Sectoral Accumulation Balances in the Bolivian Economy

The discussion in chapter 2 demonstrated that Bolivia faced strong external shocks over the last two and a half decades. Large fluctuation in the quantities of foreign capital inflows to the country has affected its overall macroeconomic performance. During the 1970s, the large supply of financial resources available in international financial markets allowed the Bolivian government to acquire large amounts of foreign debt. During that period growth and investment rose rapidly. During the 1980s, when the debt crises developed, Bolivia transferred a large quantity of resources abroad through debt service payments. During that period, growth plummeted and inflation increased to world record levels. After 1985, when the stabilization programme was introduced, positive capital inflows restarted again, stability was attained and positive growth rates were recovered. During this process, Bolivia also faced extremely sharp changes in its terms of trade. During the 1970s and first half of the 1980s there was a positive trend in prices for most of the country's export products. However, from 1985 onwards prices of minerals and gas deteriorated sharply. The country literally had to develop its export base from scratch. The results, of course, were a complete restructuring of the economy's productive base, large changes in the employment structure, and, therefore, significant shifts in income distribution among sectors. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.