International economic crisis being felt in Bolivia

With exports down 33 percent year on year in January, Bolivia has begun to feel the impact of the international economic crisis. There are fears about the effect on the balance of trade.

Carlos Ortega

A natural gas plant in Bolivia. Exports of natural gas – Bolivia's most important raw material – have fallen by 32 percent since 2008.

Men search for gold in a Bolivian mine. Bolivia's mineral exports have fallen by 26 percent so far this year compared to 2008.

LA PAZ, Bolivia – Bolivia’s National Statistics Institute (INE) reported that year-on-year exports fell by 33 percent in January as the effects of the global economic crisis began to be felt.

La Opinión reported that, according to the INE, Bolivian exports totalled US$345.84 million in January, compared to US$515.48 million in the same month last year – a fall of US$169.64 million.

The greatest falls were reported in manufacturing (46%), hydrocarbons (32%), and minerals (26%). On the other hand, exports of agricultural and forest products, game, and fish were 41.7 percent higher than a year ago.

Exports of natural gas, the most important raw material after minerals, fell by 32 percent from US$260 million in January 2008 to US$177 million in January this year.

Los Tiempos published figures that show how the crisis has begun to make itself felt in the country: “In January this year, sales of natural gas to Brazil and Argentina totalled US$141.86 million and US$35.43 million respectively. Volumes sold to Brazil fell to below 20 million cubic metres per day (CMD) as heavy rains allowed it to switch to hydroelectric power, while Argentina received on average 4 million CMD”.

The fall in natural gas exports, however, is an international trend, which is not limited to Brazil and Argentina. Gas exports in January 2008 were 77.2 percent higher than a year earlier, when they totalled US$148 million. Sales of natural gas to Brazil totalled US$213 million and those to Argentina US$24 million.

El Nuevo Día reported the concern expressed by the Bolivian Foreign Trade Institute (IBCE) at the INE’s figures. The IBCE’s general manager, Gary Rodriguez, said that the country was beginning to feel the impact of the global crisis and explained that “the value of exports will fall because prices and volume will be reduced by the recession; protectionism will increase around the world; and the fact that [our currency] is tied to the dollar makes Bolivian goods less competitive”.

Rodriguez added that the situation is even more worrying because imports are rising as exports fall and this will lead to a balance of payments deficit.