Name: Plurinational State of Bolivia. Population: 9.9 million (2010 estimates). Capital: La Paz (administrative), Sucre (official). Other important cities: Santa Cruz, Cochabamba, El Alto. Area: 1 098 580 km². Currency: Boliviano. GDP per capita: US$ 1979 (2010 figures). Exports: natural gas, zinc, gold, silver, soy, tin. Languages: Spanish, Quechua, Aymara and GuaranÃ, among others. Religion: separation of church and state, with a majority Catholic population. Life expectancy: 66 years (2009 figures).
In recent years, Bolivia has achieved political stability. President Evo Morales, elected in 2005, led a political and economic reform that included a major modification of the Constitution, the strengthening of state companies and the application of a variety of social programs. Strong citizen support for the current government administration permitted the implementation of a new Constitution and the re-election of President Morales in 2009.
As a result of high prices for the raw materials the country exports and a prudent macroeconomic policy, economic growth has averaged 4.7 percent over the past seven years. The country has had significant current account surpluses since 2003 and the fiscal balance became positive beginning in 2006. Thanks to this performance and the debt relief, public debt declined from 94 percent of the Gross Domestic Product (GDP) in 2003 to less than 40 percent in 2011. International reserves increased from less than US$ 1 billion to US$ 12 billion during the same period. Bank deposits and loans have more than tripled over the past seven years and banks have strengthened their solvency and liquidity. Poverty decreased from 63 percent in 2002 to 59 percent in 2008—rural extreme poverty declined by 10 percentage points during the same period.
Despite these advances, Bolivia faces significant development challenges. Moderate poverty affects more than half of the population and income inequality continues to be high. The recent economic growth is vulnerable to changes in international raw material prices. Private investment is low and the large investment projects in extractive industries promoted by the government are behind schedule. Informal employment is high, which results in lower productivity. Productive development in rural areas, where a third of the population lives, is hindered by inadequate infrastructure. The public sector suffers from weak governance, which limits policy implementation. Social and gender indicators remain below the average for the region.
In addition, in recent years, some social groups that initially supported the government have participated in protests to demand specific investment projects and to oppose some government policies. These policies include the attempted withdrawal of the subsidy for hydrocarbon derivatives and a project to build a highway through a protected area and indigenous lands.
The current Country Partnership Strategy (CPS) was discussed by the Bank’s Board of Executive Directors in December 2011. The CPS will guide World Bank activities during the 2012-2015 fiscal period. This is the first four-year CPS after three consecutive short-term strategies were implemented given the political instability before the election of President Morales and the uncertainty generated by the constitutional reform.   Based on government priorities, the results of consultations and the Bank’s comparative advantages, over the next two years, the CPS proposes a flexible program of technical assistance and investment projects for approximately US$ 170 million in four result areas:
• Sustainable productive development. This area includes projects to improve agricultural production, promote access to lands, provide infrastructure and improve producers’ access to markets. • Climate change and disaster risk management. This area covers activities to support disaster risk management and rehabilitation of basic infrastructure. It also helps the country to take into account the effects of climate change in its public policies. • Human development and access to basic services. This area includes activities to promote access to basic services and maternal and child health. It also seeks to reduce malnutrition and promote early childhood development, secondary school education and youth employment. • Public sector effectiveness. This area supports the implementation of a population and housing census and an agricultural census, as well as the improvement of household surveys. It also includes other activities to promote quality in the public administration.
The Strategy design took into account crosscutting issues such as gender, good governance and the fight against corruption.
The CPS promotes the implementation of the current portfolio of 13 investment projects in the four result areas. A total of US$ 444 million has been allocated to these projects, US$ 330 million of which will be disbursed during the four-year period. Bank activities in Bolivia also include several donations to support initiatives in electrification, adaptation to climate change, conservation of biodiversity, early childhood development and community development.  During the first half of the CPS implementation period, Bolivia will have access only to financing from the International Development Association (IDA). The country could access resources from the International Bank for Reconstruction and Development (IBRD). When considering this possibility, the IBRD will take into account the country’s macroeconomic management and the private investment situation. At the government’s request, the Bank will provide technical assistance to prepare Bolivia for the transition.
The International Finance Corporation (IFC)Â will continue to finance high-impact private initiatives in sectors such as microfinance, agribusiness and forestry. It will also support the simplification of public procedures in the construction sector and the development of small and medium-sized enterprises.
In line with the priorities of the Bolivian government and the competitive advantages of the World Bank with respect to other development partners, many of the activities in Bolivia have focused on rural development. The Rural Alliances Project has supported 782 partnerships and has trained nearly 45,000 rural producers to improve their production processes, in keeping with the requirements of their markets. More than 53,000 families have benefited from financing for business plans. The financial analysis of 150 completed plans found that 85 percent of the organizations financed had positive results. The Land for Agricultural Development Project helped 128 producers’ associations access lands and credit to increase their production and provided technical assistance and non-reimbursable funds to four municipalities of Santa Cruz Department. These activities benefited more than 1,250 families living in poverty, including those residing in indigenous communities, and enabled the incorporation of nearly 104,000 hectares of land for agricultural activities.  With respect to improving rural infrastructure, the Second Participatory Rural Investment Project financed 232 investment projects in 194 municipalities. Twenty-nine irrigation projects were implemented, benefiting approximately 7,500 people and 101 sub-projects for roads and bridges favored nearly 183,500 individuals. The project trained 20,700 members of 217 civil organizations and municipal governments in the preparation, management and evaluation of plans, programs and projects. The Emergency Recovery and Disaster Management Project is rehabilitating basic infrastructure damaged by El Niño and La Niña phenomena and is strengthening the government’s capacity for natural disaster response. One hundred and eighty-two projects have been completed, benefiting 300,000 people in municipalities with high poverty rates. During the Decentralized Infrastructure for Rural Transformation Project, now completed, 9,200 photovoltaic systems were installed and more than 20,000 new users were connected to the power grid.
The The World Bank has also developed initiatives in the areas of education and infrastructure in urban areas. The Secondary Education Transformation Project created some 14,000 additional spaces by expanding school facilities, offered more than 10,000 training sessions for at-risk students and trained over 1,000 teachers in citizen values and attitudes. The Urban Infrastructure Project enabled 35,000 residents of Santa Cruz to access the sanitation network. This project also achieved the overall enhancement of 22 neighborhoods in La Paz by improving infrastructure and the provision of basic services, benefiting more than 18,000 people.
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