-Korean government pledges full support for the economic development process of Bolivia in the years to come
Since former Bolivia Amb. Guadalupe Palomeque de Taboada was promoted to a
higher position, that is, to Vice Minister of the Bolivia Ministry of Foreign Affairs last
January this year, current Charge d'Affaires Luis Pablo Ossio Bustillos & Mrs. Maria
Jose Zapata Aliaga from the Embassy of Bolivia hosted a reception to mark its
192nd Anniversary of Bolivia Independence in the Plaza Hotel Seoul on Aug. 4th evening.
While Director-General Hur Tae-wan from the MOFA (Ministry of Foreign Affairs) who was on hand on behalf of the
Korean government, pledged full support for the economic development process
of Bolivia in the years to come, envoys from Latin American region were conspicuous
among participants, including Nicargua Amb. Edgardo Cuarezma Garcia, Ecuador
Amb. Oscar Gustavo Herrera Gilbert, El Salvador Amb. Milton Alcides Magana
Herrera, Brazil Amb. Luis Fernando de Andrade Serra, Argentina Amb. Jorge Roballo etc.
First off thanks to broadcasting of Korean broadcasting stations about Bolivia's
attractive landscapes including Uyuni Salt Desert and Lake Titicaca. 13,000 Korean
tourists visited Bolivia last year, allowing the two countries to make even more
closer, Bustillos began his welcome remarks during the opening ceremony of the
reception.
Praising the efforts of former Bolivia Amb. de Taboada who has devoted on
people-to-people diplomacy, the Charge d'Affaires in particular said: "The government of
President Evo Morales, who has an indigenous background, has given our country
its greatest stability. With more than a decade of service to our people, the poverty
rate in our country has been reduced by more than twofold".
Regarding Korean companies' investment into Bolivia, Bustillos introduced that
Samsung Engineering built a petrochemical fertilizer plant producing urea and
ammonia in Cochabamba; Hyundai Development constructed the Banegas Bridge,
the longest of its kind in the world at 1,440 meters, in the eastern part; and LG
International and Posco Daewoo are considering investing in Bolivia’s lithium, gas and other mineral and natural resources. Moreover, the Korea Land
and Housing Corp. is undertaking residential construction projects in Santa Cruz,
while the Korea International Cooperation Agency has provided technical services
and run knowledge-sharing programs, according to the Charge d'Affaires. a.i.
From the perspective of its natural resources development, Bolivia is well endowed
with natural resources. Among the country’s most valuable assets are its mineral deposits, hydrocarbons (petroleum and
natural gas), and its renewable natural resources, such as agricultural and forest
products, especially soybeans and Brazil nuts.
Nevertheless, Bolivia continues to receive considerable foreign technical assistance
and long-term loans from international organizations, including the World Bank and the Inter-American Development Bank, as well as from numerous creditor nations. Its
governments have been able to shift their priorities from administering deficit-run—and often corrupt—state-owned companies to improving the country’s dire health and educational services and transportation infrastructure.
Important boosts to the economy also accompanied rapid development of
agriculture and extraction industries in the Santa Cruz region, the growth of natural
gas and oil exploration in the surrounding areas of Tarija, Chuquisaca, Santa Cruz,
and Cochabamba, the modernization of the telecommunications industry, and
new investments in electric power generation and water services.
In consideration of the fact that Bolivia is a resource rich country with strong
growth attributed to captive markets for natural gas exports – to Brazil and
Argentina, Korean companies will have to concentrate on such areas in terms of
their investment direction in Bolivia, according to observers. However, the country
remains one of the least developed countries in Latin America because of state-oriented policies that deter investment and growth.
To summarize up Bolivia Economy overview in a glance, following a disastrous
economic crisis during the early 1980s, reforms spurred private investment,
stimulated economic growth, and cut poverty rates in the 1990s. The period 2003-05 was characterized by political instability, racial tensions, and violent protests
against plans - subsequently abandoned - to export Bolivia's newly discovered
natural gas reserves to large Northern Hemisphere markets.
In 2005, the government passed a controversial hydrocarbons law that imposed
significantly higher royalties and required foreign firms then operating under risk-sharing contracts to surrender all production to the state energy company in
exchange for a predetermined service fee. High commodity prices between 2010
and 2014 sustained rapid growth and large trade surpluses with GDP growing 6.8%
in 2013 and 5.4% in 2014. The global decline in oil prices that began in late 2014
exerted downward pressure on the price Bolivia receives for exported gas and
resulted in lower GDP growth rates - 4.9% in 2015 and 4.3% in 2016 - and losses
in government revenue as well as fiscal and trade deficits.
A lack of foreign investment in the key sectors of mining and hydrocarbons, along
with conflict among social groups, pose challenges for the Bolivian economy. In
2015, President Evo MORALES expanded efforts to court international investment
and boost Bolivia’s energy production capacity. MORALES passed an investment law and promised
not to nationalize additional industries in an effort to improve the investment climate.
In early 2016, the Government of Bolivia approved the 2016-2020 National Economic and Social Development Plan aimed at maintaining growth
of 5% and reducing poverty.