Bolivia's economy: silver, tin, gas and the search for a fourth

How silver and tin set the pattern

Bolivia has exported one dominant mineral at a time for four centuries. Silver from Cerro Rico paid for the colony; Wikipedia's economy article records that by the 1840s, after the wars of independence, silver output was half its level of 1790. Tin took over after 1900 and became the main industry. The Worldmark encyclopedia summarises the long result: an economy that always depended on mineral exports, chiefly tin, with an agriculture that stayed close to subsistence and imported large quantities of food.

At their peak, the Worldmark encyclopedia records, the tin mines earned 70% of the country's export income. The tin economy ended in two blows. Growth of about 5% a year in the 1960s and 1970s turned negative in the 1980s, the Worldmark account records, while inflation that had averaged 3.5% in the 1960s and 22% in the 1970s ran out of control. In October 1985 the world tin price collapsed to a fraction of production costs, and the state mining company laid off more than 20,000 miners. Mining was restructured; Wikipedia records that the state now runs only a small part of it, and that small, often low-productivity cooperatives employ many former state miners.

The reform programme that followed opened the economy. In 1994 the first government of Gonzalo Sánchez de Lozada began the "capitalization" of six state enterprises, the airline, the railways, electricity, telecommunications, the ironworks and the oil and gas company YPFB, under which a private partner took 50% of the shares and the management. Wikipedia records US$7 billion of foreign direct investment in stock between 1996 and 2002 as a result, and the construction of a gas pipeline to Brazil after three units of YPFB were capitalised in 1996.

How natural gas paid for a decade of surpluses

A discovery in 1997, Wikipedia's economy article records, multiplied the known gas reserves tenfold. The fields lie in the south, at San Alberto, San Antonio, Margarita and Incahuasi, on the territory of the Guaraní people. Brazil took the gas under a long-term contract that ran to 2019, and exports to Argentina resumed in 2004.

How the gas should be sold, and by whom, became the central political question of the early 2000s. A plan to export it through Chile brought down a president in October 2003, and on 1 May 2006 a decree took ownership, possession and control of hydrocarbons back to the state, which Article 359 of the 2009 constitution then fixed: the state owns all production and alone may sell it. Wikipedia gives the government's take from gas between 2007 and 2017 as approximately US$22 billion.

The World Bank series show what that meant for the whole economy. Exports of goods and services rose from 18.3% of GDP in 2000 to 47.2% in 2012. The general government, in deficit by 7.8% of GDP in 2002, ran a surplus of 4.0% in 2006 and stayed in surplus from 2008 to 2013, by IMF figures. Gross government debt fell from 85.5% of GDP in 2003 to 30.5% in 2011. The central bank's reserves of currency and gold, Wikipedia records, rose from US$1.085 billion in 2000 to US$15.282 billion in 2014. Nominal GDP, US$9.5 billion in 2005, reached US$33.0 billion in 2014.

What the gas years did for poverty and inequality

The social figures moved with the revenue. Wikipedia's economy article gives the extreme poverty rate as falling from 38% to 18% between 2006 and 2019, and cites an ECLAC study that puts the fall at 38.2% to 15.2% between 2005 and 2018; the two periods and the two end figures differ, and both are on record. The World Bank's Gini coefficient for Bolivia, 61.6 in 2000, was 40.9 in 2024. Life expectancy at birth rose from 62.1 years in 2000 to 68.7 years in 2024, and adult literacy from 86.7% in 2001 to 96.7% in 2024.

Wikipedia's country article lists the programmes the hydrocarbon revenue financed: the Renta Dignidad, a minimum pension for people over 60; the Juana Azurduy payment, covering medical costs for pregnant women and young children; and the Juancito Pinto payment to the parents of children who stay in school, named after a child hero of the War of the Pacific.

Why the surpluses turned into deficits

The revenue fell before the spending did. Britannica's biography of Evo Morales records that the economy had begun to slow significantly by 2015, largely because of lower world oil and gas prices. Exports dropped from 43.3% of GDP in 2014 to 24.5% in 2016 in the World Bank series. The government has run a deficit every year since 2014 in the IMF's figures, reaching 11.0% of GDP in 2020 and 11.6% in 2025, and gross debt climbed back to 84.8% of GDP in 2025.

The reserves went first. They are held by the Central Bank of Bolivia, founded in 1928 and reorganised in 1945, which the Worldmark encyclopedia describes as the sole bank of issue. Wikipedia records that they still stood at just under US$3.8 billion in 2022 and fell below US$500 million in the course of 2023, leaving the country short of dollars. Prices followed: consumer inflation, 0.7% in 2021, was 5.1% in 2024 and 19.5% in 2025. Real GDP grew 10.0% in 2021 after a fall of 12.7% in 2020, then shrank by 1.1% in 2024 and 1.6% in 2025.

The World Bank's country overview names the constraints in its own words: limited gas reserves, high fuel subsidies and global decarbonisation, and a need to find alternatives to gas exports. Britannica's news digest recorded on 19 September 2026 that Bolivia had approved a US$1.9 billion agreement with the IMF and eliminated diesel subsidies. The IMF projected inflation of 20.7%, a contraction of 3.3% and gross debt of 102.7% of GDP for 2026.

Why a gas exporter imports its fuel

Bolivia has long sold gas abroad and bought diesel. The Worldmark encyclopedia, writing from figures of 2003 and 2004, records that domestic crude covered internal needs but that petroleum products, diesel in particular, still had to be imported, with refinery capacity of 67,000 barrels a day in November 2004. Wikipedia's economy article now describes the country as a net importer of oil, its fields in the east and south producing too little for domestic demand. The three refineries were fully privatised in 1999 and the reserves taken back by the state in May 2006.

The World Bank overview counts high fuel subsidies among the strains on the budget, beside the limited reserves of gas left to export. The pipeline to São Paulo that carried the boom was completed in February 1999 at a cost of US$2.1 billion, by the Worldmark encyclopedia's figure, and the Brazilian contract it served ran to 2019.

Electricity draws on the same gas. Wikipedia gives thermal plants 60% of supply and hydropower 40%, and the World Bank series show renewable sources falling from 49.8% of electricity generated in 2000 to 38.2% in 2021. In 2000, by the Worldmark encyclopedia's count, hydroelectric plants had produced 50.1% of output.

The trade that remains has moved south. Wikipedia records that Brazil overtook the United States as the main destination for Bolivian exports in 2001, that Bolivia became an associate member of Mercosur in March 1997, and that the main sources of imports include China, Brazil, Chile, Peru and Argentina, with refined petroleum at the top of the import list.

What the farms and mines produce

Agriculture, forestry and fishing made up 13.0% of GDP in 2000 and 8.8% in 2024, by World Bank figures. Two farming economies sit side by side. On the Altiplano the Worldmark encyclopedia describes dry farming of potatoes, maize, barley, quinoa, broad beans and oca, with about two-thirds of cultivated land outside the Titicaca shore left fallow each year, and the potato freeze-dried into chuño or tunta that keeps indefinitely. In the eastern lowlands of Santa Cruz, commercial farming produces the crops that are exported: soybeans have been the leading legal agricultural export since 2001, Wikipedia records, and the 2018 harvest included 9.6 million tonnes of sugarcane, 2.9 million tonnes of soy and 1.2 million tonnes of maize. Coca, which the constitution protects in its natural state, was grown on an estimated 29,500 hectares in 2007. The Worldmark encyclopedia records that eradication had removed 50,000 to 60,000 hectares by 2002, and that the absence of a substitute crop was among the reasons given for slow growth at the time.

What the mines still yield

Mining remains the other half of exports. The minerals Wikipedia lists for 2023 are silver, tin, antimony, zinc, lead, boron and tungsten, with gold besides. Under the Salar de Uyuni and the smaller salt flats lies lithium: the United States Geological Survey figure cited by Wikipedia is 9 million tons. Development has gone slowly. A state plant at Uyuni opened in January 2013 and produced mainly potassium chloride; a partnership signed in 2019 between the state company YLB and a German firm, ACISA, was cancelled after local protests over royalties.

Industry including construction accounted for 31.3% of GDP in 2024 and manufacturing for 13.1%, in the World Bank's breakdown. Food, drink and tobacco is the main branch of manufacturing, with soybean crushing, sugar and edible oil concentrated in Santa Cruz and Cochabamba.

How most Bolivians earn a living

Measured unemployment is low and says little. The World Bank series give 3.0% in 2025, with a peak of 7.9% in 2020, while labour force participation stood at 78.6% in 2025. Wikipedia's economy article records that 83.9% of the workforce was informally employed in 2024. Services made up 53.4% of GDP in the World Bank's 2024 figures.

Emigration has slowed in the estimates. Net migration, a loss of 26,940 people in 2000 by World Bank estimates, was a loss of 3,179 in 2025. The share of people living in towns and cities rose from 61.9% in 2000 to 71.6% in 2025.

Where the next revenue is meant to come from

The World Bank's partnership framework with Bolivia, set out on its country page, lists agriculture, urban development, disaster risk and renewable energy as the sectors it supports, and aims at universal electricity coverage by 2030; its Rural Alliances Project has worked with more than 100,000 producers. Since July 2024 the World Bank Group has run a single combined office in La Paz.

The alternatives on record are the ones the land offers: lithium in the salt flats, soy and sugar in Santa Cruz, and the iron ore of El Mutún, where an Indian steel company signed in 2007 to invest US$1.5 billion and left in 2012 after disputes over land and gas supply, winning US$22.5 million in arbitration in 2014.