ IP.0 1.0. .L crease is, however, almost wholly due to expanded road transportation. Cooperative Road Service (SCBAC) which comprise the most important roads i L - V.CL 11VI UIlGLL LU1U± -t LJ=U t:tL -7,)V CLJU -L'JJ W1 . U U naJGte: hauled rose by more than 9 times in the same period (Table 13). The rate .L ±J.LlUt : ±11l L-UdLI Ul4 CLL.Lt;0 d.VPt-,CU 10 WA VU Ut:;Q_.LL1.LL1, L1 iI± .Lcu: U UVVU ~Y -,GI 09 Railroad transportation has shown a declining trend; freight traffic in Uon-k-*.±UiW=LA:,I'Z5 W,:U) I.LJ -L7:;7 dUUJUU LWUULIAUj 0±L LIit:, c:V-OVL%= LU and passenger transportation has fallen sharply. Air transportation has continued to grow rapidly and nas become an important part of the traUs- portation system. Many outlying towns, especially in the northern and eastern parts, have their only communications with the rest of the nation via air travel, and meat is supplied from the Beni area by cargo plane. 47. The substantial increase in road traffic has been made possible by large investment in improving the existing network and in extension of penetration roads to the northern and southern parts of the country. There exists today a fairly extensive but still primitive network of roads with a total length of 20,000 kilometers. Only 550 kilometers are hard-surfaced highway (Cochabamba-Santa Cruz-Montero), and only 4,000 kilometers are all-weather roads. The basic investment in the existing network of railroads a-u roaus in 'D via e!-ma seevs U IUt- Vvoy nLL&i in relMULLJI to the present and prospective level of economic activity. Investment requirements are relatively modest. The immediate need for new IUvest- ment in roads can probably be limited to the completion of penetration roads to the Upper Beni area and some further extension of these roads which will link the road network of the Altiplano with navigable rivers in the northern and northeastern parts or the country. In order to facili- tate the exploitation of areas opened up or to be opened up by penetra- tion roads, there is also a need for constructing a system of feeder roads in connection with these penetration roads. 48. The railroads consist of two parts. The western part links up the principal urban and mining centers of the Altiplano and adjoining main valleys. It also connects to railroads in Peru and Chile, leading out to ports on the Pacific coast. The eastern part connects the Santa Cruz area with Argentine and Brazil. About one-half of the length of the western part was until recently government-owned and the rest privately- owned. Since February 1959 the British part of the privately-owned railroads, which represent about 80% of the total, was taken over by the Bolivian Government, as the owners declared themselves unaole to under- write the growing deficits. 49. As about 75% of the railroad traffic consisted of transporta- tion of minerals, declining exports of tin have greatly reduced freight traffic. In addition, railroads have lost traffic, both of cargo and passenger. due to the low cost of transportation by truck and bus. Declining traffic, together with inefficient management, duplicating facilities, emiEration of competent technicians and labor difficulties have since 1958 resulted in heavy losses. The financial and managerial situation of the railroads is growing worse. Desnite innrease in freight and in passenger rates, by 20% and 25% respectively in 1960,railroad revenues nre still decra.ing. A nreliminary stuv of fhp. Rolivian railroads hv the Bank seems to indicate that they might again become profitable if adeuantp measures for reorganiing and integrating thp railroads are taken, if labor discipline were restored, and if mining output revived. The investment in the ws.tern railway reuired to move mineral nitn+. i not. large. The need for investment seems to be limited to rebuilding inventories and, possibly, introduction of diesel engines. The construction of rail- road b e.a ee C0chM lflLoWm1ID_n _-n.1 SMAta Cruz I*.J. IL 4I,I pat C.LLL4. W4. V,,%, only highway in Bolivia, seems to deserve very low priority and ought to lines to Brazil and to Argentina is estimated to cost $8 million and $15 U.LJ.UL4A 1C;JJV.t.LVU-LJ, CLIU _L.O LOV Vt.; L_LJCLA. U L.),Y _LL~LJ,U::11 U1_t,ULJ U Z L, L)II the two countries. Traffic on the lines is likely to remain low for many years anu tUeSe verEy 3UuLLU.U LuVeUUn1 ix I. o Imae a agr1lcant, contribution to the country's development in the foreseeable future. 50. The Lloyd Aereo Boliviano, a government-controlled entity, is the principal air carrier in Bolivia. It performs service between the - 15 - main cities and industrial centers in Bolivia and with neighboring countries. Freight rates for air transport are low. The company has been running at a deficit in recent years and has not been able to modernize its equipment because of lack of finance. II. FINANCIAL SITUATION A. Introduction 51. In the first years after the Revolution an indiscriminate use of Central Bank credit to finance large deficits of the Central Government and the public entities led to a runaway inflation and large balance of payments deficits. The stabilization program, introduced in 1956, put strict limitations on Bank credit and abolished the system of multiple exchange rates, import and export licensing and price control. Since 1957 increases in the cost of living index have been limited to about 10% per year and even less in 1960. if corrections are made for changes in the sample of the index this year. The exchange rate has been main- tained unchanged since 1958 at a level of about Bs. 12,000 to a dollar as compared with Bs. 60 to a dollar in 1952, but the external deficit nersisted as imnort levels were maintained in the face of declining exports. Real wages appear to have been maintained if not increased since the Revolution -- first by a rationing system during thi hinprinflation PAnrd since stabilization by wage increases. B. Money and Credit 52. The present credit system in Bolivia is dominated by the Central Rank, a governmen+-oned banlk which Ehn.h noi-Pnrmg +ho -Nr-+nnQ nf' +.ha Central Bank (Monetary Department) and a commercial bank (Banking Depart- ment) .The portfolio of the Man+tar Dearment ^P +of ta+-n1 ann s at the end of 1960 about 5 times as great as that of the banking systeni. The present dominating r'o-l of the Centra Pnlr i n r%f' ih+r Ih ~ -wcn. mim4 eml P+ oCn.a Bank -- a _o i subsnh tant-al increase in credit to the public sector over the last 10 years, whereas 1rsnnc +, +-ho n-,.wn+oacan+an nn,al itr Anl4r.aA in .-ar, +-avnme ('Thkle 1. ~ 7)I 'Y 1 .L. %..L U LV L O ULI ~V_ ULoL,y I C; "U%- U and the accumulation of counterpart funds from the U.S. aid program has Larially offISet thle bUdgt deficit Netb Q1redit toU thie public sebtor hfas decreased from Bs. 220 billion in 1956 to Bs. 59 billion in 1960 (Table l)). uredits ou te privaue sector have had W be kept vBry 5mall in vLew 01 the continued expansion of credit to the public sector. This policy has been iuplemented by means of basic reserve requirements of 30o, marginal reserve requirements of 75% of demand deposits of commercial banks, credit limits for the Banking Department of the Central lank and a rediscount rate of 19% for commercial operations. There is an acute shortage of private credit in Bolivia, and effective interest rates for first-class risks vary between 25 and 35% annually, including bank commissions. - 16 - more or less in step with the increase in domestic prices; the real value of the money supply has been virtua*ly uncUangeU fur tne lat turee ytlo (Table 17). Except for 1957 and 1959, the credit expansion has also given rise to some further reductions in foreign exchange holdings. Experience of the past years seems to indicate that the room for maneuvre in the credit field is very limited, while foreign exchange reserves remain at the present low level. The fact that private demand deposits abroad held by Bolivians are very large -- dollar deposits alone are about three times as large as domestic demand deposits -- shows that the confidence in the Bolivian economy on the part of private enterprises is not very great (Table 16). It may be necessary to continue the present restrictive credit policy until more confidence in the economy is apparent and to gear the credit expansion to resources available from abroad. C. Price and Wage Policy 55. Since the stabilization, the government has tried as far as possible to limit increases in salaries, wages and rates for public utili- ties. The discrepancies between rates and actual costs have, however, increased so much that adjustments were indispensable in order to avoid financial difficulties in the companies concerned. So far only the rates of the railroads have been adjusted, while the government has hesitated to take actions on power and gasoline prices because of fear of political repercussions. 56. The strong position of the trade unions in Bolivia has made difficult the task of containing the oressure for higher wages. and wage compensations given in 1958 and 1959 were probably larger than justified hv prine increases alone. Although the nressure abated somewhat in 1960. a policy of restraint in this field continues to be an essential element of the stabilization prnoram. D_ Public Finances f7. Sine the introuctinn of the stnhilistion nroram in 19q6 the budgetary performance of the public sector has improved. Central C;mvPrnTnn revenus ihav inrae nui~ oa broadeh-n-nling o e f thei tany hnq and more effective tax collection, expenditures have been pruned to nc~cn~n rr~ irA hiAr,dvi defci ts4- ha -,ic beern finanrced _, an i -a ing extent in a non-inflationary manner by drawing on counterpart fund tially reduced, the financial position of the public sector has not has not been able to increase the proportion of current expenditures covered by tax revenues in rleCent -yeUar.S, whl-ile currenlu t-'L.U defcit ofpU_ubi enter- -rises have increased substantially, giving rise to increasing short-term borrowing and non-payment of supplies, wages and salaries. - 17 - 58. (1) Central Government Budget. The Bolivian Government has since the Revolution assumed many new responsibilities in the economic as well as in the social fields. At the same time its financial basis, already inadequate, was weakened in the following years by falling mineral production. The dollar equivalent of total financial resources of the Central Government was about the same in 1951 and 1958, but the part arising from taxes declined by about 30% because of a substantial fall in taxes on personal and corporate income and on exports, mainly originating in the mining sector, which has only partly been compensated by an increase in other tax revenues. The difference was covered by foreign aid (see Table 18). 59. There exists no breakdown between a current and a capital budget. On the assumption that the total of expenditure on the ministries, contribution to social security, wage reclassification and "other expendi- tures" (Table 19) is equivalent to total current expenditure, tax revenUes covered only 76% of current expenditure in 1958, 89% in 1959 and 84% in 1960. Capital expenditure, which in this tabulation include repayment and interest on foreign debt. represented between 1q-20% of total expen- diture. The current deficit and capital expenditure have, in recent years, been fi nanned mainly by I_S hidopt. mnnort- which has amounted to htween 23-30% of total receipts. Drawings on the Central Bank have continued, thoug,h at. A minli pnredced P- 60. The 196buge projects exedtrsand receipts, 20%_ and 26, respectively, higher than in 1960. The proportion of current expenditures finnce by ta reveues- -"A v' to f- ; U114-, -A- - vO_/1 in 1961. Debt service has been increased from Bs.11.6 billion in 1960 I~LI . - UL.LLL li ..L7wLy U"t L Uile amount d4IU L " .1 s LL~~ U shor ofI acLtUCa.l 0J.01 ,irgat-i of Bs.100 billion, which is equal to nearly 30% of expected tax revenues. l)LnegtJJLL.LULlb5 l. tUlIO Ut II1lZi UlI U11tj IfIaLLIJ lorteigri Uut~L5 a±l-u ULIUUI Way, uI. wie~ tax revenues are 11xe±y to reacin tue projecteu Levui, expenditures may be understated. However, this should not by itself give I4. O U U L _L~Ut 0.Pt-LJLl.Jr,, CXQ ULII= r VU.L .4ILlju _L L ....LY LU IU.LU UUI UIz: principle of gearing its total expenditures to the cash inflow from taxes and U.S. buUget support. The linanci impact of the Ceneral ouvernment budget should therefore be neutral. 62. As far as the budgetary position is concerned, there is the risk that the budgeted improvement in the revenue/current expenditure ratio might be nullified, if a rise in current expenditures is not accompanied by a corresponding rise in tax revenues. On a more long-term basis an improvement of the budgetary position will, to some extent, depend on the success of rehabilitating the state enterprises and in particular the mining industry. The possibility that mining again will be a tax resource of the same importance as before the Revolution seems, however, rather remote, taking into account the difficulties which are being experienced in nationalized undertakings. A further broadening of the tax base and a further increase of the efficiency of tax collection seem, therefore, IR - indispensable for any appreciable increase in tax revenues, which also depends~ onJ ai geelJt.J re~vival of the economiIy. Nr1IJeover, increae tLax revenues will not by themselves improve the fiscal situation if provi- sions are not made to limit the rise± in expendureLU to) essentl~.dJ needs. The substantial rise in current expenditures in 1961 is particularly disturbing in the light of the present precarious fiscal situation. o3. (2) Comilol Buaget. uomibols arawings on Central BanK creit increased substantially in 1960 (Table 20). In both 1959 and 1960 the financial position of the enterprise showed marked deterioration. Des- pite non-payment of duties and royalties and highly inadequate replacement expenditures, Comibol has been compelled to obtain short-term borrowing from its foreign suppliers and from smelters to such an extent that the margin for additional borrowing on the basis of current production now is virtually exhausted, In addition, large arrears have been accumulated on payments of wages, salaries and supplies from domestic sources. Calcula- tions by the company show that if export taxes and full replacement costs had been taken into account, the total loss in 1957 can be estimated at $5.0 million increasing to $12 million in 1960. The 1960 loss is equivalent to 23% of total estimated costs. (Table 21). 64. The budget for 1961 prepared by Comibol does not indicate any significant improvement in the financial position. In fact, tin prices have increased in 1961, and the financial position might be somewhat improved. However, until the Triangular operation has been put into effect, costs reduced and output expanded, Comibol will continue to be a source of weakness rather than strength for government finance. 65. (3) Other State Enternrises. YPFB has also had to resort to Central Bank credit in 1960 as output and revenue declined. The freeze on petroleum prices and sharn increases in sales on credit have contributed to an increasingly difficult financial position, despite a reduction in investment exnenditures, On the amm.mtion of an effective start of the $10 million investment program, an 8% increase in petroleum output is budgeted in 1961 which. together with a decline in outstanding claims on other sectors, will increase total receipts by about 40%. If the price of regular gasoline were to be increased by 4o%. which is under considera- tion, this would boost the revenues by another 10%. 66. Since 1957 the railroads in Bolivia have been run at increas- ing-deficits, despite~ insfficie~nt mai ntenance expenditure, The dfic'its, estimated at about Bs.24 billion in 1959 and probably more in 1960, have been partly financed by loans from Ar'gentina and Venezuela, and recently by non-payment for supplies and salaries. A deficit of Bs.27 billion is budge+ed for 1061. 67. The CovelrpmOua-upuravon of Bolivia is an autonomuu agency which analyzes technical and economic aspects of public projects and acts as an executng ageucy fvr public investeteu. it uperates witn receipts from the Treasury, from the U.S. counterpart fund and from incomes derived from - 19 - the operation of various entities controlled by the Corporation, It has also been entrusted with the disbursement of the IDB credit of $10 million. Incomes from public entities are budgeted at Bs.43 billion in 1961, while receipts from the Treasury and counterpart funds amount to Bs.39 billion (Table 23). Expenditure in 1961 is budgeted at Bs.169 billion or Bs.87 billion more than the aforementioned receipts. In fact. the budget consists of a list of projects which the Corporation will endeavor to undertake if sufficient funds are made available. E. The United States Aid Program to Bolivia 68 Tn the analysin of the fisal and monetrv qitnqtion reftrenc: has been made to the great importance of the United States budget support nnrl nin.rnn+. fiint. Tho UTni tat.it nid nreom ha haon - kcyq+.na of the stabilization program and has also contributed to the maintenance of y p e r it n^ im T%, A e% nnA ^-Pf n In- "n 4 nTrn cr +. "!n+n~ 4 r +V1o fn o n. rf' a standstill in total production, a growing population and declining n% ^rtoq+c TJ Q -; A -;- 1 ff'3_1040 -4- 4~- -+ +- _+ 1,,4 ci1 k C representing about 9% of total imports during this period (Tables 24 and. -4- L1 ^ U 4- - . dJu, -4.4 b~L -1,- . (t0_1U1 ~ ± b J .U U! U Iii dJ ~ Lic in various fields, mainly in agriculture, transportation, health and agencies of the Bolivian and the U.S. Governments, in which much of the personne as wel aZi IL[UnnCe was .Luni1nea Irom auroad. Ie u±ret supply of equipment and materials amounted to $15 million, mainly for agriculture an transportation. The rest of the aid, aoout $114 million, consisted partly of imports of foodstuffs mostly under the U.S. agricultural surplus program, amounting to about $60 million, and partly in direct grants of dollars. In theory, the sales of goods provided under this part of the program snould have given rise to counterpart funds or the same amount. However, some of these goods were donated, some were sold at below import prices because of artificially low exchange rates prior to 1950 and some payments were delayed, thereby causing a decrease in the real value because of iflation., with the result that,out of )11h million of such aid only about 56 million, including arrears, of counterpart funds were created during tne wnole periou.ADout .4[ millon 01 uniLs amount has been relea3ea rr different purposes, 32 million for budget support and the rest for specific oevelopmen projects,monstly in agriculture, transportaton, Inustry and mining 69. About one-third of the U.S. aid during 1952-1960 has been used for investment or specific development projects, either directly or in- directly through allocation of counterpart funds. U.S. aid, which rose from negligible amounts in 1952 and 1953, to $14.7 million in 1954, and $30 million in 1956, was gradually reduced in the following years. More over, at the same time that aid was reduced, government policies were changed so that commodity aid would generate counterpart funds, and by 1960 a much larger part of total aid was used for investment purposes. Even though the absolute amount of U.S. aid for non-investment purposes has declined, especially from the peak level in 1956/57. the public sec- tor, including state enterprises, has not been able to reduce its depen- dence upon emergency assistance correspondingly. as the decline has prob- ably been accompanied by decreasing public investment, increasing debt, and the susnension of service of many external obligations. In fact, the: - 20 - U.S. grant aid for 1961 is again at a higher level, increasing $6 million over the 1960 total, and very substantial additional assistance for development purposes is provided. F. Balance of Payments 70. With imports maintained at or above pre-Revolution levels up to 1957 and with lower exports of minerals, current deficits in the balance of payments rose substantially after the Revolution. Imports have shown some decline in recent years, partly owing to reduced imports of agricul- tural goods, but the fall was more or less offset by a further decline in exports. Since 1953 the current deficits have represented between one- quarter and one-half of commodity imports (Table 25). Furthermore, the cnange in the political situation after the Revolution together with the runaway inflation engendered a massive flight of private capital reflected in a negative balance of 459 million in the item "errors and omissions" in the 1952-1960 period. This loss of capital has deprived Bolivia of much needed resources, and has had an adverse effect on economic activity, especially in private minin and manufacturing industries. Up to 1956 the main sources of finance were a drawing down of the sizeable foreign ex- change reserves built un during the Korean War boom. sunplierq' credits and U.S. grants. Since 1957 the deficits have been financed by U.S. j7rnfq nnH innrPnqncr -infl n%T ef' nrvn+ u1.P 1 cnL7_-.Pr rni1 in, r-rnnP-.i r)n with oil exploration. 71. Bolivia has in recent years gradually abolished all bilateral trade and pea,ments -aren-nts Wit nl-i -11rng cOuntries. - - -11n, tariff schedule was introduced in 1958. It increased duties on industrial smuggled into the country. The tariffs are under revision. Since 1956, L _iUI ~ Z~I~ .&ULIL1U .L 2Ui VKO WU 'VIU V .L1 1AX. _J _AILLLO W,-U, ti. _L L d L la had standby agreements with the IMF. During the 1956-1960 period it drew A ?Il± 14on dan' repurchase U1R ,L p . n iIlL LUl -11 -IL on AdIIJ A.I --u L 1e~iL under discussion. As much as $4.7 million in additional funds might be a much needed supplement to Bolivia's gross international assets of $7 nd-.Lil J.AJJ W1J.L%,1L Od 'j..V u.. L U U'.) LJLL) L J11WLIVIIJ 0 ,.Lua'J . III. PUBLIC INVESTDENT AND ITS FINANCING 72.U)L.L 2 LEIVUJXRU inete tU.'5L[Z decJiI± )U"BoLa are't Wwdely disjpersedj among different Ministries and public autonomous entities. Until recen- tly there was a virtual absence of any coordinated project planning or investment budgeting. In 1960 a National Planning Board was established and entrusted with the task of investigating and coordinating various investment projects, in order to drawn up an overall investment plan for economic development in Bolivia. The Board has been assisted by experts from the U.N. technical program, ECLA and FAO. The National Planning Board presented in December last year an emergency plan for investment in - 21 - Dolivia over the next two years. It consists of 65 projects with a total cost of $100 million. Main emphasis is put on investment which will yield returns in the near future. About one-third of the invest- ment proposed would be in the mining and petroleum industries, another one-third in agriculture, and one-sixth in transportation and the rest in other industries and social investment. A longer term development plan covering the period 1962-1971 is now being prepared. 73. It appears that domestic public savings have not only been negative in recent years. but that the situation in 1959/60 deteriorated due to the losses of the state enterprises. No substantial improvements can be expected unless there is a major change in government fiscal policy and a willingness to reorganize the operations of state enterprises. Given the time that will he rRnuired to effPctnate thise changes. the implementation of an investment plan will depend to a great extent on commitments in general terms for foreign financial assistance of about 56millio^n, ofP rhMi _It9r mi-1lIon is i" r-nats. P O1hisc-total t7 mnillo will be allocated to budget support, while the rest of the assistance -- tlIJ. mn i"Jon - 'e e arma rked.',..,.ln for~ -e -J-P-1- - - -Av a con-nrues as follows with the investment proposed under the emergency plan (figures Emer- Foreign Financial Assistance from gency Triangular United Plan Operation States I.D.B. Other Total -1/ Camibol 15.9 13.00 1.50=' 14.50 YPFB 11.5 8.70 8.7D Agriculture and Food Industry 28.2 5.00 4.00 9.00 Transportation 16.0 4.80 4.80 Power 7.4 1.60 1.60 Other Industries 1.0 Social improve- ment 8.3 2.00 2.00 Studies 2.0 0.25 1.002/ 1.25 Credit to Private Enterprises: Mining 3.4 1.60 1.60 Industry 3.0 100 1.10 2.10 Agriculture 3.0 1.00 1.70 2.70 Unsnecified 1.1 114 Total 99.7 ii.nn 23.A6 i n- 25 n Ji-n 1 Argentina 2/ United Nations Source: 1CA, h1JB and staff esti)nte - 22 - 7. About half of the foreign credit already extended in 1961 to Bolivia is directed to financing investment in the mining and petroleum industries. Such concentration of foreign finance in these sectors is a result not only of the fact that an increase in production of minerals is essential for a revival of thp Pionomy as a whole hut al.qr hn.aiis arrangements have been made in these sectors for technical assistance, wihich hasq increnaed t.he absorptive%r c-npactity for' usez of cpt Tyi other fields, the preparedness for new investment is much less advanced. F or ei gn c re di+ ob t ned f oo, s ec _ .Si An -i g and P _t n0+ - ---0 to about $26 million, or about one-third of the investment proposed for IAK-I 1~.'.L UL--Jii -L± r' Av. F-JLCL.L 8 .LLV W-.LLL L.II4% U.I-, CU.L %J.L I VJ.. sugar refineries, mobile thermal units, airport extension, construction OfL penetration road to upper Benji and Somle feederUU1 rods0, roadt _iprovet:1 and maintenance, colonization and a number of other small agricultural projects. They- i-ll also provide for additional credit to private enter- prise in industry and agriculture and funds for technical assistance in connection with preparation of projects and for geological surveys of the raining areas. 79. Foreign official economic assistance available for economic development in Bolivia has altogether increased from a level or 0-0 million per year in recent years to about $9 million which will probably be utilized over a 2 year period and which will provide for a substantial realization of the investment under the emergency plan. The projects for which foreign finance have been obtained seem on the whole to have high priority and available funds should cover most of the immediate need for foreign capital. The realization of these projects is likely to be highly beneficial to the economy, providing arrangements for effective admini- stration and management of these projects are carried out. Many of the projects for which financial assistance has been arranged in principle are not ready for rapid execution. while rather extensive further studies are required for most of the other projects in the emergency plan, before foreign assistance can be contemplated. However, even at the ?resent stage of preparedness there seem to exist some important segments of the economy such as private electrical power and railroads for which external assistance has not been obtained although it is required. 76. Additional credit of about $25 million is envisaged under the Triangular operation in order to accomplish a full rehabilitation of the state mines. There may also be need within the next few vears for further substantial financial assistance outside mining to secure a balanced and steadv growth. Tn general. both to accelerate the imnle- mentation of investment plans for which foreign finance has been obtained and to increase the absorntive cannity for new nanital inientions- it is essential to strengthen the very weak and inadequate planning manhinery nartinlarly at the prniptt Ivel._ in Rniivia_ AsistancZ has been requested from the Organization of American States for this n)irnq - 23 - IV. GROJTH AND BAIANCE OF PAYMENTS PROSPECTS 77. The revival of the Bolivian economy is heavily dependent upon the implementation of policy decisions designed to achieve an increase in minerals exports. External conditions are, on the whole, favorable to such an increase in exports. Under the International Tin Agreement, Bolivia's export quota in the last 12-month period before quota regula- tions were abolished (October 1959-September 1960) amounted to some 28,000 tons as compared with an actual production of 22,000 tons in 1960. Prospects are for a fairly favorable tin price in the next 4-5 years. However, the substantial rise in the first half of 1961 is due mainly to special factors on the supply side, which are thought likely to be of relatively short duration. External market conditions for Bolivia's petroleum are also favorable. With relatively ample foreign funds already obtained or in pros- pect for investment in the mining and petroleum industries, and assuming that the companies meet with some success in finding new deposits, an increase of 5-10% per year in production is clearly attainable. This will depend upon the establishment of effective management of the tin mines and the restoration of a minimum of order and discipline in the labor force. It is still too early to Judge whether the government has the determination required, in the face of the difficult political situation, to carry through these measures. If these measures are inmlemented. exoansion of output of petroleum and minerals by 5-10% increase per year should produce an equiva- lant increase in tntal exchange earnings. 78. The domestic market provides scope for a substantialexpansion of agricultural production. The substitution of agricultural imports with domestically produced goods is likely to continue and a 100% self-sufficiency of sugar, rice and cotton seems feasible in the next few years, which implies import saving of more than $10 million. Given further extension of the acreage of existing farms in, and some acceleration of the immigration to, the lowlands, an expansion of agricultural output of 5% per year seems realistic. 79. The extent to which manufacturing industry will profit by the increasing output in the above-mentioned industries, will depend on the tariff policy, control of contraband imports and the general climate for private enterprise. Some rise in industrial output seems feasible, although any large new investment seems unlikely in view of the present large unused capacity. Other sectors of the economy are likely on the average to expand in step with the expansion in the basic industries. On the whole, depending mainly on the success of rehabilitating the mining industries, a rate of economic expansion of about 516 per year should be within reach. Such a rate of growth might appear rather optimistic in view of past performance, but it should be realized that the starting point is rather low-- mining cutput in 1960 was only two-thirdsof the pre-Revolution level and for the first time a concentrated effort is being made to expand production in mining, which is crucial for the Bolivian economy. 80. The expansion is likely to be accompanied by a somewhat lower rate of growth in imports if proper policies are pursued. Rising output in the ining and petroleum industries would be accompanied by some increase of im- ports of equipment and supplies. Increases in imports of raw materials and goods for private consims':ption would depend on thf - 2h - sJuces ±1n c(rntaig inflatinary teU151L_:, _L11 tULP:,_CtL CLLIU V1_WiOI~UCL1U_L118 the pressure for higher wages in particular. Even if the government is fairly successful in these fields and given the reduction in import needs as a result of increased domestic production, some rise in imports for current exports and consumption is likely. Imports of supplies and equipment for net investnent purposes in 1959/60 amounted to no more than ;0 million per year. iith the deficit on current account averaging about. 25 million, the difference between earnings and non-investmenf, imports was about '15 million. This gap between exports and non-investment imports, roughly estimated, might be reduced to less than $5 million in 1965. If progress is made during the period in reducing the very high realization costs in connection with mineral exports, some further improve- ment would result. In any case, it seems that Bolivia for several years will have difficulty in financing with its own earnings imports necessary to support the consumption requirements of an expanding economy. even if the capital goods imports required for economic growth are exclusively foreign financed. 81. In the long run, a further expansion in exports of tin from Bolivia might be limited by marketing difficulties. World consumption of tin rose at a very slow rate in most of the 1950's, but the pace has ouickened considerably in the last two years. Although it appears likely tnat world demand will continue to expand for some years, a continuation of the trend towards *substitution of tin by aluminum, plastic-coated netal and cardboard and towards the change to electrolytic processing of tin plate, which requires less tin than the "hot-dip" method, might again reduce appreciably the rate of growth in world demand. Whether Bolivia in the last half of the 1960's (when exports presumably will be nressing naginst the Rolivian qnota nnn htaiin a lrar nart of thep world market for tin, is uncertain. 32. Exports of other metals might increase further, but any sub- Stantial impovemnt oP +h current balance of parmne s+sta+4nn TAld presumably depend on a sizeable expansion of exports of petroleum and _aricnltural ands +he nrnnPt. for Thih v-1 n + 11 hhiv1 innr1t.in IT RYrT7PjAT. PUICJ DTBT, D)RBT q".IC1.P A-KD crl7).PThTrtT4T\TESS', 83. Despite large current deficits at the end of 1960, the increase .4 ue 11 al XkAJJ mII O i e 1I~AI ium, U 4 lu-iJ emnq - 1,', UIi 4~ - A -L,LU-.L-- - ULI 1i 0 been fairly small, owing mainly to substantial United States aid, a large reducio of forig exhag reeres and shr-ter- finncng At t-4-he end of 1960, the external public debt amounted to $179 million, excluding onhe -unUo±I'±uJAeU [Jvo.uLA part- of the UC oU BraL Ul. auuuu yP4u IuLLL--ou andu debt to former mine owners (Table 1). A large part of the debts consist O1 DOLVidIn Uj IUHb 50 U1H WII: VI0 UU ;LUU.' 111al'i UdU. E' WOVU WV Le After 25 years of default, the terms of this debt were renegotiated in 195o on very favorable terms for Bolivia ana service was resumed in 1957. Defaults started again in the second half of 1960. Negotiations for - 25 - resumption of payments on this debt are still not concluded. The Export- import 'Bank maae l6ans to Bolivia'in the 19401' to fini e an oil reinfner,y for YPFB and to construct the Santa Cruz-Cochabamba highway. Most of the medium-term debt consists of suppliers' credits on exports from various European countries in 1955-57, mainly to YPFB. The Export-Imoort Bank loan and the medium-term credits have not been fully serviced since 1958. At the end of 1960 accumulated arrea-ra on service of nublic external debt amounted to 112.2 million (Table 4). 84. Service payments on external public debt are scheduled at 116.7 million in 1961. tP9.8 million in 1962 and abont 419 million in +.h fnllmy- ing three years (Table 2). Indemnification payments to former mine owners, whiihb qTnnm+.ounr1 n I_9 millin-n in io0_io0AA (rnhla 99) nvo lIT + continue at the present rate ('1.2 - 1.5 million) for some years to come. fin n-mnii LyL. ~1~hC1n+. h ~ _nr~ nr+ -, "Tk+ 0- --- incldin further indemnification payments, would in 1961 represent about 33% of th 160eorts +an OVAron -^21" in the follwin . years Da--ent Of arrears at the end of 1960 are not taken into account. 85. This high proportion represents by itself a heavy burden, but the extremely weak Linancial and uecoumic poi uion of the country makes the situation still more serious. Tith the present low level of export amu± u o even u-Jrnvesume-u mpurte must be partly financed from anroad, Moreover, current revenues of the Central Government and the state enter- Prises have in general been inadequate to finance current expenaltures, including normal maintenance costs, and full service on external debt of the entral uovernment alone would represent nearly u30 or expected tax revenues in 1961. 86. Recent borrowing from the IDB and DLF to sectors other than mining and petroleum are mostly repayable in local currency. The terms of the loans extended to Comibol and YPFB are not known, but repayment in foreign currency is under consideration with a repayment period of 10 years. In view of the relatively large foreign debt service and the present weak economic and financial position, the margin for further public borrowing from abroad on conventional terms seems to be exhausted. Although substantial financial assistance from abroad has already been obtained, there are areas of the economy in which additional external assistance could be effectively employed. This assistance should take the form of grants and soft loans until the expectation for economic revival and continued growth rests on firmer ground. STATISTICAL APPENDTX Table No. Ex+ernal Deb+ 1. External public debt 2. Estimated contractual service payments on external Pub-LLU UtzLU 3. Servicet paywets lz on1 external; pulcUet, 1955)-60 4. Estimated accumulated arrears on external public debt, December 31, 1960 Production 5. Gross national product, by origin, 1950-59, absolute figures 6. Gross national product, by origin, 1950-59, nercentages 7. Agricultural production, 1955-60 8. Production index for the manufacturing industries, use of industrial energy and production of Portland cement, 1950-60 9. Production of minerals, by Comibol and private mines, 1955-1960 10. Exports of minerals from Comibol and private mines, 1952-1960 11. Petroleum production and consumption, 1950-1960 12. Prices on petroleum products, 1961 13. Monthly traffic on roads Monetary Situation 1L. Monetary survey, 1950-1960 15. Credit expansion, 1956-1960 16. Money supply and privately-owned deposits of Bolivianos in HS hank, 190Q-10Q 17. Percentage change in money suply -n cos of ing index Table No. Pihlic.Finance 18. Structure of revenues of Central Government in 1951 and 1958 19. National Government cash receipts and expenditures, 1958-1961 20. Receipts and expenditures of the Mining Corporation of Bolivin 10E-10 A 21--I Net~-4 profi or lls 4>kin th vl;njn CopoatonoP B0,1J.v, -CJAn. '-) 'D- - 4 . '.4 .44 . - ..4- ±', JL I.L , 'JJ~ .'J4 U± JI ~ 4 ..LV.LL '.. 2. Development Corporation Of olivia, 191 - uUdget External Finances Allocation o:C U.S. aid 19>f52-1960U, udget LYU61/62 25. Balance of payments, 1948, 19'2-190 26. Exports classified by commodity, 1948o and 1952-190 27. imports classified by categories 1948 and 1952-1960 208. Price and volume indices of exports, 1948 and 1952-1960 29. Prices of main export commodities in major markets, 1948 and 1952-1961 30. Prices of exports, imports and terms of trade, 1948 and 1952-1960 31. Gold and foreign exchange reserves of Bolivian banking system 1950-1960 Table I.: BOLIVIA - EXTERNAL PUBLIC DEBT OUTSTANDING DECEMBER 31, 1960 ],JITH 1AJOR Wr .Dc 'Wr)t A rnfl'if'TQ T A TT A Wr -)- r~t i ' TTTT V -31 i1)4 f/ 1/., ,LEPoUT.D ADJDlIJ- JAUA ., V96 T I JL 31, 196J- (In t1ousancdLS of U.S. UU-Ll eqLuiva.Leli t)i P4.:lLe Debt outsta ding Decemb)er 31, 1960M Item Net of Including January 1 - ,.~u , ,.1 , , Juvp.161 undisbursed undisbursed - TnT DEBT 1é7768 1791,1 16,75n Publicly-issued bonds 61,906 61,906 - Republic of Bolivia External Sinking Fund Bonds 2% -3%, 1958-1993 /b 61,906 61,906 Privately-placed debt 28,372 28j,37 $1,877,572 Arpic -ngineering (Belgium) to Govt. of Bolivia 3%. 195h-1961 609 609 8869,303 Peruvian Corp. to Govt. of Bolivia 3%, 195h-1967 860 860 l1,432,h32 Deutsche Sudamericanische Bank to Govt. of Bolivia 75,1955-61 918 918 ,3,280,700 Ferrocarril Arica-La Paz to Govt. of Bo1ivia 3:, 195,7-1962 2,058 2,08 Direc. Gral. de Ferrocarriles 107 107 ,28h,5b1 MoratoriaBritanica 7T, 1958-1965 3,265 3,265 6668 Ferrostaal1 to Govt. of' Bolivia 3%, 1959-1961 48 48 Autonomous Govt.institutions of B o li i 1 97A l- ),7 ~jÆ.J " 4L -L4, .7 1 Lý L43 71 L4. $h,00,295 Moratoria Francesca 3,71' 3,714 S71 76I I,JL4 JJr .Ad.Uerto Markus uu Gart. of Bolivia 119 119 -ITTr a. 1.nCn L.n^ Various letters ol c r edJLt 4U 14kJ L. M. Ericssor to Govt. of Bolivia 253 253 .onvenio A-lman lo lo Moratoria Aleman 1,037 1,037 ILnItler-11m-erican De--VeLopmelt JjDank lioans- - - 900 $5,000,000 to Bolivian Govt. Develop- ment Agency h%, 1961-1973 c --u 3%,5oo,o0o to Govt. of Bolivia 4%, 1961-1971 - - 4,500 U.¶s Government loans 33,919 33,919 3,500 Export-Import Baik to Corporacion Boliviana de Fomento /d 33919 _33919 - ,8,500,000 h%1 1942-1964 h,h71 h,471 510.320.000 3. 19h2-197h 8.951 8.9ý1 8,hoo,ooo 3z%, 1949-1974 15,935 15,935 ),70.0,0C) L 3/)L 1955-197[ ),562 _,6 Internat'1 Cooperation Administration _3-2 $3,500,U0 to 0MIBOL 5 3' %, 1961-1 971 3,500 See Pootnotes at e cd cf table, Table 1: BOLIVIP. -- EXTERNAL PUBLIC DEBT OUTSTAFDING DECEMBER 31, 1960 l1TH 1iJOR REPORTED ADDITIONS JA.NUATE 1, 1961 TO JULY 31, 1961 La (CONT.) (In thousands of U.S. dollar equivalents) Page 2 Debt outstanding . December 31, 1960 major au_LL,.1on1 Item Net of Including January 1 - undisbursed undisbursed Jusy 31, 1961 Loans from other governments h3,STi 55,221 3,750 A54,244,133 Govt. of Argentina to Govt. of Bolivia 3%, 1960-1985 42,594 54,244 Cr$ 187,853,671 Bank of Brazil to Central Bank of Bolivia,1960-1970 977 977 DM 15,000,000 Federal Rep. of Germany to Rep.of Bolivia, 1961 /e 3,750 /a Excluding debt arising from the nationalization of the mines, rThich took place in late 1953. /b This bond issue is the result of asettlement formalized in 1958 on ) defaulted- $ 2,400,000 6%, 1917-1940 issues: $29,000,000 8%, 1922-1947 $1h,000,000 7%, 1927-1958 $23,000,000 7%, 1928-1969 In 1958, the principal amount of old bonds outstanding was $56,278,000. Under the settlement, bonds were stamped to indicate a new principal amount equal to 110% of the original amount, the additional 10% being in full payment of unpaid interest. Starting the second half of 1957. interest was to be paid on the stamped bonds upon surrender of coupons at a rate of 1% per annum through 1959; 1 % per annum in 1960 and 1961; 2% per annum the 1st half of 1962; and 3% per annum thereafter. A cnmulativi sinkina find of. V nor annum for tho vers 1962 to 1966 was to be provided. The sinking fund thereafter was to be 1% per annum, the sinking beine based on the amount of $56.278.000. LC This is the U.S. dollar portion of a $10 million loan; the other $5 million being renavable in bolivianos. /d These debts are guaranteed by the Govt. of Bolivia. Repayment terms on these /P The funds will be advanced to the Inter-American Development Bank in tranches pursuant to a loan agreement in which the IADB will act 'both for itself and IBRD - Economic Staff Table 2: BOLIVIA - ESTTIATED CONTRACTUAL SERVICE PAYIENTS ON EXTERNAL PUBLIC PBT OUTSTANDNG NTNCLUDING UNDISBURSED AS OF DECEMBER 31, 1960 ITH MAJOR ADDITIONS JANIARY 1, 1961 TO JULY 31, 1961 (In thousands of U.S. dollar equivalents) Page 1 Total. debt P1licly-issued bonds Privately-placed debt /b e u---.-e-- OUt- ._b OUt- staRding Payments during year standing Payments during year standing Payments during year Year plus un- Amorti- In- plus un- Amorti- In- plus un- Amorti- In- disbursed zation terest Total disbursed zation terest Total disbursed zation terest, lta. January 1 Janur J January 1 1961 179,418 13,477 3,239 16,716 61,906 - 844 844 28,372 9,445 115 9,56o 1962 182,061 8,44o 4,317 12,757 61,906 289 1,399 1,688 18,927 3,853 29 3,832 1963 173,384 7,828 4,406 12,234 60,750 316 1,654 1,970 15,074 3,164 15 3,179 1964 164,608 7,637 h,219 11,856 59,486 354 1,616 1,970 11,910 3,417 11 3,423 1965 155,909 8,668 4,059 12,727 58,070 397 1,573 1,970 8,493 3,548 8 3,556 1966 146,050 6,063 3,832 9,695 56,482 444 1,526 1,970 4,945 116 5 121 1967 138,655 6,358 3,574 9,932 54,706 779 1,472 2,251 4,829 77 i 78 1968 125,2o8 6,374 3,280 9,654 51,590 872 1,379 2,251 1969 116,218 7,529 2,975 10,504 48,102 977 1,274 2,251 1970 105,758 7,597 2,608 10,205 44,194 1,094 1,157 2,251 1971 94,879 8,559 2,216 10,775 39,818 1,225 1,026 2,251 1972 82,645 6,968 1,802 8,770 34,918 1,372 879 2,251 1973 71,561 7,133 1,478 8,611 29,430 1,537 714 2,251 1974 59,817 6,317 1,135 7,452 23,282 1,721 530 2,251 1975 48,337 6,525 827 7,352 16,398 1,928 323 2,251 Sce footnotes at end of table. Table 2: BCLIVIA - ESTiJATED CONTRACTU= STVIOE PAIMRVTS ON XTERNAL PUBLIC DEPT OUTSTANDING INCLUDING UND18BORSED ASý OF DECEMBER 31, 1960 WITH MAJOR ADDITIONS JANUARY 1, 1961 TO JULY 31, 1961 (COT) (In thousands of U.S. dollar eqlivalents) Page 2 U,S. GovernmnAt lDans Inter-American Development Bank loans ToU.S Gvne l ort-Import Bank /C Debt out- Dei oit- U'et uin ~a e-bt out- Pyet uigya .ear standing Payrments during year stand Payments during year staudin PAyments during year plus un- Amorti- In- plus un- Amorti- In- plus un- Amorti- In- disbursed zation terest Total disbursed zation terest Total disbursed zation terest TAt! anuary 1 Jert Jaury January 1 1961 - - - - 33,919 2,73h 1,050 3,784 33,919 2,734 1,050 3,78h 1962 9,500 - 405 1o5 3h,685 3,000 1,1ho 4,140 31,185 2,970 938 3,908 1963 9,500 -4 o5 ho5 31,685 3,050 1,024 4,074 28,215 2,970 825 3,795 1964 9,500 - 405 4o5 28,635 2,568 915 3,h83 25,245 2,468 722 3,190 1965 9,500 643 4o5 1,4h8 26,067 2,246 837 3,083 22,777 1,966 649 2,615 1966 8,857 643 379 1,022 23,821 2,26 7h3 3,169 20>811 1,966 576 2,542 1967 8,21h 643 354 997 21,395 2,426 644 3,070 18,845 1,966 504 2,470 1968 7,571 643 328 971 18,969 2,426 545 2,971 16,879 1,966 432 2,398 1969 6,928 1,6h3 302 1,945 16,543 2,476 hh7 2,923 14,913 1,966 360 2,326 1970 5,285 1,642 231 1,873 ih,o67 2,526 3h3 2,869 12,947 1,966 287 2,253 1971 3,6h3 1,6h3 161 1,804 11,541 2,756 228 2,984 10,981 2,196 20 2,oo 1972 2,000 1,000 90 1,090 8,785 2,196 125 2,321 8,785 2,196 125 2,321 1973 1,000 1,000 45 1,o45 6,589 2,196 83 2,279 6,589 2,196 83 2,279 1974 - -- - h, 393 2,196 41 2,237 h,393 2,196 41 2,237 1975 2,197 2,197 12 2,209 2,197 2,197 12 2,209 See footnotes at end of table. Table 2: PWLIVIA - ELTIMATED COITRACTUAL SERVICE PY1\vMIT3 ON EXTERNAL PUBLIC DEBT OUTSTANDI-G INCLUDING UDBURSED AS OF DECEMBER 31, 1960 TITTH MAJOR ADDITIONS JANUARY 1, 1961 TO JULY 31, 1961 (CONT.) (In thousands of U.S. dollar equivalents) U.S.Government loans Loans from other ICA V-Western Governments Td Debt out- Debt out- P di yea b nare curent in defaUse Year standing Payments during year standing Payments during yearerv ent s i !. pluIs un- plus un- disbursed Amrti- In- Total disbursed Amorti In Total January 1 zation terest January 1 zation terest 1958 settlement. - L Approximately $4*7 million od. 1961 - - - - 55, 22L 1,298 1,230 2,528 this debt is in default. Service 1962 3,500 30 202 232 57,673 1,298 1.,344 2,642 payments on the undefaulted 1963 3,470 80 199 279 56,375 1,298 l,308 2,606 amounts outstanding are based 1964 3,390 100 193 293 55,077 1,298 1,272 2,570 on estimates received from the 1965 3,290 280 188 468 53,779 1,83 1,236 3,070 Bank of Bolivia. Terms of re- 1966 3,010 46o 167 627 51,945 2,h3h l,179 3,613 payment on defaulted amounts 1967 2,550 460 10 6oo h9,511 2,433 l,103 3,536 are unavailable. 1968 2,090 46 113 573 47,078 2,433 1,028 3,h61 1969 1,630 510 87 597 hh,645 2,433 952 3,385debt originally agreed to have 1970 1,120 560 56 616 42,212 2,33 877 3,212 1971 560 560 24 584 39,877 2,935 801 3,736 payments show are based on 1972 - - - - 36,942 2,400 708 3,108 estimates received from the 1973 34,542 2,400 636 3,036 Central Fank of Boliviao .1974 32,12O 5624 2,/a The repayment terms on the Ds 15 .1975 2c, 7 42 2,1400 1492 2,892 million loan from the Federal Republic of Germany included in this category, have not been settled. Service payments shown are estimates based on the assumption that it will have ap- proximately the same r epayment terms as the $14.5 million loan frot the Inter-American evelop- Bnk± ofBoiia Trs f e cThD - Fseriomic Spynsfonh notsC been mae3ice158srvc Table 3 ANNUAL SERVICE PAYMENTS ON EXTERNAL PUBLIC DEBT: 1958-1960 (In thousand U.S. $ equivalents) 1958 1959 1960 Bonded debt 997 653 46h Export-Import Bank loans 1,080 300 - Railroad loans 738 678 15 Consolidated Argentine debt - - 2,406 Consolidated part of Brazilian debt - - 75 Medium-term debts 1/ 3,602 2,537 2,975 Total payments on debt 6,417 h,168 5.935 l/ Does not include commercial advances and credits of COiBOL, YPFB and Lloyd Aero Boliviano. Source: Central Bank of Bolivia. Table 4 ESTIATED ACCUIMULATED ARREARS ON SERVICE PAYMENTS ON EXTERNAL PUBLIC DEBT AS OF DECEMBER 31, 1960 (In thousand U.S. $ equivalents) 1. Long-term Debt b,471 Bonded debt 464 Capital - Interest 46 Export-Import Bank Loans 6,650 Capital 3,873 Interest 2,777 Railroad Loans 1,259 Capital 1,164 Interest 95 Consolidated Part of Brazilian Debt 98 2. Medium-term Debt 3,687 Arpic Agreement MirknTQ Ag,reeme.nt+ 119 YPFB Debts 365 French Ag-ement 90h7 British Agreement 40 Other 179 3. Total Arrears 12,158 Source: Central Bank of Bolivia. Table 5 (In millions of bolivianos, 1951 nrices) 1950 1951 1952 1953 195*4 1955 1956 1957 1953 1959 Agriculture 1,023,742 l,023,742 980,560 917,560 M81,556 933,l16 903,67h 959,;93 1,053,233 L,19,077 Mining h95,h98 5h5,55 553,938 561,710 459,128 685,2 0 .31,al2 L50,733 310,352 358,h12 Petroleum 23,787 20,hO8 20,608 23,787 65,19 105,68 126, 10 139,766 135,151 12h,830 ianuf ac turing Industries 45b,274 475,802 466,038 466,03 521,617 529,873 J 38,196 3'-2,111 375,534 399,193 comerce 359,269 426,376 623,013 332,593 393,6h1 635,737 h15,328 129,é50 ho?,190 413,562 Transportation 148,325 151,722 130,254 177,990 199,050 222,167 16,136 201,k2L 226,650 233,017 Banking 26,223 23,261 32,287 13,16i 10,05 12,097 20,169 16,166 21,136 21,186 Coristruction 6,386 i0,641 13,771 9,3 '3 9,39 12,519 10,015 11,893 15,669 1),397 Public Admnis- tration 3/ 617,569 473,797 559,333 252,913 291,250 310,21 264,221 210,715 275,305 269,052 u4er 3ervices 305,879 315,656 325,433 328,226 326,_330 336,607 360,797 363,590 _3-,1o 35197) ross 'ational roduct -3,263,657 3,476,930 3$60b,035 3,133,126 3,158,365 3,383,08 3,230,076 3,108,563 3,172,227 3,366,7b6 2/ Includes communi-ations, power, ownership of building and personal services. 3/ Reductions showT;n for this sector imay be overstated. Source: Junta Nacional de Planeamiento. Table 6 GROSS NÅTIONAI, PO_)UCT, BY 1ORIGMi, 1950-1959 Origin 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 (billions of boliviano3, 195- pricesT Total 3,263.5 3,476.9 3,560.0 3,133.1 3,158.i- 3,383.b 3,230.1 3,108.6 3,172.2 3,3b4.7 (percentages) Agriculture 31.h 29.5 27.5 29.3 27.9 27.6 28.0 30.8 33.2 3h.h Mining 15.2 15.7 15.6 17.9 l6.5 1[.3 13.6 14.5 9.8 10.7 Petroleum 0.7 0.6 0.6 0.8 2.1 3.1 3.9 4.5 h.3 3.7 Manufacturing industry 14.0 13.7 13.1 14.8 16.5 15.6 15.1 n1.0 11.8 11.9 Commerce 11.0 12.3 12.0 12.2 12.5 12.9 12.9 13.8 12.9 13.3 Transportation 4.5 4.3 5.0 5.7 6.3 6.5 6.9 6.6 7.1 7.0 Banking 0.8 0.8 0.9 0.4 0.3 0.h 0.6 0.5 0.7 0.6 ConstruCtion 0.2 0.3 0.4 0.3 0.3 0.4 0.3 0.4 0.5 0.5 Public administration 1/ 12.8 13.7 15.7 3.1 9.2 9.2 8.2 6.8 3.7 7.4 Other services 2/ 9.>4 9.1 9.2 10.5 10.1 10.0 10.5 11.1 11.0 10.5 TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 1/ Reduction shown for this sector may be overstated. 2f Includes communications, power, ownership of building and personal services. Source: Junta Nacional de PlaneaMiento T able 7 AGRICULTURAL AND MEAT PAODUCTION, 195-1959 1958 1955 = 100 1000 tons 195 1956 1957 1958 1959 1960 Wheat 62.5 146 133 183 100 108 - Barley 67.2 82 64 82 100 100 - Rice 283. 90 90 105 100 127 10 Yuca 125.0 96 109 109 100 100 - Coffee 3.8 90 90 90 100 107 - Peanuts 2.2 68 68 90 100 100 - Quinoa 12.0 100 100 120 100 100 - Sugar cane 670.0 80 86 91 100 131 152 Refined sugar 16.0 25 27 56 100 112 155 Peat 53.0 101 117 98 100 104 - Corn 283.4 76 85 118 100 109 - Potatoes 592.0 80 67 80 100 110 - Source: Ministry of Agriculture and I.C.A. Table 8 IND CAnTT2 TFrMTQDUTAT ACTIrV Use of electric energy in manu- Production Index of facturing indus- of manufacturing tries in la Portland output Paz area Gemer.t 1955 = 100 (mill. KJH) (1,000 barre- 1950 86 -- -- 1955 100 28.8 216 1956 92 28.9 193. 195'7 63 23.8 ___ 5 71 20.9 169 959Q 72 2. 8 96 75 1/ 23.5 225 Prvisiol imate~. 79 ,,0oarc: Boiinaoe Company andNU. I.C.A Table 9 PODUCTIOM OF MINERAï65 BY COMIBOL AND PRIVATE M]ES, 1955-960 (In thousands of fine metric tons of metalic content) Gold:" (fine Tin Tungsten Lead Copper Zinc Antimony Silver Cc,i rM Gomibol 23.5 1.6 9.6 3.3 17.6 - 0.2 n.a. Private mines 4.6 1.h 11.3 0.3 1.3 5.2 - 2,300 Total 28.1 3.0 20.9 3.6 18.9 5.2 0.2 2,30D 1956 Conibbi 23.0 1.6c 10.7 4.0 21.2 - 0.2 n.a. rivate mines .h 1.h 10.4 0.6 - 1,0 - 700 Total 27.4 3.0 21.1 4.6 21.2 4.0 0.2 700 t, ibC5 21.7 1.2 8.3 3.0 15.0 - 0.1 7 Private mines 5.8 1.1 18.3 0.8 0.1 3.0 0.2 1,00 Total 27.5 2.3 26.6 3.8 15.1 3.0 0.3 1,h07 1958 oteibel 17.5 0.6 7.6 2.2 8.7 - 0.2 5 Private mines 3.8 0.6 15.0 0.7 0.4 6.6 - 600 Total 21.3 1.2 22.6 2.9 9.1 6.6 0.2 608 1959: Comibol 15.8 0.h 6.3 1.5 2.2 - 0.1 1 iäatc mines 5.2 - 0.8 1.8 0.6 0.5 5.2 - 1,001 21.0 1.2 21.1 2.1 2.7 5.2 0.1 1,002 1960 131!boi 15.2 0.5 7.3 1.5 3.4 - 0.1 1 Private mines 6.8 - 1.1 0.9 0.8 5.3 - 1,41i 22.0 0.5 21.4 2.4 L.2 5.3 0.1 1,L12 1! Production figures for the private mines are not directly available. Figures shown are exports, which are roughly equivalent to production in most cases, 2/ Includes 800 tons sold to Comibol by a medium mine and not included in that Mine's export figures. Murce: Mining Corporation of Bolivia (Comibol) and Mining Bank. Table 10 EXPORTS OF HINERAIB FROM COIIBOL AND FRC1, PRIVtTE HINES (As % of total dollar value) Total Percentage exports medium small Unspecil mill.U.3.$ Comibol sized mines mines 952 136.0 6.1 1.1 17.3 0. i~~ n~1fo3 ~ '4 o ý 95 ) .R7 71. .5 8l i Ocýc 0'7 R'iL . 1 .1' I 1955 9.81 & 15. 1.- -19-? Li8.j 71.9 16.2.ý 3. 19 5.77 7. . '1. 34 -i rn ÉnP r' r' n 1OO 6 68.2 9.0 18.9 3,- 1960 59.9 61.7 13.1 19.9 5.3 Source: MJining Corporation of Bolivia Table 11 PETROLEUM PRODUCTION, 1950-1960 (In thousands of cubic meters) Froduction Consumntion Crude Losses and Year CrPdePRrfiivte(i e --y - - n-r-t-- -n-- - iii 'YPFB Private stocks 1950 98 - 98 78 - n.a. 1951 83 - 68 79 - n.a. 1952 84 - 71 95 - n.a. 1953 96 - 72 106 - n.a, 1954 269 - 249 203 - n.a,. 1955 428 - 338 243 99 86 1956 508 - 446 297 122 79 1957 568 - 406 274 197 87 1958 547 - 375 271 219 57 1959 504 - 351 265 152 87 1960 495 74 359 304 180 85 Source: National Petroleum Corporation. n~a.= Not available. - = Indicate less than 0.5 cubic meters. Table 12 PRICES OF PETROLEUM PRODUCTS, JUNE 1961 Export Price per liter prices Bolivianos U.S. cents to Chi!3 Gasoline regular 424 3.50 3.567 Gasoline extra 583 4.86 - Gasoline super-extra 1,000 8.33 -- Kerosene 250 2.09 - Diesel oil 300 2.50 3.302 Fuel oil 250 2.09 2.906 Source: National Petroleum Corporation Tnble 13 rPTr,vC 'P;rF 'TIC nM T;n/flI 17\Tp,h 7 ';Q ~c('DAr, l956C -J96oA 1956 1957 1958 1959 1960 Ts Total truck traffic (tnrougn ana on all SCBAC roads, urban) nam-ber of tracks 11,755 18,468 33,U4i 47,752 49,705 it if " with 1956 = 100 100 156 280 405 422 2. Through truck traffic on selected roaas, number of trucks: a. El Alto-Oruro 284 1,154 1,769 3,350 3,354 b. Sucre-Epizana l4b 291 593 551 717 c. Cochabamba-Chapare 316 436 724 785 755 d. La Paz-Unduavi 1,549 2,115 2,660 2,165 2,300 Total 2,295 3,996 5,746 6,901 7,126 3.. Estimated through tonnage hauled on all SCBAC roads (excluding local and urban traffic), metric tons 12,541 27,988 60,95 93,939 117,386 metric tons with 1956 = 100 100 222 480 746 )30 Source: Bolivia-American Cooperative Roads Service (SCBAC) Table 14 MONETARY SURVEY, 1950-196) _/ (In billions of bolivianos) 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 Net gold and foreign exchange position 2.09 2.95 2.15 4.14 3.63 3.46 - 55.91 - 5.53 - 9.68 - 3.51 -47.36 1et IF position - - 0.15 -0.02 -0.02 -0.02 - 23.98 - 35.06 -72.69 -63.54 -47.r3 Loans to public sector 3.54 4.24 7.73 16.69 26.18 66.80 337.56 395.17 485.18 593.98 661.0 Loans to State Banks 0.08 0.08 0.09 3.75 6.23 6.25 6.25 0.40 0.29 5.16 6.53 Loans to private sector 2.12 2.56 3.26 3.34 5.07 9.26 25.32 61.38 71.38 73.22 73.13 Other assets, mainly fixed assets 0.32 0.56 C).92 0.88 2.13 3.98 11.92 29.25 38.29 47.51 55.35 Total of assets = liabilities 8.15 10.39 14.30 28.79 43.23 89.73 301.14 445.61 512.78 652.81 701.62 Money supply: notes + demand deposits of the public 5.00 6.00 9.09 16.40 27.43 55.97 197.04 291.18 300.50 385.54 418.57 Time and savings deposits 0.48 0.64 0.78 0.86 0.76 0.94 6.24 7.99 6.14 7.66 8.64 Importers' advance deposits 0.31 0.44 o.19 0,30 0.21 -1.53 1.46 1.31 2.50 3.05 1.70 Counterpart deposits -1 - - - - - 2.64 24.46 71.05 103.39 12929 Govern.ment deposits 0.86 1.67 2.16 3.93 9.20 20.08 68.60 71.22 71.97 86.69 70.46 Capital and reserves of banking system 0.85 1.03 1.36 6.32 4.13 6.04 10.52 34.04 42.55 41.37 51.40 Other liabilities 0,67 6.3 0.73 0.97 1.50 5.16 14.64 15.42 18.08 25.09 21.58 Source: International Financial Statistica. 1/ At end of each year. Table 15 CREDIT'r SoN 9o (In billions of bolivianos) Changes in 1956 1957 1958 1959 1960 end 1960 I. Credit Expansion 225.12 5.84 1._i._i 69.72 60.39 513.05 Public Sector, net credit 219.'63 27.32 j2.56 66.61 58.3 467.89 Inerease in credit 270.79 5T¯76 9. 9() 113. 7 ~ 667.6h Less increase in deposits h8.52 2.62 0.75 1.72 -16.23 70.h6 Less increase in counteroart funds 2.6h 21.82 6.59 32.3h 25.90 129.29 Private Sector, net credit 10.85 3h.3b 10.66 -0.23 0.28 62.79 Increase in credit 1. 3~Ò60 10.00 1.86 -0.09 73.13 Less increase in non-monetary deposits 5.23 1.60 -0.66 2.07 -0.37 l0.34 Other Factors (including capital accounts) -4.06 -9.82 -2.12 3.34 1.28 17.63 II. Absorbed by Net Sale of Foreign Exchange 83.35 -h2.30 h1.78 -15.32 27.3 94.39 Reduction of net assets 3 - ~ 1 -17 3.5 47.3 Net drawing on I1,MF 23.98 8.08 37.63 -9.15 -16.51 47.01 III. Increase of Money Supply (1-11) 142.07 9L.11 9.32 85.04 33.03 h18.57 Currency 106.79 67.21 2 I 5 ~33.6 35h.o Deposits 35.28 26.93 -18.86 25.09 -0.ho 6h.53 Percentage increase in money supply 252 h8 3 28 9 Scurce: International Financ,ial Statistics Table 2.6 NONF SUPPLY AND 'RIVATELY OWNED DEP OSITS OF BOLIVIANS IN UNIED STITE3 BANKS 1950 -1960 (In billions of bolivianos and millions of dollars) End of 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 ,,"oney supply (billions of bolivianos 1 5.0 6.0 9.1 16.4 27.4 56.0 197.0 291.2 300.5 385.5 418,6 Notes in circulation (billions of2 bolivianos) 3.3 3.9 6.1 11.4 19.8 38.5 145.3 212.5 240.7 320.7 354,6 Demand deposits 1/ (billions of bolivianos) 1.7 2.1 3.0 5.0 7.6 17.5 51.7 78.7 59.8 64.8 64 0 Fercentage of total money supply in deposits 355 365 345i 305 28 31% 26 27% 20 17a 15 Equivalent in millions of dollars: (a) total money supply 33.1 18.2 14.3 13.1 25.3 33.3 33.8 32.5 35.1 (b) deriand deposits 1/ 5.0 5.5 4.2 4.1 6.6 9.2 6.7 5.4 5.3 Private deposits of Bolivian citizens and private firns in United States banks (millions of dollars) 12.2 10.8 10.5 12.6 14.4 15.7 18.1 14.9 15.3 15.3 15.2 Source: Central Bank, Bolivian Statistical Bureau and IiLF. 1/ Excluding Governnent deposits. PERCENTAGE CHANGES IN !ONEY SUPPLY, COST OF i1VING, AND_VALUE OF THE DOLLAR FROM DECEMBER TO DECEiBER OF EACH YEA R 1950 - 196o, in percentages 191 199 1953 1954 1955 1956 -1957 1958 1959 1960 Variation in money supply + 20 + 52 + 80 + 67 + 104 + 252 + 48 + 3 + 29 9 Cost of living index in La Paz + 26 + 33 + 150 + 106 + 51 + 480 - 14 + 12 + 11 6 2 Value of dollar on free market 1/ 1/ + 227 + 11 + 125 + 82 + 11 + 39 - o.4 - Source: Central Bank and Bolivian Statistical Bureau. 1/ The free market was illegal during those years. 2/ The official index rose by 1o'. However, a change in the sarple accounts for about 4,J of the increase from December 1959 to December 1960. Table 18 STRUTR 0F REVENUES OF CENTRAL uOVE inLLTIDU IN 191 A 1958 (In thousands of 1950 dollars, and ercen TAX REVENUES Taxes on capital 634 3.1 599 2,8 on personal income 1,573 7.5 578 2.7 ou corporate income 3,210 15.5 1,116 5.2 on imports 1,259 6.0 5,978 27.7 on exports 6,643 31.8 571 2.7 Indirect domestic taxes 2,423 11.7 4,504 20ý.9 NON TAX REVENUES Communications 1,498 7.1 1,376 6,4 Others (including exchange differential) 3,587 17.3 482 2.2 AIRElGN AD - - 6,343 29.4 9,VTA.L RECEIPTS 202 827 100.0 21,543 100,0 Source: United Nations Consultant Group. ,1t Excludes accruals from other years. Table J.9 TrrTflT .T I- T Tr0L7TATTh' r T .iT mrC* nkr iie-i*-rm r , n t/ (In billions of bolivianos) 1958 1959 1960 11 Actual Actual Actual 2/ Regeipts Customs 91.5 108.7 120.0 160.0 Internal taxes 78.8 106.5 120.0 161-4 Darter receipts from Comibol - - 2,0 - Revenues from iadrijones oilfield - - - - Communications ) , , 9.1 Other (including 2% exchange tax) ) 15.5 Total tax revenues 188.4 268.1 266.0 346.0 Budget support from counterpart funds 61.3 119.1 76.5 84.0 Total receipts 297 842.5 L0. Ex: oeditures "inistries 156.0 206.0 221.6 254.7 Other ernendi turms Bonded debt ) 6.6 5,6 CnmmPre-l trriit. 15.9 21 0 n 26.0 Wage reclassification, Christmas bonus and family all/ane,+t I/ / q 9A Contributions to servicios 22.0 30.0 25.1 27.4 Contributions to Development Corp. 14.4 20.0 10.5 12.0 C+ ho" O < 4A O Total expenditures 200.8 380.7 364. 430.0 Cash surolus (+) or deficit (-) - 61.1 - 22-0 6ource: iinistry of Finance, Bolivia 1/ Actual receipts and expenditures in the year irrespective of the budget year to ifnich they relate. 2/ Preliminary figures. included in expenditures under respective iiinistries. TABLE 20 MINING CORPORATION: CURRENT LIABILITIES, 1957-1960 (In millions of U.S. dollars) 1/ ITEMS LIABILITIES 1957 1958 1959 1960 Loans Central Bank 6.1 9.9 9.1 12.4 1/ Others (mostly smelters) 0.1 6.2 0.1 10.0 7.3 16.4 14.6 27.0 Accounts Payable accounts 7.9 6.7 7.8 8.9 taxes 0.8 1.0 1.8 2.2 Socianl Sec ry 2.0 -1.233 Materials received 8.9 3.8 3.2 5.0 MerandiseA- re-na ceived 5.6 2.3 1.9 3.2 n1-hrsf 4. 7 n '7 -1A< Ii Ki 01. nT Accounts (3.0) (1.2) (0.5) -- Other Payables Dolivian Gov!t 67 8.3 113 15.0 2// Others 0.7 7.4 2.9 11.2 2.4 13.7 2.5 17.5 Current Liabilities 7.3 36.3 47.7 68. Pending (Net) 0,2 0.2 0.2 (0.7) Reserve for Severance Pay 9.0 8.0 8.9 9.9 Capital 32.5 32.0 33.2 41.7 1/ Accumulated Profit or Loss 11.4 7.0 (3.3) (4.3) 2/ Total Liabilities 90.4 83.5 86.7 92.7 Losses during year 0.2 6.5 10.3 12.6 (Continuation Table 20) Banco Central de Bolivia credits equivalent to 10.8 million dollars capitalized in accordance with Supreme Decree No. 5185 of April 18, 1960, and Supreme Decree No, 05701 of February 10, 1961. 2/ Accumulated losses at end of 1960 reduced by writing off export taxes due the Government equivalent to 11.6 million dollars in accordance with Supreme Decree No. 05729 of March 10, 1961. Note: Exchange rates used in converting to dollars: December 31, 1957: 8.540 Bolivianos per US$1.00 December 31, 1958: 11.905 " "i December 31, 1959: 11.865 " it December 31, 1960: 11.885 " " " Source: Comibol end of year balance sheets. TABLE 21 OMIBOL - CONSOLIDATED STATEMENTS OF PROFITS AND LOSS, 1957-60 (In millions of U.S. dollars) 1957 1958 1959 1960 Receipts: From concentrates sold and on hand (gross value) 57,8 43.7 42.7 41.8 Operating expenses: Labor 24.1 18.1 21.7 24.1 Materials 11.1 7.6 7.3 7.9 Various 1.2 2.9 3.5 3.3 Central Office 1.2 1.1 1.7 2.3 Loss on Machacamarca- Uncia Railroad 0.6 0.2 0.3 - 1/ Direct Onerating Costs 382 29o9 340. 37.6 Realization Costs 21.1 15.2 14.1 13.4 Loss on Oeationns no+ included in cost 0.6 59.9 0.1 6.2 0.1 48.7 0.1 1.l1 Operating Loss before Depreciation -2.9 -2.8 -2.8 -2.7 Operating Loss -5.0 -4.3 -8.8 -12.0 Cource: Comibol Balance Sheets Table 22 RETENTION PAYMENTS TO FORIER 0Y NERS OF NATIONALIZED INES,_ 95-1961 (In thousands of U.3. dollars) Year Patino Aramoyo Hochshield Total 1953 176 176 2;578 2930 1954 889 666 802 2,357 195 100 389 19018 2.908 1956 1,587 871 789 3,247 1957 1.889 290 847 2.975 1958 749 259 415 1,424 1959 798 165 294 1.206 1960 812 200 235 1,247 Total 8,io 2,966 6,978 18,294 1961 budget 1,465 Source: Mining Corporation of Bolivia, Table 23 DEVELOPHILENT CORPORATION OF BOLIVIA, 1961 BUDGET 1/ (In millions of Bolivianos) Receipts 2/ Expenditures 1. National Treasury 23,666 2/ 1. Administration 10,249 2. Counterpart funds 15,418 2. Civil Engineering 44,673 3. CBF, own operations 42,712 a. investments 40,588 a. air transportation 5.528 b. studies 4,085 b. water well drilling 1,118 3. Energy and fuels 29,746 c. Guabira 23,751 a. investments 24,768 d. National Cement Factory 6,380 b. studies 4,978 e. milk factory 3,80 4. Industry 53,431 f. tire recapping 1,200 a. exploitation 35,310 g. colonization camp sales 712 b. investments 17,340 h. oxygen plant 123 c. studies 781 i. livestock sales 120 5. Agronomy and higrations 31,181 4. Funds from other sources 87, 48 a. investments 28,905 b. studies 2,276 Total 169,.280 1 ,2( Lource: Development Corporation of Bolivia. 1/ The Development Corporation budget for 1961 is more properly a project document, in that it -shows the work which the Corporation would endeavor to undertake were there sufficient financing. Actual funds available for 1961 are substantially less than those indicated, and actual expenditures will take place only as non-inflationary sources of financing are found. 2/ Does not include $10 million IADB loan, part of which will be available in 1961 for CBF projects. 3/ In the national budget for 1961 an amount of Bs.12 billion is allocated to the Development Corporation. Table 2L4 ALLOCATION OF U.S. AID 1952-1960 AND BUDGET FOR FISCAL YEAR 1961/1962 (In millions of U.S. dollars) Total Calendar years Fiscal year 1952- 1952- ------- ------ 195 3 1954 1955 1956 1957 1958 1959 1960 ud et Technical assistance 20.8 3.6 2.0 1.8 2.3 3.3 3.2 2.9 1.7 1.9 Development expenditures 30.0 - 15.4 0.9 4.0 4.0 5.7 17.7 1/ Budget support 31.2 - - - 6.? 8.5 9.6 6.4 7.0 Frivate consumption 56.8 - 43.L 12.7 2.1 1.1 -2.2 +/- 0 Net accum-tulation of counterpart funds 10.6 - - - - 1.4 4.4 2.6 2.2 -0.5 Total 149.4 3.6 14.7 19.8 30.1 25._0 22.2 20.2 13.8 26.1 1/ Exclusive of econonic assistance to Comibol and YPFB, but including loans repayable in local currency from U.S. Development Loan Fund. Percentage distribution: 1954/1956 1957 1958 1959 1960 Budget 95 19,61/1962 Technical assistance and development 33.0 15.5 32.0 34.0 54.0 75.0 Budget support and consumption 67.0 79.0 48.0 53.0 30.0 27.0 Net counterpart accumulation - 5.5 20.0 13.0 16.0 - 2.0 Total 100,0 100.0 100.0 100.0 100.0 100.0 Source: U.S. Operation ilission in Bolivia. Tabe2 BALANC- 1960 1 (In millions of U.S. dollars) 1948 1952 1953 1954 1955 1956 1957 1958 1959 19601 A. Goods and services and private donations: Exports f.o,b..2/ 100.3 95.1 65.1 72.7 83.6 84.2 78.3 54.8 61.9 54.6 Irmorts f.o.b. -.72.2 - 97.3 - 71.4 - 71.6 - 77.6 - 79.2 - 84.5 - 74.1 - 62.4 - 67.3 Freight, insurance (net) 10.3 - 14.0 - 10.3 - 9.5 - 13.8 - 15.9 - 16.5 - 13.0 - 1.6 - 12.1 Investment, income (net) - 20.6 18.8 - 1.9 - 1.1 - 4.1 - 3.1 - 2.6 - 2.0 - 2.7) . Other services (net) - 13.7 - 1l.6 - 6.2 - 7.7 - 12.0 - 7.5 - 5.5 0.6 - 13.24/- 4.2 1rivate donation 0.3 - - - 1.7 1.3 0.3 0.2 0.2 - Total - 16.2 - .0 24.7 -17.2 - 22.2 -_20.2 31.7 -5 -2.4 -2.0 l. Economic aid and official long- term capital movements: U.S. Government aid - 1.0 2.6 14.7 19.5 30.1 25.0 22.2 20.2 13.8 U.S. Government loans - 3.6 1.0 1.7 - 0.1 - 0.3 0.1 - 0.4 - 0.1 - Suppliers' credits - - - - 12.8 12.2 - 7.4 - 2.4 - 2.5 - 3.0 Subscription to tin buffer stock - - - - - - 6.2 - 2.1 - 2.9 2.1 Loan for tin buffer stock and subsription - - - 6.2 - 0.6 - 2.6 - 2.9 indemnification to former mine owners - - -0.4 -2.4 -2.9 -3.2 - 3.0 -1.4 - L.2 - 1.2 Others 0.6 - 5.5 - 4.8 4.9 - 3.6 2.0 5.2 4.0 - 3.0 Total 0.6 -_j. -_16 .9.1 29.6 38.8 14.0 17.7 _1 1:L.1 C. Private capital movements: Long-term o.4 - 0.4 - 0.2 + 0.1 2.5 2.5 5.9 16.0 20.5 20.8 Short-term 1.9 0.5 - 6.2 - 1.1 2.3 1.1 4.2 - 1.3 0.4 0.6 Total 1. 0.1 - 6.4 - 1.0 4.8 _-36 _10.1 14.7 20.1 20.2 Table 2. 5 BAILLANCE OF PAYMENTS - 1948, _952 - 1960 (In millions of U.S3. dollars) Pa,-e 1948 1952 1953 1954 1955 1956 1957 1958 1959 1960 D. NeL errors and omissions: 14.7 - 2.7 13.1 6.6 - 15.9 - 43.9 11.2 1.1 - 18.7 - 'E. Total (A through_D): 0.6 - 12.5 - 19.6 - 2.5 - 3.7 - 21.7 4.6 - :2.2 2.5 - 5.1 F. Moetagr movements: Net IMF position - - 2.5 - 3.0 1.0 :2.0 - 0.7 - 1.3 Payments agreements (net) ) 9.7 12.3 - 10.6 0.5 12.7 - 1.1 - 3.1 2.5 5.0 Cther Central Bank foreign ) - 0.6 assets (increase -) ) 5.9 - 4.1 0.4 6.9 - 4.7 3.4 - 4.3 1.4 honetary gold (increase -) ) 2.8 - 1.1 17.2 3.8 - 0.9 0.2 0.1 - - Total - 0.6 I. 19.6 2. 5 3.7 21.7 - 4.6 2.2 - 2.5 5.1. Source: IMF Balance of Payments Yearbook. 1/ No sign indicates credit; minus sign indicates debit. 2/ Preliminary "/ Including non-monetary gold 4/ Including net losses (credit) of foreio-n enterprises and development and exploration expenses in foreign currency of foreign oil companies, Table 26 GROSS VALUE OF EXPORTS 1/ CLAS.-IFIED BY COMM0ODITY, 1948 AIID 1952-1960 (In millions of U,S. dollars) 1948 1952 1953 1954 1955 1956 1957 1958 1959 1960 Tin 30.2 84.8 72.9 54.9 57.3 59.2 57.4 36.3 52.9 59 Tungsten 2.9 14.2 13.7 14.2 15.7 14.5 6.4 1.2 1.3 1.5 lead 10.1 11.4 7.1 5.6 6.:3 7.6 8.4 5.9 4.9 4,8 Zi ne 2.8 13.2 5.6 4.7 5.7 5.0 5.4 3.2 0.9 l ,ilver 5.5 6.0 5.3 4.4 5.0 6.7 4.8 5.3 4.1 4.5 .ntimony 6.2 4.2 1.8 1.7 1.9 1.5 1.? 1.3 1.5 Copper 3.1 2.9 2.9 2.4 2.7 4.1 2.6 1.5 1.7 1.5 Other minerals 2/ 0.1 1.1 1.3 8.3 3.2 1.5 1.8 1.0 1.8 2.2 Sub-total exports llM 137.8 l1).6 96.2 97.8 100.2 88.5 _55.7 69.1 _2...2 Petroleum (crude - refined) _n.a. n.a. n.a. _i._a. 2.3 2.9 4.6 5.1 3.1 _L aill cther products _n.a. n.a. n.a. n.a. 23 3.5 4.6 3.9, 5.5 Total exports 112.8 141. 112.7 9. 02.4 106.6 9. 64.7 ?? 67.8 jource: Central Bank of Bolivia, Annual Report, 1959. / Exports on c.i.f. basis, but exclude contraband exports. 2/ Including gold. n.a. Not available. Table 2Z GROSS VALUE OF IMFORTS 1/ CLR'iSIFIED BY CATEGORIES, 1948 AND 1952-1960 (In millions of U.S. dollars) 1948 1952 1953 1954 1955 1956 1957 1958 1959 19(0 Foods and beverages 18.4 24.4 22.6 21.6 20.3 16.5 26.6 15.3 16.0 Live animals 2.9 3.4 3.1 1.5 4.4 5.1 0.9 0.2 - Raw materials 9.1 10.8 10.0 9.8 9.3 7.2 5.7 4.7 5.0 ±ianufactures 38.3 54.0 32.3 32.6 48.4 55.3 59.0 59.4 44.0 Total imports 68.7 92.6 68.0 6 . 82.4 84.1 92.2 79.6 6 68.4 cource: Banco Central de Bolivia, .1emoria Anual, 1959. 1/ Imports on a c,.i.f. basis, but exclude contraband imports estimated at 5 up to 1959 and at 10% in 1960. Furthermore, estimated imports from Argentina and Brazil for railway construction are excluded. Table 28 PRICE ANýD VOLUEE 'INDICES OF EXPORTS, 1948 AND 1952-1960 (1953 = 100) 1948 1952 1953 1954 91956 1957 :958 1959 1960 Price index Total 92 124 100 99 98 105 94 87 92 93 Tin 103 12? 100 100 98 106 99 98 106 106 Tungsten 32 107 100 B9 81 84 41 15 15 19 Leadi 1133 123 100 104 111 118 10o9 88 76 76 Zinc: 57 159 100 100 116 127 119 98 109 124 Silver 42 99 100 100 99 105 106 102 106 100 Volume index Total 102 99 100 87 89 86 87 58 67 58 Tin 107 92 100 83 80 77 80 57 69 56 Tungsten 65 97 100 116 141 125 114 58 63 56 LeadL 108 126 100 77 80 91 110 96 93 90 Zine 88 149 100 85 89 71 82 59 14 17 Silver 124 116 100 83 97 124 87 99 73 80 Source: International Financial Statistics. Table 29 PRIGES OF iAIN EXPORT CI0MO1DITIES IN i4JOR MARITTS, 1948, 1952-1961 (U.S. dollars per 100 lbs.'/) 1961 1948 1952 1954 1956 1958 1960 1595Jan. H~ar. Dlay- T IN United States 99.2 120.4 92,.1 101.0 95.0 101.3 100.4 103.9 110,8 United llingdom 99.2 120.6 89,.9 98.5 91.9 99.6 98.0 101.8 - COPPER United States (dcmestic) 22.32 24.50 29.96 41.83 26.25 32.50 29.0 29.0 30.50 United Kingdom 24.12 32.68 31.34 40.52 24.68 30.63 27.47 27.97 31.00 T EAD United States 18.04 16.52 14,10 16.00 12.20 11.92 11.00 11.00 11.00 United Kingdom 17.18 16.76 12.10 14.57 9.12 8.95 8.03 8.12 8.14 ZINC Uni-ced States 14.20 17.11 11.,22 14.00 10.80 13.46 12.00 12.00 12.00 United Lingdom 14.40 18.52 9,82 12.24 8.32 11.09 9.95 10.30 10.27 Source: International Financial StatiStics, Jne 1-957 and July 1961. 1/ Unit values of the period or averages of monthly quotations during the period. PRCE-r v~r-nm'r.r.fm OF.nrn EXrUTS iRIC' tipr LILA-uz 1948 and 1952 - 1960 1953 = 100 1948 1952 1953 1954 1955 1956 1957 1958 1959 1960 Price of exports 92 124 100 99 98 105 94 87 92 93 Price of imports 1/ 102 102 100 99 100 103 106 105 104 Io4 Terms of trade 90 122 100 100 98 102 89 83 88 89 Sn/ivp rie o Tn+ir onts Finanoil Steatistics e 1/Prices of imports for all of Lntin America. Table 31 GOLD ÄND EXCiHAGE RESERVES OF BOLIVIAN BANIKING SYSTEM AT THE END OF EACH YAR, 19o-l960 (In rillions of U.S. dollars) A- 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 96 Gold 24.0 24.0 22.0 23.3 6.1 1.3 2.2 1.4 1.4 1.2 1.2 -l.2 Convertible currencies 11.7 18.9 10.7 7.3 12.5 11.7 4.6 7.8 2.2 6.2 6.8 .7 cor-corvertible currencies - 0.4 0.5 0.1 0.4 0.7 - 0.3 4.3 6.0 0.6 0ý2 Total .43.3 :33.2 30.7 -9.0 7 6.8 9.5 7. 13.4 86 _2. Net IMF position - - 2.5 - - - -3.0 -4.0 -6.c) -5.2 -3.9 -2.9 Source: iPiF.