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                     Key Economic Indicators
        (Millions of U.S. dollars unless otherwise noted)

                                  1991      1991      1993 /1
Income, Production,
 and Employment /2

Population (millions) /3              6.65      6.81      6.94
Real GDP (pct. chg.)
 in 1988 pesos                        4.1       3.44      4.0
Real Per Capita GDP /10             912     958       1,017
 Percent change  /10                  7.3       5.56      6.5
Nominal GDP /10                   6,067.3   6,527.0   7,059.
GDP by Sector (pct.)
 Agriculture                         17.6      16.7     n/a
 Manufacturing                       16.3      16.5     n/a
 Trade & Services                    24.6      25.3     n/a
 Public Administration                9.0       9.2     n/a
 Mining                               6.2       5.8     n/a
 Transportation/Communications       10.6      11.2     n/a
 Oil Industry                         2.7       2.6     n/a
 Others                              14.9      12.7     n/a
Unemployment Rate Percent /6/10       7.0       5.4       7.4

Money and Prices /2

Money supply (M1) 
 (millions of bolivianos) /8      1,446.8   1,960.2   1,958.5
Fiscal Deficit Percent GDP /12        4.3       4.6       6.0
Inflation pct. (12 months)           14.5      10.5      10.0
Commercial Bank Deposits /7       1,121.1   1,118.4   2,002.0 
Interest Rates on U.S. dollars
 Loans Avg. percent /8               19.1      17.6      17.4
 Deposits  Avg. pct. /8              12.1      11.7      11.4
 CD Time Deposits Avg. pct. /8        8.4       7.5       7.4
Exchange Rate (Bs/$) /2
  Year-end /10                        3.73      4.10      4.45
  Average /10                         3.59      3.85      4.28

Trade and Balance of Payments /2

Total Exports (FOB) /11             848.6     710.3     312.5
  Exports to the U.S. /4/5          208.7      72.4      86.7
Exports - Natural Gas /11           232.6     122.8      43.1
Exports - Tin (CIF) /11              99.7     107.4      46.4
Other Mineral Exports (CIF) /11     256.4     272.5     132.6
Tot. Imports (CIF frontier) /11     992.3   1,130.5     561.0
  Imports from the U.S. /4/5        189.7      95.5      99.4
Current Account Balance /13        -313.4    -587.0    -542.0
Capital Account Balance /13         128.7     371.0     210.0
Central Bank Gross
 Reserves (year-end) /11            393.0     416.90    383.7
Central Bank Net
 Reserves (year-end) /11            200.3      40.0     239.7
Public Foreign Debt /9            3,582.3   3,784.50  3,743.6

 Loan Disbursements /11             279.4     384.5     141.3
 Capital Payments /8                107.0     106.9      57.2
 Interest payments /8               113.2      99.5      49.2


1/   Estimated data (Central Bank of Bolivia and UDAPE) and/or
targets set by the Government of Bolivia and the IMF.
2/   Central Bank of Bolivia.
3/   National Institute of Statistics (based on 1992 census).
4/   U.S. Department of Commerce.
5/   U.S. Department of Commerce as of June 1993.
6/   Based on surveys of urban areas.  Data does not include
7/   Superintendency of Banks
8/   1993 Figure as of October 31, 1993
9/   Foreign Debt of the Central Bank of Bolivia
10/  Embassy estimate
11/  Central Bank of Bolivia; 1993 figure as of June 1993.
12/  IMF data. N.B. The IMF estimate of GDP is much lower than
that reported by the Central Bank.
13/  Central Bank of Bolivia estimate as of September 30, 1993

1.  General Policy Framework

    In 1985, the Government of Bolivia initiated a series of
economic reforms to arrest hyperinflation and open the
economy.  The currency was allowed to float, commercial banks
were allowed to set their own interest rates, import and
investment permit requirements were eliminated, economic
activities which had been reserved for government corporations
were opened for private investment, and the government entered
into an IMF standby program.  The Paz Zamora Administration,
which took office in 1989, institutionalized and advanced these
market-oriented economic reforms.  The Sanchez de Lozada
Administration, which took office in August 1993, plans to push
these market-oriented reforms further with the privatization of
the large, state-owned corporations.

    The results of the economic reforms have been a dramatic
drop in inflation (to less than 20 percent each year since
1986), steady economic growth (between 2.5 and 4.1 percent
annually starting in 1987) and growing amounts of private
investment.  The economy is expected to grow by about four
percent in 1993 with inflation of around 10 percent. 
Commercial bank deposits have more than tripled since 1989 to
over $1.9 billion, indicating a return of flight capital. 
Exports and imports have grown sharply with private firms now
accounting for over half of export earnings, as opposed to five
percent in 1985.  Trade surpluses and large inflows of foreign
aid have resulted in growing foreign exchange reserves.  Net
reserves in the Central Bank had reached $272 million by
October 1993, about three months worth of imports.  The
positive growth since 1986 has more than offset the decline of
the economy during the first half of the decade.  By 1990, the
GDP and export figures were back to about where they had been
in 1980.  During the decade the population grew by 13 percent
to an estimated 6.1 
million so GDP per capita fell during the decade to about $900
in 1990.

    In compliance with the IMF programs, the government has
reduced the budget deficit of the non-financial public sector
(which includes central, regional and municipal governments
along with the parastatal corporations) to 4.6 percent of GDP
in 1992 (as estimated by the IMF).  Central government tax
revenues came to about 11.1 percent of GDP in 1992.  Tax
revenues have risen sharply due to better administration and
increasing tax rates.  The government also receives transfers
from public enterprises and from foreign grants (1.5 percent of
GDP).  Budget deficits have been covered by foreign loans and
the sale of certificates of deposit by the Central Bank.  With
the budget deficit shrinking, the number of certificates of
deposit in circulation has decreased to only $90 million worth
by October 1993 and the interest rate offered on the
certificates has declined from 16.2 percent in 1989 to 7.4
percent by October 1993.

    The money supply, both M1 and M2, has grown slowly since
1985 with M1 averaging around five percent of GDP.  However,
the published figure for money in circulation (1.96 billion
bolivianos) is misleading since there are also millions of U.S.
dollars in circulation and dollars are a legal means of
exchange.  Banks are allowed to keep dollar accounts and make
dollar loans.  Over 87 percent of the $1.9 billion worth of
deposits in Bolivia's 16 commercial banks are presently held in

    The new investment law allows contracts to be written in
dollars.  Interest rates have fallen over the last two years as
growing confidence in Bolivia's financial stability led to
excessive liquidity in the banks and as government borrowing
has decreased.  By October 1993 the average rate of dollar
deposits had fallen to 11.2 percent and the average rate on
dollar loans was down to 18.2 percent from 16 and 24.3 percent
respectively in 1989.

2.  Exchange Rate Policy

    The official exchange rate is set daily by the government's
exchange house, the BOLSIN, which is under the supervision of
the Central Bank.  The BOLSIN holds daily auctions of dollars. 
The Directors of the BOLSIN meet every day to decide the
minimum rate and the number of dollars to offer for sale.  The
average amount of dollars offered each day is $5 million. 
Sealed bids are then collected and opened with dollars going to
those bidding at or above the minimum rate.  With this
mechanism the Central Bank has slowly devalued the boliviano in
line with domestic inflation and inflation in Bolivia's major
trading partners.  The rates set by the BOLSIN cannot ignore
market forces because currency exchanges in banks, hotels,
exchange houses and on the street corners are legal and
active.  The parallel market exchange rates are always within
one percent of the official rates.

3.  Structural Policies

    In 1990, the government reduced tariffs from 16 to ten
percent for all imports except for capital goods for which the
tariff is five percent.  In addition, the government charges a
13-percent value-added tax and a two-percent transaction tax on
all goods, whether imported or produced domestically, when they
are sold.  There are excise taxes on some consumer products
including cars.  Import permits were required for sugar, cement
and wheat, but that requirement was eliminated in September
1990 after the promulgation of an investment law.  The central
government sets the prices of fuels while the municipal
governments try to control the price of a bread roll commonly
consumed by the poorer members of society.

    In late 1990 and early 1991, the Bolivian Congress approved
three laws that the executive branch had pushed hard in order
to promote private investment.  The investment law establishes
many guarantees, such as remission of profits, freedom to set
prices, convertibility of currency, etc., that had been
previously authorized by Presidential decree.  That law
essentially guarantees national treatment for foreign investors
and authorizes international arbitration except for disputes in
the oil industry.  The hydrocarbons law authorized YPFB, the
government-owned oil company, to enter into joint ventures with
private firms and to contract companies to take over YPFB
fields and operations, including refining and transportation. 
The mining law created a tax on profits, which is creditable in
the United States, and opened up the border areas to foreign
investors as long as their Bolivian partners hold the mining

    In 1992 the Bolivian Congress approved a privatization law
that allows the government to sell state owned companies and
assets.  In 1993 the Congress passed a new banking law that
establishes clear rules for the commercial banks and authorizes
them to maintain foreign currency accounts.  (That
authorization had been in effect since 1985 from a presidential
decree but a law passed by Congress is much more permanent.) 
All government purchases over 100,000 Bolivianos (about
$23,000) are, by law, handled by one of three private
purchasing agents.  The purchasing agents sell the bid
specifications, evaluate the bids and rank order the offers for
the government office or corporation making the purchase.

4.  Debt Management Policies

    The Bolivian government owes over $3.7 billion to foreign
creditors.  About half of that is owed to international
financial institutions, mainly the World Bank and the
Inter-American Development Bank, and the other half is owed to
foreign governments.  The bilateral debt payments have been
rescheduled four times now by the Paris Club, the last time for
an 18-month period.  Furthermore, several foreign governments
have forgiven substantial amounts of the bilateral debt.  In
September 1990, the U.S. Government forgave $372 million owed
by the Bolivian government including all of the old A.I.D.
loans and $31 million of the old PL-480 loans.  (All U.S. 
assistance to Bolivia has been on a grant basis since the late

    The Bolivian government has reduced the debt it owes to
commercial banks from over $700 million in 1985 to $9.6 million
by mid-1993.  The government bought back many of the debt
claims at 11 cents on the dollar and has exchanged other debt
claims for investment bonds which will mature with the full
face value of the debt claim in 25 years.  Most of the
investment bonds have already been redeemed for private
investment projects in Bolivia.  The government has now
contracted to exchange the remaining commercial debt at 16
cents on the dollar.

5.  Significant Barriers to U.S. Exports

    There are no significant barriers to U.S. exports to
Bolivia and the minor barriers to U.S. direct investment apply
to all foreign investors, not just U.S. investors.  The
requirement to obtain import licenses, previously required for
sugar, wheat and cement, was eliminated in September 1990 with
the passage of the Investment Law.  Article 8 of that law
states, "Freedom to import and export goods and services is
guaranteed, with the exception of those products that affect
public health and/or the security of the state."  The Export
Law of April 1993 also prohibited the import of products which
affect the preservation of flora and fauna, particularly
nuclear waste.  Again, none of these restrictions discriminate
against U.S. exporters.

    In October, 1992, the Bolivian government eliminated the
tariffs on all but 11 products coming from four members of the
Andean Pact which means that similar products coming from the
United States will be at a slight price disadvantage.  However,
less than five percent of Bolivia's current level of trade is
with those Andean countries.  The Andean Pact is committed to
adopting a common external tariff but Bolivia will be allowed
to keep its tariff rates at five and ten percent.

    Bolivia became a member of GATT in August 1990 but has only
signed the GATT codes on customs valuation so far.

    There are no limitations on foreign equity participation
and dozens of Bolivian companies are wholly owned by U.S.
investors.  The new investment law essentially guarantees
national treatment for foreign investors.  The only restriction
on foreign investment is that foreigners may not obtain mining
concessions within 50 kilometers of the borders.  However,
Bolivians with mining concessions near the borders may have
foreign partners as long as they are not from the country
adjacent to that portion of the border.

6.  Export Subsidies Policies

    In early 1991 the government eliminated a certificate
rebate program under which the exporters of "non-traditional"
goods received certificates equal to six percent of the value
of the export.  The certificates were to offset the ten percent
value-added tax charged on all purchases in Bolivia.  The
certificate program was replaced with a "drawback" scheme which
rebated either two or four percent of the value of most
"non-traditional" exports.  An export law, approved by Congress
in April 1993, replaced the drawback program with one whereby
the government grants rebates of all the domestic taxes paid on
the production of items later exported.  The only indirect
subsidy on exports comes from the government-owned railroad
which charges a lower shipping rate per ton on exported
commodities than on imported goods.

7.  Protection of U.S. Intellectual Property

    Protection of intellectual property rights (IPR) improved
during 1992 following the promulgation of two laws.  The film
law, passed by Bolivia's Congress in December 1991, will
provide protection to films and videos as soon as the
implementing regulations are published.  The law requires all
films and videos shown or distributed in Bolivia to be
registered with the newly created National Movie Council. 
Films not registered and not carrying a seal by the Council may
be confiscated.  The copyright law (Ley de Derecho de Autor),
passed in April 1992, provides IPR protection to literary,
artistic and scientific works for the lifetime of the author
plus 50 years.  The law protects the rights of Bolivian
authors, of foreign authors domiciled in Bolivia, and of
foreign authors published for the first time in Bolivia.  These
protections will extend to authors of computer programs once
the implementing regulations have been promulgated.  The
Bolivian Congress recently ratified three treaties in order to
join the World Intellectual Property Organization and the Bern
and Paris conventions.

    Patent protection remains inadequate but there is
widespread agreement in the Bolivian government that the
90-year-old patent law needs to be updated to conform to
international standards.  The Bolivian government endorses
Andean Pact Decision 344 of 1993 which requires its members to
offer 20-year patents and other modern levels of patent
protection.  The executive branch is drafting a bill for
congressional consideration that would fix these standards by

    Despite the historically inadequate legal and
administrative protection of intellectual property, there are
no specific complaints from any U.S. firm about piracy of
films, pharmaceuticals or patents.  It is impossible to
estimate the losses to U.S. firms caused by the duplication of
video cassettes or the pirating of satellite signals for
television broadcasting.  (Actually, most of the duplicated
videos are apparently coming from other countries.)  In any
case, the market for these products in Bolivia is very small
since only a small fraction of the seven million people own

8.  Worker Rights

    a.   Right of Association

    Bolivian workers have the right to establish and join
organizations of their own choosing, and they are free to elect
their own leaders.  This right applies to workers in all areas
of the country.  There are no areas where workers are governed
by anything other than the general labor code.  Labor law
prohibits any contract which denies workers' constitutional
rights and freedoms.

    b.   Right to Organize and Bargain Collectively

    Bolivian workers have the right to organize and bargain
collectively.  The law does not extend this right to government
workers, but the distinction is largely ignored in practice, as
virtually all government workers are unionized.  Negotiations
between government representatives and freely elected labor
leaders are common.  Workers in the private sector possess and
frequently exercise the right to strike.  Employees of
government agencies (e.g. the Airport Administration Agency)
also stage short strikes from time to time.

    c.   Prohibition of Forced or Compulsory Labor

    The law prohibits forced or compulsory labor, and the law
is generally complied with and enforced.  No cases of forced or
compulsory labor came to light during 1993.

    d.   Minimum Age for Employment of Children

    The law prohibits the employment of persons under 18 years
of age in dangerous, unhealthy, or immoral work.  Bolivia's
50-year-old labor code is ambiguous on the conditions of
employment for minors from 14 through 17 years of age. 
However, even the existing legal provisions concerning
employment of children are not enforced.  For example, child
labor under 14 years of age is common.  Young children can be
found on the streets selling lottery tickets and cocaine-laced
cigarettes, shining shoes and assisting bus drivers.  They are
not generally employed in factories or businesses.

    e.   Acceptable Conditions of Work

    In urban areas, only half the labor force enjoys an
eight-hour workday and a workweek of five or five and one-half
days.  Like many other labor laws, the maximum legal workweek
of 44 hours is not enforced.  Responsibility for the protection
of workers' health and safety lies with the Labor Ministry's
Bureau of Occupational Safety.  Labor laws that provide for the
protection of workers' health and safety are not adequately
enforced.  Although the state-owned mining corporation,
COMIBOL, has a special office charged with mine safety, the
mines, often old and operated with antiquated equipment, are
particularly dangerous and unhealthy.

    f.   Rights in Sectors with U.S. Investment

    Probably 70 percent of U.S. investment in Bolivia is in the
petroleum industry.  Petroleum industry worker rights are
legally the same as in other sectors.  However, conditions and
salaries for workers in the petroleum industry are generally
better than in other industries because of strong labor unions
in that industry.

         Extent of U.S. Investment in Selected Industries

              U.S. Direct Investment Position Abroad
                on an Historical Cost Basis - 1992
                    (millions of U.S. dollars)

Category                                    Amount

Petroleum                                                 D
Total Manufacturing                                       0
    Food & Kindred Products                     0
    Chemicals and Allied Products               0
    Metals, Primary & Fabricated                0
    Machinery, except Electrical                0
    Electric & Electronic Equipment             0
    Transportation Equipment                    0
    Other Manufacturing                         0
Wholesale Trade                                           D
Banking                                                   D
Finance and Insurance                                     0
Services                                                  0
Other Industries                                          D

TOTAL ALL INDUSTRIES                                    189

(D)-Suppressed to avoid disclosing data of individual companies

Source:  U.S. Department of Commerce, Bureau of Economic
Analysis, unpublished data.

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