Bolivia

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Development Challenge Other Donors FY 2002 Program Activity Data Sheets Summary Tables Program Summary Strategic Objective Summary USAID Search: Bolivia Previous Years' Activities 2001, 2000, 1999, 1998, 1997 54     Introduction Bolivia's commitment to economic stability and growth, democratic political reforms, and increased social welfare make it a strong development partner. Nevertheless, the country is far from ready to graduate from development assistance. The provision of greater economic opportunities for the poor, the strengthening of democratic values, the improved health of poor Bolivians, and the conservation of natural resources still need to be sustainably developed. Additionally, with the remarkable strides in illegal coca eradication over the past year, there is a strong need to continue with significant levels of alternative development assistance. USAID's strategy addresses all of these concerns, and at the same time supports several of the principal U.S. foreign policy goals as well as the Government of Bolivia's (GOB) National Plan of Action, including the GOB's target to eliminate all illegal coca from Bolivia by 2005. The Development Challenge Located in the heart of the Andes, landlocked and rugged, Bolivia has only recently emerged from years of political and economic instability. Bolivia remains one of the most impoverished nations in the hemisphere with over five million Bolivians living in poverty. There remains a large income gap between rich and poor that continues to widen. On the positive side, Bolivia has enjoyed macroeconomic stability for over 15 years. The government has implemented profound policy and institutional reforms in areas such as pensions, justice, decentralization, and customs. Nevertheless, Bolivia's economy has grown at only about 4% a year in the 1990s, and has been much lower over the last two years. At this rate, it will take over 40 years for the per capita gross domestic product to double. With a population growth rate of 2.3%, the economy needs to grow significantly faster and distribute benefits more broadly in order to alleviate poverty. Because of citizen dissatisfaction and impatience with Bolivian democratic development, and the government's inability to reduce poverty significantly despite over 15 years of macroeconomic stabilization efforts led to violent demonstrations in 2000 during April and September. In addition to the loss of lives, there were dozens of road blockades which caused significant commercial hardship as well as widespread destruction of many roads. As a consequence of the general social unrest and economic crisis, living standards of the poor and those dependent on the informal sector have declined in the last two years. In May 2001, the GOB will submit a Poverty Reduction Strategy Paper (PRSP) to the IMF and the World Bank, which is a pre-requisite for securing approximately $1.3 billion in debt relief over the next 15 years. Bolivia's external debt totals approximately $4.5 billion. The PRSP incorporates recommendations from civil society representatives, collected through nationwide public consultations under a "National Dialogue." As a key member of the core donor advisory group to the GOB, USAID played an active role in the PRSP and Heavily Indebted Poor Countries (HIPC) II process, fully participating in consultations and providing feedback, comments, and recommendations for the development of Bolivia's Poverty Reduction Strategy. The PRSP aims to alleviate poverty through the implementation of a broad-based growth strategy that will promote the efficient and transparent use of resources from HIPC, the GOB, and all donors. Systemic constraints, such as inadequate governmental, financial and educational institutions; poor technological capability; limited financial services; a shortage of human capital and experience; and poor infrastructure continue to impede economic growth. USAID-supported activities, however, continue to achieve significant measurable successes. Examples include a proven alternative development program; innovative micro-financial services for the poor; highly successful and sustainable primary and reproductive health care services; an effective AIDS awareness and prevention initiative; innovative justice reform and citizen-participation activities; and state-of-the-art environmental programs. Food assistance reaches out to the poorest of the poor in rural areas, enhancing food security, creating new income opportunities, and improving access to and quality of health services. While diversifying its economy slowly, Bolivia remains vulnerable to external shocks. It has been negatively affected by a continued deterioration in the terms of trade and climatic phenomena (e.g., El Nino) that impact the agriculture sector, which constitutes close to 18 percent of the economy. Bolivia's development goal is to achieve higher rates of broad-based, sustainable economic growth, which will require assistance in reforming a broad range of policies, strengthening key public sector institutions, expanding and upgrading infrastructure and increasing private investment. Other Donors Bolivia has a very active donor community, with the participation of eight multilateral and fifteen bilateral donors whose contributions average $500 million per year. Thirteen of the bilateral donors are DAC members. Japan and the United States are the largest bilateral donors. The donors are organized around four development themes in support of the GOB's newly formulated National Poverty Strategy. In addition, the donors also monitor progress on the HIPC initiative and the PRSP. FY 2002 Program USAIDīs request for $108.2 million in FY 2002 funds includes support to: 1) continue our efforts in counter-narcotics through the development of alternative marketable crops and self-sustaining linkages to regional and international markets in the Chapare and Yungas; 2) strengthen the social base of democracy and governance through the implementation of key reforms and institutional strengthening of the judicial branch, the legislature and local governments; 3) continue increasing income and opportunities for Bolivia's poor through access to financial services and the introduction of high value crops and associated value added processing industries; 4) improve production technology, linking local and international product markets, productive infrastructure, and school feeding through the P.L. 480 Title II program; 5) continue to improve the health of the Bolivian population by supporting knowledge, attitude and behavior changes of mothers and children, and strengthening the quality and coverage of health care options through a more decentralized health care system; and 6) reduce degradation of forest, water, and biodiversity resources by discouraging deforestation and ensuring a reduction in pollution. Activity Data Sheets 511-001 Increased Citizen Support for the Bolivian Democratic System   511-002 Increased Income for Bolivia's Poor with Emphasis on Targeted Communities, Directly or Indirectly Assisted by USAID 511-003 Improved Health of the Bolivian Population 511-004 Forest, Water and Biodiversity Resources Managed for Sustained Economic Growth 511-005 Illegal and Excess Coca Eliminated from Bolivia Country Background Information Resources   CIA Factbook Library of Congress National Geographic Country Maps State Dept. Country Information

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