Gross Domestic Product (GDP): US$4.35 billion in 1987, or roughly US$640 per capita. After growing unprecedented 5.5 percent per year in 1970s, economy ravaged by recessionary and hyperinflationary spiral peaking in 1985. Economy grew 2 to 3 percent per year in second half of 1980s. Unemployment averaged under 6 percent during 1970s but reached more than 20 percent by 1987.
Agriculture: Second most agricultural country in South America, with 60 percent of farmers in highlands and 20 percent in relatively fertile valleys. Accounted for 23 percent of GDP in 1987. Employed about half (46 percent) of official labor force estimated at 1.6 million in 1986. Accounted for only 15 percent of total exports in late 1980s. Farming technology primitive. Underground economy--based on contraband, coca production, and other commercial trading in informal sector--employed two-thirds of Bolivia's workers.
Industry: Employed 20 percent of work force in late 1980s. Silver and tin traditionally dominant mining industries, but mining sector declined after tin market collapse in 1985. In 1987 mining sector accounted for only 4 percent of GDP, 36 percent of exports, 2.5 percent of government revenues, and 2 percent of labor force. Coca/cocaine industry rivaled total legal exports but fueled inflation. Manufacturing sector played minor role (10 percent of GDP in 1987) in economy and consisted mainly of agriculture, hydrocarbons, and mining. Construction slowed in late 1980s to 3 percent of GDP.
Energy: Hydrocarbons, particularly natural gas, leading export and constituted critically important sector of economy in late 1980s. Substantial hydroelectric potential. Relatively low level of domestic energy consumption, destined for residential or commercial use (46 percent), followed by transportation (31 percent), industry (20 percent), and mining (3 percent).
Services: Employed 34 percent of work force in late 1980s. Sector included banking and other financial services, transportation, communications, and tourism. Despite small numbers and shaky financial status, commercial banks remained core of private financial sector in 1988, with US$357 million in assets.
Exchange Rate: Boliviano replaced Bolivian peso as official currency January 1, 1987. After floating against United States dollar, boliviano stabilized at B2.3=US$1 by 1988; difference between official and black-market rates did not exceed 1 percent.
Imports: Officially, over US$777 million in 1987; unofficially, over US$1 billion, taking into account contraband imports. Most imports from Brazil in 1980s. In 1987 nearly 42 percent of total imports capital goods; 40 percent, raw materials and intermediate goods; 16 percent, consumer goods.
Exports: Official exports in 1987 totaled US$569 million, lowest level of 1980s, a period of declining terms of trade. Export competitiveness increased after 1985, when all export taxes were abolished and floating exchange rate was adopted. Coca-related exports often equaled or exceeded legal exports in 1980s, generating from US$600 million to US$1 billion annually, although estimated 1988 cocaine revenues fell below US$300 million. Hydrocarbons became leading export in 1980s, accounting for 11 percent of GDP and over 50 percent of government revenues in 1985. Natural gas replaced tin and other minerals as leading export, growing from 21 to 44 percent of exports in 1980-87; most went to Argentina and Brazil. Tin declined to just over 12 percent by 1987. Timber exports, mainly to Brazil, surpassed all other legal agricultural exports in 1987 and totaled US$31 million.
Balance of Payments: Experienced persistent deficits during 1980s, averaging 10 percent of GDP in first half of 1980s. Public sector deficit dropped from 28 percent of GDP in 1984 to 3.8 percent in 1986. Total external debt of US$4.6 billion in 1986 slightly exceeded GDP. Deficit in 1987 nearly US$500 million (10.5 percent of GDP), when public sector expenditures equaled about 30 percent of GDP. Deficits fell to 6 percent in 1988. Gross reserves at end of 1988 totaled nearly US$405 million and net reserves about US$181 million. Gold reserves totaled US$300 million.
Fiscal Year: Calendar year.
Fiscal Policy: President Víctor Paz Estenssoro's New Economic Policy (Nueva Política Económica--NPE), imposed in 1985, eliminated hyperinflation and reduced inflation to near zero, rising to 15 percent per year in late 1980s. Drastic NPE reforms froze spending by all state-owned enterprises, eliminated subsidies, lifted price controls, lowered import tariffs by introducing unified 20 percent duty, raised oil prices, undertook aggressive tax collection, radically restructured largest and most costly state-owned mining and oil-drilling companies, and dismantled Bolivian Development Corporation..
Data as of December 1989