Oil and gas market report. Bolivia. Panorama and perspective for business

Bolivia, with its large oil and natural gas potential, is becoming an increasingly important link in South American energy trade. With new fields and pipeline construction, the nation is becoming the natural gas hub for the Southern Cone. In 1998, Bolivia experienced 4,7% GDP growth, the fastest in South America, and Bolivia's best performance since 1988. In addition, Bolivia brought its inflation rate to a 2-decade low of 4,4 %. In addition to tight global capital markets, investments also is expected to decrease due to the completion of the Bolivia to Brazil gas pipeline. This extremely capital-intensive project accounted for a significant portion of Bolivia's investment for 1998 and 1999. Bolivia has made significant economic improvements over the past few years by adopting a series of free market policies. The mayor improvements in economic growth have been made possible primarily through the government's unique capitalization program of key national industries. In addition to the Capitalization Program, Bolivia's economic growth is a result of its involvement in several free trade associations. Bolivia, as well as Chile, is an associate partner of the Mercosur, whose members include Argentina, Brazil, Paraguay and Uruguay. Bolivia is also member of the Andean Pact, which comprises Peru, Colombia, Ecuador and Venezuela. Bolivia's unique involvement in both of these trade groups is allowing it to become an important cornerstone in the integration of the South American continent. Specifically, Bolivia is increasingly becoming an important transport hub within the continent. Energy is one of the main products Bolivia is attempting to transport. According to the government, nearly $5 billion of investment is needed by 2005 so Bolivia can succesfully develop its oil and gas reserves, build pipelines, and construct power plants if it wishes to emerge as the regional hub.