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U.S. Department of State 
Bolivia Country Commercial Guide 
Office of the Coordinator for Business Affairs 
 
 
                                 BOLIVIA
                        COUNTRY COMMERCIAL GUIDE
                                FY-1995


 
CHAPTER I.  EXECUTIVE SUMMARY - 
 
Bolivia is the poorest country in South America.  Nonetheless, it is 
firmly committed to a free market economic system, and has had positive 
economic growth eight years running.  The market-oriented reforms 
initiated in 1985 have been institutionalized and advanced.  With a low 
level of industrialization, Bolivia is reliant upon imports, especially 
capital and consumer goods, to meet its citizens' needs.  The U.S. is 
Bolivia's largest single trading partner; in 1994 Bolivia had a slight 
trade surplus with the U.S.: imports from Bolivia were $260 million 
while exports to Bolivia reached $186 million, according to U.S. Dept. 
of Commerce statistics. 
 
The economic growth rate for 1994 was 4.1 percent.  Bolivia's 1994 
inflation rate was 8.3 percent, one of the lowest in the region. 
 
Best prospects for investment for U.S. companies are in the mining, 
petroleum, and agriculture sectors.  In addition, the Government of 
Bolivia (GOB)is in the process of selling off 50 percent of its six 
largest public corporations (electric power, telecommunications, 
hydrocarbons, airline, railroad, and smelter).  As all of the six 
companies to be partially sold (in a process called "capitalization" by 
the Bolivians) are moderately to seriously undercapitalized, a large 
amount of investment should be the result of the capitalization process.  
Capitalization, which is the centerpiece of to President Sanchez de 
Lozada's economic reform plan, differs from traditional privatization in 
that money paid by the new partner(s) goes not to the national treasury 
but into the company as direct investment.  These new investments should 
offer significant possibilities for U.S. companies to sell products and 
services.  
 
After some delays, the capitalization process entered its final phase in 
June when the three generating units of the electric power company, 
ENDE, were sold to three U.S. companies.  Their combined bids were USD 
140 million, USD 40 million over book value.    
 
Bolivia has an investment law which guarantees national treatment and 
free convertibility of currency.  However, potential investors should be 
aware that the criminal and civil justice system is rife with 
corruption.   
 
Country commercial guides are available on the National Trade Data Bank 
on CD-ROM or through the INTERNET.  Please contact STAT-USA at 1-800-
STAT-USA for more information.  To locate country commercial guides via 
the INTERNET, please use the following World Wide Web address: www.stat-
usa.gov.  CCGs can also be ordered in hard copy or on diskette from the 
National Technical Information Service (NTIS) at 1-800-553-NTIS.   
 
CHAPTER II.  ECONOMIC TRENDS AND OUTLOOK 
 
Major Trends and Outlook: 
 
Bolivia has had eight years of moderate economic growth through 1994, 
and this trend should continue, with 1995 growth around 4 percent 
through the first trimester.  Inflation was 8.3 percent in 1994; 
inflation has risen to an annualized rate of just above 10 percent 
through the first five months of 1995 but should finish in single digits 
for the year.  Reserves are roughly equivalent to five months of 
imports, about where they were in 1994.  Banking deposits are around 
$2.3 billion as of 6/30/95, a shade under 1994 levels but not too 
unhealthy considering two banks failed in late 1994.  Two of Bolivia's 
largest commercial banks acquired foreign partners/ownership in June 
1995; this is in general a positive trend, adding new capital to a 
relatively fragile system. 
 
The imminent capitalization (a form of privatization in which the 
government sells off only 50 percent of companies, instead of an 
outright sale) of the Bolivian Government's six largest companies should 
give a boost to economic growth.  Three and perhaps four of the six 
companies will most likely be sold by the end of 1995, with the largest, 
the oil company YPFB, to be sold by early/mid-1996 (the GOB says by the 
end of 1995 but we don't see how that can happen; they have missed 
nearly all deadlines for the last two years).  The GOB hopes to attract 
between $1-2 billion in new direct investment into the key sectors of 
transportation (airline, railroad), energy (electric power, 
hydrocarbons), mining (smelter with mining concessions bundled in) and 
communications (phone company).   
 
If successful, capitalization should bring internationally-skilled 
management and modern technology to the companies being sold.  As all 
suffer from a lack of capital, well-placed investment could pay 
attractive dividends in the mid- to long-term.  As the new managers move 
in, however, the workforce may shrink initially, as most payrolls of the 
public corporations are bloated.  The GOB also hopes corruption will be 
lessened as a by-product of capitalization, as large numbers of jobs and 
amounts of money move out of public control.   
 
The government plans to use the money which in the past went to the 
companies to be capitalized towards increased social investment in 
education, public health, and roads.  These sectors should therefore be 
more attractive in the coming years to U.S. providers of goods and 
services.   
 
The administration of President Gonzalo Sanchez de Lozada is committed 
to keeping inflation low.  In 1993 and 1994 the rate of inflation was 
below 10 percent, and, while the rate has slipped above 10 percent for 
the last 12 months as of May 1995, in all likelihood the 1995 rate will 
also be in single digits, although not falling to the government's goal 
of 6.5 percent.  The GOB is attempting to improve tax collection methods 
and has modified its tax structure to increase revenues.  It is also 
trying to clamp down on tax cheats and, to a lesser extent, on parts of 
the extensive informal economy.   
 
The outlook for Bolivia's economy remains positive for the next two 
years, until the end of the present administration.  While the elections 
of 1997 should bring some uncertainty as to who economic policy makers 
would be in a new administration, nearly all of Bolivia's political 
parties are now dedicated to free market principles, and there should be 
no large-scale changes.  At the same time, Bolivia's endemic poverty and 
public indebtedness--the GOB has around $4.2 billion worth of bilateral 
and multilateral debt--will not go away or be reduced in any measurable 
way.  Bolivia will remain heavily dependent upon the kindness of 
strangers--World Bank, IMF, InterAmerican Development Bank, friendly 
donor nations--to balance its books. 
 
Principal Growth Sectors:   
 
The two major sectors of the Bolivian economy, mining and agriculture, 
should see significant growth in 1995, for different reasons.  The 
mining sector is seriously undercapitalized.  Even so, mining should see 
an upturn not because of much new investment (although it has attracted 
several multinational companies who are actively prospecting), but 
rather because international prices have been steadily rising through 
the first half of 1995, with the trend expected to continue through the 
end of the year.  As the mining sector accounts for roughly half of the 
country's export earnings, price increases will help boost the country's 
trade balance.  On the other hand, the agricultural sector is growing 
dynamically, as increased hectarage in the soil-rich Santa Cruz 
department is being moved into soybean production.  Bolivia exports soy 
products to its Andean Pact neighbors and has been expanding its 
production for the last several years.  This trend should continue; 
Brazilian producers have been buying more land to bring it into 
production; Bolivian investors are also increasing their land holdings.   
 
The hydrocarbons sector is also important.  U.S. and foreign oil 
companies continue to look for oil and gas throughout the country.  A 
proposed gas pipeline to Brazil, while still in the planning stages, is 
increasingly looking like a reality, as U.S. and international companies 
have entered into partnership with both YPFB and Petrobras, the 
Brazilian state-owned oil company, to help bring the project to 
fruition.  Construction of the pipeline should begin in 1996 or 1997.  
Once online, the pipeline will bring substantial export earnings to 
Bolivia.  The construction of the pipeline on the Bolivian side will 
cost an estimated $500 million, and will have a significant impact on 
the regional economy of Santa Cruz department.  
 
Government Role in the Economy: 
 
Total governmental spending accounts for around 40 percent of GDP (1994 
GDP of around $7 billion).  As mentioned above, the GOB hopes to 
significantly reduce its presence as an economic player by selling off 
its six largest companies under the process of capitalization.  It also 
plans to privatize some 70-75 smaller companies, the most significant of 
which are regional dairies, hotels, and spinning mills.  The GOB sees 
its new role as primarily one of exercising a role as a supervisor and 
overseer of economic activity, leaving actual production concerns to the 
private sector.  It wants to increase its public investment in 
education, health and infrastructure.   
 
In 1994 the GOB began the process of popular participation, whereby for 
the first time it gives money from the central government directly to 
the city governments of some 300-plus communities throughout Bolivia.  
This means that some areas which have never received money from the 
central government now have control over money to go towards maintaining 
and building infrastructure--roads, schools, health units, etc.--where 
they live.  While not having much of an economic impact in macro terms, 
the significance in social terms of giving control to regions cannot be 
overemphasized. 
 
Public investment will not significantly increase in 1995, primarily due 
to the capitalization process.  Estimated planned public investment will 
be around $550 million; actual amounts will be less as not all money 
will make it out of the pipeline by the end of the year.  The Central 
Bank of Bolivia estimates that actual public investment in 1994 was $499 
million dollars, while estimates of private investment were around $128 
million (The government dropped the requirement for investment permits 
in 1985 so there are no reliable figures on private investment).   
 
Balance of Payments Situation: 
 
In 1994 Bolivia's trade deficit, which had grown sharply the previous 
three years, shrunk significantly, to $224 million from a 1993 deficit 
of $496 million.  Of the 1994 merchandise exports of $985 million, 
minerals accounted for $413 million, natural gas (to Argentina) $92 
million, and non-traditional exports $521 million.  Imports were $1.209 
billion in 1994, up slightly from 1993 figures.  Consumer goods 
accounted for $281 million, intermediate goods $488 million, and capital 
goods $424 million.  Capital goods imports accounted for only 35 percent 
of total imports in 1994; they had been 43 percent of total imports in 
1993.  Unregistered imports in the form of contraband probably accounted 
for several hundreds of millions of dollars, as did unregistered exports 
in the form of consumer goods, gold, and cocaine.   
 
Bolivia's current account deficit in 1994 reached $133 million, offset 
by a positive capital account of $389 million and "extraordinary 
financing" of $133 million (i.e., rescheduled debt payments).  Net 
international reserves increased to $502 million at the end of 1994, up 
from $371 million at the end of 1993.  Errors and omissions in the 
balance of payments published by the Central Bank were a negative $306 
million. 
 
The positive balance in the capital account came from $128 million in 
direct investment and $360 million in external loan disbursements.  The 
World Bank ($79 million), IDB ($136 million) and CAF ($72 million) 
accounted for the majority of disbursements.  The government paid $139 
million on principal and $137 million in 1994 to service its debt.  Thus 
its net inflow was only $84 million.  Bolivia also received $267 million 
in the form of assistance on a grant basis, as "unilateral transfers" 
calculated by the Central Bank.   
 
Bolivia renegotiated some of its debt payments through the Paris Club of 
bilateral lenders in 1994.  Total official debt of the GOB at the end of 
1994, according to the Central Bank, was $4.18 billion, with $1.8 
billion owed to other governments and the rest to multilateral 
development banks. 
 
Infrastructure Situation: 
 
Bolivia approaches the 21st century without a paved road to any 
neighboring countries, but by early 1996 a road to its main port of 
Arica in northern Chile should be paved, greatly improving its 
export/import capacity while reducing transport costs and time.  There 
are other road projects in development or under construction to go to 
the Peruvian border south of Lake Titicaca and from La Paz to the Amazon 
Basin.  Facilities dedicated to public education and public health are 
also limited. 
 
The national phone company, ENTEL, which should be jointly owned by an 
international communications company by September/October 1995, has 
fairly modern digital switching equipment for calls between cities and 
for connections to satellites.  Local calls within cities are handled by 
independent cooperatives which will have a monopoly on this service for 
six years, until 2001 (the new co-owner of ENTEL will also have a six 
year monopoly on long-distance service).  The cooperatives have not kept 
up with modern technology; their installations costs are high and 
service is poor.  Cellular phones are becoming increasingly popular with 
businesspeople and government officials.  One private company offers 
cellular phone service in Bolivia's largest cities and continues to 
expand service areas.  With the capitalization of ENTEL in the fall of 
1995, the new owner/manager of ENTEL will most likely use ENTEL's B band 
to offer cellular service. 
 
ENFE, the national railroad, is also to be capitalized in late 1995. It 
has suffered from years of underinvestment.  Its hauling capacity is 
also limited by Bolivia's mountains and by its narrow gauge track (built 
by the British at the turn of the century).  The rail system consists of 
two independent lines separated by the eastern range of the Andes.  The 
western line connects the cities of La Paz, Cochabamba and Oruro with 
northern Argentina and the Chilean ports of Arica and Antofagasta.  The 
eastern line connects the city of Santa Cruz with western Brazil and 
northern Argentina.  Rolling stock is transferred from one system to the 
other at a connection in northern Argentina. 
 
There are two air carriers, American Airlines and the government-owned 
Lloyd Air Boliviano (LAB), which offer daily service to Miami.  LAB is 
one of the companies to be capitalized in the fall of 1995.  A U.S. 
cargo company flies to and from Bolivia twice weekly.  Regional airlines 
as well as LAB offer flights to neighboring countries, most on a daily 
basis.  A private airline, Aerosur, competes with LAB on national 
flights.  
 
--CHAPTER  III.  THE BOLIVIAN POLITICAL ENVIRONMENT- 
 
Nature of political relationship with the U.S.: 
 
The United States remains Bolivia's largest provider of foreign 
assistance, its major trading partner, and its largest foreign investor.  
The U.S. has considerable influence at nearly all levels of Bolivian 
politics, society, and culture, despite Bolivia's past reputation as a 
hotbed of anti-American leftism. 
 
U.S.-Bolivian relations have been good for several years.  Both 
countries demonstrate a strong commitment to fostering and strengthening 
democracy, combatting terrorism, fomenting sustainable economic growth 
and development with a strong emphasis on addressing social problems, 
and fighting the threat posed by drug trafficking.  President Sanchez de 
Lozada, Vice President Cardenas, Foreign Minister Aranibar and other 
cabinet officials have visited the U.S. on several occasions; Vice 
President Gore reciprocated with a brief visit to Bolivia in March 1994. 
 
More recently U.S.-Bolivian relations weathered a particularly difficult 
stretch following the March 1, 1995 threat to decertify Bolivia as a 
fully cooperating country in the area of counternarcotics policy.  A re-
invigorated coca eradication campaign produced noteworthy results and 
the GOB avoided full decertification.  Equally important, a new 
bilateral extradition treaty was signed in June, 1995.  Nevertheless, 
counternarcotics issues remain a controversial feature of bilateral 
relations as the GOB'S ability to sustain the counternarcotics effort is 
uncertain. 
 
Under the direction of President Sanchez de Lozada and Foreign Minister 
Antonio Aranibar, Bolivia pursues a forward-looking foreign policy, 
seeking to expand markets in East Asia and Europe and to promote western 
hemisphere free trade.  Indeed, Sanchez de Lozada was instrumental in 
developing the goal of hemispheric free trade by the year 2005 during 
the Miami Summit of the Americas. 
 
Some Pending Issues in U.S.-Bolivian Relations: 
 
Bolivia must sustain the current coca eradication effort throughout 1995 
or once again risk decertification for not fully complying with 
counternarcotics treaty obligations. 
 
While Goni hopes to get away from foreign aid, Bolivia needs aid for 
years to come, at a time of plummeting assistance levels in the U.S. and 
elsewhere, in order to address balance-of-payments and social problems.  
Goni hopes for more multilateral assistance, especially from 
international financial institutions for initiatives such as alternative 
development projects.  He also has asked for (and received) U.S. 
guidance and assistance on charting a workable sustainable development 
strategy. 
 
Bolivia needs to become more attractive to foreign investors; e.g., by 
reforming the judicial system, approving a bilateral investment treaty, 
eliminating bureaucratic impediments, downsizing and modernizing 
Bolivia's parastatal corporations (which Goni hopes will be partially 
bought off by investors: his "capitalization" plan), and tackling the 
recalcitrant labor unions. 
 
Bolivia has begun its own "good governance" initiative, crucial to 
attracting investment and improving Bolivia's image, but the road ahead 
will not be smooth.  The Goni administration first reformed the 
Executive Branch, then tackled Supreme Court corruption in the form of 
an unprecedented impeachment case against two justices.  The 
administration is now working on a corruption case linking high-level 
members of the MIR party and the previous administration to drug 
traffickers. 
 
Bolivia remains the world's second-largest producer of cocaine, much of 
it for the illicit U.S. drug market, and the world's second largest 
grower of coca, most for the illicit drug trade.  U.S.-Bolivian law 
enforcement cooperation must, therefore, continue, including ending 
illegal coca cultivation and improving legal/judicial cooperation in 
areas such as extradition.  The signing of a new extradition treaty in 
June '95 marks an important step forward in this regard. 
 
From the U.S. Government perspective, the overarching, interrelated 
policy goals in Bolivia shared by the current and former governments of 
Bolivia, are the "three D's":  nurturing the democratic process, 
encouraging economic development and stability and eliminating the 
illegal drug (coca/cocaine) industry and drug trafficking. 
 
Major Political Issues affecting business climate: 
 
The election of Gonzalo Sanchez de Lozada as president in 1993 not only 
marked the fourth successive peaceful transfer of power but clearly 
demonstrated the growing maturation of Bolivian democracy.  By all 
accounts the 1993 elections were generally open and honest.  Once known 
for political instability and a dizzying string of military coups, 
Bolivia is among South America's leaders in building democratic 
political institutions and in the opening of its economy.  This 
political stability has no doubt helped the economy recover over the 
last 10 years, and is one reason foreign investors have come.  Still, 
the government must continue to fight corruption at all levels of 
government, the judicial system needs to be updated and streamlined, and 
the legislature must pass laws that create clear rules of the game for 
business. 
 
Synopsis of political system, schedule for elections, and orientation of 
major political parties: 
 
Bolivia's plurinominal electoral system encourages multiple parties, and 
greatly limits the ability of any one party to gain a clear majority.  
Consequently, coalition governments, with little room to maneuver, are 
the rule.  Parties retain total control in nominating candidates for 
congressional office.  However, recent changes to the constitution will 
allow the direct election of deputies in fifty percent of the 
congressional districts in 1997.  This change reflects President Sanchez 
de Lozada's desire to make government more responsive to the average 
citizen. 
 
Sanchez de Lozada's MNR party won an impressive 34% of the vote in a 
crowded field of 14 candidates in the presidential elections.  The MNR 
also won a majority in the Senate and a plurality in the Chamber of 
Deputies.  With support from the centrist UCS, leftist MBL, indigenous 
MRTKL party (of Vice President Victor Hugo Cardenas) and two minor 
parties, Sanchez de Lozada and his centrist MNR party have cobbled 
together a tempestuous but workable coalition.  Temperamental UCS leader 
Max Fernandez withdrew his support from October '94 until June '95. 
 
Political trends  
 
President Sanchez de Lozada interpreted his 1993 election victory as a 
loud call for change and embarked on an ambitious legislative program 
promoting capitalization (privatization), and electoral and education 
reform.  Unfortunately, the government's implementation of these 
legislative successes has been slow, resulting in growing 
disenchantment.  Voter frustration over the government's 
ineffectiveness, as well as over continued high levels of poverty, will 
likely be an important factor in the '97 general election. 
 
Challenges and changes 
 
The major challenge confronting President Sanchez de Lozada as he 
approaches his administration's half-way mark will be to fully implement 
the legislative change passed in 1994 - capitalization, educational 
reform and popular participation.  Each of these three areas remains 
highly controversial, and tackling any one of them would be difficult.  
To fully succeed, Sanchez de Lozada will have to overcome his natural 
reluctance to use his congressional majority and forcefully push through 
his program.  To his credit, his majority did use its pull in early July 
1995 to pass the Telecommunications Law, an important step in the 
capitalization process. 
 
This will be complicated by the fact that the government coalition, 
which commands only a slight majority in the lower house, is shaky.  
After eight months in the opposition, brewery owner and UCS leader Max 
Fernandez led his 21 UCS deputies back into the government in June, but 
he remains an unreliable partner.  Meanwhile, the leftist MBL, never a 
entirely comfortable fit, is increasingly restive and will try to water 
down if not thwart key aspects of the GOB'S counternarcotic and 
political reform policies. 
 
Outline of political system 
 
Three branches of government: 
 
EXECUTIVE:  Eleven-member cabinet, most recently shuffled in March 1994.  
President elected to five-year term (starting in 1997), but cannot serve 
consecutive terms.  If no candidate wins an absolute majority of the 
popular vote, a president is elected from the top two finishers by 
Congress. 
 
     Bolivian Cabinet (as of June 1995) 
PRESIDENT                   Gonzalo SANCHEZ DE LOZADA 
VICE PRESIDENT              Victor Hugo CARDENAS (MRTKL) 
FOREIGN MINISTER            Antonio ARANIBAR (MBL) 
MINISTER OF GOVERNMENT      Carlos SANCHEZ Berzain 
DEFENSE MINISTER            Raul TOVAR (UCS) 
MINISTER OF THE PRESIDENCY  Jose Guillermo JUSTINIANO 
MINISTER OF FINANCE         Fernando COSSIO 
MINISTER OF ECONOMIC        Jaime VILLALOBOS 
DEVELOPMENT (w/o Portfolio) 
MINISTER OF SOCIAL          Enrique IPINA 
DEVELOPMENT 
MINISTER OF SUSTAINABLE     Luis LEMA Molina 
DEVELOPMENT 
MINISTER W/O PORTFOLIO      Alfonso REVOLLO 
  (for Capitalization) 
LABOR MINISTER              Reynaldo PETERS 
JUSTICE MINISTER            Rene BLATTMAN (IND) 
MINISTER OF SOCIAL          Ernesto MACHICAO 
COMMUNICATION 
 
Unless indicated, ministers are members of the MNR party. 
 
LEGISLATIVE:  Two-chamber congress; 27-member Senate (chosen by party 
slate; three per department (or state). 130-member Chamber of Deputies, 
apportioned roughly by population.  Senators and Deputies serve five-
year terms (starting in 1997), elected from party slates, and may be re-
elected.   
 
The following major parties are currently represented in congress: 
     GOVERNING COALITION 
 
-- MBL     Free Bolivia Movement (leftist) 
-- MNR     Nationalist Revolutionary Movement (centrist) 
-- MP      Patriotic Movement (split from CONDEPA) 
-- MRTKL   Tupac Katari Revolutionary Liberation Movement (indigenous) 
-- MUP     Unity and Progress Movement (split from CONDEPA) 
-- UCS     Civic Solidarity Union (populist) 
 
     OPPOSITION 
 
-- ADN     National Democratic Action (center-right) 
-- CONDEPA Conscience of the Nation (populist) 
-- MIR     Movement of the Revolutionary Left (center-left) 
 
The governing MNR-MTKRL-UCS-MBL-MP-MUP coalition has: 
 
     -- 18 of 27 Senate seats 
     -- 85 of 130 House seats 
 
Next Elections:  Municipal, December 1995; National, June 1997. 
 
Suffrage:  Universal and compulsory at age 18; more than 1.7 million 
ballots were cast in the 1993 presidential elections.  Around 2.3 
million voters expected to vote in 1997 
 
JUDICIARY:  Consists of Supreme Court and departmental and lower courts; 
the 12 Supreme Court justices are nominated by the President, elected by 
the Congress (with two-thirds approval) and serve one ten-year term.  
The Attorney General, independent from the Executive Branch, is also 
appointed by the President, confirmed by the Congress and serves a ten-
year term. 
  
 
--CHAPTER IV.  MARKETING U.S. PRODUCTS AND SERVICES - 
 
Distribution and Sales Channels: 
 
Import Channels:  There are four principal types of commercial import 
channels: commission or independent sales agents or representatives, 
import houses, subsidiaries of foreign firms, and direct importation by 
government agencies. 
 
It is important not only to select the type of distribution system most 
suitable for the exporting firm and its product, but also to appoint an 
experienced, aggressive, financially solvent representative.  Capital 
goods exporters should ensure that potential representatives have access 
to key decision-makers. 
 
Most heavy equipment, machinery, and general merchandise must be 
delivered through seaports in Peru, Chile, Brazil, and Argentina.  
Occasionally, bad weather, landslides, port congestion, or other factors 
may block all import channels.  It is important to cooperate closely 
with Bolivian importers in arranging transportation and preparing and 
submitting shipping documents.  Air cargo transportation may at times be 
desirable even for heavy items. 
 
USE OF AGENTS/DISTRIBUTORS, FINDING A PARTNER 
 
Most of the numerous agents, distributors and representatives in Bolivia 
are very effective in dealing with government agencies, as well as with 
private industry.  Commission agents take orders on a direct shipment 
basis.  Some specialize in certain products or in supplying customers 
engaged in specific activities.  These agents and representatives do not 
stock products.  Agents are required to have a minimum paid-in capital 
of $2,000 to initiate a business activity in Bolivia. 
 
Agents must also meet certain other requirements and register with the 
National Chamber of Commerce, the Internal Revenue Service, the 
Secretariat of Industry and Commerce, the National Directory of 
Commerce, and the local municipality.  Agents and representatives 
require a letter or agreement from the foreign firm appointing them as 
representative or agent.  This document should clearly indicate the 
validity of the contract, the sales area covered by the agent, the 
financial terms, and whether the exporting firm has the right to appoint 
other agents in other areas of the country.  Legal counsel is 
recommended in drawing up the contract, which enables the agent to 
participate on behalf of the foreign firm in government tenders.  The 
usual commission in Bolivia varies from 5 to 10 percent, depending on 
the product and the agreement reached by the interested parties. 
 
IMPORT HOUSES 
 
Import houses in Bolivia are normally relatively large, although there 
are some small, well-established importers.  These firms import for 
their own use and also represent foreign firms on a commission basis.  
Many operate general merchandise outlets.  Larger importers have 
subsidiaries and branches throughout the country, as well as sub-
distributors, and a sales force to canvass retailers, wholesalers, and 
consumers.  This method offers the U.S. exporter a degree of financial 
security, as the importer assumes the risk of importing general 
merchandise.  More importantly, U.S. exporters via their agents are also 
allowed to sell to government agencies in response to tenders. 
 
WHOLESALE AND RETAIL MERCHANDISING 
 
Thousands of Bolivians are engaged in merchandising, usually in small 
facilities or as street vendors.  Although many goods are available 
through wholesalers, a significant percentage enters the country as 
contraband, thus avoiding the usual tax and tariff regulations.  In 
addition, many wholesalers import directly and then distribute goods 
through their own retail outlets in major cities plus through other 
firms. 
 
Many retail establishments are small operations, often family owned.  
Others are direct outlets run by local producers.  Over half of 
Bolivia's manufactured products are nondurable consumer goods such as 
food, beverages, coffee, clothing, and shoes. 
 
DISTRIBUTION AREAS 
 
The main distribution center is La Paz, Bolivia's largest city and the 
seat of government.  Most import houses, distributors, and agencies use 
La Paz as their major central outlet, though some are located in 
Cochabamba and Santa Cruz. 
 
FRANCHISING 
 
There is no special legislation regarding franchising in Bolivia.  
However, any foreign company wanting to grant a specific franchise in 
Bolivia must first register the brand name with the Office of Industrial 
Property, in the Secretariat of Industry and Commerce.  Once the brand 
name is registered, the foreign company may grant the local company a 
franchise through a contract specifying the terms of mutual agreement. 
 
DIRECT MARKETING 
 
Setting up a local branch or subsidiary provides a greater advantage 
when selling and servicing machinery to government agencies or to 
private businesses. 
 
JOINT VENTURES/LICENSING 
 
Joint venture operations are ruled by the Investment Law and the Supreme 
Decree 22526 of June 13, 1990. 
 
A joint venture in Bolivia is defined as a specific business venture 
carried out by two parties with separate legal licenses. Once the 
objectives are clearly defined, a contract is signed between the parties 
and each party is liable for the percentage owed.  If one of the parties 
has other business interests, these are not included in the joint 
venture operations, unless specifically stated.  Corporations and/or 
individuals, foreign or domestic, may enter into joint venture 
agreements.  Foreign companies are not required to have a local legal 
license in advance.  However, they must have legal documents that show 
their legal status in the country of origin. 
 
STEPS TO ESTABLISHING AN OFFICE 
 
Foreign investments are welcome in Bolivia.  There are specific laws 
designed to facilitate the bureaucratic requirements in order to 
establish an office in Bolivia. 
 
We strongly suggest that companies wishing to establish an office in 
Bolivia hire the services of a local attorney to avoid unnecessary 
delays and pitfalls. 
 
Under Bolivia's commercial code, business can be conducted under the 
following types of business entities: 
 
1. Corporation (Sociedad Anonima, S.A.) 
   Owners of capital are described as shareholders. 
 
2. Private companies (Sociedad de Responsabilidad Limitada, S.R.L.) 
   Owners of capital are described as quotaholders and have limited 
liability. 
 
3. General Partnership (Sociedad Colectiva, S.C.) 
   Participants are described as partners.  Partners are responsible for 
joint and individual liability. 
 
4. Limited Partnership (Sociedad en Comandita Simple, S.C.S.) 
   Participants are described as partners. There are two types of 
partners: General Partners (Socios Colectivos), who have unlimited 
liability, and Limited Partners (Socios en Comandita) who have limited 
liability. 
 
5. Limited Partnership Company (Sociedad en Comandita por acciones, 
S.C.A.) 
   Owners of capital are described as shareholders and partners. 
 
6. Branch of a foreign company. 
 
7. Sole Proprietorship. 
 
The corporation, private company and branch are the most common vehicles 
for foreign investment. 
 
Taxation on foreign companies is similar to that applied to local 
companies.  Starting in 1995 all companies are compelled to pay a tax 
equal to 25 percent of profits as of the end of the year.  The previous 
system required a tax paid equivalent to three percent of a company's 
declared assets.  The new system should be more beneficial to foreign 
investment, especially for U.S. companies, because they should be 
allowed to use their tax paid in Bolivia as a tax credit in the U.S., 
under the world-wide income taxation system.  Companies should consult a 
knowledgeable accounting firm in Bolivia for more detailed information. 
 
SELLING FACTORS/TECHNIQUES 
 
It is essential that U.S. firms be formally represented in Bolivia 
through import houses, commission or independent sales agents, local 
distributors, or local subsidiaries. 
 
Periodic visits by representatives of U.S. suppliers are likewise 
essential in order to provide training and assistance to the distributor 
or agent and to establish personal contact with customers. 
 
ADVERTISING AND TRADE PROMOTION (INCLUDING LISTING OF MAJOR NEWSPAPERS 
AND BUSINESS JOURNALS) 
 
The Bolivia advertising industry has grown and is now more professional 
and competitive than before.  The tremendous increase in private 
television channels now in operation prompted the industry to devote 
special attention to TV commercial spots.  La Paz remains the principal 
advertising center.  Nineteen ad agencies operate in Bolivia, of which 
Contacto Ltda, Prisa Ltda, Avila Publicidad, and Multicomunicacion are 
the leaders.  All 19 are members of the Association of Advertising 
Agencies.  The Association's address is: 
 
Asociacion Boliviana de Agencias de Publicidad, Casilla 985, Calle 
Vicenta Eguino 408, La Paz, Bolivia.  Telephone (591-2) 363133, Fax: 
(591-2) 363312, Cable: ABAP.  La Paz contact is Edgar Aguirre, 
President. 
 
Advertising agencies usually charge a 15 percent commission, although 
this percentage is negotiable. 
 
Television is the principal form of advertising, followed by newspapers 
and radio.  According to the latest statistics supplied by the 
Association of Advertising Agencies, television accounts for 80 percent 
of advertising expenditures.  Eight percent goes for newspaper and 
magazine ads and seven percent for radio spots.  Other media such as 
movie theaters, neon signs, billboards and direct mailing account for 
the remaining five percent. 
 
Television:  Except for one government-owned national TV broadcasting 
station, all other regional TV stations are in private hands.  Eight 
belong to the major state universities. 
 
Only the government station is considered "national" because it alone 
transmits to all areas of Bolivia.  The other stations beam their 
signals only to the major cities.  All privately-owned regional and 
university TV stations have to rent the interconnection system from 
ENTEL, the national telecommunications company, to broadcast nationally.  
There are also nine private cable TV systems in the cities of La Paz, 
Cochabamba and Santa Cruz.  One of them, Video Cable Universal, wholly-
owned by the U.S. company Comtech Supply Inc., has installed the latest 
fiber optic technology (1994).  There is currently a small-scale price 
war in La Paz between the hard-wire VCU and the UHF-based cable 
companies. 
 
Latest data available on the profitability of the TV and radio 
broadcasting industry showed a total profit for all companies of $18 
million (not all companies are profitable).  The industry is currently 
(June 1995) regulated by the Direccion de Telecommunicaciones 
(Telecommunications Directorate), but would be regulated by a 
Superintendency of Telecommunications once ENTEL is capitalized in the 
fall of 1995.  The Directorate controls hours for broadcasting but no 
price controls on commercial time exit. 
 
La Paz, Santa Cruz, and Cochabamba combined have 30 of the countries 84 
broadcasting stations, 74 of which are VHF, the others UHF.  All TV 
stations have color transmission, using the U.S. system (NTSC), with 525 
lines and 50 cycles.  In 1994, there were approximately 250,00 black and 
white TV sets and 500,000 color TV sets in use throughout the country. 
 
RADIO:  All but two radio stations are in private hands (one of the  two 
belongs to the military, the other to the central government).  Radio 
stations are popular here, in part because radios are cheap and can 
bring entertainment and news to the vast majority of the population that 
can't afford television.  It is also widely used to reach the large 
illiterate population, over 50 percent of the total population of 7 
million.   The last year or two has seen a big increase in new FM radio 
stations throughout the country.  La Paz, Santa Cruz and Cochabamba 
account for 160 of the country's 244 stations.  Nearly half of the 
stations--118--are AM; 70 are short-wave, and 56 FM. 
 
The approximately 3.5 million radios in Bolivia reach an audience of 
some 4.5 million people.  Radio stations are very effective in reaching 
rural populations, particularly given the proliferation of programs in 
the two dominant native languages, Aymara and Quechua. 
 
NEWSPAPERS:  Newspapers are the second most important advertising 
vehicle.  The five newspapers in La Paz have a daily circulation between 
30,000 and 80,000 copies.  The major La Paz newspapers are Presencia, La 
Razon, El Diario, Ultima Hora and Hoy, all of which are circulated 
nationally.  The major newspapers from Santa Cruz, El Mundo, and from 
Cochabamba, Los Tiempos, are also sold nationally. 
 
THEATERS:  There are about 25 motion picture theaters in La Paz, with an 
estimated total seating capacity  of 20,000. 
 
Only two U.S. market research firms, Coopers and Lybrand and Price 
Waterhouse, currently operate in Bolivia.  However, 10 Bolivian market 
research firms represent foreign consulting companies.  Most of these 
firms also provide engineering and industry feasibility studies.  An 
updated list of consulting firms and their services is available in the 
Economic/Commercial section of the U.S. Embassy in La Paz. 
 
All market research and consulting companies are required to register 
with the National Association of Consulting Companies.  All 
correspondence to the Association may be addressed as follows: 
 
Asociacion Nacional de Empresas Consultoras (ANEC) 
Casilla 8560, Edif. Mutual La Primera, Bloque B, Piso 5, Oficina. 6, La 
Paz, Bolivia.  Contact is Maria Eugenia Leon, Secretary, telephone (591) 
(2) 324532, fax (591)(2) 354351 
 
PRICING PRODUCT 
 
Bolivia's open market economy does not impose price controls on most 
products.  Price is set freely by supply and demand, except for two 
commodities, petroleum, set by the central government, and the most 
commonly sold bread rolls, whose prices are set by the municipal 
government.   
 
SALES SERVICE/CUSTOMER SUPPORT 
 
The service and maintenance provided by local agents of U.S. companies 
are probably the most important competitive factor in helping them 
compete successfully against other foreign suppliers.  U.S. suppliers 
have traditionally provided sales services by training their local 
agents.  The competitive advantage of U.S. products against similar 
European and Japanese products is in price, quality, reputation, and 
customer support. 
 
SELLING TO THE GOVERNMENT 
 
Government activities traditionally represent approximately 40 percent 
of Bolivia's GDP.  The government and its publicly-owned corporations 
and agencies are the main buyers of machinery, equipment, materials, and 
other products and services.  They are legally required to call for bids 
when proposed purchases are above 100,000 Bolivianos (notated as "Bs." 
and equivalent to approximately 4.78 Bs. per U.S. dollar exchange rate 
as of mid-June 1995).  Although any local or foreign firm can present 
proposals for government bids, only those firms legally established 
under Bolivian law may sign contracts, if awarded, for government 
purchases.  Thus, it is important for U.S. companies to have a local 
agent. 
 
 
Due to the capitalization process, and because most of the larger 
governmental entities will have private administration by the end of 
1995/mid-1996, the Bolivian Government decided that as of March 20, 
1995, all public entities interested in purchasing goods or contracting 
services will have different options based on the amount of the 
transactions (per Supreme Decree 23981 and Supreme Resolution 215475), 
as described below:   
 
A) Small purchases:  Each institution may purchase directly from its own 
budget without calling for bids, if the purchase does not exceed 20,000 
Bs. (approx $4,184 at the exchange rate of 4.78 Bs./dollar as of June 
1995).   
 
B) Direct invitation:  When the purchase is above 20,000 Bs but does not 
exceed 600,000 Bs. 
 
C) Exceptional contracts:  Purchases of national security items for the 
Armed Forces or any other products or services of national interest, 
with no limit in value. 
 
D) Public bid:  When the purchase is above 600,000 Bs. (approx $125,523 
as of 6/95). 
 
Bid specifications containing technical and commercial requirements will 
be available through the relevant government entity and will be 
published three times consecutively in local media at least 30 days 
before the bid deadline. 
  
The two contracting offices currently working in Bolivia, the British 
Government corporation Crown Agents, and the French Government 
corporation C3D, with whom the Bolivian Government signed contracts 
years ago to administer government purchases, may still arrange 
purchases for government entities that require their services or do not 
have the technical capability to prepare and conduct its purchases.  
Those agencies then will submit the terms of reference or the technical 
specifications as appropriate.  Public sector procurement of goods and 
services requires competition and agreement between parties. 
 
The qualifying procedure and the awarding decision is entirely in the 
hands of the Chief Executive Officer of the public entity.  The CEO may, 
however, delegate this decision to a four member qualifying commission, 
established with high executives and technical staff of the public 
entity.  Domestic goods and services receive a 10 percent preference in 
any bidding in order to protect local industry.   
 
When a project is financed by an international institution (World Bank, 
Inter-American Development Bank), the bids follow that institution's own 
rules. 
 
The proposals must be presented in Bolivian territory.  Bolivian law 
specifies that American or other foreign firms interested in providing 
goods and services to the Bolivian Government must have a local address 
in Bolivia and a legal representative or a local agent in order to sign 
the contract, if awarded.  
 
Bid specifications will include specific instructions on how to present 
the bid.  Tender terms vary according to the requirements of the 
government agency issuing the tender.  Both the price and the quality of 
the product/service will be considered when awarding the contract. 
 
PROTECTING YOUR PRODUCT FROM IPR INFRINGEMENT 
 
A foreign company wishing to market and protect its 
product/trademark/name in Bolivia must first register the brandname, 
etc. with the Office of Industrial Property in the Secretariat of 
Industry and Commerce, located on the Avenida Camacho, corner with Calle 
Bueno in downtown La Paz.  Protection of intellectual property in 
Bolivia is nearly non-existent; companies should be prepared to take 
their case to the courts in order to protect their IPR rights.  
 
NEED FOR A LOCAL ATTORNEY 
 
A local attorney will be required in order to establish a company in 
Bolivia or to register a brand name with the Office of Industrial 
Property.  A complete list of patent and commercial attorneys, as well 
as general practice attorneys, is available in the Economic/Commercial 
section of the U.S. Embassy in La Paz.  
 
--CHAPTER V: LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENTS - 
 
BEST PROSPECTS FOR NON-AGRICULTURAL GOODS AND SERVICES. 
 
PART 1.  MINING SECTOR, RANK 1, (MIN)   
PART 2. Narrative: Mining remains one of the two most important sectors 
in the Bolivian economy, generating almost 50 percent of Bolivia's 
foreign exchange.  The Bolivian Government is actively seeking foreign 
investment in the mining and metallurgical sub-sectors. 
 
Historically, about 50 percent of all mining equipment was purchased by 
the state-owned mining company, COMIBOL, or BAMIN, the now-defunct 
state-owned bank which specialized in the mining sector.  COMIBOL now is 
nearly bankrupt itself, and as a result, nearly 90 percent of all sales 
since 1990 have gone to the private sector. 
 
The best sales prospects for mining equipment: equipment for medium-
sized open pit mines and heap leaching operations, and for small- and 
medium-sized alluvial gold mining cooperatives. 
 
For medium-sized open pit operations, best prospects include drills 
(open pit production drills), crushers and pulverizers, conveyors, 
compressors, front-loaders, bulldozers, 15- to 30-ton heavy-duty trucks, 
gravimetric or flotation concentrators, and pumps. 
 
For the small miners, best prospects include small drills, front-
loaders, crushers, concentration tables, flotation concentrators, hand 
tools, and explosives. 
 
PART 3. 
                            1994     1995     1996 
A. TOTAL MARKET SIZE        9.032    12.0     14.0     
B. TOTAL LOCAL PRODUCTION     0        0        0 
C. TOTAL EXPORTS              0        0        0  
E. IMPORTS FROM THE U.S.    3.056     4.2      5.0  
  
The above statistics are unofficial estimates, in U.S. dollars. 
 
 
PART 1.  HYDROCARBONS SECTOR, RANK 2, (OGS) 
 
PART 2.  Narrative: The chief potential trade opportunity in the 
hydrocarbons sector for 1995-1996 is the proposed $600 million gas 
pipeline (488 kms) to Brazil from the city of Santa Cruz (the Brazilian 
portion of the line is estimated to be worth over $1.5 billion).  A 1993 
contract to carry out the project, with a total length of 1,800 kms and 
estimated total cost of $2.5 billion, is still being renegotiated with 
the Brazilians as of June 1995.  Price and market issues are still 
unresolved.  YPFB, the state-owned Bolivian petroleum company (until its 
capitalization in late 1995/early 1996), and Petrobras of Brazil have 
agreed on the relative percentages of participation in the pipeline.  
Enron Development Corp. of Houston is the strategic partner of YPFB, 
while the BTB consortium (British Gas, Tenneco, and BHP) is helping 
Petrobras.  Petrobras will have 15 percent of the Bolivian portion of 
the pipeline, with YPFB having the balance (although shared with Enron); 
YPFB will have 20 percent of the Brazilian portion of the pipeline, 
while Petrobras will have 51 percent and the BTB consortium the balance 
(note: this percentage could change as the Government of Brazil recently 
ended Petrobras' monopoly).  A second natural gas pipeline project, from 
Tarija in the south to northern Chile, is being discussed but probably 
won't happen.  YPFB, ENAP (the Chilean oil company) and BHP were looking 
into the project.  Other pipeline projects are being considered to 
Paraguay and Peru. 
 
YPFB's capitalization program is a great opportunity for U.S. investors, 
and U.S. petroleum companies are interested in the plan.   
 
A total of 19 foreign companies have exploration/exploitation contracts 
with YPFB, including U.S. companies Diamond Shamrock (formerly 
Occidental Bolivia), Tesoro Petroleum, Chevron, Mobil, Santa Fe, Texaco, 
Exxon and Phillips (Maxus, recently purchased by YPF of Argentina, also 
is here).  Other foreign and U.S. corporations have or are in the 
process of negotiating contracts.  Bolivia allows exploration of large 
blocks up to 1.5 million hectares. 
 
YPFB is currently the largest user of oil and gas equipment.  However, 
exploration and exploitation by private companies are increasing, and 
thus their need for drilling machinery equipment, pipelines and services 
will expand rapidly if large oil or natural gas fields are discovered. 
 
The Bolivian-Brazilian gas pipeline project will generate a tremendous 
demand for pipeline goods.  YPFB will continue to need pipeline and 
drilling machinery and equipment, wellheads and pumps.  The 
capitalization of YPFB in late 1995/early 1996 should see even more 
investment as the private partner comes on-line.  Currently most of the 
foreign oil companies contract or purchase exploration drilling 
equipment. 
 
PART 3. 
                           1994       1995      1996 
 
A. TOTAL MARKET SIZE        2.9        1.4       5.0       
B. TOTAL LOCAL PRODUCTION    0          0         0 
C. TOTAL EXPORTS             0          0         0 
D. TOTAL IMPORTS            2.9        1.4       5.0  
E. IMPORTS FROM THE U.S.   1.63         .8       3.5 
 
The above statistics are unofficial estimates, in U.S. dollars. 
 
--CHAPTER VI: TRADE REGULATIONS AND STANDARDS - 
 
TARIFF AND IMPORT TAXES 
 
The following describes the calculation of charges imposed on imports to 
Bolivia, including the customs tariff, domestic taxes, and customs fees.  
Bolivian import charges are more cumbersome than costly; however, most 
import charges, including domestic taxes (most of which are creditable) 
and fees, range from 30-45 percent, considerably more than the stated 5 
or 10 percent tariff. 
 
1.  The CIF (cost, including insurance and freight) border value of the 
imported product. 
 
2.  Inspection company fees: SGS or Inspectorate, the two official GOB 
inspection companies, charge 1.92 percent of the FOB cost of the 
imported product. 
 
3.  Customs tariff: a 10 percent flat rate is applied to (1), unless the 
products are listed as capital goods by Bolivian presidential decree, in 
which case the rate is 5 percent. 
 
4.  Customs Warehouse fee: for GOB customs warehouses (AADAA) within the 
country not yet privatized, a 0.5 percent fee is charged on (1).  If 
products remain in the warehouse over 30 days, a 2 percent fee is 
charged on (1) for up to 90 days.  Private customs warehouses, now in 
operation at the El Alto (which serves La Paz), Cochabamba and Santa 
Cruz airports, allow only a five day grace period, and base their rates 
on weight rather than value.  The GOB plans to eventually privatize all 
customs warehouses. 
 
5.  Internal Revenue Service (Renta) fees:  Value added tax (IVA) is 
charged at 14.94 percent effective rate on (1+2+3+4+7+8A+8B+9).  Note 
that this IVA tax payment can later be offset against the importer's 
value added tax liability, upon resale.  Using the example of the 
imported car described below in paragraph 9, if the importer retails the 
car for $18,000, he is obliged to pay 13 percent of that amount, $2,340, 
to the government as a value added tax.  However, that amount can be 
reduced by the $1,723.80 of value added tax paid at the time the car was 
released from Customs. 
 
A problem arises if the importer does not sell any product domestically, 
as is the case with petroleum companies in the exploration phase.  This 
applies to the equipment imported by the oil companies that cannot be 
re-exported, like pipe and drill bits.  Machinery that will be re-
exported, such as helicopters and seismic equipment, can be imported 
free of duty and taxes under the RITEX system, which allows for the 
temporary import of equipment. 
 
6.  Specific consumption tax (ICE) is charged at an additional 
percentage rate on (1+2+3+4+7+8A+8B+9) if the product is defined as a 
luxury good, such as automobiles (18%), household appliances (10%), 
perfumes (20%), cosmetics (30%), liquors (50%), cigarettes (50%), and 
beer (60%). 
 
7.  Customs forms and fees:  the Bolivian Customs office charges between 
$50-60 for the forms and fees required for each shipment. 
 
8.  Customs broker charges: 
 
A.  The following rates are applied to (1) for land cargo and CIF 
airport value for air cargo, as customs broker fees: 
 
From USD 1         to    10,000 is 2 percent 
         10,001    to    20,000 is 1.5 percent 
         20,001    to    30,000 is 1.25 percent 
         30,001    to    50,000 is 1 percent 
         50,001    to   100,000 is 0.75 percent 
        100,001    and above    is 0.5 percent 
 
B.  In addition, customs brokers charge 17.65 percent over the value of 
their bill to cover their IVA tax liability. 
 
9.  Specific chambers, such as the Chambers of Commerce, Industry, and 
Construction, charge an additional fee between .03 and .04 percent of 
(1). 
 
CUSTOMS VALUATION 
 
Because of the complex Bolivian Customs system, we urge U.S. exporters 
to verify the real amount of total duties payable to enter Bolivia.  The 
Economic and Commercial section of the U.S. Embassy in La Paz can 
provide a list of reliable customs brokers who can expedite paperwork. 
 
Following is a practical example of how Bolivia import charges are 
imposed on an automobile with a FOB price of $9,000 and a CIF border 
value of $10,000. 
 
IMPORT STRUCTURE                   IMPORT CHARGE 
 
1.  CIF BORDER VALUE:              USD 10,000. 
 
2.  INSPECTION COMPANY FEE : 1.92 PERCENT 
OF USD 9,000                       USD    172.80 
 
3.  CUSTOM TARIFF : 10 PERCENT OF USD  
10,000                             USD  1,000 
 
4.  CUSTOMS WAREHOUSE: 0.5 PERCENT OF USD 
10,000                             USD     50 
 
5.  VALUE ADDED TAX (IVA) : 14.94 PERCENT 
OF USD 11,538.10 (10,000+172.80+1,000+50 
+50+200+35.30+30)                  USD  1,723.80 
 
6.  SPECIFIC CONSUMPTION TAX (ICE) : 18 
PERCENT OF USD 11,538.10 (10,000+172.80 
+1,000+50+50+200+35.30+30)         USD  2,076.86 
 
7.  CUSTOMS FORMS                  USD     50 
 
8A. CUSTOMS BROKER FEE : 2 PERCENT OF USD 
10,000                             USD    200 
 
8B. CUSTOMS BROKER CHARGE : 17.65 PERCENT 
OF USD 200                         USD     35.30 
 
9.  SPECIFIC CHAMBERS : 0.03 PERCENT OF 
USD 10,000                         USD     30 
 
TOTAL TARIFF, TAXES AND FEES TO WITHDRAW 
CAR FROM CUSTOMS :                 USD  5,338.76 
(OR 44.15 PERCENT OF THE CIF BORDER VALUE) 
 
As noted in paragraph 5, the $1,723.80 value added tax paid by the 
importer reduces the importer's tax liability when the car is resold.  
So subtracting that amount means the actual import tariff and fees 
amount to $3,614.96 or 36.14 percent of the CIF border value. 
 
IMPORT LICENSES 
 
Import licenses are currently required only for firearms.  
Pharmaceutical products have to be registered in the Secretariat of 
Health and approved under World Health Organization guidelines. 
 
USED GOODS 
 
Import permits from the Secretariat of Industry and Commerce are 
required for used clothing and rags.  The permit must be obtained prior 
to shipping.  These items must also have a sanitary certificate from the 
proper health authorities in the exporting country.  There are no 
special non-tariff requirements affecting the import of other used 
goods. 
 
EXPORT CONTROLS 
 
In order to become a legal exporter from Bolivia, the interested company 
must obtain a legal solicitorship.
 
Once the solicitorship is obtained, the local company must register with 
SIVEX, the Exporters Single Window System (Sistema de Ventanilla Unica 
del Exportador) at the Secretariat of Industry and Commerce. 
 
In order to proceed with an export shipment, the exporter must present 
the following documents: commercial invoice, packing list, and a 
certificate of inspection issued by one of the two government-contracted 
inspection companies.  Then the Customs authority issues the exporter's 
bond.  If the exported product is animal or vegetable, a sanitary 
certificate must be obtained from the Secretariat of Agriculture. 
 
SIVEX then grants the certificate of origin which makes the exporter 
eligible for duty-free treatment to countries offering Bolivia duty-free 
benefits. 
 
IMPORT/EXPORT DOCUMENTATION 
 
The following five documents should be presented to Customs for all 
shipments to Bolivia.  It is not necessary to present these documents to 
a Bolivian consulate in the United States. 
 
SELLER'S COMMERCIAL INVOICE 
 
This invoice may be completed in either Spanish or English on the 
shipper's letterhead.  The invoice must include a detailed description 
of the products by item, the unit price, and the total FOB price.  The 
invoice must also include the freight costs, either air or ocean, and 
the insurance to the port of destination.  If the invoice does not 
include insurance and freight, Bolivian Customs will charge 5 percent of 
the FOB price.  This is necessary because the value added tax is 
calculated on the basis of the CIF price. 
 
BILL OF LADING OR AIRWAYBILL 
 
The bill of lading must be presented with two original bills, signed and 
sealed by the freight forwarder, and two non-negotiable copies.  One of 
the bills of lading, or a copy, should accompany the original bill and 
the commercial invoice.  Bills of lading may not be drawn to the order 
of the shipper.  However, they may be drawn to the order of the 
consignee, who is permitted to endorse it to a third party.  For air 
cargo, the airwaybill is the bill of lading. 
 
INSURANCE POLICY 
 
Customs requires a copy of the insurance policy to calculate the value 
added tax. 
 
PACKING LIST 
 
The packing list facilitates Customs inspections and is beneficial to 
the importers in case of loss. 
 
INSPECTION CERTIFICATE 
 
Pre-shipment inspection is required on imported products with a FOB 
value of $1.00 or more.  Overseas agencies under contract to the 
Bolivian government administer the program; inspections may be performed 
in the port of origin or in Bolivia by either SGS Control Services in 
New York at (212) 482-8700, or SGS Government Programs in Miami at (305) 
592-0410, or by Inspectorate in Miami at (305) 599-1124. 
 
SPECIAL DOCUMENTATION 
 
Sanitary and purity certificates: certificates of origin indicating 
state of health are required for the import of live animals.  Purebred 
livestock imported for breeding purposes also require a pedigree 
certificate.  Live plants and all seeds, except vegetable and flower 
seeds, require sanitary certificates. 
 
 
Pharmaceuticals are subject to strict quality control regulations.  
Imports must be accompanied by a certificate of analysis in Spanish, 
which may be issued by a reliable manufacturer.  This certificate must 
include expiration dates. 
 
Labels on pharmaceutical products should be in Spanish.  In addition, 
pharmaceuticals must be registered with the Secretariat of Health before 
they are imported. 
 
Food shipments require a sanitary certificate issued by the pertinent 
authority of the exporting country, i.e. the U.S. Dept. of Agriculture.  
Foodstuffs may be subject to analysis by an official entity in Bolivia, 
and most food and beverage labels must be registered in Bolivia.  
Exporters are encouraged to check with importers regarding relevant 
policies prior to shipment. 
 
For specific information regarding existing foreign agricultural 
standards and testing, packaging and certification systems, contact the  
Technical Office for International Trade, U.S. Dept. of Agriculture, 
Building 1072, Barc-East, Beltsville, MD 20705, tel: 301-344-2651. 
 
For more information on procedures relating to animals and plants, and 
their by-products, contact the Animal and Plant Health Inspection 
Service (APHIS), U.S. Department of Agriculture, 6505 Beltcrest Road, 
Hyattsville, MD 20782; Tel (301) 436-8590 (Veterinary services)/X8537 
(Plant inspection).  APHIS maintains a service office in Lima headed by 
an officer based in Caracas, Venezuela. 
 
AIR CARGO 
 
Air cargo shipments require airwaybills instead of bills of lading.  
Follow IATA and/or ICAO rules governing labeling and packaging of 
dangerous and restricted goods as well as for issuance of the special 
shipper's certificate required under IATA rules for such items.  
Airlines will supply information and forms upon request. 
 
PARCEL POST 
 
An authorized customs broker must intervene for any parcel post valued 
at over $100.  A private person may receive parcel post valued up to 
$100 without the intervention of a customs broker just by filing a 
Customs form at the post office.  
 
 
ENTRY AND WAREHOUSING 
 
As a landlocked country, Bolivia maintains ports of entry in Chile, 
Peru, Brazil, Argentina and Uruguay (by river) through free transit 
agreements with each country.  Arica, Chile, is generally considered to 
be the best port of entry.  Other main ports are Antofagasta, Chile; 
Matarani and Ilo, Peru; Santos, Brazil; and Rosario, Argentina. 
 
Bolivian Customs maintains warehousing facilities in these ports where 
incoming goods may be stored for 90 days.  The charge for Customs 
storage is 0.5 percent of CIF for goods stored for each 30-day period or 
fraction thereof.  Once clearing documents are signed, goods must be 
removed from storage within eight days to avoid an additional charge of 
two percent of CIF. 
 
Imported merchandise may be considered abandoned either by an explicit 
request or by failure to claim it within the required 90 days.  By law 
such goods are subject to public auction, the proceeds of which go to 
the interested party after expenses are paid. 
 
If the importer wishes to remove his/her merchandise after the 90-day 
period but before the auction takes place, he/she must pay a 5 percent 
charge over the Customs tariff plus 2 percent of CIF.  Due to the 
expense and time involved in reshipment, U.S. exporters usually prefer 
to sell refused goods in Bolivia. 
 
TEMPORARY ENTRY 
 
Manufacturers may distribute products through international trade fairs.  
When this channel is used, capital goods destined for the productive 
sector enter under temporary import permission for an exhibition period 
of 90 days, with a bank guarantee note of one percent over CIF value.  
Within this period the goods may be nationalized or reexported.  If 
nationalized, duties for certain capital goods may be discounted by 50 
percent under the preferential customs policy granted to international 
trade fairs. 
 
The Temporary Importation Permit (TIP) is issued by the Customs 
administration for goods intended as samples, exhibitions, natural 
disaster relief machinery and equipment, equipment and apparatus for 
testing and scientific research, aircraft and vehicles for tourism, 
equipment for petroleum exploration and exploitation and other similar 
items intended for reexport, and are allowed entry without payment of 
duty under a bank bond covering all duties and customs fees and the 
guarantee of a local customs brokers.   
 
TIP is allowed for a period of ninety days, which can be extended only 
once for an additional 90-day period.  If a longer period is required, 
the local customs broker, on behalf of the importer, must obtain a 
special permit valid for one year from the Ministry of Finance.  In 
order to obtain the one year special permit, the importer must have a 
contract to justify the temporary admission. 
 
LABELING, MARKING REQUIREMENTS 
 
Special labeling indicating origin and type of merchandise is not 
required for imports to Bolivia.  However, retail packages must show 
weight or measure of contents in metric units.  Special regulations 
governing cigars, cigarettes, and tobacco also exist. 
 
All goods shipped by ship to Bolivia pass through foreign ports of 
entry.  Packages and containers should clearly indicate gross weight in 
kilograms, serial numbers, and the words "en transito a Bolivia."  For 
Chilean ports, markings must be stenciled. 
 
PROHIBITED IMPORTS 
 
Prohibited items include: firearms and other weapons without special 
permission from the Ministry of Defense; pharmaceuticals and drugs not 
registered in the country; spoiled or adulterated beverages and food 
products, or products that contain noxious substances, selected liquors, 
such as pisco and similar products; diseased animals; plants, fruits, 
seeds and other vegetables that contain parasites and germs, or plants 
that are declared harmful by the Secretariat of Agriculture; foreign 
lottery bills; advertisements imitating money or bank certificates, 
postage stamps and other government-valued papers; pornographic books, 
booklets, paintings, engravings, figures and other obscene objects; 
roulette machines and devices used for gambling; merchandise with the 
same registered trademark as a product made in Bolivia; used clothing 
without a sanitary certificate from the country of origin (except in 
personal baggage); used hats and shoes (except in personal baggage); 
vicuna skins, hair and products. 
 
FREE TRADE ZONES/WAREHOUSES 
 
Bolivia has established eight free trade zones (FTZ), five of which are 
now in full operation: El Alto (serving La Paz), Puerto Aguirre, 
Cochabamba, Santa Cruz and Oruro.  The others in Desaguadero, on the 
border with Peru, San Matias in Santa Cruz, and Guayaramerin in the 
Beni, are not yet in full operation.  The other in Cobija (in the 
northern part of Bolivia), although established years ago is not 
attractive to investors because of the lack of roads and other basic 
infrastructure.  Bolivian FTZs are regulated by the National Council of 
Free Trade Zones (CONZOF), created in the 1990 Investment Law.  FTZs are 
operated by private companies which are selected by the government 
through public bid.  There are special procedures which must be followed 
to obtain approval to operate in these zones.  Export processing zones 
have up to 180 days duty-free treatment (RITEX) to assemble kits and 
produce parts for reexport. 
 
 
SPECIAL IMPORT PROVISIONS 
 
Samples and advertising materials are usually subject to regular duty 
rates, except those articles specifically prepared as samples, for 
example, shoes cut in half, small patches of fabric, and pharmaceuticals 
and liquors contained in small bottles marked "free sample (muestra 
gratuita)."  If commercial samples do not exceed $25 in value, they do 
not require commercial invoices. 
 
 
DUTY EXEMPTIONS AND REDUCTIONS 
 
Exemptions/reductions are permitted for: imports made under current 
international agreements and government contracts; imports under 
intraregional agreements that specifically provide for duty exemptions; 
imports made by diplomatic and consular corps; travelers' personal 
effects not exceeding $300; imports of gold, except jewelry. 
 
MEMBERSHIP IN FREE TRADE ARRANGEMENTS 
 
Bolivia is making a determined effort to save its existing bilateral 
trade agreements with Mercosur countries, and hopes to acquire 
preferential status as Mercosur moves toward imposing a common external 
tariff.  At the same time, Bolivia intends to continue as a member of 
the Andean Pact, which has removed all internal trade barriers.  Bolivia 
has signed bilateral trade agreements with other South American 
countries, eliminating or reducing tariffs on limited lists of products.  
Bolivia most recently signed a free trade agreement with Mexico in 
September, 1994.  The European Union, Japan and the United States allow 
most Bolivian exports to enter their markets at duty-free or duty-
reduced rates.  Bolivia acceded to the GATT in 1989, and ratified its 
membership in September, 1990.  The Bolivian Congress should ratify 
Bolivia's membership in the World Trade Organization (WTO) sometime in 
late 1995. 
 
The following is a list of the countries with which Bolivia currently 
has trade agreements:  Argentina, Brazil, Paraguay, Uruguay, Andean Pact 
(Peru, Ecuador, Colombia, Venezuela), Peru, Chile, Mexico, EU, USA (ATPA 
trade preferences, not a trade agreement). 
 
--CHAPTER VII: INVESTMENT CLIMATE - 
 
OPENNESS TO FOREIGN INVESTMENT 
 
The Bolivian government is anxious to attract foreign investors.  It 
knows that large infusions of foreign investment are needed to achieve 
significant per-capita growth.  The GOB in late June 1995 completed the 
capitalization process with the first of its six largest parastatals to 
be partially sold to foreign investors.  ENDE, the electric power 
company, sold its three generating plants separately to three U.S. 
companies, who competed in an open and transparent process.  The GOB 
hopes capitalization will inject large sums of capital, management 
expertise and new technology into its state-owned companies.  The 
government will give management contracts and 50 percent of ownership to 
the foreign investors who offer the best investment packages for each of 
the six public companies to be capitalized.  The GOB cannot afford to 
maintain levels of investment needed in most of the companies to be 
capitalized.  The five remaining companies are in the oil, 
telecommunications, transportation (airline, railroad) and smelting 
(tin, antimony) sectors.  These companies are supposed to be under 
private management by the end of 1995, except for the smelter, which is 
planned for 1996.  The GOB also realizes it needs the management 
expertise of the private sector to help reduce waste, corruption and 
mismanagement in its public corporations.  Many of the sectors could 
stand an infusion of newer technology as well.  In the mining sector, 
the GOB is willing to sell post-revolution mines and concessions, and to 
enter into joint-venture or leasing contracts for mines nationalized in 
the 1952 revolution, all in the hope of reactivating the sector. 
 
Since 1985, 100 percent foreign ownership is allowed with no requirement 
to register foreign investments.  There is no screening of foreign 
investment or preferential or discriminatory treatment applied to 
foreign investment. 
 
In 1990 and 1991, the government passed three important laws designed to 
set forth clear rules of the game for private investment.  The 1990 
Investment Law guarantees all investors national treatment, free 
currency conversion, unrestricted remittances, and the right to 
international arbitration in most industries.  New mining and 
hydrocarbons laws authorize joint ventures with the state-owned 
corporations and provide a new tax system designed to allow foreign 
firms paying taxes in Bolivia to obtain foreign tax credits in their 
home countries.  The Mining Law also allows foreign firms to operate 
within the 50-kilometer border belt in joint venture or service 
contracts with Bolivian mining companies, with the exception of firms 
from the country adjacent to such border.  The Hydrocarbons Law, 
however, does not permit international arbitration in all cases, and 
this restriction has kept the U.S. from signing a bilateral investment 
treaty with Bolivia.  The GOB is working on a new hydrocarbons law as 
part of its capitalization program; its most recent draft includes a 
provision allowing international arbitration.  The government hopes to 
have the law approved by Congress in August, 1995.  The GOB has 
consistently failed to meet previously scheduled dates for 
capitalization, however. 
 
New laws regarding banking and exports were passed in 1993.  The Banking 
Law legalized many activities that were previously not clearly legal, 
such as factoring, leasing, issuing stocks and bonds, administering 
mutual funds, and foreign currency hedging.  Banks can now maintain 
accounts in foreign currencies (as a matter of fact, over 95 percent of 
deposits as of 6/94 were in dollar or dollar-pegged accounts).  The 
roles of the Central Bank and the Superintendency of Banks were defined, 
as were capital and reserve requirements.  The Export Law, designed to 
make the tax system neutral vis-a-vis exports, grants tax rebates to 
exporters.  A hoped-for result is that Bolivian exports will become more 
competitive.  Also, a 1992 Privatization Law permits the GOB to sell 
those state-owned companies not prohibited for sale by the constitution.  
Smaller government companies are the main target of this law; the 
largest government entities will be capitalized which means only 50 
percent will be sold.  The GOB has earned a little over USD 20 million 
for firms privatized to date.  The largest sale was USD 10 million for a 
sugar mill.  The government hopes to privatize between 75-100 companies 
in 1995/96, with a combined worth of USD 60-100 million. 
 
All oil exploration activity currently must be carried out via contract 
with Yacimientos Petroliferos Fiscales Bolivianos (YPFB), the 
government-owned petroleum company.  Most of the mines currently owned 
by Comibol, the state-owned mining company, may not be purchased 
outright, but may be operated in a joint venture or leasing contract 
with COMIBOL.  COMIBOL, however, is currently near bankruptcy, and has 
now stated its willingness to enter into joint ventures or leasing 
contracts for all of its holdings (previously Comibol had mines and 
areas off limits to foreigners).  Bolivia's long-distance telephone and 
railroad companies are state-owned.  The railroad company has large 
debt, antiquated lines (narrow gauge) and equipment.  The telephone 
company, ENTEL, however, is a solid money-maker, and has been eager to 
enter into joint ventures with foreign firms to provide additional 
services.  ENTEL earns a profit (USD 25 million in 1992, 20 million of 
which reverted to the government).  Although there is no restriction on 
foreign ownership of land, the current land title system, dating from 
the 1952 revolution's agrarian reform, makes direct investment difficult 
in some rural areas of Bolivia.  It is easier to contract or form joint 
ventures with local agricultural producers.  The GOB has said that 
amending the agrarian titling law is also a priority and hopes to have 
the Congress consider a bill next year. 
 
Bolivia has one of the simplest and lowest tariff regimes in the region.  
Capital goods are currently subject to a 5 percent tariff, with all 
other imported goods taxed at 10 percent.  An elimination of the capital 
goods tariff was proposed by the current government in its pre-election 
platform.  Since taking office in August 1993, government officials have 
dropped this proposal because they discovered the fiscal cupboard to be 
bare.  The list of products defined as capital goods has been expanded 
considerably, though some investors believe it needs to be updated 
annually in a systematic manner.  Despite the simple tariff structure, 
imports are subject to a number of additional taxes and fees which can 
amount to another 15-35 percent.  The Bolivian Customs system is being 
partially privatized, with the goal of increasing efficiency and 
eliminating opportunities for corruption. 
 
There is no discrimination against foreign investors, other than the 
legal prohibitions against international arbitration in the hydrocarbon 
sector, and on mining concessions within 50 kilometers of the border.  
However, Bolivian firms with mining concessions near the borders may 
contract foreign partners to develop their mines. 
 
U.S. and foreign firms are able to participate in government research 
programs.  Work permit, visa and residence requirements are not 
discriminatory.  There are no special incentives for investment, other 
than new tax systems for hydrocarbon and mining companies which could 
permit foreign companies to receive foreign tax credits in their home 
country. 
 
Bolivia has signed Bilateral Investment Agreements with Germany, Italy, 
France, Spain, Chile, Venezuela, Colombia, Peru, Argentina, Brazil, 
Mexico, China, Canada, Belgium, Great Britain, Sweden, Switzerland and 
the Netherlands. 
 
CONVERSION AND TRANSFER POLICIES 
 
There is free currency conversion at local banks and exchange houses.  
The official exchange rate is set by a daily auction of dollars managed 
by the Central Bank.  The Central Bank offers ten million dollars each 
day but sets a secretly held minimum floor price for the dollars.  In 
this way the Central Bank has managed a steady depreciation of the 
Boliviano in line with the inflation rate since 1985.  The Central Bank 
cannot ignore market forces because dollars can be legally bought and 
sold on the streets and at the exchange houses.  Since 1985, there has 
always been adequate foreign exchange, so no queuing has been required.  
The unofficial, street corner exchange rates are always within one 
percent of the official rate.  There are no restrictions on remittances.  
There is little risk of devaluation of the Boliviano.  The currency 
depreciates at a regular rate, according to market forces.  Depreciation 
in 1994 was around 7 percent.  Depreciation will be roughly 7-10 percent 
in 1995, if trends continue (inflation is running at around 10 percent 
for the last 12 months as of May 1995). 
 
EXPROPRIATION AND COMPENSATION 
 
Article 22 of the Bolivian Constitution provides that expropriation may 
be imposed for the public good or when the property does not complete a 
social purpose, if carried out in accordance with laws and with just 
compensation.  The Mining and Hydrocarbons Laws also provide for 
expropriation of land when needed to develop the underlying mineral or 
hydrocarbon concession. 
 
The last expropriation in Bolivia was in 1969 when the government 
nationalized the petroleum concessions granted to the Bolivian Gulf Oil 
Company.  Although the compensation agreement between the Bolivian 
government and Gulf Oil allowed for a 30-year payment period, the entire 
compensation due to Gulf Oil was paid in 7 years.  There have been no 
cases of discrimination in expropriation involving U.S. companies.  
There are laws which require joint venture contracts in the mining 
sector, in certain circumstances. 
 
DISPUTE SETTLEMENTS 
 
Property and contractual rights may be enforced in Bolivian courts, but 
the legal process is very time-consuming at best, and corrupt at worst.  
For that reason, the National Chamber of Commerce, with assistance from 
the U.S. Agency for International Development, has established a local 
arbitration tribunal.  The Investment Law provides that investors may 
submit their differences to arbitration in accordance with the 
constitution and international norms.  However, the Hydrocarbons Law 
permits international arbitration only for disputes over "technical" 
issues.  This restriction has prevented the U.S. from signing a 
bilateral investment treaty with Bolivia.  Most oil companies which have 
exploration contracts with YPFB, the state-owned petroleum company, 
define issues that will be considered "technical" in their contracts.   
 
Corruption is an endemic problem; two Supreme Court judges, including 
the Chief Justice, were removed from their positions in 1994 after they 
were found guilty of asking for and accepting bribes.  There is no overt 
government interference in the court system, but judges in Bolivia are 
political appointees and often respond to political pressures.  Bolivia 
does not accept nor enforce judgments of foreign courts.  It has a 
functional commercial code that dates from around 1939.  There is no 
bankruptcy law.  Most, if not all, loans are therefore secured ones.  
Creditors often will press criminal charges against debtors, although 
imprisonment for debt was abolished recently.  Property interests are 
recognized and enforced.  The GOB accepts binding international 
arbitration in all sectors except hydrocarbons. 
 
Bolivia has signed the convention to become a member of the 
International Center for the Settlement of Investment Disputes (ICSID), 
but has not yet submitted the convention to its Congress for 
ratification.  Bolivia's Congress is currently considering ratifying the 
New York Convention of 1958 on the recognition and enforcement of 
foreign arbitral awards. 
 
PERFORMANCE REQUIREMENTS/INCENTIVES 
 
Bolivia imposes no performance requirements as conditions for 
establishing, maintaining, or expanding an establishment, or for access 
to tax or investment incentives.   
 
RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT/PROTECTION OF PROPERTY 
RIGHTS 
 
Foreign and domestic entities have the right to establish and own 
business enterprises and engage in all forms of remunerative activity, 
with obvious exceptions for national security or illegality, i.e., 
narcotics.  Private entities may freely establish, acquire and dispose 
of interests in business enterprises.  All private enterprises enjoy the 
same access to markets, credit, licenses and supplies as the public 
enterprises, except that YPFB controls the domestic petroleum products 
market.  This market is supposed to be opened to competition as part of 
the capitalization of YPFB, but details are still forthcoming.  In the 
last couple of years the GOB has allowed private airlines to compete 
with the state-owned airline, LAB, on domestic routes.  Purchasers of 
property/businesses should consult legal counsel before entering into 
contracts.  Under Bolivia's Investment Law, foreign investors enjoy the 
same rights as domestic investors. 
 
PROTECTION OF PROPERTY RIGHTS 
 
Bolivia's existing Intellectual Property Rights (IPR) legislation is 
weak and government enforcement efforts are nil.  The only way currently 
to ensure protection is to hire a good local attorney to chase down 
offenders and take them to court.   
 
The government is aware of the problem and is taking steps to modernize 
its legislation and implementation capabilities.  The government has 
agreed to a modification of Andean Pact Decision 313, Decision 344, 
which at least would provide a higher floor for patent and trademark 
protection.  The agreement increases patent protection from 15 to 20 
years, offers parallel protection, gives patent protection to plant 
species, and makes the agreement the floor, not the ceiling, for 
individual agreements that Bolivia may strike with other countries on 
IPR.  The government will use Decision 344 as a guideline in the 
legislation it is drafting to improve protection of intellectual 
property rights.  The GOB also negotiated a free-trade agreement with 
Mexico in 1994, which requires a higher standard of IPR protection. 
 
The current administration plans to enact a Supreme or Ministerial 
Decree to implement those portions of Decision 344 which do not conflict 
with existing law.  Even though the Andean Pact Decisions should have 
become law when they were published in the Andean Pact Gazette, the GOB 
feels it needs to make the decisions a part of Bolivian law for them to 
hold credence in court.  This would be a stop-gap measure until the 
full-fledged IPR law could be readied and passed by Congress.  The GOB 
also hopes to upgrade the technical capacity of the personnel and 
computer equipment in the Industrial Property Office.  Currently, the 
Industrial Property Office responsible for registering patents and 
trademarks has one attorney, four clerks, and one recently-acquired 
computer.  Records are still handwritten.  In 1991, the Bolivian 
Congress passed a new copyright and film/video law; regulations were 
published in December, 1994.  Bolivia has joined the World Intellectual 
Property Organization, and Congress approved its accession to the Paris, 
Geneva and Berne Conventions. 
 
In 1995 Bolivia avoided being placed on the 301 Watch List, unlike its 
Andean Pact neighbors.  This was more due to Bolivia's relatively small 
economy than to any action on its part, as the GOB has rarely taken 
steps to protect IPR rights (some cassettes and videos were destroyed in 
June 1995).  At the time this report was published (end June 1995) the 
International Intellectual Property Association (IIPA) has petitioned 
the USG to end Bolivia's privileges under the Generalized System of 
Preferences (GSP) and the Andean Trade Preference Act (ATPA). 
 
Patent registration requests are reviewed by clerks for form rather than 
substance.  A notice of the proposed patent registration is then 
published in the Official Gazette.  If there are no objections within 50 
days, a patent is then granted for a 15-year period.  The patent must 
then be used in Bolivia within two years in order to be valid.  
Protection for the layout design of a computer chip is not specifically 
protected under any law, but apparently can be patented. 
 
Trademark registration is carried out similarly to patents, except that 
the period for objections to a trademark registration is 18 months.  
Once obtained, a trademark is valid for a ten-year, renewable term.  It 
becomes null if not used for an 18-month period.  There are no 
provisions to protect trade secrets. 
 
The Bolivian Copyright Law, passed in April of 1992, provides IPR 
protection to literary, artistic and scientific works for the lifetime 
of the author plus 50 years.  It protects the rights of Bolivian 
authors, of foreign authors domiciled in Bolivia, and of foreign authors 
published for the first time in Bolivia.   
 
Foreigners not domiciled in Bolivia will enjoy protection under this law 
to the extent provided in international conventions and treaties to 
which Bolivia is a party.  Bolivian copyright protection includes the 
exclusive right to copy or reproduce work; revise, adapt or prepare 
derivative works; distribute copies of the work; and publicly 
communicate the work.  The exclusive right to translate the work is not 
explicitly granted in the law, but the law does prevent unauthorized 
adaptation, transformation, modification and editing.  The law provides 
for IPR protection for computer programs and data bases to be 
promulgated by separate regulations.  Draft regulations for IPR on 
software have been finished but are awaiting presidential approval.  The 
law does provide IPR protection to musical compositions, but does not 
provide specific protection to sound recordings.  Implementing 
regulations are still forthcoming. 
 
The Bolivian Film and Video Law, passed in December of 1991, contains 
elements of IPR protection.  The law created a National Movie Council 
(CONACINE) to coordinate, control and carry out various activities 
related to the movie industry.  It requires all films and videos shown 
or distributed in Bolivia to be registered with CONACINE and to show a 
seal from CONACINE.  The intent of the law was that films or videos not 
bearing the CONACINE seal could be confiscated and burned. 
 
TV stations are generally perceived to be the worst IPR offenders in 
Bolivia, usually by showing films that are still in cinemas, thus 
siphoning off business from the normal cycle of cinemas, pay-for-
TV/cable, home video, and network TV.  Many stations do not pay rights 
for showing TV programs. 
 
REGULATORY SYSTEM: LAWS AND PROCEDURES 
 
TRADE AND INVESTMENT BARRIERS 
 
The Bolivian government has almost no trade or investment barriers.  
Import licenses are required only for medicines, weapons, and chemicals 
which can be used for processing cocaine.  Products imported from the 
other Andean Pact countries (Venezuela, Colombia, Ecuador and Peru) 
enter Bolivia free of duty, which gives them some advantage over 
products imported from the United States.  However, Bolivia imports much 
less from its Andean Pact neighbors than it does from the U.S.  The U.S. 
remains Bolivia's major trading partner. 
 
The Investment Law of 1991 guarantees that foreign investors will be 
accorded national treatment.  It also guarantees remittances of profits 
and dividends as well as convertibility of currency and unrestricted 
imports required by domestic investments.  Foreign investors may own up 
to 100 percent of a Bolivian firm.  The only restrictions on foreign 
investments are the prohibition on mining and petroleum concessions to 
foreigners within 50 kilometers of the border.  However, the 1991 Mining 
Law allows foreign investors access to the border areas as partners with 
Bolivian companies which have the concessions. 
 
It is Bolivian Government policy to promote free market competition.  
However, there is no anti-monopoly law and there are still state-owned 
monopolies, including the national long-distance telephone company 
(ENTEL), the national railroad (ENFE), the national petroleum company 
(YPFB), and to a lesser extent the national mining company (COMIBOL) and 
the national electric company (ENDE).  The government, as part of its 
capitalization plan, approved legislation in 1994 creating independent 
Superintendencies which will regulate and control utilities.  Free 
competition in those sectors will eventually be allowed; for example, 
with ENTEL, the new owners will have a six-year monopoly on long-
distance service, while local cooperatives will have the same period to 
offer local phone service without competition (assuming they meet 
service and growth goals in their contract with the GOB).  After six 
years the entire telecommunications market will be thrown open. 
 
Aside from petroleum prices, the Bolivian Central Government no longer 
controls prices for goods or services,  (Petroleum prices are controlled 
because only the government-owned monopoly sells petroleum products.)  
The GOB plans to deregulate petroleum prices in the near future but has 
to devise a tax system which will compensate the government for lost 
transfers once YPFB is capitalized.  Until recently municipalities had 
the power to control prices of electricity.  Legislation passed in the 
spring of 1994 gives the Central Government rate-setting authority in 
sectors to be capitalized, which included the energy sector.  
Municipalities still possess authority to set water, garbage collection, 
and intra-city public transportation rates.   
 
Bolivian tax laws are simple and fairly applied.  Not too long ago, the 
government modified its hydrocarbon and mining tax systems to allow 
foreign investors to obtain foreign tax credits in their home countries.  
The government sets a minimum monthly wage, currently around USD 42 (the 
average monthly wage is closer to USD 100).  Although nearly all workers 
earn more than the minimum, it is significant because other benefits, 
such as pensions, are pegged to the minimum wage.  Factory workers earn 
around USD 100 per month plus benefits.  The government plans to 
privatize the state social security system via capitalization. 
 
It is possible for a company to obtain an exemption from the state 
health care system if the company demonstrates that it will provide 
adequate health services. 
 
Bureaucratic procedures have been reduced, but plenty of red tape and 
archaic policies still exist.  One example is that all documents to be 
notarized must be handwritten.  The current administration, as did the 
last, has vowed to de-bureaucratize the government and reduce 
"hypercorruption," but this is proving a difficult task.  Bribes paid by 
hapless businessmen and women to move their paperwork through the 
bureaucratic maze are common.   
 
EFFICIENT CAPITAL MARKETS AND PORTFOLIO INVESTMENT 
 
Historically, Bolivian commercial banks were closely-held operations 
that lent only to those persons well known to the bank or to blue-chip 
companies.  Bolivian bankers are now becoming more sophisticated and 
capable of evaluating future cash flows and expected rates of return.  
Nevertheless, some foreign investors may not qualify for loans due to 
Bolivian bankers' preference for local collateral.  Since commercial 
credit is generally extended on a short-term basis at fairly high 
interest rates, most foreign investors prefer to obtain credit 
elsewhere.  Foreign banks have recently (June 1995) begun to enter the 
Bolivian banking services market via mergers with local banks.  This 
should eventually increase the strength of the system, as the foreign 
banks bring more capital and better management/cost controls, and avoid 
lending to firms with which they have economic interests, which is the 
biggest problem facing many Bolivian banks. 
 
Another option available to established Bolivian companies is the 
issuance of short- or medium-term debt on the local securities exchange.  
The La Paz Securities Exchange opened in November 1989.  Currently, its 
principal activity is acting as a secondary market for Central Bank 
Certificates of Deposit.  However, it is increasing its activities in 
bond issues.  There are three Bolivian mutual funds which have been 
approved by the local regulatory authority, the National Stock Market 
Commission.  The Commission is on the right track as a regulatory 
agency, but is still in the initial phase of training its personnel and 
establishing procedures.  No companies issue stock.  Hostile takeovers 
are therefore non-existent. 
 
Bolivia's banking system currently has around USD 2.3 billion in 
deposits.  In 1985 that number was around USD 70 million. 
 
On paper, Bolivian accounting principles meet worldwide standards.  In 
fact, auditing standards are nowhere near world standards and many 
businesses prefer the system of three sets of books to evade taxes.  In 
addition to the general problem of lack of prompt, effective judicial 
decisions, lenders have great difficulty in foreclosing, and there is a 
poor registry for creditors to register liens. 
 
BILATERAL INVESTMENT AGREEMENTS 
 
Bolivia has bilateral investment agreements in force with the U.K., 
Germany, and Switzerland, and has signed BIT's with Spain, Belgium, 
Sweden and Argentina.  The Argentine agreement is interesting because it 
allows international arbitration which goes against the current 
Hydrocarbons Law.  The agreement will not be submitted to Congress for 
ratification.  The U.S. has not signed a BIT with Bolivia based upon 
Bolivia's unwillingness to allow international arbitration in the 
hydrocarbons sector.  As mentioned, the GOB is addressing the problem in 
the draft legislation for the hydrocarbons sector.  Some members of the 
government have indicated that the GOB is anxious to discuss a BIT with 
the U.S., but only after the proposed changes to the Hydrocarbons Law 
are (hopefully) approved by Congress later in 1995. 
 
OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS 
 
An investment insurance agreement signed in 1985 by Bolivia and the 
Overseas Private Investment Corporation (OPIC) provides for a full range 
of OPIC programs, including insurance, financing and use of OPIC's 
opportunity bank.  OPIC provides financing assistance through direct 
loans and through guarantees in loans by private U.S. financial 
institutions for U.S. investments in Bolivia.  Since 1986, OPIC has 
approved USD 106 million of loans for Bolivia and hopes to continue to 
show strong support for U.S. investors in Bolivia.   OPIC has noted a 
growing number of new investors with interest in inconvertibility, 
expropriation and political risk insurance from investors and is eager 
to do more insurance business in Bolivia. 
 
Since October of 1991, the Multilateral Investment Guarantee Agency 
(MIGA) has offered a complete line of investment guarantees to foreign 
investors in Bolivia. 
 
In late 1993, the U.S. EXIMBANK decided to increase its exposure in 
Bolivia.  It has entered into three USD 10 million credit guarantee 
facilities with local banks, with terms of up to five years.  EXIM has 
indicated its willingness to work directly with qualified private 
companies on loans and insurance.  EXIM is also willing to consider 
individual transactions with Bolivian banks that do not yet have 
sufficient net worth to qualify for the USD 10 million credit guarantee 
facility.   EXIM is not ready to do business with the government, 
however.  EXIM is also offering its political and commercial insurance 
programs in Bolivia. 
 
LABOR 
 
Labor Force:  Of the 7-million people living in Bolivia, an estimated 
2.3 million are in the labor force.  According to a recent survey of 
commercial establishments in the urban areas, 688,000 people work for 
private and public companies, 173,000 people work for government 
agencies (central, regional and municipal), 104,000 are unemployed and 
some 516,000 are underemployed.  That means about 820,000 people work in 
agriculture.  In fact, the 1992 census found that 42 percent of the 
population still lives in the rural areas. 
 
The legal minimum wage is only 42 dollars a month but the average wage 
for a factory worker is about 100 dollars per month.  Benefits, 
including a Christmas bonus equal to one month's salary as well as 
retirement payments, add another 30 percent to the wage bill for most 
companies. 
 
Most companies are unionized; all unions belong to the Confederation of 
Bolivian Workers.  However, the militant leaders of the Confederation 
are often ignored by the rank-and-file workers.  The labor law permits 
Bolivian workers the right to organize and bargain collectively. 
 
Bolivia has an abundant low-cost labor force.  The official unemployment 
rate in urban areas is 7 percent.  That rate does not take into account 
underemployment or rural unemployment.  For purposes of the official 
unemployment rate, a part-time street vendor is considered employed.  
Foreign investors have found the labor force to be stable with low rates 
of turnover, and with high levels of manual dexterity.  There is not yet 
a high level of skill in textile manufacturing in Bolivia. 
 
Most firms enjoy positive relations between labor and management.  
Employees in state-owned firms awaiting privatization and 
capitalization, however, are not likely to welcome new owners, precisely 
because they fear for their jobs.  COB, the main umbrella labor union, 
is likely to continue challenging the administration, especially if 
capitalization results in initial job cuts, not growth.  Bolivian labor 
law guarantees workers the right of association, restricts child labor, 
and provides for worker safety.  Enforcement, however, is often lacking.  
While there is little high-tech manufacturing or industry, relatively 
untrained and uneducated workers in the mining industry have learned how 
to use high-tech equipment at the country's largest private gold mine 
owned by a U.S. company. 
 
FOREIGN TRADE ZONES/FREE PORTS 
 
Bolivia has established eight free trade zones (FTZ'S) in which foreign 
investors enjoy the same investment opportunities as domestic investors. 
 
Due to its land-locked status, neighboring countries also have granted 
Bolivia duty-free zones.  While most freight enters Bolivia via Arica, 
Chile, the free trade zone in Puerto Suarez, on the border with Brazil, 
has seen business boom in 1994-95. 
 
CAPITAL OUTFLOW POLICY 
 
The Bolivian Government does not restrict capital outflow, nor does it 
encourage it. 
 
FOREIGN DIRECT INVESTMENT STATISTICS 
 
The Bolivian Government does not collect or publish data on the stock of 
foreign direct investment, or on the flow of outbound investment by 
Bolivians in other countries.  The government estimates the inflow of 
foreign investment based upon surveys and extrapolation from economic 
growth statistics.  The requirement for investment permits was 
eliminated in 1985.  The Bolivian Central Bank estimated that foreign 
direct investment in 1994 came to USD 128 million.  The general 
consensus is that most foreign direct investment is in the mining and 
hydrocarbon sectors. 
 
MAJOR FOREIGN INVESTORS 
 
The U.S. is the largest foreign investor in Bolivia, predominately in 
the hydrocarbons and mining sectors.  Argentina, Brazil, and Chile are 
other important investors. 
 
-CHAPTER VIII: TRADE AND PROJECT FINANCING - 
 
DESCRIPTION OF BANKING SYSTEM 
 
Bolivia's banking system is made up of the Central Bank and 18 
privately-owned banks.  Citibank is the only U.S. bank with a branch 
office in Bolivia (La Paz).  Commercial banks account for over 80 
percent of the deposits and loan portfolio of the formal Bolivian 
financial system.  The remaining 20 percent is concentrated in savings 
and loans, credit unions, and other financial institutions.  As of June 
30, 1995, total deposits in the banking system were $2.3 billion, of 
which over 88 percent were in dollar denomination deposits. 
 
All commercial banks provide regular banking services, accepting 
deposits for both checking and savings accounts and offering loans on 
short and medium term.  Local banks are authorized to hold dollar-
denominated time deposits.  The Central Bank performs functions similar 
to those performed by the U.S. Federal Reserve.  The Central Bank also 
provides government guarantees on loans to official agencies. 
 
A new banking law, aimed at modernizing the Bolivian banking system, has 
been in effect since April 1993.  The previous banking law dated back to 
1928 and had been amended numerous times, resulting in a web of 
conflicting regulations.  The new law, while not perfect, addresses such 
emerging areas as factoring and leasing, parameters for bank holding 
companies, regulatory roles of the Central Bank and the Superintendency 
of Banks, how banks will interact with capital markets, and generally 
ensures compatibility with the Commercial Code. 
 
FOREIGN EXCHANGE CONTROLS AFFECTING TRADING 
 
There are no foreign exchange controls.  See the section entitled 
'Conversion and Transfer Policies" under the Investment Climate section.    
 
The Boliviano (BS.) is divided into units of 100 centavos, although 
coins denominated at less than 50 centavos are rarely used.  Travelers 
checks, dollars and other currencies can be readily exchanged in 
exchange houses, banks and major hotels.  It is difficult to cash 
personal checks in Bolivia as a non-resident.  The Boliviano is freely 
convertible for all transactions.  As of June, 1995, the rate of 
exchange was 4.79 Bs. for one U.S. dollar. 
 
Several money exchange houses legally operating in Bolivia offer prompt 
conversion of several currencies at legal rates, in addition to 
transfers. 
 
For more detailed information on Bolivia's financial system, including 
information on securities exchanges, debt-equity investment bonds, 
export financing lines for Bolivian exporters, project facilities, and 
financing for private enterprise development, consult the financing 
guide published by the U.S. Department of Commerce's Latin 
American/Caribbean Business Development Center. 
 
GENERAL FINANCING AVAILABILITY 
 
Credit is difficult to obtain, and is generally extended only on a 
short-term basis.  Interest rates range from 12 to 18 percent for loans 
in U.S. dollars and from 28 to 36 percent for Boliviano loans without 
maintenance of value provisions. (note: these were the rates as of June, 
1995)  Collateral requirements for all but the most valued clients are 
very high.  Interest rates are influenced by the Central Bank's 
certificate of deposit rates, as well as by high administrative costs 
resulting from bank operational inefficiency.  Foreign companies are 
eligible to borrow from the local financial system. 
 
HOW TO FINANCE EXPORTS/METHODS OF PAYMENT 
 
TYPES OF AVAILABLE EXPORT FINANCING AND INSURANCE (INCLUDING BILATERAL - 
E.G. EXIMBANK, MULTILATERAL, AND LOCAL SOURCES) 
 
International and bilateral organizations provide some credit lines at 
lower interest rates.  These lines come from the Inter-American 
Development Bank, the World Bank, and the Andean Development 
Corporation.  They are channeled through the Central Bank for on-lending 
to private Bolivian banks that make loans to the productive sector.  
OPIC and EXIM currently offer insurance and/or financing products to the 
private sector. 
 
PROJECT FINANCING 
 
Interested parties should consult the private lending offices of the 
IDB, World Bank and CAF.  OPIC and EXIM should also be consulted.  
 
LIST OF BANKS WITH CORRESPONDENT U.S. BANKING ARRANGEMENTS (Interested 
parties should consult ASOBAN, the local association of banks, for the 
most up-to-date information): BHN Multibanco, Banco Boliviano Americano, 
Citibank, Banco Mercantil, BISA, Banco de la Nacion Argentina, Banco 
Nacional de Bolivia, Banco de Credito de Bolivia, Banco Real, Banco 
Santa Cruz, Banco de la Union, Banco de La Paz, BIDESA.  (The 
Economic/Commercial section of the U.S. Embassy has a list of bank 
officers, addresses, phone and fax numbers.) 
 
-- CHAPTER IX: BUSINESS TRAVEL- 
 
BUSINESS CUSTOMS 
 
Most members of Bolivia's private sector are experienced entrepreneurs 
with ample direct exposure to U.S. and European business customs and 
procedures.  Visiting U.S. travelers find their Bolivian counterparts 
for the most part adept and sophisticated in their various fields of 
interest.  The local representative is a vital component in the 
successful operation of foreign-based firms.  In the case of investment 
contracts, direct sales for major projects, and all government agency 
purchases, a local representative is required by law. 
 
With regard to product promotion and distribution, Bolivia's small 
market requires that most agents represent more than one line of 
merchandise.  The amount of effort given to promoting a particular 
product line is determined in part by the interest and support expressed 
by the supplier, as well as by the agent's ability and interest.  Given 
the key role played by local representatives, the importance of 
occasional personal visits from company representatives as well as 
prompt, responsive handling of communications, cannot be overstated.  
After a firm business relationship has been established, local 
distributors and agents generally expect to be extended an offer to 
visit the foreign company's plant facilities and head offices in order 
to become more acquainted with the company's personal and operating 
techniques. 
 
Although capitalizing and privatizing, Bolivia's economy remains heavily 
public-sector oriented until those processes are completed sometime in 
1996.  Businesspeople should be prepared to deal with government 
officials and their procedures.  U.S. exporters or shippers should 
adhere to the instructions of the Bolivian importer, as well as to the 
instructions in the trade regulations section of this report regarding 
shipment of goods in order to avoid difficulties and Customs fines.   
 
Corruption exists in both government and business.  U.S. companies 
should exercise the utmost care and discretion in their business 
dealings. 
 
 
TRAVEL ADVISORY AND VISAS 
 
Visas:  Any foreigner that wishes or needs to work in Bolivia must first 
obtain a working memorandum from the Ministry of Labor.  To do so, they 
need to present a legal request and their passport with a valid visa.  
The GOB has three different non-immigrant categories for the entry of 
any foreigner into Bolivia.  These are: 
 
1. Tourist visa, free of charge and valid 30 days.  This visa is valid 
for business purposes and may be extended for another 30 days, upon the 
payment of $30 in the offices of the Immigration Service. 
 
2. Temporary residence visa, with the following requirements:  valid 
passport containing specific-purpose visa (for any purpose other than 
tourism); legal petition addressed to the Director General of 
Immigration and Foreign Affairs, requesting temporary residence; work 
contract legalized by the Ministry of Labor, specifying the duration of 
the contract; certificate from the institution for which the person is 
going to work (or a certificate of studies, for students only); police 
security clearance, issued by the Bolivian Police; legal address, 
registered with the Bolivian Police; temporary residence request form, 
change of visa request form, required even if it is their first visa; 
for temporary residence of up to two years a fee of 100 Bs. must be 
paid.  (note: the Bolivian Government reserves the right to accept or 
deny the temporary residence of foreigners in Bolivia). 
 
3. Indefinite residence visa, with the following requirements:  valid 
passport containing two-year temporary residence visa; legal petition 
addressed to the Director General of Immigration and Foreign Affairs 
requesting indefinite residence; medical certificate issued by the 
National Institute of Employment Health; Police security clearance 
issued by Bolivian Police; legal address registered with Bolivian 
Police; payment of $50 to the National Treasury; birth certificate 
legalized by a Bolivian consulate; police security clearance, issued in 
the country of origin and legalized by a Bolivian consulate; indefinite 
visa request form, change of visa request form, work contract legalized 
by the Ministry of Labor.  (note: the GOB reserves the right to accept 
or deny the indefinite residence of foreigners in Bolivia.) 
 
B. The above categories cover principals, managers, trained and 
specially qualified employees involved in the company's operations. 
 
C. No special qualifications are required to secure entry.  The 
person/investor is not limited in the type of work he/she can perform.  
There are no limits to the amount of money invested to qualify for 
entry. 
 
D. There are no specific restrictions for a person/investor entering 
Bolivia.  There is no requirement to train nationals.  A businessperson 
may remain as long as required.  There is no need for a person/investor 
to have been previously employed with a related company outside Bolivia.  
There is no numerical limitation on the number of 
businesspersons/investors from the U.S. that may enter Bolivia.  The 
spouse and children of the visa holder are entitled to enter the country 
with the visa holder; however, their names must be included in the legal 
petition to the Director General of Immigration and Foreign Affairs. 
 
E. The qualifications or restrictions referenced above for U.S. 
businesspersons/investors do not differ from those for individuals from 
other countries. 
 
The head of immigration is Victoria Baldivieso, Directora Nacional de 
Migracion y Extranjeria, Ministerio de Gobierno, La Paz, tel (591) (2) 
359665 or 370475, fax 376701. 
 
HOLIDAYS 
 
The following legal holidays are observed throughout the country: 
 
New Year's Day      January 1 
Carnival     Varies 
Good Friday     Varies 
Labor Day      May 1 
Corpus Christi     Varies 
Independence Day     August 6 
All Saints Day     November 1 
Christmas Day     December 25  
 
LOCAL STATE HOLIDAYS 
 
February 10     Oruro Day 
April 15     Tarija Day 
May 25     Sucre Day 
July 16     La Paz Day 
September 14     Cochabamba Day 
September 24     Santa Cruz Day 
September 24     Pando Day 
November 10     Potosi Day 
November 18     Beni Day 
 
BUSINESS INFRASTRUCTURE (E.G. TRANSPORTATION, LANGUAGE, COMMUNICATIONS, 
HOUSING, HEALTH, FOOD) 
 
Transportation is hindered by a lack of developed infrastructure.  
Bolivia has just over 50,000 kms of roads, of which just over 2,000 kms 
are paved.  There are paved roads from La Paz to Lake Titicaca, 
Cochabamba, and Oruro.  Most of the road between Cochabamba and Santa 
Cruz is paved.  No paved roads exist to neighboring countries.  The 
national railroad system has a total of 3,651 kms of track, divided into 
two non-connecting segments.  The western segment of 2,274 kms is the 
longest and serves the Pacific ports of Arica and Antofagasta, Chile, as 
well as the lake port of Guaqui and the major cities in the Altiplano 
and valleys.  It connects with the Argentinean rail system.  The eastern 
segment of 1,377 kms links Santa Cruz with Brazil and Argentina.  Grain 
export facilities on the Paraguay river near Brazil are being improved.  
Airline connections to other Latin American countries and to Miami are 
reasonable.   
 
Utilities are adequate to good.  Electric power is reliable in the major 
cities.  Residential current in La Paz in 110 and 220 volts, 50 cycles.  
Cochabamba, Santa Cruz and most other cities operate on 220 volts, 50 
cycles.  Water shortages may occur in the dry season in La Paz.  Water 
may not be considered potable by American standards in any Bolivian 
city, although the major cities have improved their water supply systems 
in recent years. 
 
LANGUAGE 
 
Spanish is both the official language and the language of commerce in 
Bolivia.  Aymara and Quechua are also spoken extensively outside the 
major cities, but Spanish is understood in all but the most remote 
regions.  English is widely spoken among businesspersons and public 
officials, but most prefer to speak Spanish. 
 
OFFICE HOURS 
 
Office hours are the same throughout the year, but vary somewhat from 
city to city.  In La Paz and Cochabamba, hours are generally from 9 am 
to 12 noon and 2 pm until 6:30 or 7 pm.  In Santa Cruz, the tropical 
climate demands that work begin and end earlier, beginning at 7 or 8 am 
and ending about 4:30 pm, with a two-hour lunch break in the middle of 
the day. 
 
HEALTH CONDITIONS/PRECAUTIONS 
 
La Paz's altitude may cause headache or more serious health problems for 
individuals with heart or lung ailments.  It is a good idea to consult a 
doctor before coming to La Paz.  Recent arrivals are advised to limit 
their activities while they acclimate.  Sanitary conditions are such 
that it is advisable to boil water at least 20 minutes or to consume 
bottled water.  There are, however, many good and safe restaurants in 
the major cities.  Hepatitis and rabies are endemic in Bolivia, although 
with proper caution both can easily be avoided. 
 
TELECOMMUNICATIONS 
 
National and international telephone and cable services are available in 
La Paz and other major cities.  Direct dialing is available between the 
cities of La Paz, Santa Cruz, Cochabamba, Oruro, Tarija, Potosi and 
Sucre.  Many business establishments operate telex machines.  Direct 
dialing to the U.S. and most other countries is available. 
 
TRANSPORTATION 
 
Taxi fares from the El Alto airport to La Paz vary according to the 
number of passengers, but generally the charge is 5 Bs per person for a 
collective taxi.  Individual taxi fares average 25-30 Bs.  Within the 
city, fares average about 1.80 Bs during the day and 2 Bs at night.  
Rental cars are available, but this service is expensive and frequently 
includes a driver who also must be paid.  U.S. drivers licenses are 
valid in Bolivia for 90 days after arrival. 
 
The major cities of Bolivia offer a radiotaxi service with special 
fares.  Fares within downtown La Paz cost 5 Bs for one to five persons.  
Fares from downtown to the peripheral areas are 10-20 Bs.  This service 
may be rented for a full day at a special cost. 
 
CLIMATE 
 
All of Bolivia experiences a rainy season during the summer months (Dec-
Mar).  The average daytime temperature is 60 degrees fahrenheit for most 
of the year, but evenings are much cooler.  Daytime weather is usually 
pleasant.  Santa Cruz is a tropical city, generally hot and humid, while 
Cochabamba, in a mountainous valley, has a climate similar to that of La 
Paz, except somewhat milder. 
 
HOTELS 
 
There are several good, comfortable hotels in the central part of La Paz 
where single rooms range between $35 and $120 a night, including tax.  
Several new hotels have recently been built, including the Radisson 
Plaza, the Plaza, the Presidente, the Palladium and the Libertador.  
There are also several good hotels in Santa Cruz (Tajibos, Yotau) and 
Cochabamba (Portales, Grand).   
 
-- CHAPTER X: APPENDICES - 
 
APPENDIX A: 
 
A. COUNTRY DATA 
 
POPULATION 1993 (A):  6.94 million 
 
POPULATION GROWTH RATE (A): 2 percent 
 
DISTRIBUTION: roughly 58 percent of the population lives in urban areas. 
 
RELIGION: Catholicism is the dominant religion;  freedom of religion 
exists. 
 
GOVERNMENT SYSTEM: Executive, legislative and judicial branches are 
separate.  President elected every five years, upper and lower houses of 
Congress elected every five years; independent judiciary appointed by 
executive branch, with Supreme Court judges appointed for 10 years. 
 
LANGUAGES: Spanish (official), Aymara, Quechua, and other native 
tongues.   
 
WORK WEEK:  Monday through Friday, 9-12, 2-6:30; see "Business Customs" 
above for more detailed information. 
 
(A): National Institute of Statistics (INE) 
 
--APPENDIX B: DOMESTIC ECONOMY- 
 
                          1994      1995      1996 
 
(billions of dollars) 
GDP (E)                   6.772     7.23        7.725 
GDP GROWTH (percent)        4.1      4.0          4.5 
GDP PER CAPITA (A):    USD 975 
GOVERNMENT SPENDING AS PERCENT OF GDP, 1994: 40 percent (G) 
INFLATION                   8.3     10.0         10.0 
UNEMPLOYMENT RATE (D) (A):  7.4      7.2          7.0  
FOREIGN EXCHANGE RESERVES 12/94 (E): GROSS: 659 MILLION; NET: 502 
MILLION 
 
AVERAGE EXCHANGE RATE: AS OF 6/95, 4.79 Bolivianos per dollar, 
depreciation for 1995 estimated to be around 7 percent 
FOREIGN DEBT: USD 4.2 Billion (E) 
DEBT SERVICE RATIO (E): .28 (USD 276 million principal and interest, USD 
985 million exports) 
U.S. ECONOMIC/MILITARY ASSISTANCE (F):  USAID: 89 million; 
counternarcotics: 23.3 million; military: 22.4 million; Peace Corps: 1.8 
MILLION 
 
(A) Embassy estimate 
(B) GOB estimate 
(C) INE - National Institute of Statistics 
(D) Based on surveys of urban areas.  Data does not consider 
underemployment 
(E) Central Bank of Bolivia 
(F) FY 1995, U.S. Embassy La Paz, estimate 
(G) All government spending as percent of GDP, 1994 
 
--APPENDIX C:  TRADE - 
 
1994 TOTAL EXPORTS (A): 985 million 
1994 TOTAL IMPORTS (A): 1209 million 
1994 U.S. MERCHANDISE EXPORTS TO BOLIVIA (B): 186 million 
1994 U.S. MERCHANDISE IMPORTS FROM BOLIVIA (B): 260 million 
1994 U.S. SHARE OF BOLIVIA'S IMPORTS: 15 percent 
BOLIVIAN MERCHANDISE TRADE BALANCE WITH U.S., 1994 (B): plus 74 million 
PROJECTED AVERAGE ANNUAL GROWTH RATE FROM WORLD THROUGH 1996 (C): n/a; 
imports grew by 12 percent in 1993 and were flat in 1994 
U.S. IMPORTS PROJECTED ANNUAL GROWTH RATE THROUGH 1996 (B): n/a; U.S. 
exports to Bolivia declined by 14 percent in 1994 and by 3 percent in 
1993. 
 
IMPORTS OF AGRICULTURAL GOODS 
TOTAL 1994 WORLD IMPORTS: 145 million 
AGRICULTURAL IMPORTS FROM THE U.S. IN 1994 (B): 25 million 
AGRICULTURAL GOODS TRADE BALANCE: 7.5 million deficit for Bolivia 
(Embassy estimate using Central Bank aggregate figures) 
 
TRADE BALANCE WITH THREE LEADING PARTNERS 1994 (A) (millions of U.S. 
dollars): 
 
BOLIVIAN EXPORTS 
U.S. 302 
ENGLAND 151 
ARGENTINA 144 
 
BOLIVIAN IMPORTS 
U.S. 229 
BRAZIL 183 
JAPAN 174 
 
PRINCIPAL U.S. EXPORTS TO BOLIVIA IN MILLIONS OF USD (B): 
1001 WHEAT AND MESLIN  14.0 
1101 WHEAT AND MESLIN FLOUR   8.7 
8431 MACHINERY AND PARTS   8.4 
2837 CYANIDES, ETC.   7.8 
8471 COMPUTERS  6.8 
 
PRINCIPAL U.S. IMPORTS FROM BOLIVIA (B): 
7113 GOLD JEWELRY   105 
8001 TIN    52 
4407 WOOD   29 
1701 SUGAR  11 
2607 LEAD ORE   9.3 
 
(A) Central Bank of Bolivia 
(B) U.S. Dept. of Commerce 
(C) INE 
 
--APPENDIX D: INVESTMENT STATISTICS - 
 
Investment statistics are not available.  The government dropped the 
requirement for registration in 1985.  
 
--APPENDIX E:  U.S. AND COUNTRY CONTACTS- 
 
COUNTRY GOVERNMENT AGENCIES 
(Please contact the Economic/Commercial section of the U.S. Embassy in 
La Paz for a complete list; all phone/fax numbers use country and city 
code (591) (2) unless noted; all addresses are in La Paz unless noted; 
Casilla means P.O. Box) 
 
MINISTRY OF FOREIGN RELATIONS AND WORSHIP: 
 
Lic. Antonio Aranibar Quiroga, Minister of Foreign Affairs and Worship, 
Plaza Murillo, esq. Ingavi, tel 371150, 371151, fax 371155. 
Dr. Mario Reyes Chavez, National Secretary for International Economic 
Relations, same address, tel 369824, fax 371155 

MINISTRY OF GOVERNMENT: 

Lic. Carlos Sanchez Berzain, Minister of Government, Av. Arce esq B. 
Salinas, tel 370460, 371355, fax 371334 
  
MINISTRY OF NATIONAL DEFENSE: 

Lic. Raul Tovar P., Minister of Defense, Plaza Abaroa, tel 359461, 
371365, fax 353156  
 
MINISTRY OF ECONOMIC DEVELOPMENT: 
 
Dr. Jaime Villalobos, Minister of Economic Development, Palacio de 
Communicaciones, Piso 20, tel 356741, fax 375000 
 
Dr. Mauricio Gonzalez Sfeir, National Secretary of Energy, Palacio de 
Communicaciones, Piso 12, tel 374054, fax 392758 
 
Dr. Teddy Cuentas, National Secretary of Mines, Av. 16 de Julio, tel 
374124, fax 359998 

Lic. Freddy Teodovich, National Secretary of Transportation, 
Communication and Civil Aviation, Palacio de Communicaciones, Piso 5, 
tel 377222, fax 371395 
 
Lic. Douglas Ascarrunz, National Secretary of Industry and Commerce, Av. 
Camacho esq Bueno, tel. 372041, 372042, fax 358831 
 
Ing. Edgar Talavera Solis, National Secretary for Agriculture, Av. 
Camacho 1471, tel 361348, fax 357535 
 
Director General of Customs, Ing. Javier Calderon, calle Potosi 940, tel 
371321 or 371378, fax 392505 
 
MINISTRY OF CAPITALIZATION: 
 
Lic. Alfonso Revollo, Minister of Capitalization, Palacio de 
Communicaciones, Piso 17, tel 377222, fax 377451 
  
Lic. Edgar Saravia, National Secretary of Capitalization, Piso 20, tel 
356738, fax 08112823 
 
MINISTRY OF HUMAN DEVELOPMENT 
 
Lic. Alberto Bailey Gutierrez, National Secretary of Culture (copyright 
issues), tel 378128, fax 378128 
   
MINISTRY OF SUSTAINABLE DEVELOPMENT AND ENVIRONMENT: 
 
Ing. Luis Lema Molina, Minister of Sustainable Development and the 
Environment, Av. Arce 2147, tel 367449, fax 392892 
 
Other important contacts: 
  
Empresa Nacional de Television Boliviana (National Bolivian Television 
Company), General Manager Lic. Miguel Montero Vaca, Casilla 900, tel 
376356, fax 359753 
 
Administracion de Aeropuertos y Servicios Auxiliares a la Navegacion 
Aerea (AASANA, the Airport and Auxiliary Services Administration), 
Executive Director Ing. Alvaro Echenique, Casilla 4382, tel 351341, fax 
342731 
  
Banco Central de Bolivia (Central Bank of Bolivia), President Lic. 
Fernando Candia, Casilla 3118, tel 374151, fax 392398 
  
COUNTRY TRADE ASSOCIATIONS/CHAMBERS OF COMMERCE 
 
Confederacion de Empresarios Privados de Bolivia (Bolivian Private 
Entrepreneurs Confederation), President Carlos de Chazal, Casilla 130, 
tel 356831, fax 379970 
 
Camara Americana de Comercio de Bolivia (American Chamber of Commerce of 
Bolivia), General Manager Ana Maria Galindo de Paz, Casilla 8268, tel 
342523, fax 371503 
 
Camara Nacional de Comercio (National Chamber of Commerce), Executive 
Director Fernando Caceres, Casilla 7, tel 378600, fax 391004 
 
Camara Nacional de Industrias (National Chamber of Industries), General 
Manager Dr. Alfredo Arana Ruck, Casilla 611, tel 374476, fax 350620 
 
Camara Boliviana de la Construccion (Bolivian Chamber of Construction 
Companies), President Oscar Cobarrubias, Casilla 3215, tel 370981, fax 
370981 
  
Camara Nacional de Mineria (National Chamber of Small Mining), Casilla 
2022, tel 325140, fax 379653     
 
Asociacion Nacional de Mineros Medianos (National Association of Medium 
Miners, President Raul Espana-Smith, Casilla 6190, tel 352223, fax 
354124 
 
Camara Agropecuaria del Oriente (CAO) (Eastern Agricultural Chamber), 
General Manager Walter Nunez, Casilla 116, tel (591) (33) 44966 or 
51391, fax 22621 
 
Asociacion de Bancos Privados de Bolivia (Bolivian Private Bankers 
Association, ASOBAN), Executive Secretary Carlos Iturralde B., Casilla 
5822, tel 321379, fax 391093 
 
Asociacion Nacional de Industriales Textiles (National Association of 
Textile Industries), President Carlos Morales, Casilla 3836, tel 343467, 
fax 343467 
 
COUNTRY MARKET RESEARCH FIRMS: 
 
All market research and consulting companies are required to register 
with the National Association of Consulting Companies (ANEC), Casilla 
8560, President Oscar Aguilar Orellana, tel 324532, fax 354351 
 
The Society of Engineering Consultants may be contacted at Casilla 6113 
 
COUNTRY COMMERCIAL BANKS 
 
MAJOR COMMERCIAL BANKS IN BOLIVIA 
 
Banco Boliviano Americano (purchased by Interbanco 6/95), Loayza esq Av. 
Camacho, Casilla 478, tel 350860, fax 353984 
 
Banco de Santa Cruz de la Sierra, 277 Junin 154, Santa Cruz, Bolivia, 
tel 591 3 369911, fax 350114 
 
Banco Mercantil, Calle Ayacucho esq. Mercado, tel 356902, fax 391442 
 
Banco Nacional de Bolivia, Av. Camacho esq Colon, Casilla 360, tel 
354616, fax 371279 
 
Banco Real, Av. 16 de Julio 1642, tel 366603, fax 391413 
 
BHN MULTIBANCO, Casilla 4824, tel 320789, fax 391358 
 
Banco Ganadero, 24 de Septiembre 110, Santa Cruz, tel 591 3 391616, fax 
361617 
 
Banco Industrial, Av. 16 de Julio 1628, tel 323343, fax 392013 
 
Banco de la Nacion Argentina, Av. 16 de Julio 1486, tel 359211, fax 
391392 
 
Banco de La Paz, Av. 16 de Julio 1473, Casilla 6014, tel 390950, fax 
08112875 
 
Banco de Credito, Calle Colon esq. Mercado, tel 391722, fax 391044 
 
Citibank, Plaza Venezuela 1434, tel 369955, fax 08112894 
 
Banco Economico, Av. Camacho 1245, tel 354341, fax 08112745 
 
Banco Internacional de Desarrollo (BIDESA), Calle Potosi 1285, tel 
360820, fax 361130 
 
Banco de la Union, Av. Camacho 1416, tel 360431, fax 325880 
 
Interbanco (bought out Banco Boliviano Americano 6/95), Casilla 14758, 
Calle Mercado 1046, tel 317707, fax 316787 
 
MULTILATERAL DEVELOPMENT BANKS 
 
World Bank, representative Isabelle Giradot Berg, BISA Building, on the 
Prado, 9th floor, tel (591)(2) 356844, fax 391038, La Paz 
 
InterAmerican Development Bank, representative David Atkinson, BISA 
Building, on the Prado, 5th floor, tel (591) (2) 351221, fax 391089, La 
Paz 
 
Corporacion Andina de Fomento (CAF), the Andean Development Corporation, 
representative Dr. Hernan Escudero, calle Esmeralda no. 4, tel (591) (2) 
357735 or 363934, fax 391032, La Paz 
 
 
U.S. EMBASSY TRADE PERSONNEL 
 
INCUMBENT/GRADE/                       PERCENTAGE TIME  
            COMMERCIAL WORK 
 
Curtis B. Kamman, Ambassador                       15 
 
Robert Perry, Deputy Chief of Mission              10 
 
Paul Larsen, Economic Counselor/Commercial Attache 60 
 
Dirk Hofschire, Economic and Commercial Officer    50 
 
Fernando Urquidi, FSN-Senior Economic Specialist   15 
 
Jaime Bilbao, FSN-Senior Commercial Specialist    100 
 
Luisa San Martin, FSN-Commercial Secretary         90 
 
 
WASHINGTON-BASED USG COUNTRY CONTACTS 
 
Bolivian Government Representation in the United States 
 
Embassy of Bolivia, 3014 Massachusetts Ave NW, Washington, DC 20008, tel 
202 483-4410, fax 328-3712 
 
Consulates General: 
 
25 SE Second Ave. Suite 545, Miami, FL 33131 tel 305 358 3450/3451, fax 
374-8636 
 
211 East 43rd St, Room 802, New York, NY 10020, tel 212 687-0531/0530, 
fax 687-0532 
 
870 Market St, Room 255, San Francisco, CA 94102, tel 415 495-5173, fax 
399-8958 
 
Honorary Consuls: 
 
Luis Zambrana, 7710 Carondelete Ave, St. Louis, MO 63105, tel 314 725-
9966, fax 725-9103 
 
Ricardo Antezana, 13933 SE 60th St, Bellevue, WA 98006, tel 206 244-
6696, fax 243-3795 
 
David C. Mitchell, 1801 Gilbert Ave, Cincinnati, OH 45262, tel 513 271-
5381, fax 271-8189 
 
Jaime R. Escobar, 1200 W. Superior St, Suite 101, Melrose Park, IL 
60160, tel 312 343-1234 
 
Peter Mariaca, Calle Munet Court, No. 10, Camara, Puerto Rico, tel 809 
740-8444, fax 798-7525 
 
Jorge Gelatoire C., 11107 River View, Houston, TX 77077, tel 713 789-
4362, fax 789-8124 
 
The Bolivian Chamber of Commerce is located at One World Trade Center, 
Suite 5215, New York, NY 10048, Manager Jorge Palacios, tel 212 839-7086 
 
Below is a list of selected current reports on commercial and economic 
conditions in Bolivia available from various sources. 
 
U.S. Department of Commerce Publications:  some of these reports were 
prepared within the Office of Latin America (OLA), while others were 
submitted by the U.S. Foreign Commercial Service and the 
Economic/Commercial section of U.S. Embassy La Paz. 
 
These reports and those of the Department of State are generally 
available through the U.S. Government Printing Office, tel 202 783-3238, 
unless otherwise indicated.  The reports are also available on the 
National Trade Data Bank (NTDB), tel 202 377-1986, which may be accessed 
at most local or university libraries.  In addition, there are a number 
of valuable reference works and periodicals, the most important of which 
are listed below.  The best way to obtain guidance on using these 
information resources is to contact the Bolivian desk officer, Room 
3025, U.S. Dept. of Commerce, Washington, D.C. 20230, tel 202 377-1659. 
 
U.S. Exports/World Areas by Schedule E Commodity Grouping Report, FT 
455, annual 
 
Industrial Outlook Report: Minerals, annual 
 
Industrial Outlook Report: Petroleum, annual 
 
Financing Guide (available free of charge from the Latin 
America/Caribbean Business Development Center, U.S. Dept. of Commerce, 
tel 202 377-0703, 377-0841), and the Guidebook to the Andean Trade 
Preference Act (also available free of charge from the same source) 
 
U.S. DEPARTMENT OF STATE PUBLICATIONS 
 
Background Notes: Bolivia, available periodically from the Dept. of 
State, Office of Public Communications, Bureau of Public Affairs, 
Washington, D.C., 20520.  Background Notes provides political and other 
background information on Bolivia (annual subscriptions to the 
Background Notes series may be purchased by contacting the 
Superintendent of Documents, Government Printing Office, Washington, 
D.C. 20402) 
 
Area Handbook for Bolivia, periodic 
 
The Commercial section of the U.S. Embassy in La Paz (tel 591 2 430251, 
fax 433710) can provide a list of publications related to Bolivia, 
including those published in Bolivia. 
 
--APPENDIX F: MARKET RESEARCH - 
 
List available and upcoming DOC/ISAS and IMIS  
 
Computers and Peripherals Sector, April 1995 
 
Medical equipment -Industry Sub-sector analysis 
 
--APPENDIX G: TRADE EVENT SCHEDULE- 
 
1) Santa Cruz International Trade Fair, September 14-27, 1995, Event 
type: TFO, Santa Cruz, Bolivia, Industries: GIE (U.S. pavilion to be 
managed by the AMCHAM Bolivia (La Paz office), with U.S. Embassy 
providing guidance). 
 
2) Infrastructure USA, November 16,17, 1995, RC, ID 96000439, 
Industry:GIE, La Paz (catalog show)  
 
3) New Products USA, February 8,9, 1996, RC, ID 96000437, Industry: GIE, 
La Paz (catalog show) 
 
4) Multi-State Trade Days, September 19-20, 1996, MSTD, ID 96000000, 
Industry: GIE, La Paz (catalog show) 
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