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IV. TRADE POLICY BY SECTOR 
(1) OVERVIEW  
1. Agriculture is one of Bolivia's key economic  sectors in terms of its contribution to 
employment and exports, although its relatively modest  contribution to GDP is a reflection of its low 
productivity.  Since the last review of Bolivia in  1999, institutional change, social conflict and 
restrictions on access to credit have had a negative impact on the sector's performance.  Nevertheless, there has been a marked increas e in agricultural exports, which have benefited from preferential 
access to major foreign markets, particularly th e Andean Community.  Bolivia has not made any 
notification to the WTO on domestic support since 2001 or on export subsidies since 2000. 
2. Traditionally, mining has played an important ro le in Bolivia's economic development and it 
continues to occupy a leading place as a generator of exports, even though its  relative importance has 
tended to decline in recent years.  Mining compani es are subject to payment of an alternative tax 
whose rate for sales on the domestic market is 60 per cent of the rate applicable to exports. 
3. Bolivia's manufacturing sector is fairly small.  Low productivity in this sector reflects the 
weaknesses affecting Bolivia's production structure in general and explains in part the lack of success 
which many Bolivian manufactures have had in pene trating foreign markets.  Some industries, 
however, have seen their exports increase sharply (fo r example, dairy products and clothing) in recent 
years.  The growth in trade in manufactures with  the Andean Community has been of particular 
importance, while the trade benefits granted by the United States have encouraged the export of 
textiles and clothing to that market.  Bolivia's ma nufacturing sector benefits from a number of official 
support programmes. 
4. The hydrocarbons industry, especially natural g as, has contributed greatly to exports and 
foreign investment in Bolivia.  In May 2005, a controversial hydrocarbons law was enacted which, 
inter alia , changed the tax regime and the nature of ag reements between the State and operators and 
could discourage foreign investment.  Private particip ation is allowed, including that from abroad, in 
all activities in the electricity sector.  The majority of prices and rates have been regulated and cross 
subsidies continue to be granted. 
5. The services sector accounts for approximately  54 per cent of GDP and 46 per cent of 
employment.  At the regional level, Bolivia takes pa rt in the efforts to lib eralize trade in services 
within the Andean Community, one of the latter's major projects.  At the multilateral level, Bolivia 
has made commitments in five of the 12 sectors cove red by the GATS.  It has also acceded to three of 
the principles contained in the Reference Pape r on telecommunications.  Additional commitments 
under the GATS would lead to greater predictability fo r Bolivia's investment re gime and in turn this 
would help to attract foreign investment. 
6. In 2001, the existing exclusivity rights for th e supply of local fixed telephony and national 
and international long distance telephony services were  abolished pursuant to Bolivia's commitments 
under the GATS.  The opening up of the market raised the level of competitiveness and this, inter 
alia, led to lower prices for long distance telephon y and increased the supply of services.  There are 
some restrictions on consumption abroad for telecommunications services. 
7. In mid-2005, the banking system had recovered after a number of massive withdrawals of 
bank deposits during the period under review.  Alt hough it has lowered, the high cost of credit has 
been identified as a problem for the economy as a whol e.  Operations by offices representing foreign 
banks are limited solely to promotion.  In 200 4, a temporary tax on financial transactions was Bolivia WT/TPR/S/154/Rev.1 
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introduced.  Any person contracting insurance to c over risks in Bolivia must do so through a company 
established in Bolivia. 
8. In Bolivia, the overall cost of transporting goods is the highest in South America and this is 
essentially the result of a limited highway infrastruct ure.  Bolivia allows foreign participation in 
building, operating, running , equipping and maintaining airports and related services.  On the other 
hand, no foreign participation is allowed in air transport cabotage. 
9. The tourism sector is the fourth most important  generator of foreign currency in Bolivia and 
offers national treatment for the supply of services , except for tourist guides.  The right to offer 
professional services is restricted to Bolivian nationals .  There are also limitations on foreigners in 
other occupations, confining their participation to concrete projects or requiring the existence of a 
reciprocal treaty.  Bolivia has signed agreements on the recognition of qualifications with several 
countries, particularly those of the Andean Community. 
(2) AGRICULTURE , LIVESTOCK , FORESTRY  
(i) Special features 
10. Between 1994 and 2004, the agricultural sector accounted for 14 per cent of Bolivia's GDP, 
but employed 42 per cent of the working populati on and generated an average of 28 per cent of 
exports.  The oilseeds and agro-industrial oilseed  products subsectors have grown steadily, while 
other dynamic sectors have been sunflowers, sugar, chestnuts and forestry.  Almost 60 per cent of the 
agricultural labour force uses traditional methods with little value added, particularly in the high zones 
and the central valleys, where there is little invest ment, technology, road infrastructure or irrigation.1 
11. The agricultural sector has a wide variety of products, of productivity, geography and 
communication with markets.  In the eastern areas (border with Brazil) and tropical lowlands of the Oriente, the main crops are soya beans, sugar, maize, sunflowers and tropical wood, grown for the 
domestic and foreign market and as a result of in vestment from Argentina and Brazil.  In the 
Altiplano (high plateau), the major crops are tube rs and cereals and agriculture has only developed 
slowly at annual averages of 1.8 per cent between 1993 and 2003.  Labour in this area has a per capita 
income of less than US$780 and pove rty affects 64.5 per cent of the population.  In the tropical humid 
zone, agricultural production grew annually by 5 per cent between 1993 and 2003, per capita income 
exceeds US$1,100 and the rate of poverty is 48 per cent.
2 Bolivia's topography and absence of access 
to the coast makes the road in frastructure costly and causes problems for regional and global 
integration. 
12. According to the FAO3, Bolivia covers a total area of 110 million hectares and in 2002 the 
area used for agriculture was 37 million hectar es.  Primary agriculture had approximately 
660,000 farms in 2002, covering some 25 million h ectares and employing 1.6 million people or 
around 40 per cent of the working population.4.  Small farms do not exceed 4 hectares in the Altiplano 
and 50 hectares in the Llano (plains).  The land use systems include smallholdi ngs (highlands, valleys, 
lowlands);  modern, large- or medium-sized modern  commercial operations (low lands in Santa Cruz);  
                                                      
1 Economist Intelligence Unit (2004). 
2 Inter-American Development Bank (2003a). 
3 FAO database statistics, information on line. Available at: http://faostat.fao.org/ updated in 
April 2005.  
4 Inter-American Development Bank (2003a). WT/TPR/S/154/Rev.1 Trade Policy Review 
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farms of indigenous groups (lowlands);  large ca ttle ranches (Beni, Chaco); and concessions granted 
to commercial forestry companies and forest dwellers.5 
13. The authorities state that Bo livia does not have any credit subsidy policies to boost 
agriculture.  Through second-tier institutions, the so urces are channelled to the sector through private 
banks.6  According to the Asociación de Instituciones Financi eras para el Desarrollo Rural  – 
FINRURAL (Association of Rural De velopment Financing Institutions)7, in 2000 less than 5 per cent 
of the financial system's total portfolio went to the agricultural sector and over 60 per cent of 
agricultural loans went to lowland areas.8  In recent years, the level of  agricultural debt has increased 
because of high interest rates and low levels of gr owth.  With the support of the Government, banks 
drew up programmes to reschedule the debt and, at th e end of 2003, 54.8 per cent of the sector's debt 
had been rescheduled.9 
14. Table AIV.1 shows the percentages in the most  cultivated areas in 2004:  soya beans (26), 
maize (12), sunflower seeds (7), rice (6), potatoes (5 ), feed grasses (5), sugar cane (4), wheat (4), 
barley (4), cotton (3), and bananas (3).  Betw een 1998 and 2004, the largest increase in the area 
cultivated was, in percentages, ba nanas (9), cotton (8), feed grasses (4), sunflower seeds (3), sugar 
cane (3), cassava (2), maize (2), a nd soya beans (2).  The highest yields (annual average) were for 
potatoes (5), and soya beans, maize and sunflowers (4).  Compared with other countries in the region, 
Bolivia generally has lower yields and there is only a very limited amount of new land suitable for 
agriculture.10  
15. According to the Ministry of Economic Development, in 2004 investment in export crops 
mainly focused on soya bean oil, soya bean cake a nd flour, soya beans, crude sunflower oil, sugar and 
chestnuts.  The number of agricultural exporters increased from 369 in 2003 to 410 in 2004.  The growth in exports occurred following an expansion of the area under crops.
11 
16. Between 1999 and 2004, agricu ltural exports increased by an average of 11 per cent and 
imports by 1 per cent.  Of total exports, soya b ean cake, flour and oil accounted for 19 per cent over 
the same period.  According to the authorities,  experimental production of soya beans using 
genetically-modified seeds began in 2005 (see Chapter III(2)(x)). 
17. The Andean Community is the main market , taking an average of over 70 per cent of 
agricultural exports between 1999 and 2004.  Colombia  and Venezuela were the leading importers of 
soya bean products.  The other importers of Boliv ia's agricultural products during the period 1999-
2004, in order of importance, were Peru, the Eu ropean Union (EU), Uruguay, the United States, 
Chile, Argentina, Ecuador, Brazil a nd Japan.  Exports of chestnuts mostly went to the EU and the 
United States.  Refined sugar is exported to Peru and unrefined s ugar to the United States.  Other 
                                                      
5 Bojanic, Alan J. (2001). 
6 Microfinance has grown rapidly in rural areas in recent years. In the agricultural financing system, the 
portfolios of banks, mutual funds and coop eratives have to be taken into account. 
7 Information on line. Available at: http://www.finrural-bo.org/. 
8 In order to support microloans, the Government set up the Fondo de Desarrollo del Sistema 
Financiero y Apoyo al Sector Productivo – FONDESIF (Development Fund for the Financial System and 
Support for the Production Sector). The Ministry of Rural and Agricultural Affairs (MACA) also has a financial services and loans unit.  
9 Economist Intelligence Unit (2004). 
10 Inter-American Development Bank (2003b). Soya b ean yields are around 2 tonnes per hectare in 
Bolivia, 2.6 in Paraguay, 2.4 in Brazil and 2.2 in Argentina. 
11 Between 1992 and 2000, the total area cultivated grew by 533,000 hectares. Future expansion of 
soya bean cultivation will possibly depend on increased pr oductivity, taking into accoun t the limited availability 
of land. Bolivia WT/TPR/S/154/Rev.1 
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products exported include ethyl alcohol (EU, Peru), sesame seeds (Japan, Paraguay), bananas 
(Argentina), quinoa (EU, United States), almonds  (United States, United Kingdom) and powdered 
milk. 
18. During the period 1999-2004, Bolivia's agricultura l imports were mainly soya beans (Brazil), 
wheat and wheat flour (Argentina, United States) a nd preparations for produci ng beverages (Chile).  
During the period 1998-2003, agricultural imports ca me from Argentina (32 per cent), Brazil (17 per 
cent) and Paraguay (4.6 per cent), together with Ch ile (15 per cent), the United States (12 per cent) 
and Peru (6 per cent). 
(ii) Policy objectives for the sector 
19. The Ministry of Rural and Agricultural Affairs (MACA) replaced the Mi nistry of Agriculture, 
Livestock and Rural Development (MAGDR) in Ma rch 2003 and is responsible for the sector's 
policies.  The MACA identifies the main problems in the sector as land ownership;  climate 
conditions, low productivity, limited infrastructure;  eros ion and degradation;  and lack of credit.  The 
policy objectives12 include enhancing competitiveness and par ticipation in international markets, 
promoting sustainable practices, increasing f ood safety, substituting illicit crops, creating 
opportunities for under-privileged groups and promoting broad social participation.  Since 2002, some 
of the key programmes in the sector have been  the Agricultural Support Programme;  the Food 
Security Programme;  the National Seed Progra mme;  the National Agricultural Health and Food 
Safety Service (SENASAG);  technical assistance  for small producers;  the Production and Rural 
Support Programme;  the pilot project  for camelids;  the sustainable area development project;  and 
the local roads project. 
20. Since the last review of Bolivia in 1999, ad ministration in the agricultural sector has been 
marked by institutional change a nd social conflict that have affected the context for implementing 
sectoral policies.  Various programmes have been in itiated, but in general the results and the follow-
up have been limited.13 At the end of 2002, the strategy for transforming agricultural production was 
presented, its aims being to introduce initiatives on agrarian reform, loans, improved infrastructure, 
technology and the creation of production chains.  In April 2003, the national plan for land reform and 
ownership was approved and it includes the restructuring of the Instituto Nacional de Reforma 
Agraria – INRA (National Agrarian Reform Institute).14  
21. Another initiative taken during this period was to set up the Unidad de Productividad y 
Competitividad  – UPC (Productivity and Competitiveness Unit) and the Bolivian productivity and 
competitiveness scheme in 2001.  The objectives we re to support production lines with export 
potential15 through Bolivian Competitiveness Agreements (ABCs).16 These are instruments that 
regulate government and private investment in infrastructure and logistics, human skills and 
development, rules and simplification of proce dures, foreign trade, technology and innovation, 
financing and access to loans.  During 2004, agreem ents were signed on production lines for leather 
and leather products, timber, wheat, poultry, maize, gr apes, wine and palm hearts and the agreements 
on oilseed and quinoa were renewed. 
                                                      
12 National Agricultural and Rural Development Strategy. 
13 The MACA has multisectoral programmes such as food security, irrigation and agricultural services, 
which include the SENASAG and the Bolivian Agricultural Technology Scheme. 
14Agrarian Superintendency (2001). The Ministry of Sustainable Development is responsible for the 
national land ownership plan. 
15 The agricultural products concerned include quinoa, oilseeds, timber, camelids, grapes, wine, leather, 
chestnuts, bovine meat, bananas, palm hearts, wheat, cotton and textiles, and poultry products. 
16 Inter-American Development Bank (2003c). WT/TPR/S/154/Rev.1 Trade Policy Review 
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22. Agricultural research is little developed, partly  because of institutional instability.  Some of 
the leading organizations are the Fundación para la Promoción e In vestigación de Productos Andinos 
- PROINPA (Foundation to Promote and Carry out Research into Andean Products), Centro de 
Investigación Agrícola Tropical  – CIAT (Tropical Agricultural Research Centre17, Sistema Boliviano 
de Tecnología Agropecuaria – SIBTA (Bolivian Agricultural Technology Scheme (March 2000)) and 
the Sistema de Recursos Genéticos para la Agricultura y Alimentación (National Genetic Resources 
for Agriculture and Food Scheme (2003)). 
23. The Estrategia Nacional de Desarrollo Agropecuario y Rural  – ENDAR (National 
Agricultural and Rural Development Strategy), coor dinated by the MACA, was drawn up in 2004 as 
the main instrument for guiding policies in the sector and as part of the General Economic and Social 
Development Plan and the Poverty Reduction Strategy.  The aim of the ENDAR is to foster the integration of farmers and indigenous people;  rural employment;  supply/demand linkages;  food 
security;  competitiveness;  sustainable land use;  and development of land registers and title deeds.
18 
The 2004-2008 National Alternative Development Plan is part of the ENDAR and of the 2004-2009 
Integral Strategy to Combat Illicit Drug Trafficking.19 
24. As regards agricultural trade, Bolivia imposes few restrictions  on imports and does not apply 
export subsidies.  It has not submitted any notif ication to the WTO on domestic support since 2001 
nor on export subsidies since 2000.20 Bolivia has a drawback system, new free zones and the RITEX 
(see Chapter III). 
25. In 2005, the average MFN tariff applied by Bolivia to agricultu ral products was 9.8 per cent 
(see Chapter III(2)(iv)).  Bolivia gives tariff pr eferences to Andean countries, the MERCOSUR, 
Chile, Cuba and Mexico (Table AIV.2).  In 2004, its  average tariff on the ma jor agricultural products 
imported from preferential trade part ners was between 1 and 2 per cent.21 The majority of the 
25 agricultural products most commonly imported by  Bolivia from its preferential partners were 
subject to a zero tariff.  Bolivia grants only lo wer preferences on sugar and sunflowers and does not 
apply tariff quotas, variable duties on imports or price bands. 
26. Bolivia benefits from the tariff preferences grante d by its trading partners , particularly for its 
exports of soya beans to Andean markets, where it is  affirming its role as an exporter.  The advantage 
of the closeness of these Andean markets is probably offset by opportunities for higher prices in other 
markets.  Nevertheless, between 1999 and 2004, prefer ential access, particularly for soya bean cake, 
started to become less important as a result of the gr eater opening up of Andean  markets to other soya 
bean-producing countries. 
27. Bolivia has preferential access to the United St ates and the EU (GSP, see Chapters II and III).  
According to the USITC import figures, in 2004 Boli via had duty-free access to the United States for 
over 99 per cent of its agricultural exports (Table AI V.3).  In the EU, in 2002, almost 95 per cent of 
Bolivia's agricultural exports entered duty fr ee, including over 18 per cent under the GSP. 
                                                      
17 Bojanic, Alan J. (2001). 
18 The authorities indicate that the Strategy’s budget is US$304 million up to 2007, of which 60 per 
cent of the resources needed  have been committed. 
19 The alternative development zones are: the tropi cal zone of Cochabamba;  Yungas and north of 
La Paz;  the poor zones to the north of Potosí, Chuq uisaca and south of Cochabamba;  Yapacani and the Isiboro-
Secure Carrasco and Amboro national parks. 
20 WTO documents G/AG/N/BOL/1 of 5 June 1998 and G/AG/N/BOL/6 of 10 May 2001. 
21 Simple average of tariffs on the major imports. Bolivia WT/TPR/S/154/Rev.1 
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(iii) Key subsectors 
(a) Agricultural products 
28. With two harvests a year, soya bean production accounts for 15.1 per cent of the gross value 
of agricultural production and occupies one  third of the total land under cultivation.22 Production 
amounted to over 1.5 million tonnes in 2004 (Table AIV.1), with average annual growth of 6.4 per 
cent between 1998 and 2004.  In 2004, there were some 14,000 producers, 70 per cent of whom could 
be considered small producers.  Production costs pe r hectare are approximately US$275.  Spending on 
production has increased with the cultivation of soya beans.  Bolivia has suffi cient capacity to process 
all its harvest23, and soya bean cake or crude soya bean oil are the products most exported (55 per cent 
of agricultural exports between 1999 and 2004), mainly to the markets in Andean countries. 
29. The exploitation of chestnuts accounts for over 75 per cent of economic activity in the 
northern part of Bolivia, where conditions are suita ble for growing chestnut trees over a large area of 
over 100,00 km2.  Since 1996, Bolivia has become the major global supplier24.  Ninety-nine per cent 
of domestic production goes to export markets in the United States and the EU.25 
30. The expansion of investment and production t echniques enabled an average increase of over 
5 per cent annually in sugar production between 1999 a nd 2004.  In terms of volume, more sugar is 
produced than any other product (almost 5 million tonn es).  Sugar cane is grown in Santa Cruz and in 
2000,  on average, 70 per cent of production was consumed in the domestic market.  Exports of 
refined sugar to Peru and Colo mbia showed a sharp increase between 1999 and 2004.  The United 
States imported unrefined sugar (66 per cent) under a tariff quota of 8,424 tonnes in 2004. 
31. Between 1998 and 2004,  production of sunflower seeds rose by 7.7 per cent annually and 
yields increased by 4.1 per cent.26 Exports of sunflower products went to regional markets in 
Colombia and Venezuela (crude and refined sunf lower seed oil) and Colombia and Chile for 
sunflower seed cake.  Cotton production rose by  6 per cent annually between 1998 and 2004, while 
the area under cultivation increased by 8 per cent ove r the same period, which explains a decrease in 
yields of 1.8 per cent annually.  The traditional market  for Bolivian exports of cotton is Peru;  exports 
fell by an average of 26 per cent annually between 1999 and 2004.  The cotton produced in Bolivia is 
short-fibre cotton, but the textile industry requires some imports of long-fibre cotton. 
32. In 2001, Bolivia became the leading producer of quinoa, with 46 per cent of global 
production.27 Quinoa mainly goes to the EU, where e xports increased by 16 per cent between 1999 
and 2004.  On the other hand, exports to the Unite d States fell by an average of 6 per cent over the 
same period.  Other products such as potatoes, maiz e and rice play an important role in agricultural 
production and in supplying staples for household consumption in Bolivia. 
33. The cultivation of coca leaves has been a traditional activity for centuries in Bolivia.  The area 
under cultivation has varied with the eradication pr ogrammes since 1986.  It is estimated that net 
crops fell by two thirds between 1997 and 20 03, although between 2001 and 2003 replanting 
exceeded destruction, with a return to 60 per cent of the net figure when production was at its peak 
                                                      
22 Inter-American Devel opment Bank (2003b). 
23 USDA (2005). 
24 Ibid. 
25 CAEM Consultants, CAINCO-SCZ, Eurocentro – Bolivia (2005). 
26 USDA (2004). 
27 Available at: www.infoagro.gov.bo. WT/TPR/S/154/Rev.1 Trade Policy Review 
Page 88 
 
 
during the 1990s.28 In recent years, substitution by altern ative crops appears to have provided less 
tangible results and it is estimated that the coca  cultivation zone increased by 17 per cent between 
2003 and 2004.29 Eradication appears to have had a nega tive impact on agricultural income and in 
recent years the coca sector has accounted for a sm all percentage of GDP.  The authorities indicate 
that Law No. 1.008 provides for legal growing of coca on 12,000 hectares.30 
(b) Livestock 
34. Livestock production is the second most important agricultural industry.  Production of 
bovine meat in 2004 was around 220,000 tonnes.  Th e sector employs more workers than any other 
agricultural production line (Table IV.1).  With th e exception of small quantities exported to Peru, the 
majority of production is for domestic consumption.  Livestock is raised in the lowland areas in Beni 
and Santa Cruz.31 The method used is extensive traditional breeding on natural pasture. 
Table IV.1 
Economic contribution and job cre ation in agricultural production 
Current situation 10-year forecast 
Production sector Exports 
(US$million)  
Job creation Exports 
(US$million)  
Job creation 
Oilseeds 322.00 117.500 600.00 160.000 
Quinoa 5.00 15.500 40.00 60.000 
Wood and articles of wood 41.00 42.000 1,000.00 243.900 
Leather and articles of leather 23.00 2.800 80.00 15.000 
Bananas 3.70 12.800 30.00 60.000 
Textiles and cotton 42.30 43.500 300.00 61.000 
Camelids 5.00 60.000 80.00 104.300 
Poultry 0.17 30.000 1.50 30.800 
Wheat 0.05 94.000 0.06 114.400 
Chestnuts 30.00 20.000 116.80 116.800 
Grapes, wine, singanisa 0.09 11.000 10.00 14.000 
Palm hearts 0.36 4.500 20.00 12.000 
Bovine meat 1.00 142.000 50.00 160.000 
Total 633.67 655.600 4,328.36 1,512.200 
a Singanis is a Bolivian spirit obtained by distilling natural wine from fresh grapes. 
Source:  UPC (ENDAR working document, MACA, August 2004). 
(c) Forestry 
35. According to data from the Forestry Superinte ndency, Bolivia has forest cover amounting to 
53,400,000 hectares, with produc tion capacity of 20 million m3/annually, an area of woodland under 
concession amounting to 7,900,000 hectares, 1,900,000 hectares of certified woodland and 603,408 hectares of new concessions in 2004.  Certifica tion of sustainable forest management is the 
responsibility of the Consejo Boliviano para la Certificación Voluntaria  – CFV (Bolivian Council for 
Voluntary Certification). 
                                                     
 
28 United States Department of State (2004). 
29 United Nations Office on Drugs and Crime (2005). According to the authorities, the area on which 
substitute crops were grown in the tropical region of Cochabamba rose from 40,613 (1986) to 143,887 hectares 
(2004). The authorities estimate that 128,000 hectar es of coca were thus eradicated in 1986-2004. 
30 The net area cultivated was calculated to be around 28,000 hectares in 2003. 
31 USDA (2004). Bolivia WT/TPR/S/154/Rev.1 
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36. The procedural regulations of the Sistema de Regulación de los Recursos Naturales 
Renovables –  SIRENARE (Scheme for the Regulation of Renewable Natural Resources), 
implemented in 2002 together with the Forestry Law (1996), the Environment Law (1992) and the Law on the National Agrarian Reform Service IN RA (1996) compose the regulatory framework for 
the forestry sector.  There is no environmental development law.  Each year, the Forestry 
Superintendency identifies a maximum area to be th e subject of concessions and this varies according 
to the authorizations granted by the Superinte ndency based on approval of annual forestry operating 
plans.  According to the authorities, the total area authorized by the Superintendency has never been 
exploited.  Although progress has been made in th e regulatory framework, the institutional framework 
does not appear adequate to prevent unsustainable practices.
32 
(3) MINING AND MINERAL PROCESSING  
(i) Main features 
37. Historically, mining has played an important role in Bolivia's development, even though its 
relative impact has tended to decline in recent year s.  Since 1998, value added in the mining sector 
(including smelting but not hydrocarbons) has risen at  a lower rate than in the economy as a whole, 
though apparent growth accelerated from the sec ond half of 2003 onwards with the increase in the 
international price of minerals.  The mining sector 's contribution to total GDP was 4.4 per cent in 
2004 (provisional figure) compared with 5 per cent in 1998.33 Its share of total employment has 
continued to decrease, from 1.4 per cent of to tal employment in 1998 to 1.2 per cent in 2004 
(provisional figure).34 The problems facing the mining sector include the concentration of activities 
with low value added, a limited production infrast ructure, high operating costs, low productivity and 
frequent labour disputes.35 
38. The majority of minerals are exported and mining continues to play a leading role in 
generating export earnings.  In 2 004, mining exports accounted for 20.4 per cent of total exports, 
although this percentage is much lower than  in 1998 when they represented 36.4 per cent.36 In value 
terms, the main mineral exported is zinc, followed by tin, silver and gold.  Tin exports showed a 
marked increase between 2003 and 2004.  In 2004,  the major foreign export markets for mineral 
products were the United States, the Unite d Kingdom, Japan, Peru, Argentina and Brazil.  
39. Mining operations are divided into those usua lly conducted through joint venture contracts 
between the Bolivian Mining Corporation (COMIBOL ) and private companies, usually large-scale 
projects, and operations carried out by the medium and small-sized private sector.  The latter are 
conducted by nine medium-sized private ente rprises and 510 cooperatives, of which 275 were 
operating at the beginning of 2005.  COMIBOL is an  independent public body set up in 1952 and it 
has gradually transferred its operational activities to the private sector.  Subsequently, COMIBOL became a business structure almost exclusively involve d in administering a portfolio of joint venture, 
leasing and services contracts.  Nevertheless, Law No. 2.400 of 2002 authorizes COMIBOL to take 
over the management and direct and definitive admi nistration of mining and metal operations if the 
concessionaires go bankrupt.  The mines at Huanuni and Caracoles, for example, were placed under 
COMIBOL management in 2002 and 2004 respectivel y when they ran into financial difficulties.  
                                                     
 
32 Inter-American Development Bank (2004a). 
33 Central Bank of Bolivia (2004a). 
34 Ministry of Mining and Hydrocarbons (2003). 
35 Ministry of Mining and Hydrocarbons, Vice-Ministry of Mining (2004). 
36 Central Bank of Bolivia (2004c). WT/TPR/S/154/Rev.1 Trade Policy Review 
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40. The medium-sized private mining sector is the most important in terms of production.  In 
2004, it accounted for 69 per cent of mining production in Bolivia, mainly focusing on the exploitation of gold, silver, zinc  and lead deposits.  Mining coop eratives have become increasingly 
important in terms both of produc tion and volume and of employment  of labour;  they employ 80 per 
cent of the labour in this sector.  The size of cooperatives varies from just a few workers up to over 
2,000;  the majority of these use artisanal production techniques.  
41. Investment in the mining sector fell dur ing the period under review, amounting to 
US$213.6 million between 1998 and 2002, which was lower than the figure of US$368.1 million for 1993-1997.  Between 1998 and 2002, all investment in the sector came from private sources.  
(ii) Policy and institutional framework 
42. The Government considers mining to be essen tial for Bolivia's economic and social 
development because of its role in generating foreig n currency, jobs and taxes.  After consulting the 
mining sector, the Government planned and drafted a mining policy strategy contained in the document entitled Mining Policy and Plan for th e Revival of the Mining Sector (PRESEMIN).
37 The 
Plan is intended to guide government action in th e mining sector in years to come.  The aim is to 
develop Bolivia's mining potential, putting into e ffect an investment plan amounting to some 
US$1,227 million between 2004 and 2007-2008 involving a series of projects of varying dimensions 
and a gradual increase in mining exports of around  50 to 100 per cent.  The PRESEMIN's basic 
strategies are to seek fiscal incentives for the mi ning sector, tax incentives for the import of capital 
goods, support for mining projects under preparation,  setting up or reviving metalworking plants, and 
promoting new mining projects.  In the cooperativ e and small-scale mining area, it is seeking to 
increase investment by implementing new financing mechanisms.  
43. The PRESEMIN also endeavours to boost and e xpand the Mining Investment Fund (FOMIN) 
and improve the marketing of minerals from sma ll producers.  The FOMIN was set up by Supreme 
Decree No. 27.205 of 8 October 2003 and is aimed at mining cooperatives.  In order to receive 
FOMIN financing, a beneficiary must set up a joint or participatory venture with the FOMIN so that 
they both share the risks and benefits and th e Fund is able to supervise the project.  
44. The Ministry of Mines and Hydrocarbons is responsible for mining policy.  Within the 
Ministry, the Vice-Ministry of Mines drafts and implements policies on prospection, exploration, 
operation, processing, beneficiation, smelting a nd marketing of minerals and metals and the 
promotion of investment, as well as on basic and applied metallurgical research.  The Consejo 
Nacional de Minería  (National Mining Council), set up under Supreme Decree No. 27.334 (Decree on 
revival of the mining sector) of 31 January 2004 is a standing consultative a nd advisory body for the 
Government in relation to mining policy.  The Ge neral Superintendency of Mines is the highest 
administrative authority and settles disputes in th e mining sector.  The regional superintendencies 
have initial responsibility for granting concessions and settling disputes in their respective areas.  The 
National Geology and Mining Technology Service (SERGEOTECMIN), inter alia , conducts 
geological surveys and environmental impact assessments and acts as the technical body for the granting of mining concessions.  
45. The Mining Code, Law No. 1.777 of 17 Ma rch 1997, regulates activities relating to 
prospection, extraction, processing, smelting and ma rketing of minerals.  Hydrocarbons are governed 
by special laws.  According to the provisions of the Mining Code, minerals in the subsoil belong to 
the State, which, through the Executive, grants mi ning concessions to Bolivian or foreign individual 
or collective persons requesting them.  A mining co ncession is a transferable property which, subject 
                                                     
 
37 Ministry of Mines and Hydrocarbons, Vice-Ministry of Mines (2004). Bolivia WT/TPR/S/154/Rev.1 
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to the payment of royalties, gives the owner a right to prospect or explore for minerals and to conduct 
operations, process, smelt, refine and market mine rals for an indefinite period.  Owners of 
concessions must pay an annual fee, whose amount depends on the size of the concession.  National 
treatment applies to mining concessions with the prov iso that foreign individual or collective persons 
may not purchase or possess mining concessions with in 50 kilometres of Bolivia's international 
borders.38 
46. According to the environmental regulations on mining activities, Supreme Decree No. 24.782 
of 31 July 1997, an environmental permit is requi red for prospecting and exploration, operations, 
processing, smelting and refining, whether or not th ese activities form an integral part of the mining 
production process.  
47. No mining activities are reserved to the State.  The Mining Code provides that COMIBOL is 
responsible for managing and administering the St ate's mines, without carrying out mining activities 
directly, doing so only through joint venture, supply of services or leasing contracts.  The Code 
provides that COMIBOL, through an international public bidding procedure, shall transfer mining 
concessions that had not been the subject of joint venture or leasing contracts at the time the Code was 
published.  Nevertheless, as indicated above, Law No. 2.400 of 24 July 2002 provides that COMIBOL 
shall take over the definitive administration of mining and metallurgical activities when contracts 
awarded following a bidding procedure can no longer be fulfilled in accordance with the agreed contractual framework, except in the case of mining cooperative contracts.  
48. Like any other economic activity, mining companies are subject to annual payment of the 
profits tax (IUE).  The complementary mining tax (ICM) is a departmental royalty and applies to 
companies engaged in exploration, operations, bene ficiation, marketing and smelting of minerals.  
It is an alternative to the IUE:  at the end of the period, the IUE and the ICM are compared and only the higher of the two taxes is paid.  The rate of the ICM is flexible and varies according to fluctuations 
in international prices of minerals, with ceilings a nd floors.  For example, the ICM for silver ranges 
from 3 to 6 per cent of the gross value of sales and for gold from 4 to 7 per cent, according to given 
price scales.  The ICM rates are different for each mineral.  The amount applicable to sales on the 
domestic market is 60 per cent of that on exports.
39 It is estimated that revenue from the ICM 
amounted to US$6.2 million in 2003 and US$9.9 million in 2004.  
49. Mining activities are eligible for a number of general fiscal incentives, including the regime 
on temporary admission for final processing (see Chapter III(2) and (3)).  The General Customs Law 
(amended by Supreme Decree No. 27.947 of 20 December 2004) incorporated into the regime on 
temporary admission for re-export of goods in the same  state with suspension of taxes, machinery, 
equipment and instruments to be used for explora tion, operations and trans port in the mining sector 
for a period of five years.  In addition, sin ce December 2004 (under certain conditions) the date of 
payment of the value-added tax, the special consum ption tax and the relevant tariff on the import of 
capital goods and other assets to be used exclusiv ely for mining activities by mining investors may be 
extended by 24 months from the time of definitive import.40 This extension applies to imports to be 
used to realize the investment between 1 Janua ry 2005 and 31 December 2006 and where investment 
in assets exceeds US$100 million.  
                                                      
38 Mining Code, Law No. 1.777 of 17 March 1997, Article 17. 
39 Article 98 of the Mining Code. 
40 Supreme Decree No. 27.878  of 26 December 2004. WT/TPR/S/154/Rev.1 Trade Policy Review 
Page 92 
 
 
(4) MANUFACTURING  
(i) Main features 
50. The manufacturing sector in Bolivia is relativ ely small.  During the period 1999-2004, its 
contribution to GDP was fairly stable and amounted to an average of 16.6 per cent.41 Over the same 
period, the average annual increase of the manufacturi ng GDP in real terms was 2.8 per cent, which is 
a downturn compared with the growth of 4.3 per cen t in the preceding six years.  The performance of 
the manufacturing sector has been affected by the l ack of dynamism in domestic demand and external 
"shocks" (see Chapter I), although in recent years th ese factors have been offset by the satisfactory 
international prices for Bolivia's exports and th e trade preferences granted by the United States 
(see below).  
51. Growth in the manufacturing sector has been aff ected by the performance of a few industries, 
particularly those relating to mining, agriculture or forestry (see also sections (2) and (3) above).  As 
shown in Table AIV.4, during the period 1990-2001 (the latest years for which a breakdown exists), 
in terms of generating value added, the major ma nufacturing activities have been the preparation of 
foodstuffs and beverages, and the manufacture of refined petroleum products .  These two industries 
alone accounted for almost 70 per cent of Bolivia's manufacturing GDP.  
52. As far as employment is concerned, the prepar ation of foodstuffs and beverages is the most 
important industry;  other large employers include  the manufacture of textiles, clothing, footwear, 
wood products and printing and publishing (Table AI V.4).  The number of jobs in the manufacturing 
sector has remained fairly stable, although there have been changes reflecting economic cycles and 
marked fluctuations in individual industries.  
53. From 1991 to 2001, labour prod uctivity (per capita value added) in the manufacturing sector 
was an annual average of around US$18,800, although the figure is only US$12,900 if petroleum refining is not included.
42 As can be seen from Table AIV.4, ther e are wide disparities in productivity 
among industries.  The data available suggest that  productivity is higher in activities relating to the 
processing of raw materials (for example, the prepara tion of oils, sugar and tobacco products) than in 
the manufacturing of more sophisti cated products.  The low level of productivity in the manufacturing 
sector could help to explain the problems experience d by Bolivian products in penetrating foreign 
markets.43 
54. Small companies predominate in the manufact uring sector and only around 14 per cent of 
manufacturers employed more than 50 people in 2001, the latest year for which data are available.44 
Many manufacturing activities are in the informal se ctor:  a World Bank study estimated that some 
90 per cent of manufacturers, which employed 72 per cent of the labour force, were operating 
informally.45 The study also indicates that both use of pl ant capacity and investment in fixed assets are 
low.  Manufacturing is one of the activities that h as attracted the least foreign direct investment.46 
55. It is estimated that 80 per cent of production in the manufacturing sector goes to the domestic 
market and the remainder to foreign markets.47 Bolivia's exports of manufactures rose at an annual 
                                                      
41 WTO Secretariat calculations based on the Bole tín Estadístico of the BCB, No. 325, March 2005. 
42 Using the average offici al exchange rate during the period 1999-2001. 
43 Capra, Katherina (2001), page 6. 
44 National Statistical Institute, "Estadísticas anuales de la industria manufacturera, 1995-2001”. 
45 World Bank (2001). 
46 Capra, Katherina (2001), page 10. 
47 Idem, page 3. Bolivia WT/TPR/S/154/Rev.1 
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average of 3.9 per cent between 1999 and 2003.48 Exports were dominated by three industries (at the 
ISIC four-digit level):  primarily, the manufacture of  oils and fats, followed by petroleum refineries, 
and basic non-ferrous metal industries (Table AI V.5).  Production of da iry products, textiles and 
refined petroleum products are among the industri es which have seen the most rapid increase in 
exports.  The increase in exports to the Andean Community has been important (annual average of 
8 per cent between 1999 and 2003) and the Andean mark et has become vital for certain industries, for 
example, foodstuffs and textiles.  
56. The benefits granted by the United States under the Andean Trade Promotion and Drug 
Eradication Act (ATPDEA) (see Chapter II(4)(ii)(c)) h as led to large increases in exports of textiles 
and clothing to the United States market.49 According to a study by the Economic and Business 
Research Centre (CIEE), without the free-tr ade agreement with the United States (see 
Chapter II(4)(ii)(d)), real GDP would be 1.7 per cen t lower, following the expiry of the ATPDEA in 
January 2007.50 Many of these exports, however, come from a small number of companies;  for 
example, two firms export 70 per cent of cotton clothing.51 
57. Bolivia imports a wide variety of manufactur es, especially those produced in industries 
manufacturing metal products and mach inery, and chemicals (Table AIV.5).  The value of imports of 
manufactures into Bolivia fell by an annual aver age of 1.6 per cent between 1999 and 2003, reflecting 
in part the economic downturn during this period.52 On the other hand, imports from the Andean 
Community increased at an average rate of 1.9 per cent and Andean producers have become an 
important source of imports such as f oodstuffs and beverages and chemicals.  
(ii) Support policies and measures 
58. The Ministry of Economic Development, throu gh the Vice-Ministry of Industry, Trade and 
Export, is responsible for drawing up and implem enting development policies in the manufacturing 
sector.  The Consejo Nacional de Desarrollo Industrial  – CONDESIN (National Industrial 
Development Council) was set up under Supreme Decree No. 27.321 of 22 January 2004 as a 
government/private body for coordination of indust rial development policies and programmes.  The 
Council defines the National Industr ial Development Strategy (ENDI).  In addition, under Supreme 
Decree No. 28.137 of 17 May 2005, the regulatory framework of the ENDI was adopted for the 
purpose of regulating and integrating industria l development policies, programmes and action 
intended to resolve problems of productivi ty and competitiveness in Bolivian firms.  
59. Manufacturing (together with agriculture and tourism) is one of the activities identified as a 
priority in the "National Commitment to Bolivia n Production", the outcome of the Bolivian national 
dialogue on production.53 The Commitment indicates that in the manufacturing sector priority will be 
given to production networks and "c lusters" and/or production lines preferably aimed at exports;  in 
particular, priority will be given to clothing and textiles, leather, wood, engineering and jewellery.54 
According to the authorities, the measures envisaged include technological development, improving 
quality and innovation, training and business developm ent, financing, promoting production linkages, 
developing the domestic, border and foreign markets, and investment.  
                                                      
48 Based on information in the COMTRADE database, United Nations Statistics Division. 
49 Central Bank of Bolivia (2004b) and Central Bank of Bolivia (2003). BCB, "Memoria 2003”. 
50 Ministry of Economic Development (2005). 
51 World Bank (2001). 
52 Based on information in the COMTRADE database, United Nations Statistics Division. 
53 CONAPES (2005), Secretariat document, page 6. 
54 CONAPES (2005), idem, pages 40 and 65. WT/TPR/S/154/Rev.1 Trade Policy Review 
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60. The economic and social programme announced in May 2005 includes a manufacturing 
development strategy up to the year 2010.55 Its aim is to enhance productivity, competitiveness and 
diversification of manufacturing by means of tec hnological innovation, training, promotion, market 
development, external and infrastructural investment.  
61. Tariffs are the main instrument protecting th e manufacturing sector in Bolivia, although in 
practice this protection has been diminished by the exemptions given under preferential trade 
agreements (see Table III.4), in particular with the Andean Community.  Th e average MFN tariff in 
the manufacturing sector is 8.1 per cent (based on the IS IC), which is slightly lower than the overall 
average (Table III.2).  Unlike the situation existing at the time of the previous review in 1999, there 
are significant disparities in average tariffs in various industries, partly reflecting the application of 
zero to 5 per cent rates on capital goods (see Chapter III(2)(iv)).  The tariff changes made since 1999 
have also introduced a slight reverse tariff escala tion, which gives higher protection to less processed 
products (Table III.2).  
62. In addition to tariff protection, the Bolivian  manufacturing sector benefits from a number of 
official support programmes including fiscal exemp tions to promote exports (see Chapter III(3)(iv) 
and (v)), as well as production incentives under the Economic Revival Law or incentives for 
investment in El Alto or the Departments of Or uro and Potosí (see Chapter III(4)(iii)).  The ban on 
imports of right-hand-drive vehicles refitted as left -hand-drive vehicles gives support to companies in 
Bolivian free zones which do such refitting (see Chapter III(2)(vi)).  Government procurement 
bidding procedures also have an industrial policy co mponent when they give preference to Bolivian 
suppliers (see Chapter III(4)(v)).  There are no studies on the benefits accruing to the Bolivian 
economy as a whole from the support programmes available to the manufacturing sector, but they could lead to significant distortions because of the narrow goals they pursue, their fiscal cost and the 
additional burden they represent for the government authorities.  
63. Despite the support it receives, the manufact uring sector has long faced problems which 
reflect the weaknesses affecting Bolivia's production st ructure in general.  The Secretariat report for 
the first review of Bolivia in 1999 mentioned an inadequate infrastructure, high capital and transport 
costs, scarcity of skilled labour and competition from products smuggled into the country or produced 
in the informal sector.  Recently, a World Bank st udy found that the Bolivian manufacturing sector 
was suffering from high operating costs because of the cost of credit, supply problems, high levels of 
stocks, inflexible labour laws and infrastructure problems.
56 The high costs are also the result of 
transport problems such as bad roads, delays due to blockages and, despite the reforms implemented, 
long delays at the customs.  According to another study, the major problems in the manufacturing sector are the low level of investment, the high level of smuggling, unskilled labour, difficult access to credit, and the failure to seek out and attract new markets and products.
57 
(5) PETROLEUM AND NATURAL GAS  
(i) Main features 
64. Bolivia has petroleum and natural gas reserves a nd, according to information provided by the 
authorities, in January 2005, total reserves of petroleum (proven, probable and possible) were 
1,111 million certified barrels of crude oil, while natural gas reserves amounted to 48.7 trillion cubic 
feet.  In 2000 and 2001, large reserves of natural ga s in particular were discovered.  A study showed 
                                                      
55 Economic and Social Programme, "Plan Boliv ia Productiva y Solidaria”, Message from the 
President’s Office, 17 May 2005. 
56 World Bank (2001). 
57 Capra, Katherina (2004), page 20. Bolivia WT/TPR/S/154/Rev.1 
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that these could raise fiscal revenue by  between 10 to 50 per cent up to 2014.58 In early 2004, 
PETROBRAS Bolivia S.A. had the largest certified r eserves in Bolivia of both petroleum and natural 
gas.59 
65. In 2003, the petroleum and natural gas industry accounted for 6.7 per cent of the GDP.  In that 
year, average daily production of crude petrol eum amounted to 38,192 barrels and natural gas 
production was 952 million cubic feet per day.60 On average, during the period 1997-2003, annual 
investment in exploration and expl oitation amounted to US$419 million.61 Foreign investors 
participate to a large extent in all production, tran sport and distribution stages, particularly Brazilian, 
United States and French firms.  
66. Bolivia produces the majority of the refine d petroleum products it consumes, with the 
exception of diesel fuel, which has to be imported (almost 40 per cent of the diesel consumed).62 
Almost all the petroleum produced in Bolivia is for local consumption, although a small volume is 
exported.  
67. In value terms, exports of natural gas duri ng the period 1999-2004 increased sharply from 
2.5 to 23.1 per cent of total exports (US$35.1 and US$381.4 million, respectively).63 In 
February 2005, Bolivia exported natural gas to Br azil and Argentina (a total of 733 and 181 million 
cubic feet per day, respectively), which are the only two export markets.  Approximately 80 per cent 
of the Bolivian gas exported to Brazil is pur chased under a "take or pay" arrangement.64 
68. The domestic market for natural gas repres ents around 25 per cent of total energy 
consumption in Bolivia and thermoelectric companies are the largest consumers.65 This market has 
shown a marked increase since 1990, partly as a resu lt of the Government's efforts to promote the 
domestic consumption of natural gas.  
(ii) Regulatory framework 
69. The Ministry of Hydrocarbons (MH), set up under Law No. 2.840 of 16 September 2004 and 
Supreme Decree No. 27.998 of 7 February 2005, is  responsible for drawing up, implementing, 
evaluating and supervising government policy in the sector.  The Hydrocarbons Superintendency 
(SH), an autonomous agency established under Law No . 1.600 of 28 October 1994, is responsible for 
the following:  protecting consumers' rights, granting concessions, licences and authorizations, 
granting permits for the export of hydrocarbons and their by-products, authorizing import of 
hydrocarbons, keeping a national register of indivi dual and collective persons engaged in activities in 
the sector, approving rates for the activities regulat ed and setting prices in accordance with the 
regulations, ensuring compliance with rights and obliga tions on the part of bodies supervised by the 
SH, seeking data and information where necessar y, ensuring supplies of hydrocarbons products, 
                                                      
58 Inter-American Development Bank (2004c). 
59 State Oil Corporation, information available on line through the Ministry of Mines and 
Hydrocarbons. Available at: http://www.hidrocarburos.gov.bo. 
60 Ministry of Mines and Hydrocarbon, information on line. Available at: 
http://www.hidrocarburos.gov.bo. Production data for 2003 only go up to August 2003. 
61 CONAPES (2005), Secretariat document, page 52. 
62 UDAPE (2003b) and Ministry of Hydrocarbons, information on line. Available at: 
http://www.hidrocarburos. gov.bo. 
63 United Nations Statistics Division (2005), COMTRADE database. 
64 UDAPE (2003b). 
65 Hydrocarbons Superintendency, information on  line. Available at: http://www.superhid.gov.bo. WT/TPR/S/154/Rev.1 Trade Policy Review 
Page 96 
 
 
determining the volumes needed to supply the dom estic market and the raw materials required for 
industrialization projects, and imposing penalties in accordance with the rules and regulations.66 
70. The aim of government policy in the hydrocarbons sector is to maximize the earnings from 
the exploitation of natural gas reserves through ex port projects and development of the production 
chain incorporating value added.67 In practical terms, the objective is to implement the following 
projects:  export of natural gas to the United St ates and Mexico, setting up a petrochemical complex, 
establishing a gas-to-synthetic diesel processing pl ant, connecting 250,000 new users to the gas 
distribution network, converting 80,000 vehicles to natural gas for vehicles (GNV) over five years, 
developing the transport of compressed natural g as in modules, achieving self-sufficiency in diesel 
fuel production and enhancing the regulation of refineries.  
71. The authorities indicate that the medium-ter m and long-term vision for the hydrocarbons 
sector is to ensure that Bolivia acts as the energy leader in the re gion by building up new markets so 
as to construct a new energy framework that makes rational use of Bolivia's vast gas reserves.  The 
objective is to achieve rational use of gas resour ces, opening up and consolidat ing new export markets 
for natural gas and value-added products so as to  strengthen Bolivia's position as a centre for the 
production and distribution of natural gas in the Southe rn Cone.  With regard to foreign markets, the 
aim is to industrialize the gas subs ector by generating electricity for export.  At the domestic market 
level, the objectives are to change the national en ergy framework by promo ting mass consumption of 
natural gas, its industrialization a nd supply of the domestic market.  
72. The Constitution provides that hydrocarbons, irresp ective of the state in which they are found 
or the form in which they exist, are the direct , inalienable and permanent property of the State 
(Article 139).  No concession or contract transfer s ownership of hydrocarbon deposits.  Exploitation, 
exploration, marketing and transport belong to th e State, whose rights may be exercised through 
concessions and contracts for a specified period of time.  
73. In early 2005, the sector was organized on th e basis of Law No. 1.689 of 30 April 1996 
(Hydrocarbons Law (LH)) and a number of regulations.  The LH provides that any Bolivian or foreign 
natural or legal person may carry out one or more of the activities defined in the Law (exploration, 
exploitation, marketing, transport, refining and distribution of natural gas through networks).  
Companies operating in the hydrocarbons sector must be  registered with the SH (registration is free of 
charge).68 
74. All exploration, exploitation a nd marketing of hydrocarbons is through joint venture contracts 
with the Yacimientos Petrolíferos Fiscales Bolivianos – YPFB (State Oil Corporation).  These 
contracts may not be assigned, transferred or subcontracted, in whole or in part, unless expressly authorized by the YPFB.  Any dispute relating to a joint venture contract is settled in accordance with 
the Arbitration and Conciliation Law.  
75. Hydrocarbons transport systems are constructed under concessions granted by the SH.  Those 
holding hydrocarbons transport concessions may not be the concessionaire or participate in 
concessions for the distribution of natural gas through networks, nor may they be  buyers or sellers of 
natural gas or concessionaires or particip ants in the generation of electricity.  
                                                     
 
66 Law No. 3.058 of 17 May 2005, Article 25. 
67 Ministry of Mines and Hydrocarbons, information on line. Available at: 
http://www.hidrocarburos.gov.bo. 
68 Resolution SSDH No. 200 of 9 April 1997. Bolivia WT/TPR/S/154/Rev.1 
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76. The distribution of natural gas through networks is a public service supplied through a 
concession (LH, Article 41).  Concessions are grante d by the SH following a public bidding procedure 
and are coordinated with the urba n development plans of each munici pality.  Any Bolivian or foreign 
natural or legal person may engage in the refining of hydrocarbons.  
77. On behalf of the Bolivian State, the YPFB ex ercises ownership rights over all hydrocarbons 
and represents the State in concluding contracts for shared operations, association and production of 
petroleum.  Any petroleum contract with the Y PFB involves payment of the following royalties and 
contributions for taxable production, paid monthly:   (i) a departmental royalty amounting to 11 per 
cent of the departmental supervised production of  hydrocarbons, payable to the department in which 
the production takes place;  (ii) a national compensat ory royalty of 1 per cent of the supervised 
national production of hydrocarbons, payable to th e Departments of Beni (two thirds) and Pando 
(one third), pursuant to Law No. 981 of 7 March 1988;  and (iii) a contribution of 6 per cent of 
supervised national production to the Bolivian Tr easury.  All enterprises involved in hydrocarbons 
transport, and refining and distribution of natural g as through networks pay 1 per cent of their profits 
to the SH, which uses this to cover part of its budget.  
78. The mechanisms provided in Supreme Decree No. 27.354 of 4 February 2004 for calculating 
the selling price of natural gas used to generate thermoelectricity and the selling price to companies 
distributing natural gas through networks  were suspended in February 2004.69 The LH provided that 
the export price of natural gas depended on the price of gas at the border (which was controlled) less 
the cost of transport by pipeline in Bolivia (Artic le 50).  The price of natural gas exported varied 
during the period 1999-2004;  in 2003, the price of natural gas exported to Brazil was higher than that 
for internal consumption ("citygate") (US$2.1 and US$1.3 per 1,000 cubic feet, respectively).  
Administrative Resolution No. 124 of 3 February 2005 brought the price of domestic natural gas 
down to US$0.8 per 1,000 cubic feet.  The authorities indicate that the export price of natural gas is set directly with the buyers.  The cost of pipeline transport of hydrocarbons is regulated by Supreme Decree No. 26.116 of 16 March 2001.
70 
79. Supreme Decree No. 24.914 of 5 December 1997, amended by Supreme Decree No. 27.959 
of 30 December 2004, regulates the price of speci al gasoline, premium gasoline, grade 100 aviation 
fuel, kerosene, liquefied petroleum gas (LPG) and A-1 jet fuel for national and international use, 
diesel fuel and fuel oil.  The maximum LPG refining price is regulated on the basis of Supreme Decree No. 27.343 of 31 January 2004, amended by Supreme Decree No. 27.695 of 20 August 2004.  
80. The price of diesel fuel sold to ther moelectricity companies is subsidized.
71 Supreme 
Decree No. 25.982 of 16 November 2000 sets a decreasing scale of subsidies for a period of 10 years until it reaches zero.  The price of LPG is also subsidized.
72 The subsidy margins for putting LPG into 
containers are defined in Supreme Decree No. 25.649 of 14 January 2000.  There is also a price-to-
the-public stabilization fund for special gasoline and diesel fuel set up in 2000.73 The authorities 
indicate that, in practice, between July 2000 and January 2004 this fund froze the price of special 
gasoline and diesel fuel.  Supreme Decree No. 27. 344 of 31 January 2004 restored the calculation 
methodology based on international prices, taking into account adjustments to the IEHD through a 
mini-band and the exchange rate.  Supreme Decree  No. 27.697 of 23 August 2004 froze the price of 
                                                      
69 Supreme Decree No. 27.368 of 17 February 2004. This Supreme D ecree repeals Supreme 
Decree No. 26.037 of 22 December, which regulated the price of natural gas sold for thermoelectricity. 
70 Hydrocarbons Superintendency (2005), information on line. Available at: 
http://www.superhid.gov.bo/Tarifas TRan.html. 
71 UDAPE (2003), page 18. 
72 Ibid. 
73 Ibid. WT/TPR/S/154/Rev.1 Trade Policy Review 
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these products because of the sharp increase in the pri ce of crude petroleum-based products.  Supreme 
Decree No. 27.959 of 30 December 2004 increased the price of gasoline and diesel fuel.  In this 
Supreme Decree, the basis was the price of crude oi l on the domestic market and a refining margin 
was given for all products.  
81. Bolivia applies an IEHD, which was introduced by Law No. 1.606 of 22 December 1994 and 
is imposed on the marketing of hydrocarbons and th eir by-products on the domestic market.  In order 
to ensure supplies on the domestic  market, the IEHD on imported diesel fuel has been lowered;  the 
authorities indicate that, in May 2005, the IEHD was im posed at a rate of zero per cent and a subsidy 
of Bs 2.06 per litre was granted.  Supreme Decree No. 27.422 of 7 April 2004 lays down the 
methodology for determining the IEHD for special g asoline and domestic diesel fuel, with rates being 
fixed at Bs 0.90 and Bs 0.86 per litre, respectively.  The rate of IEHD for the other products to which 
it applies ranges from Bs 0.56 to Bs 2.46 per litre.74 
82. The price of GNV, regulated by Supreme Decree No. 27.346 of 31 January 2004, is 
determined for all stages of production, including retailers' margins.  Boliv ia has a regime for the 
conversion of automobiles using gasoline or diesel fuel into GNV.  This regime is regulated by 
Supreme Decree No. 27.297 of 20 December 2003.  
83. In April 2005, pursuant to Law No. 1.689, the volume required for domestic consumption and 
to meet the export contracts signed by the YPFB prior to 1996 were excluded from the free marketing 
of natural gas (LH, Article 24).  Supreme Decree No. 27.493 of 14 May 2004 restricted the export of liquid hydrocarbons, which requires a special authorization from the Ministry of Hydrocarbons.  
84. In May 2005, following the referendum on gas,  Law No. 1.689 was repealed and a new 
Hydrocarbons Law - Law No. 3.058 of 17 May 2005 - was enacted.  The authorities indicate that the aim of the new Law is the following:  to comply with the results of the binding referendum on gas;  to recover ownership of hydrocarbons at the wellhea d;  to redefine government participation by 
reorganizing the YPFB so that it can take part in all hydrocarbons activities;  to introduce a direct tax 
on hydrocarbons, which will increase the State's shar e to 50 per cent of the value of hydrocarbons 
production;  and to promote the industrialization of hydrocarbons in Bolivia.  In early June 2005, the 
Congress was considering draft legislation to amen d Law No. 3.058.  A document from the Bolivian 
Hydrocarbons Chamber indicates that the new hydrocarbons law could discourage foreign investment.
75 
(6) ELECTRICITY  
(i) Main features 
85. At the end of 2004, Bolivia had 1,371.3 MW potential installed capacity.76 In 2003, it 
generated 4,339.7 GWh.  Of this amount, 87.3 per cent was by companies belonging to the national 
interconnected system (SIN), while 12.7 per cent was by enterprises belonging to the isolated system 
(SA) or independent producers (see below).  The SIN supplies electricity to the major cities, while the 
SA supplies it to small towns.77 In the SIN, electricity is generated by thermoelectricity or 
hydroelectricity while in the other systems it may be hydroelectricity, gas turbines and gas or diesel 
motors.  
                                                      
74 Supreme Decree No. 27.959  of 20 December 2004. 
75 Bolivian Hydrocarbons Chamber (2005). 
76 Electricity Superintendency, information on  line. Available at: http://www.superele.gov.bo. 
77 UDAPE (2003a), page 3. Bolivia WT/TPR/S/154/Rev.1 
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86. Bolivia is essentially self-sufficient in electric ity.  During the period under review, plans to 
export electricity were under consideration but in early 2005 they had not been put into effect.78 There 
is a high level of foreign participation in  the sector.  Up to the end of 2004, a de facto  monopoly of 
electricity transmission existed through the SIN (Electricity Transport Company S.A.).  The 
authorities indicate that, in July 2005, it was hoped that new transmission companies would shortly 
start to operate in the basic network.  
(ii) Regulatory framework 
87. Government policy in this sector is determ ined by the Vice-Minister for Electricity, 
Alternative Energies and Telecommunications (V EEAT), which forms part of the Ministry of 
Services and Public Works.79 The policy objectives in this sector are the following:  to ensure that the 
sector has a sound legal basis to improve coverage, quality and sustainability of electricity services 
and to implement the Bolivian Rural Electrification Plan (PLABER) (see below).80 The National 
Economic Policy Council, which advises the Executive, also puts forward as a policy objective for the 
sector the building of thermoelectric plants in order to export electricity.  
88. The Electricity Superintendency (SE), an inde pendent agency under public law, established 
by Law No. 1.600 of 28 October 1994 and changed by Law No. 2.066 of 11 April 2000, is the 
regulatory agency for the sector.  The SE protects c onsumers' rights, ensures compliance with the anti-
monopoly provisions, grants concessions and licences, approves maximum prices and rates applicable to the electricity industry, a nd supervises the activities of the Comité Nacional de Despacho de Carga  
– CNDC (National Load Dispatching Committee).
81 
89. The CNDC was set up by Law No. 1.604 of 21 December 1994 (Electricity Law (LE)) and its 
responsibilities are laid down in Supreme Decree No. 26.093 of 2 March 2001.  It coordinates 
generation, transmission and load dispatching at minimum cost.82 The wholesale electricity market 
(MEM) is the market for buying and selling electricity  between generators and distributors (including 
consumers which purchase electricity without going through a distributor) as provided in the supply 
contracts.83 
90. The electricity sector is organized on the basis of the LE and 12 regulations governing 
activities in the electricity industry.84 The authorities indicate that the industry's organization is based 
                                                      
78 Vice-Ministry of Electricity and Alternative Energies, information on line. Available at: 
http://www.o opp. gov.bo/web /viceelect.php. 
79 Supreme Decree No. 26.973 of 27 March 2003. 
80 Vice-Ministry of Electricity and Alternative Energies, information on line. Available at: 
http://www.o opp. gov.bo/web /viceelect.php. 
81 Electricity Superintendency, information on  line. Available at: http://www.superele.gov.bo. 
82 Load dispatching means the specific allocation of  loads to a generating plant for the purpose of 
providing the most economic supplies according to fluctuations in supply and demand for electricity, while 
maintaining the quality of the service. 
83 Supreme Decree No. 26.093 of 2 March 2001. 
84 The following are the regulations: Operation of the MEM (Supreme Decree No. 26.093 of 
2 March 2001), Concessions, Licences and Provisional Licences (Supreme Decree No. 24.043 of 28 June 1995), 
Use of Assets in the Public Domain (Supreme Decree No. 24.043 of 28 June 1995), Prices and Rates (Supreme 
Decree No. 26.094 of 2 March 2001), Quality of Distribution (Supreme Decree No. 26.607 of 20 April 2002), Quality of Transmission (Supreme Decree No. 24.711 of 17  July 1997), Marketing and International Electricity 
Inter-Connections (Supreme Decree No. 25.986 of 16 November 2000), Rural Electrification (Supreme Decree 
No. 24.772 of 31 July 1997), Resources of the Electric ity Sector to be used for Rural Electrification (Supreme 
Decree No. 25.379 of 10 May 1999), Public Electricity Supply Service (Supreme Decree No. 26.302 of WT/TPR/S/154/Rev.1 Trade Policy Review 
Page 100 
 
 
on the principles of efficiency, transparency, quality,  continuity, adaptability and neutrality.  The LE 
specifically defines generation, interconnection, tr ansmission, distribution, marketing, import and 
export of electricity as activities of national importa nce (Article 4).  It provides that enterprises 
engaged in activities within the SIN may not be in tegrated vertically whereas enterprises in the 
isolated systems may be (Articles 69 and 20).  Fo reign enterprises engaged in activities in the sector 
must set up a subsidiary in the form of a public limited company (LE, Article 10).  
91. Enterprises engaged in activities in this sect or must obtain a licence (for generation and 
transmission) or a concession (for distribution) or a provisional licence (studies with a view to generation using natural resources a nd studies on transmission installations).  Distribution is deemed 
to be a public service whereas the others are private activities.
85 Integrated activities within the 
isolated systems involving power of less than 300  kW or independent production do not require any 
licence or concession.86 
92. Concessions, licences or provisional licences are granted upon application by the interested 
party or through a public bidding procedure.  App lications from interested parties apply in the 
following cases:  (i) where, within a period of 30 days from the latest publication, no other 
applications for the same purpose have been r eceived or where a provisional licence gives a 
preferential right;  (ii) where licen ces have a prior provisional licence;  or (iii) for the export or import 
of electricity.  A public bidding procedure applies in one of the following situations:  (i) where, within 
30 days, more than one application for a provisional licence has been received;  (ii) where, within a 
period of 30 days, more than one application for a licence has been received;   (iii) for projects 
"identified or under consideration" by the State;  or (iv) where the term of concessions has expired, 
where a concession or licence is cancelled or where more than one application for a licence or provisional licence has been received.
87 The authorities explain that projects "identified or under 
consideration" by the State are projects of public in terest and the public bidding procedure is followed 
when the project does not come from the State a nd more than one application has been received.  
93. The granting of concessions and licences is subject to payment of royalties in proportion to 
the value of the investment made;  licences for generation using renewabl e natural resources and 
provisional licences are exempt from payment of royalties.88 Applicants for concessions and licences 
must provide a document showing that the company is  not integrated vertically within the SIN and 
must comply with the restrictions on ownership of installed capacity in the SIN, inter alia .89 These 
limits apply to electricity-generating companies, which may not own more than 35 per cent of the 
installed capacity in the SIN.  
94. Licences granted upon application by an interested party must meet all the requirements laid 
down in the LE and, if they are granted through a public bidding procedure, the Superintendent must take into account the recommendations  of the committee evaluating the bid.
90 The authorities indicate 
that the grant of concessions, licences or author izations through a public bidding procedure follows 
economic criteria to guarantee the competitiveness of  the sector.  Companies engaged in transmission 
through the SIN must allow full access to their ne tworks, including to independent producers and 
                                                                                                                                                                     
1 September 2001), Violations and Penalties (Supreme D ecree No. 24.043 of 28 June 1995) and Article 15 of 
Law No. 1.604 (Supreme Decree No. 24.615 of 13 June 1997). 
85 Law No. 1.604. 
86 Supreme Decree No. 24.043, Article 4. 
87 Idem, Article 24. 
88 Idem, Article 49. 
89 Idem, Article 7. 
90 Idem, Articles 20 and 30. Bolivia WT/TPR/S/154/Rev.1 
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consumers.91 Licences to transmit electricity are not exclusive.  Distribution concessions are granted 
according to the same criteria as licences.  Foreign in vestors which have set up subsidiaries in order to 
operate in the sector enjoy national treatment.  
95. Prices for the transfer of power and energy among generators and be tween generators and 
distributors that are not part of a supply contract through the SIN are regulated.92 In the SIN, the 
ceiling price for using transmission and distribution facilities, the ceiling price for supplying distribution companies and the ceiling price to cons umers supplied solely through the distributor are 
also regulated.  All prices and rates for the supply of electricity in isolated systems are regulated.  
Supreme Decree No. 26.094 specifies the procedures to be used to update prices and rates in 
electricity systems.  The ceiling price for transmissi on is fixed weekly and is calculated according to 
the total cost of transmission and maintenance and administration costs.  
96. Supreme Decree No. 27.302 of 23 December 2003 set up and regulates the MEM stabilization 
fund.  The authorities indicate that this fund stabili zes prices by limiting the fluctuation in the rates 
each distributor applies to its regular consumers, wh ich is determined by variations in the MEM price 
or in the distribution price.  The price fluctuations must not exceed 3 per cent.  The fund keeps 
individual accounts for each generating company and for each distributor, which include monthly 
amounts corresponding to the price differences in the MEM and the retail market.  In the MEM, 
distributors pay monthly to generators the differen ce between the price applied and the spot market 
price.  The SE is informed of the balance of the accounts belonging to distributors in the fund.  It 
checks the amount and issues a weekly report showi ng the balance.  Furthermore, Resolution SSDE 
No. 45 transferred resources to the stabilization fund  for distributors intended for distributors in the 
isolated systems.  
97. In practice, cross-subsidies have been grante d, basically to residential consumers, although 
there is a transitional mechan ism to eliminate these subsidies, which should end in 2008.
93 The 
authorities indicate that, as of September 2005, a subsidized rate for those consuming up to 50 KWh monthly would be applied.  
98. The LE specifies that the State is  responsible for developing electrification in smaller towns 
and in rural areas that cannot be supplied by the private sector alone (Article 61).  The authorities 
indicate that Bolivia has two rural electrificati on programmes administered by the VEEAT, which 
provide financing and loans for projects that e nhance access to electricity in rural areas through 
traditional systems and renewable energy sources, a nd they are available to any person or company.
94  
(7) SERVICES  
(i) Main features 
99. The services sector's share of GDP remained st able at around 54 per cent during the period 
1999-2004.95 Employment in the services sector also rema ined stable up to 2002, accounting for some 
46 per cent of total employment, but increased to 49 per cent in 2003 (see Chapter I, Table I.1).  
During the period 1999-2004, the net balance gene rated an average deficit of US$75.5 million 
                                                      
91 Idem, Article 2. 
92 LE, Article 45. 
93 UDAPE (2003a), pages 37-38 and info rmation provided by the authorities. 
94 Vice-Ministry of Electri city and Alternative Energies (2004) and Vice-Ministry of  Electricity and 
Alternative Energies, informati on on line. Available at: http://w ww.oopp.gov.bo/we b/viceelect.php. 
95 Bolivian National Statistics Institute, information on line. Available at: http://www.bcb.gov.bo. All 
the data for 2002-2004 are provisional.   WT/TPR/S/154/Rev.1 Trade Policy Review 
Page 102 
 
 
(see Table I.5).  Over the same period, both exports and imports of services increased, although the 
latter increased to a greater extent than exports.  
100. Bolivia undertook commitments under the GATS in five of the 12 WTO services sectors 
(see Table AIV.6).  It took part in the negotiati ons on telecommunications and financial services after 
the Uruguay Round and made commitments in both sectors.  In September 2003, it presented its 
services offer in the context of the Doha Development Round.  
101. Bolivia made horizontal commitments on modes of supply 3 and 4.96 Regarding market 
access, Bolivia's schedule of specific commitment s lays down specific conditions for concessions 
relating to the soil and subsoil, including lake and river waters, which require that companies engaged 
in trade on a regular basis must establish subsidiari es and allow the presence of natural persons in the 
case of managers, executives and specialists.  It also  indicates that only up to 15 per cent of the total 
employees of any enterprise may be foreigners and must consist of senior  personnel.  Regarding 
limitations on national treatment, the schedule provid es that, for mode of supply 3, foreigners may not 
possess land within the first 50 kilometres of Bolivia's  borders.  In addition, managers, executives and 
specialists are given national treatment and one- or two-year residence permits associated with an 
employment contract given by an enterpri se that has a commercial presence in Bolivia.  
102. Bolivia has a list of MFN exemptions in  accordance with Article II of the GATS.97 The 
exemptions affect three sectors:  road transport of passengers (applicable to all countries with which 
Bolivia has bilateral or plurilateral agreements in  force), freight, maritime transport and multimodal 
freight (applicable to the Andean Community c ountries) and audiovisual and video tape production 
services (applicable to all countries with which Boli via has bilateral or plurilateral agreements in 
force).  In the first case, the exemption consists of provisions on national treatment in bilateral and 
plurilateral agreements on international transportatio n of passengers and freight.  In the second case, it 
consists of giving preference for access to mariti me freight to operators from Andean Community 
countries.  In the last case, national treatment is  given for cinematographic works co-produced by 
Bolivian producers and producers in countries with  which Bolivia has bilateral or plurilateral 
agreements in force.  
103. Within the Andean Community, Decision 439 of 11 June 1998 sets out the general framework 
of principles and rules for liberalizing trade in ser vices in the Andean Communi ty.  It contains the 
general guidelines for creating an Andean common mark et in services, which should come into effect 
in 2005 at the latest.  The Decision will apply to measures adopted by member  countries that affect 
trade in services in all of the services sectors a nd in the different modes of supply, including those 
provided by the central, regional or local public sector, as well as those furnished by institutions 
delegated to do so.  The Decision provides that member countries of the Community shall provide 
market access and national treatment to compani es from other Andean Community member countries, 
as well as giving countries the possibility of dete rmining exceptions and safeguards for balance-of-
payments reasons (measures to offset possible fi nancial imbalances resulting from trade in services 
within the Community).  The authorities indicate that  Bolivia has held meetings regarding the draft 
decision on recognition of qualifications and st atistics on services under the Community framework.  
104. Decision No. 510 establishes an inventory of restrictive measures applied by member 
countries of the Community contrary to the principles laid down in Decision No. 439, which should gradually be phased out.  Bolivia's  inventory adopted pursuant to D ecision 510 contains 46 measures, 
six of which affected all sectors and the remainder the following sectors
98:  business services (45 per 
                                                      
96 WTO document GATS/SC/12 of 15 April 1994. 
97 WTO document GATS/EL/12 of 15 April 1994. 
98 The measures corresponding to each  sector as a percentage of the total are shown within brackets. Bolivia WT/TPR/S/154/Rev.1 
 Page 103 
 
 
cent), transport services (15 per cent), tourism and communications services (9 per cent) and financial 
services and health services (7 per cent).  The other sectors are education services, environmental and leisure services.  Seventy-eight per cent of the measu res are restrictions solely on national treatment, 
76 per cent on market access, while 35 per cent affect both.  
(ii) Telecommunications 
(a) Main features 
105. The communications sector (telecommunications, postal services, radio and television) saw 
its share of GDP fall from 2.7 per cent in 1999 to 1.7 per cent in 2004.
99 The share of total demand for 
jobs decreased between 1999 and 2003 from 0.11 to 0.08 per cent.  Investment in the 
telecommunications sector nearly tripled during the period 1999-2001 and was estimated to be 
US$100 million in 2004.100 Investment in the sector during the period 1999-2003 came essentially 
from new operators, mainly in long-distance telephon y services (as a result of the opening up of the 
market in 2001) and growth in mobile telephony.  Investment in 2003 amounted to US$120 million.  
106. In early 2004, 18 companies were providing local fixed telephony services (of which 15 were 
cooperatives) and nine provided  long-distance telephony services.101 Eighty per cent of fixed lines are 
in La Paz, Cochabamba and Santa Cruz.102 Four cooperatives controlled a pproximately 80 per cent of 
the main lines in local telephony.103 
107. In 2004, Bolivia had a total of 2.4 million telephone lines, representing an average annual 
increase of 21.3 per cent since 1999.  The increase is  mainly the result of th e annual average increase 
of 33.8 per cent in mobile lines, which is much hi gher than the increase in fixed telephony (4.5 per 
cent) (see Table IV.2).  
108. During the period under review, mobile telephon y became the main source of telephone 
services in Bolivia, overtaking fixed telephony both in terms of lines installed and in density.  The 
density of mobile lines increased by an annu al average of 21.8 per cent during the period 
1999-2003.104 A study showed that liberalization of the sector had led to a reduction in the cost of 
long-distance calls, an increase in telephone traffic, e xpansion of coverage, dive rsification in the offer 
of services, the entry of a large number of new operators and increased investment.105 
Table IV.2 
Selected teleco mmunications indicators, 1999-2004 
 1999 2000 2001 2002 2003 2004 
Main telephone lines per 100 inhabitantsa 6.4 6.4 6.3 7.0 7.1 7.1 
Cellular telephone subscribers per 100 inhabitantsb 5.4 7.3 9.4 10.4 11.9 .. 
Fixed telephone lines (thousands ) 502.6 510.8 524.4 585.5 610.3 625.4 
Mobile telephone lines (thousands) 420.3 582.6 779.9 1,023.3 1,278.8 1,800.8 
Table IV.2 (cont'd) 
                                                      
99 Central Bank of Bolivia, information on line. Available at: http://www.bcb.gov.bo. The data for 
2002-2004 are provisional. 
100 ITU (2004) and BuddeComm, (2005), pages 1 and 2. 
101 Telecommunications Superintende ncy, information on line. Ava ilable at: http://www.sittel.gov.bo. 
102 BuddeComm (2005), page 3. 
103 Telecommunications Superintende ncy, information on line. Ava ilable at: http://www.sittel.gov.bo. 
104 Ibid. 
105 BuddeComm (2005), page 5. WT/TPR/S/154/Rev.1 Trade Policy Review 
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 1999 2000 2001 2002 2003 2004 
Residential telephone connecti on costs (US$) 125 119 92 43 41 39 
Percentage of main lines that are digital 85 98 99 .. .. .. 
Public pay telephones 11,431 11,821 12,465 13,991 14,026 15,738 
Cost of a long-distance national call (Bs/minute)  2.1 2.1 2.4 2.3 .. .. 
Revenue earned from national and international telephony 
(US$million) 160.6 143.6 135.0 98.6 92.9 .. 
Estimated number of Internet users (thousands) 80 120 180 270 .. .. 
.. Not available. 
a Data for the first half of 2004. 
b Data for the fourth quarter of 2003. 
Note: The amounts in US dollars for revenue from national and international telephony have been calculated using the average 
exchange rate for each year publishe d by the Central Bank of Bolivia. 
Source: All the data come from the Te lecommunications Superinte ndency except the cost of connecting a residential 
telephone line, the percentage of main lines that are digita l and the estimated number of Internet users, which come 
from the ITU, and the revenue earned from national and in ternational telephony, whic h come from the Bolivian 
National Statistics Institute.  Data available at:  http://www.sittel.gov.bo , Indicadores de telecomunicaciones 
(2004), http://www.itu.int/hom e and http://www.ine.gov.bo. 
(b) Legislative framework 
109. The objectives of government policy are to provide a universal service in urban areas and 
universal access in rural areas, raise quality and lower prices for all telecommunications services, 
promote the convergence of services for all consumers and make a significant increase in access to the 
Internet.106 
110. The Vice-Ministry for Electricity, Alternative Energies and Telecommunications (VEEAT), 
which is part of the Ministry of Services and Pub lic Works, drafts government policy for the sector.107 
The Vice-Minister coordinates the implementation and supervision of government policy with the 
Telecommunications Superintendency (SITTEL), est ablished by Law No. 1.600 of 28 October 1994, 
amended by Law No. 2.066 of 11 April 2000, which is  part of the Sectoral Regulation System.  The 
SITTEL is responsible, inter alia , for ensuring compliance with th e regulatory legislation and the 
telecommunications regulations, fostering efficiency in telecommunications activities, determining the pricing regimes, promoting and protecting competition in the sector, laying down technical 
standards and granting concessions, licences a nd registration for the supply of services.
108 
111. Bolivia's Political Constitution proclaims Stat e ownership of the electromagnetic spectrum 
(Article 136).  The sector is structured on the basis of Law No. 1.632 of 5 July 1995 
(Telecommunications Law (LT)), partly amended by Laws No. 2.328 and No. 2.342 of 4 February 2002 and 25 April 2002, respectively.  The LT is regulated by Supreme Decree No. 24.132 
of 27 September 1995, partly amended by S upreme Decrees Nos. 24.778, 24.995, 25.950, 26.011, 
26.188 and 26.401 of 31 July 1997, 30 March 1998, 20 October 2000, 1 December 2000, 18 May 2001 and 17 November 2001 respectively.  Th e regulations do not restrict or discriminate 
against foreign investment in the sector.  
112. Supreme Decree No. 26.005 of 30 November  2000, supplemented by Supreme Decree 
No. 26.248 of 12 June 2001, approved the plan for opening up the telecommunications market.  The 
                                                     
 
106 Supreme Decree No. 26.005  of 30 November 2000. 
107 Supreme Decree No. 26.973 of 27 March 2003, Article 24. 
108 Telecommunications Superintendency, information on line. Available at: http://www.sittel.gov.bo 
Default.aspx?tabid=33 and information provided by the authorities. Bolivia WT/TPR/S/154/Rev.1 
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Decree lays down the general principles for the development of free competition and access to all 
telecommunications sectors, the multi-carrier system for long-distance telephony, access and universal service (see below).  The LT specifies that value-added services do not include basic telecommunications services (Article 2).  Law No. 1.961 of 23 March 1999 specifically states that 
telecommunications services are a national requirement and authorizes telecommunications 
companies with foreign capital to operate in th e area between the Bolivian border and the first 
50 kilometres inside the country.  
113. The LT originally gave exclusive rights to ENTEL SAM for the supply of national and 
international long-distance fixed telephony ser vices (Articles 31 and 32), but these expired in 
November 2001.  The LT also originally gave exclusive rights to telephone cooperatives for the 
supply of local fixed telephony, which also expired at the end of 2001 (Article 34).  
114. Bolivia encourages competition in the national and long-distance telephony market through a 
system for selecting the supplier of dial-up servi ces (multioperators), as provided in Supreme Decree 
No. 26.005.  Companies providing services in th is market must be established in Bolivia.
109 Supreme 
Decree No. 24.132 prohibits the supply, selling, marketing and use of reverse-charge services 
(Article 447).  
115. The SITTEL grants concessions, licences or regi stration to suppliers of telecommunications 
services.110 Concessions are given for the supply of telecommunications services to the public and 
their maximum term is 40 years.  The SITTEL grants  licences for the supply of services that use the 
electromagnetic spectrum.  Registration is given when the owner of a private network uses the 
network outside his office, land or propert y or for the supply of value added services.  
116. Supreme Decree No. 26.005 authorized the SITTEL to grant concessions directly as of 2001 
for local, trunk and international telephony services,  public telephones, signals distribution services, 
data retransmission services and resale services (Artic le 6).  In order to grant concessions directly, a 
supreme resolution is required determining that the service must be provided without restrictions as to 
the number of suppliers.111 As regards prior services, these are covered by Supreme 
Decree No. 26.005.  In addition, the SITTEL grants concessions by means of a public bidding 
procedure where this is provided in the plans of th e Vice-Ministry of Electricity, Alternative Energy 
and Telecommunications, approved by the Executive, or where an interested party has made an 
application.  
117. Concession agreements determine, inter alia , the requirements for modernization, expansion 
and development of the network used by the supp liers and obligations regarding rural services of 
common interest (LT, Article 7).  The LT pr ovides that a concessionaire whose concession has 
expired must transfer all installations, equipmen t, works and rights belonging to the outgoing owner 
to the new concessionaire.  Transfer is through a public bidding procedure, and the concessionaire 
may take part in the bidding in order to renew the concession (LT, Article 8).  All holders of 
concessions, licences and/or registratio n of public services (see below)  must pay a regulation tax to 
the SITTEL in order to finance the latter's activities and this amounts to up to 1 per cent of the gross 
income earned from the operation in the preceding year (LT, Article 22).  
118. The SITTEL grants licences with a maximum term of 20 years for the supply of services 
using electromagnetic frequencies.  Licences are gran ted through a public bidding procedure (with the 
exception of services provided by private networks),  on the condition that the technical and legal 
                                                      
109 Supreme Decree No. 24.132, Article 377. 
110 LT, title III. 
111 Supreme Decree No. 24.132, Article 14. WT/TPR/S/154/Rev.1 Trade Policy Review 
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requirements are met and the authorities have so dete rmined or where an application has been made 
by an interested party;  licences for private netw orks are granted upon request by the party and subject 
to a favourable technical-legal repor t from the SITTEL (LT, Article 9).  Holders of licences to provide 
cellular telephony services must pay an annual fee fo r the right to use the electromagnetic spectrum, 
in addition to paying the regulati on tax.  The fee is calculated on the basis of the land-based radio 
station and the terminal equipment used (Bs 439 and Bs 11 respectively).  The authorities indicate that 
these fees are adjusted annually according to the trend in the value of housing promotion units 
(UFVs).  In addition, the supply of value-added ser vices and the use of private networks outside the 
owner's property necessitates registration of the supp lier and this must be renewed every five years 
(LT, Articles 12 and 13).  
119. The interconnection regime is governed by th e interconnection regulations (Supreme Decree 
No. 26.011).  The authorities indicate that the main  objective of the interconnection regime is to 
guarantee efficient interconnection of public teleco mmunications networks, based on the principle of 
mandatory interconnection, contractual freedom  when negotiating the various aspects of 
interconnection among the parties, non-discriminati on, and ensuring intervention by the regulatory 
body at any time during the negotiations and in rela tion to any aspects of the interconnection.  Action 
by the regulatory body is intended to guarantee interconnection and full compliance by the operators 
with the regulations in effect.  
120. Operators of public networks put before the SI TTEL for approval all the details of a technical, 
economic, commercial, legal and administrative nature and the support services, termed the basic 
interconnection offer.112 The basic interconnection offer approved by the SITTEL is binding on the 
operator concerned and on any other operator accedi ng to the interconnection.   Interconnection among 
public networks is mandatory and may not be inte rrupted without a specific authorization, where 
applicable, from the SITTEL (LT, Article 18).  In terconnection agreements are negotiated among the 
parties and must be approved by the SITTEL.  If th e parties are unable to reach agreement, any of 
them may request the SITTEL to determine the term s and conditions for the interconnection, which 
must be complied with.  The authorities point out that between 2001 and mid-2005 the SITTEL 
intervened 21 times.  Interconnection charges ar e regulated by the SITTEL and have a recurring 
component (for use of the network) and a non-r ecurring component (for expanding or improving the 
network), which are determin ed using the long-term incremental cost methodology.113 The SITTEL 
defines the initial charges in interconnection contracts.  
121. The SITTEL regulates the prices applied by domina nt operators by means of ceiling prices, 
that is to say, the prices applied by operators that  are able to act independently of their competitors, 
clients or suppliers because of the effective absence of competition on the market, as well as 
interconnection charges by regulatin g recurrent and non-recurrent costs.114 Maximum prices are 
adjusted according to inflation and productivity fact ors in the sector, the latter being determined by 
the SITTEL.115 Regulation prevents the application of predatory pricing and allows the SITTEL to set 
floor prices in order to prevent competition-distorting practices (LT, Article 21).  In addition, discounts for volume of traffic are prohibited if they have anti-competitive objectives or effects.
116 
Supreme Decree No. 24.132 prohibits cross-subsidie s among services (Article 142).  In practice, the 
SITTEL has regulated prices for operators that have b een declared to be in a position to dominate the 
                                                      
112 Supreme Decree No. 26.011 of 1 December, Article 9. 
113 Idem, Articles 33 and 34. 
114 LT, Articles 2 and 21 and Suprem e Decree No. 24.132, Article 129. 
115 Supreme Decree No. 24.132, Article 151. 
116 Idem, Article 143. Bolivia WT/TPR/S/154/Rev.1 
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market and those which do not meet the gene ral tariff principles laid down in Supreme 
Decree No. 24.132 (Article 142).117 
122. Supreme Decree No. 26.005 provides for the creation of a fund to finance universal service 
projects in urban and rural areas (Article 3.1).  The plan to create such a fund was, however, 
abandoned in 2003.118 The authorities indicate that, since the market has been opened up, concession 
contracts for the supply of services contain a clause  on universal service and access obligations, which 
lays down the coverage percentages for the supply of services as of the second year.  
123. Bolivia has undertaken commitments under th e GATS in the main telecommunications 
markets (Table AIV.6).  Exclusive rights have b een abolished (see above) so the relevant domestic 
legislation has been repealed.  Bolivia's co mmitments guarantee market access for mode of 
supply 2 and national treatment for modes of suppl y 1, 2 and 3.  Market access for cross-border 
supply and commercial presence is allowed with some restrictions;  in particular, in long-distance 
services, reverse-charge services are not allowed and commercial presence is required for data transmission services.  National treatment and market access for foreign natural persons are subject to an employment contract with a company that has a commercial presence in Bolivia.
119 Bolivia has 
acceded to three of the principles laid down in  the Reference Paper (competitive safeguards, 
obligatory interconnection and public availability of licensing criteria).120 
(iii) Financial services121 
124. The financial services sector's share of GDP decreased from 5.5 per cent in 1999 to 3.3 per 
cent in 2004.122 In May 2005, the financial system had US$3.7 million and US$3.3 million in assets 
and liabilities respectively.  The Bolivian authorities indicate that the financial system, regulated by 
the Banking and Financial Entities Superintendenc y (SBEF) includes 13 private banks, one second-
tier financial entity (in which the Bolivian State is th e majority partner), nine mutual savings and loan 
funds functioning, 24 open savings and loan coopera tives, six private financing funds, two general 
deposit warehouses subsidiaries of banks, one fina ncial leasing company, two credit information 
offices and one derivatives exchange.  
(a) Banking services 
Market structure 
125. In terms of assets and liabilities, Bolivia's ba nking system shrank between December 1999 
and May 2005.  The authorities indicate that, ove r this period, assets in nominal terms fell from 
Bs 33.4 to Bs 30.3 billion (US$5.6 and US$3.8 b illion respectively).  Again in nominal terms, 
liabilities fell from Bs 30.4 to Bs 26.9 billion (US$5. 1 and US$3.4, billion respectively).  There is a 
large amount of foreign participation in the bankin g sector:  in May, 2005, four of the 13 private 
banks in Bolivia were wholly Boliv ian-owned, whereas seven were major ity or wholly foreign owned.  
                                                      
117 SITTEL Regulatory Administrativ e Resolutions 2004/002 9, 2004/1.088 , 2002/1.112, 2004/1.390, 
2003/678, 2002/0415 and 2004/0036. Available at: http://www.sittel.gov.bo.  
118 Bolivia Hoy (2003), information on line. Available at: http://www.boliviahoy.com/modules/ 
news/print.php?storyid=3524. 
119 WTO document GATS/SC/12 of 15 April 1994. 
120 WTO document GATS/SC/12/Suppl.1 of 11 April 1997. 
121 In this section, all the US dollar equivalents have been calculated using the exchange rates 
prevailing on 31 May 2005, i.e. US$1/Bs 8.1. 
122 Bolivian National Statistics Institute (2004), information on line.  Available at: 
http://www.ine.gov.bo. All the GDP data for the period 2002-2004 are provisional. WT/TPR/S/154/Rev.1 Trade Policy Review 
Page 108 
 
 
At the same date, three subsidiaries of foreign ba nks were operating in Bolivia.  Also in May 2005, 
four banks held 62.1 per cent of total deposits, 87 per cent of which were in foreign currency.  The 
authorities also indicate that, during the period und er review, manufacturing was the sector that 
received the highest share of loans from the banking system (21 per cent at 31 May 2005).  
126. The Fondo de Desarrollo del Sistema Financiero  – FONDESIF (Financial System 
Development Fund), under the Ministry of Econom ic Development, was set up as a decentralized 
institution of the Executive for the purpose of expa nding the asset base of entities in the financial 
system and increasing the availability of financial resources for Bolivia's production sector.  The FONDESIF grants loans in order to expand the portf olio of financial entities that have no operating 
licence (for example, associations which grant microl oans), provides technical assistance and supports 
studies.  The Nacional Financiera Boliviana  – NAFIBO (Bolivian National Finance Company) is a 
semi-public company owned by the State and the Andean Development Corporation whose resources 
go to finance consolidated medium-sized companies,  large companies as a second-tier bank and to the 
financial intermediation system in general.  
127. Between July 2002 and October 2003, the financ ial system saw a downturn in both assets and 
liabilities.  On three occasions (July-August 2002 , February 2003 and Oct ober 2003) there were 
massive withdrawals of deposits.  A fourth massiv e withdrawal took place in June 2005.  In this 
connection, the authorities emphasize that in each case  the origin of the lack of confidence on the part 
of depositors was not related to the activities of th e financial system.  They also stress that the 
uncertainty and lack of confidence that led to the events in the political and social spheres did not 
result in a financial crisis.  In their opinion, a soli d financial system, with an adequate level of liquid 
reserves, prevented this.  
128. The high cost of credit has been identified as one of the problems facing the majority of 
Bolivian companies.
123 The authorities state that during 2002 and 2003 they implemented an 
economic revival plan which, in part, included the rescheduling of non-performing loans totalling 
US$859.6 million at the end of 2003.  The sectors wh ich benefited from the rescheduling were mainly 
agricultural production and trade a nd construction.  The authorities also state that, in 2003, 
rescheduling had given only temporary relief a nd the companies concerned had not made an 
economic recovery.  
Regulatory framework 
129. The financial regulation system (SIREFI), under th e supervision of the Ministry of Finance, 
was set up under Law No. 2.427 of 28 November  2002.  It is composed of the General 
Superintendency (SG), the SBEF, the Pensions, S ecurities and Insurance Superintendency (SPVS) 
and the Business Superintendency (SE).  It regulat es, controls and supervises activities, persons and 
entities relating to compulsory long-term social secu rity, banking and financial entities, insurance and 
reinsurance companies, the securiti es market and businesses, within th e scope of its competence.  The 
SG has exclusive and non-assignable competence to h ear and resolve administrative appeals against 
decisions by the SBEF.  
130. The SBEF has exclusive and non-assignable competence to issue prudential regulations, 
control and supervise activities, persons and entities relating to financial inte rmediation and ancillary 
financial services.  Its activities are regulated by  Supreme Decree No. 22.203 of 26 May 1989 and 
Law No. 2.297 of 20 December 2001.  The SBEF also administers the risk information centre, which 
determines the risk criteria for personal and corpor ate loans in Bolivia.  Th e SBEF has a loan risk 
information centre scheme (CIRC), which is a databa se that groups informati on provided by financial 
                                                      
123 World Bank (2001), page 87. Bolivia WT/TPR/S/154/Rev.1 
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entities regarding their loan operations.  This scheme generates information at the individual level on 
the debts of legal and natural persons in an entity and in the system, as well as aggregate information 
on the total volume of loans granted by financial entities as a whole.  
131. There is a compendium of rules applicable to  banks and financial entities, which contains a 
thematic compilation of all the rules in force issued since 1987 and is constantly updated.  The 
authorities indicate that this compendium incorporates, inter alia , the Basel Committee's 
recommendations on monitoring the banking system.  
132. Financial intermediation and the supply of anc illary financial services are subject to the Law 
on Banking and Financial Entities (LBEF), amende d text of Law No. 1.488 of 14 April 1993, 
approved by Supreme Decree No. 26.851 of 3 April 2002.  The LBEF defines financial intermediation 
activities and ancillary financial services, and also  determines that they should be conducted by 
financial entities authorized by the SBEF.  The LBEF determines the general guidelines for setting up 
financial entities, capital and reserves, the operati ons permitted, the legal reserve requirements, 
restrictions and prohibitions.  
133. Banking financial entities, with the exception of subsidiaries, must be set up as public limited 
companies (LBEF, Article 9).  Banks established abro ad wishing to set up a subsidiary must meet the 
same requirements as banks established in Bolivia and must additionally provide the SBEF with the 
operating authorization in the country of origin, an au thenticated copy of the articles of incorporation, 
the instrument or decision authorizing operations in Bolivia, transfer and deposit of the minimum 
capital in Bolivia, the balance sheet and the audite d accounts of the bank for the latest financial year 
(LBEF, Article 17).  Applications by foreign banks to do business in Bolivia are subject to 
verification by the SBEF that the requirements for granting licences in the country of origin are, as a minimum, the same as those required by the LBEF.  The LBEF gives national treatment to foreign 
companies setting up subsidiaries in Bolivia and th e requirements on setting up a subsidiary of a 
foreign-owned bank are the same as those applicab le to Bolivian banks.  Foreign banks established 
and sited outside Bolivia may operate through ag encies, but the latter may only engage in the 
promotion of financial services and business, subj ect to authorization by the SBEF (LBEF, 
Article 19).  
134. The LBEF stipulates that a minimum of five natu ral or legal persons are required in order to 
set up a bank (LBEF, Article 11).  A foreign bank ma y not, therefore, establish subsidiaries in Bolivia 
on its own.  Founding partners that  are legal persons established outside Bolivia are subject to the 
provisions applicable to companies set up abroad as far as registration and commencement of 
operations in Bolivia are concerned (LB EF, Article 11) (see also Chapter III(4)).  
135. The minimum paid-up capital required for banks is equivalent in bolivianos to  5.5 million 
special drawing rights (SDRs).
124 All banks must establish a legal reserve fund to cover any losses, 
amounting to 50 per cent of the paid-up capital (LBEF, Article 26).  In order to establish such a fund, 
banks must set aside at least 10 per cent of their annual liquid profits.  
136. Financial entities are authorized to contract loans or obligations with other banking and 
financial entities abroad (LBEF, Article 38).  Banks  may grant or maintain loans with a lender or 
group of lenders, but they must not as a whole ex ceed 20 per cent of their net assets.  Non-banking 
financial entities may not grant or maintain loans with a lender or group of lenders if they exceed 
3 per cent of their net assets.  Housing loans to a lender or group of lenders may not exceed 5 per cent 
of the net assets of the financial entity (this limit ma y rise to 10 per cent if authorized by the SBEF).  
Banks must at all times keep net assets equivalent to 10 per cent of their total active or contingency 
                                                      
124 Resolution of the BCB Board of Directors No. 116 of 10 June 1997. WT/TPR/S/154/Rev.1 Trade Policy Review 
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funds, weighted according to their risk.  Banks may not be partners or shareholders in non-financial 
companies.  The LBEF allows banks to invest up to 40 per cent of their net assets outside Bolivia.  
137. In July 2005, Bolivia did not have any insura nce scheme for deposits but a draft law on the 
creation of a deposit guarantee fund was under consideration.  
138. Law No. 2.646 of 1 April 2004, regulated by Supreme Decree No. 27.566 of 11 June 2004, 
determines a temporary tax on financial transactions for 24 months as of the date of entry into force of 
the Law (1 July 2004).  The Law taxes transactions  at a rate of 0.3 per cent (the first year) and 
0.25 per cent (the second year).  The transactions subject to the tax are crediting and debiting of 
current accounts and savings funds in entities govern ed by the LBEF, handing over or receiving funds 
or funds from third parties which constitute a system  of payments in Bolivia or abroad without the 
intervention of an entity subject to the LBEF and certain transactions not c onducted through current 
accounts or savings funds (Article 2).  Credit and debit in the savi ngs accounts of natural persons in 
bolivianos are exempt from payment of the tax as are savings accounts in foreign currency with a 
balance of US$1,000 or less prior to paying into or debiting the account (Article 9).  
139. Bolivia undertook commitments on banking services under the GATS.  These guarantee 
market access and national treatment for commerc ial presence in Bolivia.  The presence of natural 
persons is subject to the existence of a contract with the company having a commercial presence in Bolivia.  Bolivia did not undertake commitments on modes of supply 1 and 2 nor on market access or 
national treatment.
125 
140. The SBEF has signed an agreement with the Banking Superintendency of the Republic of 
Panama on joint supervision and three me morandums of understanding with the Banking 
Superintendency of the Republic of Guatemala, th e Banking and Insurance Superintendency of Peru 
and the Banking and other Financial Institutions Superintendency of the Bolivarian Republic of 
Venezuela.126 The purpose of these agreements is to dete rmine general guidelines for joint supervision 
among regulatory agencies, exchange of informati on and the creation of cross-border banking entities 
between Bolivia and the signatory coun try, including branches and subsidiaries.  
(b) Insurance 
Market structure 
141. In early 2005, 14 insurance companies established in Bolivia and authorized by the SPVS 
were operating, of which six were engaged in personal insurance (one  with only foreign capital, three 
with foreign participation and tw o with Bolivian capital), eight general insurance companies (five 
with foreign participation and three with Bolivian capital).  There were also 38 foreign reinsurers 
registered to take reinsurance from the companies es tablished, 27 registered and authorized national 
insurance brokers, of which three also dealt with  reinsurance, and 19 fo reign reinsurance brokers.127 
                                                      
125 WTO document GATS/SC/12/Suppl.2 of 26 February 1998. 
126 Memorandum of Cooperation and/or Understanding between the Banking and Financial Entities 
Superintendency of Bolivia and the Banking and Insurance Superintendency of Peru,16 September 1996, Agreement on Joint Supervision between the Banking Superintendency of the Republic of Panama and the 
Banking and Financial Entities Superintendency of the Re public of Bolivia, 30 November 2001,  Memorandum 
of Understanding between the Banking Superintendency of the Republic of Guatemala and the Banking and Financial Entities Superintendency of the Republic of Bolivia, 9 August 2004, Memorandum of Cooperation 
between the Banking and Financial Entities Superintendency of Bolivia and the Banking and other Financial 
Institutions Superintendency of the Bolivarian Republic of Venezuela, 9 May 2005. 
127 Information provided by the authorities and the SPVS (2004). Bolivia WT/TPR/S/154/Rev.1 
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The authorities indicate that there are no restrictions on the participation of foreign capital and that in 
insurance and reinsurance companies with forei gn capital the latter's share ranges from 5 to 85 per 
cent.  
142. The total amount of premiums paid, according to the authorities, increased by an annual 
average of 19.4 per cent between 2000 and 2004, and was US$159 million.  The net premiums 
retained (total premiums paid minus premiums assi gned to reinsurance) also increased by an annual 
average of 9.8 per cent to reach US$79 million.  
143. Life insurance premiums as a proportion of the total value of premiums in 2004 were 4.8 per 
cent, while premiums for fire and allied insuran ce accounted for 12.4 per cent, automobile insurance 
9.9 per cent, common risks 14.9 per cent and professional risks 15 per cent.128 As far as the premiums 
paid for insurance in general in 2004 are concerned,  the strongest growth was in premiums paid for 
transport and civil liability (20 and 17 per cent, resp ectively) while the largest increase in the total of 
personal insurance premiums was for life in surance and annuities (197 and 344 per cent, 
respectively).  
Regulatory framework 
144. The Vice-Minister for Financial Services and Busi ness, part of the Ministry of Finance, is 
responsible for drafting, proposing and monitoring government policy in the sector.129  The General 
Superintendency of the SIREFI, set up by Law No. 1.864 of 15 June 1998130, oversees and controls 
the activities of the SPVS (see above).  The latter s upervises all regulatory aspects of activities in the 
sector, including the concession, amendment and cancella tion of authorizations to operate, authorizes 
mergers, oversees compliance with margins of solv ency and technical reserves, and imposes sanctions 
where necessary.131 As of 2002, the SPVS has had the exclusive and non-assignable authority to issue 
prudential regulations for the in surance and reinsurance sector.  
145. The insurance sector is structured  on the basis of Law No. 1.88 3 of 25 June 1998 (Insurance 
Law, LS), which is regulated by Supreme Decree  No. 25.201 of 16 October 1998.  In conjunction 
with Supreme Decree No. 25.201, the LS regulates insu rance, reinsurance, intermediaries, auxiliaries 
and prepayment entities so as to ensure the market's cr edibility, solvency and transparency (Article 4).  
The LS allows three types of insurance, namely , personal insurance, general insurance and bond 
insurance, personal insurance excludes general and bond insurance (Article 6).  The LS also 
determines compulsory insurance for traffic accidents (Article 37).  It gives foreign investors in the 
sector national treatment.  
146. Under the LS, natural or legal persons domiciled in Bolivia must take out insurance with 
companies established in Bolivia (Article 3).  The regulations in force allow maritime, river, lake, 
land and air transport insurance to be taken out in Bolivia.  Insurance and reinsurance companies must 
constitute special reserves for "disasters", where re levant, and the SPVS may require such reserves if 
it so decides.132  
147. All Bolivian and foreign insurance and reinsu rance companies offering services in Bolivia 
must be established as public limited companies in Bolivia and then request authorization from the 
SPVS in order to commence activities.  The authorities indicate, however, that pursuant to Article 7 of 
                                                      
128 SPVS (2003). 
129 Supreme Decree No. 26.973, Article 19. 
130 Law No. 2.427 of 28 November 2002, Article 24. 
131 Law No. 1.883, Article 43. 
132 Supreme Decree No. 25.201, Article 16. WT/TPR/S/154/Rev.1 Trade Policy Review 
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the LS and Article 5 of the Commercial Code fore ign reinsurers may offer services in Bolivia, 
according to the cross-border trade and consumption abroad modes, without being set up in Bolivia 
but subject to registration with the SPVS.  They also indicate that insura nce companies may freely 
place reinsurance outside Bolivia (LS, Article 13) w ith reinsurers whose international risk rating is 
equal to or higher than that of the BBB and provided th at they are supervised in their country of origin 
(LS, Article 44).  
148. Foreign insurance companies may only be set up in Bolivia through a branch established as a 
public limited company.  In addition to the sta ndard requirements for setting up a public limited 
company (see Chapter III(4)), the LS requires a techni cal and economic feasibility study, draft articles 
of incorporation, personal details proving fiscal solvency, a declaration of the partners' assets, the 
articles of incorporation and corresponding registra tion of the parent company and individual share 
certificates (Article 8).  
149. Insurance brokers must be in the form of public limited companies or limited liability 
companies and reinsurance brokers must be public limited companies (LS, Article 21).  The authorities indicate that insurance and reinsurance companies must only provide insurance in one of 
the following forms:  general insurance, bond insurance or personal insurance.  The personal 
insurance mode excludes general insurance and bond insurance.  Companies providing prepaid 
services similar to insurance may be operated solely  by companies that only provide such services or 
in the form of personal insurance (LS, Article 6).  Foreigners that have no permanent residence in 
Bolivia may not act as insurance agents (LS, Article 20).  The authorities point out that public health 
insurance is the responsibility of the State.  
150. All insurance, reinsurance or bond insuran ce companies must constitute and maintain 
minimum paid-up capital in bolivianos corresponding to 750,000 SDRs (LS, Article 29).  Insurance 
and reinsurance brokers must have minimum obligated  and paid-up capital equivalent to 2.5 and 5 per 
cent, respectively both in the case of insurers a nd reinsurers (LS, Article 29).  Insurance and 
reinsurance companies must also constitute and main tain at least four other reserves (mathematical 
reserve, reserve for current risks, reserve for pending claims and reserve for premiums payable).  The 
amount of these reserves depends on each company's flow of income and costs.
133 Insurance and 
reinsurance brokers established in Bolivia must also have an errors and omissions policy for 
US$1 and US$2 million, respectively.  
151. Insurance and reinsurance companies must inv est through stock market mechanisms.  There 
are no restrictions, except that:  no more than 5 pe r cent of the investments may be in securities of 
issuers related to the insurance co mpany;  no more than 10 per cent may be in fixed income securities 
of a company or interrelated group of companies;  no more than 20 per cent may be in a single issuer;  
the investments may not amount to more than 20 per cent of the assets of any one issuer.  (LS, Article 35).  The Central Bank of Bolivia pe riodically sets the ceiling on investment in securities 
of issuers established outside Bolivia, which may not exceed 50 per cent of the resources to be 
invested (LS, Article 35).  
152. Insurance and reinsurance companies are free to  set their rates (LS, Articles 13 and 15).  
Policies issued by insurers and reinsurers must be registered with the SPVS and are supervised by the 
latter (LS, Article 43).  The authorities indicate that  insurance contracts are regulated in order to 
ensure equity among insurance companies and tho se insured, those taking out insurance and those 
benefiting from it.  
                                                     
 
133 Supreme Decree No. 25 .001, Articles 12-16. Bolivia WT/TPR/S/154/Rev.1 
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153. Each month, insurers providing general and bond insurance must allocate not more than 2 per 
cent of net premiums to finance the operations of the SPVS.134 Likewise, insurers providing personal 
accident, health and prepaid insurance, irrespectiv e of whether they provi de personal or general 
insurance, must set aside not more than 2 per cen t of the net premiums received monthly, while 
provisional insurance and mandatory traffic accident insurance contribute not more than 1 per cent of 
the net premiums received.  
154. Bolivia has undertaken commitments in the insu rance sector within the GATS.  These provide 
market access and national treatment for reinsura nce services in modes of supply 1 and 2.  For 
reinsurance intermediation services,  market access for cross-border supply is given, together with 
consumption abroad and commercial presence, while  market access for commercial presence is given 
to insurance intermediaries.  The investigation, ad justment and settlement of claims relating to the 
supply of insurance have market access under all m odes of supply and national treatment for modes 1 
and 2.  
(c) Securities 
155. The securities sector is composed of 15 invest ment funds managed by Bolivian owners, six 
investment management funds with Bolivian capit al, three securitization companies with Bolivian 
capital, 68 companies registered on the Bolivian St ock Exchange (BBV), of which 12 have foreign 
participation (capitalized or privatized compani es) and eight are stockbrokers.  The total amount 
bought and sold on the BBV rose sharply during the period 1999 to 2001, but showed a marked decrease to US$1,317 million in 2004 (between 1999 and 2004, the decrease was an annual average 
of 5 per cent).  The authorities indicate that this dow nturn was related to the political instability during 
the period 2002-2004.  They also indicate that Boliv ia's securities market is mainly composed of debt 
instruments.  
156. The Vice-Minister for Financial Services and Busi ness, part of the Ministry of Finance, is 
responsible for drafting, propos ing and monitoring government policy in the sector.  Among the 
objectives set in the document "Bases for Boliv ia's Development Stra tegy" are improving the 
functioning of the stock exchange.
135 The SPVS is responsible for overseeing and regulating 
operations in the securities market (see above).  
157. Law No. 1.834 of 31 March 1998, amended by Law No. 2.064 of 3 April 2000, regulates the 
securities market in Bolivia and includes provisions  on the operations, obligations and establishment 
of brokers and rules on the operation and resp onsibilities of the SPVS.  Law No. 1.834 also 
determines what constitutes public offering, defines securities and determines the forms in which they 
are issued.  It also gives forei gn investors access to the Bolivian secu rities market, but they must be 
registered in the securities market register (RMV), w ithin the SPVS.  It also allows investment funds 
established outside Bolivia to participate in the Bo livian securities market (Article 91).  Authorization 
and registration of foreign securities is subject to special rules issued by the SPVS.136 Foreign 
enterprises wishing to take part in the BBV must be  registered in the RMV through a subsidiary and, 
inter alia , submit certification issued by the competen t authorities in the country where the head 
office is located attesting that the compan y is not in the process of being liquidated.137 
                                                      
134 Idem, Article 23. 
135 CONAPES (2005), Secretariat document, page 42. 
136 SPVS, Administrative Resolution No. 187 of 3 May 2001, Article 40. 
137 SPVS, Administrative Resolution No. 459 of 31 August 2004. WT/TPR/S/154/Rev.1 Trade Policy Review 
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158. There are limits on investments for invest ment funds established outside Bolivia.138 In 
particular, the resources from individual retirem ent funds managed by pens ion fund administrators 
must be invested in financial instruments outside Bolivia for a minimum of 10 per cent but not more than 50 per cent of the fund's value.
139 These investment instruments must have a minimum risk 
rating.  In general, investment funds may invest  up to 20 per cent of their total portfolio abroad.140 
159. Bolivia has undertaken commitments on the securities sector under the GATS.  It provides 
national treatment, with some restrictions on market access, for the commercial presence of companies in the trade-related securities sector, pa rticipation in issues, advisory services, settlement 
and clearing services, risk and credit analysis.  
160. The SPVS has signed a cooperation agreement with  the Andean Development Corporation in 
order to improve the information systems of securities markets in the Andean region.
141 
(iv) Transport 
161. In terms of share of GDP, the transport sector showed a slight increase from 8.9 per cent in 
1999 to 9.4 per cent in 2003.142 Estimated employment in the sector, as a proportion of total 
employment, fell slightly from 4.2 to 3.8 per cent over the same period.  The sector increased its share 
of government investment, which amounted to 40.7 per cent in 2003.  In 2004, the sector contributed 
8.5 per cent of GDP and 43.9 per cent of government investment.  
162. The total cost of transporting goods in Bolivia, in  terms of share of the c.i.f. value of imports, 
is the highest in South America.143 A study showed that Bolivia's transport system has a number of 
limitations which prevent the establishment of links with neighbouring countries and Bolivia's leading 
trade partners (mainly Brazil), thereby lowering the competitiveness of its products.144 In general, 
63 per cent of roads are dirt roads, which means that the cost of transport per kilometre rises.145 
During the period 2000-2005, road transport was th e most common method of internal and external 
transport of freight and passengers.146 
163. Water transport in Bolivia is confined to rive rs and lakes (essentially Lake Titicaca).  River 
transport goes along two axes, one from north to south (Ichilo-Mamoré), over which the largest 
volume of domestic freight moves, and the other th rough the Paraná River Waterway.  In early 2005, 
the port infrastructure for access to the Waterway was no longer sufficient, but despite this the value 
of exports carried by river transport more than tripled from 1999 to 2003 and amounted to 
US$228.9 million.147 
                                                      
138 Law No. 1.732 of 29 November 1996 (Pensions Law) and SPVS Administrative Resolution IP 
No. 038 of 14 January 2002. 
139 Law No. 1.732, Article 41. 
140 SPVS, Administrative Resolution No. 421 of 13 August 2004, Article 107. 
141 Cooperation Agreement between the Pensions, Securities and Insurance Superintendency of the 
Republic of Bolivia and the Andean Developm ent Corporation, 29 November 2002, Caracas. 
142 UDAPE (2005), page 2. 
143 UNCTAD (several years), in the 2003 edition, the calculation can be found on page 74. 
144 Inter-American Devel opment Bank (2004b). 
145 UDAPE (2005a), page 14. 
146 Idem, page 10. 
147 Idem, page 31, and National Statistical Institute (2005b), and Ministry of Public Works, Vice-
Minister for Transport, information on line. Available at: http ://www.oopp.gov.bo/web //transfluvial.php. Bolivia WT/TPR/S/154/Rev.1 
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(a) Air transport 
164. According to official statistics, the total number of domestic and international passengers 
transported in Bolivia during the period 2000-2004 in creased by an annual average of 9.9 per cent and 
amounted to 2.3 million passengers, follo wing a sharp fall between 1999 and 2000.148 Between 2000 
and 2004, the percentage of international flights re mained stable at around 37 per cent.  The volume 
of freight on national and international flights in creased by an annual average of 5 per cent over the 
same period, with the largest incr ease in the international sector.  In early 2005, Bolivia had five 
privately-owned Bolivian airlines (Aeroeste, Am azonas, Lloyd Aéreo Boliviano (LAB), SAVE and 
Aerosur) and two government-owned airlines (Tra nsporte Aéreo Militar and Transportes Aéreos 
Bolivianos).  
165. Bolivia has 37 airports, of which three are in ternational:  El Alto, Jorge Wilstermann and 
Viru-Viru (in La Paz, Cochabamba and Santa Cruz respectively).149 These are also Bolivia's major 
airports in terms of both flight and passenger tra ffic.  In 1997, the management of the three major 
airports was contracted out for a period of 25 years to Servicios de Aeropuertos Bolivianos S.A.  – 
SABSA (Bolivian Airport Services), a subsidiary of the Airport Group International company150 The 
other airfields are managed by the Administración Autónoma de Servicios Auxiliares y Navegación 
Aérea  – AASANA (Autonomous Auxiliary Services and Air Navigation Authority), which is 
regulated by the Transport Superintendency (ST).  The ST also determines tariffs and the services 
provided in airports.  
166. The authorities indicate that the Vice-Minister fo r Transport, under the Ministry of Services 
and Public Works, is responsible for proposing polic ies, regulations and instructions to promote and 
regulate the development of civil and commercial air transport in Bolivia.  In addition, the National 
Committee for the Facilitation of Transport and International Trade, established by Supreme 
Decree No. 28.124 of 17 May 2005, has been given the objective of promoting the simplification of international transport formalities and procedures by means of institutional coordination.  In 
particular, it is authorized to make recomme ndations to the Government on development and 
investment policies for the sector.  In July 2005,  the Committee had not yet made any government 
policy proposals.  
167. The ST was set up by Supreme Decree No. 24.178 of 8 December 1995, amended by 
Supreme Decree No. 24.753 of 31 July 1997, and regulat es air transport activities.  It is part of the 
SIRESE (see above) a nd is responsible, inter alia , for ensuring compliance with the rules in force, 
granting certification and operating permits, aviati on licences, declaring the cancellation of such 
certificates and permits and imposing the sancti ons provided in the applicable regulations.
151 
Technical regulations in the sector are determined  by the Bolivian General Division of Civil Aviation 
(DGAB).  
168. The sector is governed by Law No. 2.902 of 29 October 2004 (Civil Aviation Law, LAC).  
The authorities explain that, in July 2005, the LA C regulations were under consideration.  The LAC 
lays down the legal bases for activities in this sector including, air traffic, general regulations for the 
operation of airfields and airports, the type of ai rcraft, the national aviation register (RAN), personnel 
working in the sector and liability in case of accide nts.  The LAC provides that civil and commercial 
aviation shall mainly be provided by the private sector (Article 3).  
                                                      
148 STR (2005), information on line. Available at: http://www.suptrans.gov.bo and information 
provided by the authorities. 
149 UDAPE (2005a). 
150 Administrative Resolutions Nos. 004 and 005 of 27 February 1997. 
151 Supreme Decree No. 24.753, Article 2. WT/TPR/S/154/Rev.1 Trade Policy Review 
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169. Before commencing operations, it is necessary to obtain from the ST, with the following 
order:  an air operator's certificate, an operating pe rmit and an authorizati on for operations, which are 
subject to payment of a registration fee that is  higher for foreign operators than for Bolivian 
operators.152 The DGAB grants the certificate subject to detailed enquiries to establish that the aircraft 
is properly equipped and may safely engage in operations in accordance with the rules in force.  It 
grants permits to companies that have previously been certified for a period not exceeding five years 
and which have met the legal and technical require ments.  Registration in the RAN is subject to 
payment of a registration fee, which finances the National Aviation Fund, created by Supreme Decree 
No. 11.135 of 16 November 1973.  The Fund is admini stered by the Vice-Minister for Transport and 
is used to improve the services provided by public aviation bodies.153 
170. The LAC provides that companies which supply internal or international air transport services 
must be established in Bolivia and must have a permanent domicile and head office in Bolivia;  
"significant" investment in Bolivia has to be made  and at least 85 per cent of regular staff recruited 
must be Bolivian;  the companies must also show that they are economically solvent and prove their 
technical and operational capacity on an ongoing basis (Article 91).  The LAC also provides that any 
agreement among companies with the required certi fication and operating perm its must be approved 
by the ST, in coordination with the DGAB (Articles 96 and 99).  
171. The LAC restricts operation of internal air tr ansport services to Bolivian natural or legal 
persons domiciled in Bolivia (Ar ticle 90).  LAB, which belonged to the Brazilian company VASP up 
to 2000, was still considered a Bolivian compan y for the purposes of the regulations in force.154 
172. Law No. 1.600 gives the various SIRESE superint endencies the authority to approve prices 
and rates for services in their respective sector s (Article 10).  Supreme Decree No. 24.753 of 
31 July 1997 specifically provides that the SIRESE Superintendency approves and controls prices and 
maximum rates applicable to air transport services (S ingle Article).  The cost of national air transport 
is fixed in Administrative Resolution No. 57 of 5 De cember 2000.  In 1999, the trade policy review of 
Bolivia stated that foreign companies gave pref erential tariffs for exports, except for mining and 
hydrocarbons products (Chapter IV(5)(iv)).  The authorities indicate that there is no government 
policy to grant preferences for air transport costs for exports.  Nevertheless, there is information that 
the cost of transporting exports may be less in practice than that for imports.  
173. Law No. 1.141 of 23 February 1999 imposed an ai r transport departure tax (Article 22).  In 
2005, this applies to any flight outside Bolivia at  a rate of Bs 161 (updated on 1 January each year).155 
Supreme Decree No. 24.718 of 22 July 1997 provides th at operators in possession of an authorization 
to provide aviation services must pay a regulation tax of 0.45 per cent of their earnings each quarter if 
they provide international services and this is used  to finance the activities of the ST and the SIRESE 
(Article 11).  
174. The building, exploitation, operation, insta llation and maintenance of public or private 
airfields, including international airports, may be ca rried out by public or private, natural or legal 
persons (LAC, Article 22).  The ST grants 40-year concessions to Bolivian or foreign persons for the 
                                                      
152 Registration of operating certificates for foreign operators ranges from US$1,000 to 1,500, whereas 
for Bolivian operators it is US$200 to $1,000. Registration of permits and authorization for foreign operators 
ranges from US$750 to US$1,125, whereas the registration of Bolivian operators ranges from US$150 to 
US$750. 
153 Supreme Decree No. 11.135, Article 6. 
154 Supreme Decree No. 24.098 of 25 August 1995, Article 6. 
155 Supreme Decree No. 26.077 of 19 February 2001, Article 106, and information provided by the 
authorities. Bolivia WT/TPR/S/154/Rev.1 
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supply of airport services in airfields managed by the AASAN, subject to a report by the DGAB and 
the AASAN.156 The LAC allows duty-free zones in airpor ts, which are managed by the AASAN or the 
SABSA, as appropriate.  
175. In Administrative Resolution No. 26 of 16 December 1998, the ST laid down the regime for 
charges for airport services applicable in all Bolivia n airports and airfields.  Subsequently, the ST 
approved a regime for fees for landing and passenger services provided by the SABSA.157 All 
suppliers of airport services pay a regulation tax to  the ST each quarter amounting to 0.8 per cent of 
their gross earnings in order to finance the activities of the ST and the SIRESE in general.158 
176. Bolivia has signed 17 bilateral agreements a nd conventions with:  the United States (1948), 
Brazil (1951), Paraguay (1958), Peru (1960), Argen tina (1966), the Federal Republic of Germany 
(1968), Spain (1974), Uruguay (1975), Panama (19 85), Venezuela (1990), Ecuador (1991), Mexico 
(1993), Chile (1993), Cuba (1994), Costa Rica  (1995), Switzerland ( 1997) and Aruba (2001).159  
Bolivia has also signed the 1994 Chicago Convention.  
177. The authorities indicate that, at the regional leve l, Bolivia has acceded to Decision No. 582 of 
the Andean Community and the Agreement on Subregional Air Services among the MERCOSUR 
countries, Bolivia and Chile, signed in 1996 (For taleza Agreement), ratified by Law No. 1.886 of 
15 June 1998.  Decision 582 lays down the general guidelines for air transport policy in the Andean 
Community.  In particular, it determines that Andean Community member countries shall give national treatment to airlines of other member count ries of the Community and that they shall adapt 
their bilateral agreements and other similar instruments in order to guarantee that trade responds to the 
Community interest and guarantees quality and efficien cy in the supply of the service.  Bolivia did not 
undertake any air transport commitments under the GATS.  
(b) Land transport 
178. Land transport is via two rail networks (And ean and Oriental) and the highway and road 
network.  In 2003, the Andean network covered 2,27 7 kilometres, while the Oriental network covered 
1,414 kilometres, and the road and highway netw ork 61,021 kilometres (7 per cent of which are 
sealed).  The volume carried both by rail and by road increased during the period 1999-2003.
160 
Bolivia participates in the effort to create regional transport corridors through integration of the South 
American regional infrastructure.  
179. The Vice-Minister for Transport, attached to the Ministry of Services and Public Works, 
determines government policy for the land transport sector.161 It is responsible, inter alia , for 
promoting the construction, mainte nance and rehabilitation of the highway and rail infrastructure and 
for registering operators in the sector.  In 2002,  the government policy objectives for the sector were 
to integrate all parts of the country, bring down the cost of transport in ge neral, boost exports, reduce 
freight charges, provide transport services to third countries, improve the road infrastructure and protect the environment.
162 
                                                      
156 Supreme Decree No. 24 .315, Articles 1 and 6;  LAC, Article 95. 
157 Administrative Resolution No. 61 of 14 September 2001. 
158 Supreme Decree No. 24.718, Article 11. 
159 Latin American Civil Aviation Commission, information on line. Available at: 
http://clacsec.lima.icao.int/ and information provided by the authorities. 
160 National Statistical Institute (2005b). 
161 Supreme Decree No. 26.973 of 27 March 2003, Article 25. 
162 National Highways Service (2005). WT/TPR/S/154/Rev.1 Trade Policy Review 
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180. Several agencies oversee activiti es in the sector.  The ST is responsible for ensuring 
compliance with the rules on land transport in effect  (see above).  The national road system, regulated 
by Supreme Decree No. 26.336 of 29 September 2001,  manages Bolivia's major road network (basic 
network).  The other two components of the road ne twork - the departmental and municipal networks 
- are administered by the departmental prefectures and the municipalities, respectively.  
181. Bolivia does not have any general transport le gislation, but has a number of regulations 
governing activities.  Rail transport is regulated by the General Railways Law (LGF) of 3 October 
1910 and Supreme Decree No. 24.179 of 8 November 1995 (Regulations on the supply of public rail 
services within the legal framework established by the SIRESE Law).  Supreme Decree No. 25.134 of 
31 August 1998 governs management of the national highways system, composed of the basic, 
departmental and municipal networks.  
182. All railways to be used by the public must be authorized by the Executive and companies 
providing services must have a legal domicile in Bo livia (LGF, Articles 3 and 33).  The ST grants 
concessions for providing public rail services for a maximum period of 40 years.  If more than one application for a concession is received, it is granted through an international public bidding 
procedure.
163 If the concession expires or is cancelled, the outgoing concessionaire must transfer all 
the goods and assets he owns which affect th e public rail service to the new concessionaire.164 
183. Supreme Decree No. 24.179 provides that the ST shall grant licences to concessionaires to 
use, manage and operate assets belonging to the rail service, but they may not exceed the period for which the concession was granted (Articles 1 and 40 ).  The ST also publishes an extract from the 
licence application and, if there is more than one application, the licence is granted through a public 
bidding procedure together with the concession.  If the licence expires or is cancelled, all the goods 
and assets affecting the public rail service must  be transferred to the new licence holder.  
184. The rates applied by the railways must be approved by the ST.
165 The trade policy reviews of 
Bolivia in 1993 and 1999 mentioned that Bolivia a pplies rates that discriminate between imports and 
exports carried by rail, with the former being mo re than 30 per cent higher than the latter in 1999.  
The authorities indicate that there is no government po licy granting preferences for exports in the cost 
of rail transport.  Nevertheless, there is informati on that in practice such rates may be lower.  Rail 
companies have the right to compensation from the St ate if their earnings do not allow them to cover 
operating costs and this consists solely of fiscal credit notes made out to the enterprise.166 An 
agreement between Ferroviaria Andina and the ST specifies that the former receives financial 
compensation for the costs involved in re habilitating the Oruro-Cochabamba line.167 The authorities 
explain that this compensation was the only one gr anted and that in practice compensation is not 
given.  In addition, all rail companies must pa y a regulation tax to the ST, which may not exceed 
0.5 per cent of their gross earnings, in order to cove r the ST's operating costs.  The authorities point 
out that companies also pay a service tax equivalent to 2.2 per cent of their earnings.  
185. Bolivia did not undertake any specific commitme nts in the land transport sector under the 
GATS.  Nevertheless, the list of exceptions to MFN treatment contains provisions that affect land 
transport (see above).  
                                                      
163 Supreme Decree No. 24.179, Article 26. 
164 Idem, Article 37. 
165 Idem, Article 17. 
166 Idem, Articles 22 and 23. 
167 ST, information on line. Available at: http://www.suptrans.gov.bo. Bolivia WT/TPR/S/154/Rev.1 
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186. Bolivia has signed two agreements with th e MERCOSUR, Peru and Chile, namely, the 
Agreement on International Land Transport (1990) , and the Agreement on Basic Harmonized Transit 
Regulations (1992).  Within the Andean Community , Bolivia also applies land transport measures.168 
(c) River transport 
187. Goods are transported by river through two ports  (Central Aguirre and Gravetal), from where 
there is access to the Paraguay River and to the Atlan tic Ocean.  In July 2005, another port was being 
built (Puerto Busch).  Bolivia also has free ports  and warehouses in Chile (Antofagasta, Arica, 
Iquique) and Peru (Ilo), from where it has access to  the Pacific Ocean.  The major ports for trade 
outside Bolivia are Antofagasta, Arica and Iquique.  
188. The Vice-Minister for Transport, part of the Mi nistry of Services and Public Works, draws up 
government policy for the river transport sector, in coordination with the General Department of 
Maritime, River, Lake and Merchant Navy Inte rests (DGIMFMM, see below), which belongs to the 
Vice-Ministry of Defence.169 It is responsible, inter alia , for promoting the building, maintenance and 
rehabilitation of the port-river-lake infrastructure and for registering operators in the sector.  
Government policy is contained in Ministerial Reso lution No. 0617 of 28 June 2004 and the aim is to 
set up a national river navigation school, administ er and finance the econom ic development of the 
Ichilo-Mamoré corridor and maintain the major Amazon waterways.170 The authorities explain that 
these initiatives form part of the overall framework fo r promoting international trade using the rivers.  
189. The DGIMFMM also coordinates and implements government policy on the river sector, 
including safety, in coordination with the Vice- Minister for Transport.  Lastly, the Amazon 
Navigation Improvement Service, set up by Law No . 1.039 of 6 December 1998, is responsible for 
maintaining navigability on rivers in the Bolivian Amazon basin, managing the port infrastructure in 
the area (including shipbuilding) and carrying out t echnical studies on rivers in the area.  Supreme 
Decree No. 28.124 established the Operational Commission for Trade Facilitation and River 
Transport, whose objective is to propose and promote measures and actions to make the best use of river transport resources in order to  facilitate Bolivia's foreign trade.  
190. River, lake and maritime navigation policy is governed by Supreme Decree No. 12.683 of 
18 July 1975.  The Bolivian International Ship  Register, administered by the DGIMFMM, whose 
operation is governed by Supreme Decree No. 27.023 of  6 March 2003, consists of a roster of naval 
equipment and ships flying the Bolivian flag in intern ational waters.  Registrati on is also regulated by 
Supreme Decree No. 26.256 of 20 June 2001.  Suprem e Decree No. 12.683 sp ecifies that commercial 
navigation between Bolivian ports shall be solely on Bolivian vessels (Article 11).  The authorities 
point out that, in July 2005, there were no cargo reservations affecting vessels from Andean 
Community member countries, but there were re servations on cargoes from countries non-members of 
the Andean Community.  
                                                     
 
168 Decision 398 (contractual terms and responsibilitie s for the transport of passengers), Decision 399 
(contractual terms and responsibilities for the transport of goods), Decision 467 (regulation of international 
transport of goods), Resolution 272 (criteria for carriers, minimum useful cargo capacity and requirements of the 
association contract), Resolution 300 (forms applicable to carriers and authorities), Decision 398 (control of 
international passenger services), Decision 491 (t echnical regulations on vehicle weight limits). 
169 Supreme Decree No. 26.973 of 27 March 2003, Article 25. 
170 Ministry of Services and Public Works, Vice-Min ister for Transport, information on line. Available 
at: http://www.oopp.gov.bo/ web/transcarret.php. WT/TPR/S/154/Rev.1 Trade Policy Review 
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191. Supreme Decree No. 12.683 provides that the State is responsible for planning the 
construction of river, lake and maritime ports.  The authorities indicate that the port infrastructure in the Tamango Canal is privately owned wh ile elsewhere it belongs to the State.  
192. Bolivia is a member of the International Mariti me Organization and, through it, is party to a 
number of agreements.
171 It also applies a series of maritime transport measures adopted within the 
framework of the Andean Community.172 Bolivia has signed the Paraná River Waterway Treaty 
(Tratado de la Hidrovía Paraguay – Paraná)  (see the trade policy review of Paraguay, 2005, 
Chapter IV(5)(iv)).  The authorities indicate that , in July 2005, the Waterway Treaty was being 
revised.  
193. Bolivia did not undertake specific commitments in the river transport sector under the GATS.  
(v) Tourism 
(a) Main features 
194. Value added in the restaurants and hotels sector maintained its share of GDP at around 3.2 per 
cent during the period 1999-2003.173 Earnings from inbound tourism fell between 1999 and 2002, but 
increased in 2003 and 2004 when they amounted to US$187.7 million.174 The tourism sector is the 
fourth largest sector in terms of foreign curre ncy generation, even t hough earnings from inbound 
tourism as a share of total exports fell from 13 to  8.6 per cent over the period 1999-2004.  Over this 
period, both government investment and foreign di rect investment in the sector fluctuated and 
amounted to US$190,000 and US$150,000 in 2003 respectively.175 The authorities state that from 
1999 to 2003 employment in the sector increased by an annual average of 12 per cent to reach 
220,795 jobs.176 
195. During the period 1999-2003, the number of foreign visitors fell by an annual average of 
2.7 per cent to 370,233.  During the period 2003-2 004, foreign visitors increased by 9.3 per cent and 
amounted to 404,691.  A study show ed that the decrease over the period 1999-2003 was due to the 
reduction in the number of United States and Eur opean tourists, the slowdown in regional economies 
and episodes of internal instability in Bolivia during the period under review.177 In 2003, the majority 
of foreign tourists came from South America, Europe  and North America (in that order) and remained 
in the region of La Paz.  
196. Bolivia has made efforts to develop the touris m sector during the period under review.  These 
include a loan of US$10 million from the IDB to implement projects that will make Bolivia an 
international tourist destination.178 The projects aim to incorporate th e private sector and involve local 
authorities, municipalities and n on-governmental organizations.  
                                                      
171 IMO, information on line. Available at: http://www.imo.org. 
172 Decision 288 (abolition of reservations on ma ritime cargo), Decision 314 (policies for the 
development of the merchant marine in the Andean countries), Decision 390 (Andean Community countries 
may act jointly against third parties which discrimina te against maritime transp ort carriers from Andean 
countries), Resolution 422 (principle of reciprocity) and Decision 487 (maritime guarantees and preventive 
arrest). 
173 Bolivian National Statistics Institute (2005a). 
174 UDAPE (2004), page 6. The data for 2003 are provisional. 
175 Idem, pages 16 and 17. The data for 2003 are provisional. 
176 The data for 2003 are provisional. 
177 UDAPE (2004), page 4. The data for 2003 are provisional. 
178 Inter-American Development Bank (2005). Bolivia WT/TPR/S/154/Rev.1 
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(b) Regulatory framework 
197. The Vice-Minister for Tourism, part of the Ministry of Economic Development, draws up 
government policy for the sector.179 He also proposes regulations and instructions for the sector's 
development, monitors compliance with the regulati ons, promotes the sector abroad, fosters tourism 
in Bolivia, manages the information system on th e sector, keeps and updates the national tourism 
register and promotes training of personnel in the sector.  The departmental prefectures and municipalities are involved in tourism promotion programmes.  The Consejo Nacional de Turismo  
(National Tourism Council), set up by Law No. 2.074 (see below) advises the Vice-Minister for Tourism on government policy and coordinates interac tion between the private sector and the State.  
The departmental tourism councils, established under th e same Law, coordinate government policy at 
the departmental level.
180 
198. Government policy in this sector has five objectives181, namely, to recognize that, according 
to the principles of a transparent market economy,  tourism requires private initiatives for which the 
State must guarantee the conditions needed to build  up tourism;  to ensure the conservation and 
rational use of resources;  to protect tourists and ra ise awareness of tourism;  to coordinate guidelines 
with the central Government, departmental author ities and municipal governments;  and to promote 
technical and professional training of pe rsonnel involved in tourism activities.  
199. The sector is governed by Law No. 2.074 of 14 April 2000 (Law on the Promotion and 
Development of Tourism in Bolivia) and is regulated by Supreme Decree No. 26.085 of 
23 February 2001.  Law No. 2.074, which repealed Supreme Decree No. 24.583 of 25 April 1997, 
lays down the general guidelines for activities in the sect or, in particular with regard to the competent 
bodies, government policy and measures to promote tourism.  Ministerial Resolution No. 133/01 approved the regulations for inbound tourism ope rators and travel and tourism companies.  
200. The departmental tourism units (UDTs), which belong to the departmental prefectures, give 
free authorizations to companies wishing to provi de tourism services subject to on-site and legal 
verification that the requirements have been met.
182 Foreign companies with a legal domicile in 
Bolivia providing tourism services have the same  obligations and rights as Bolivian companies 
providing tourism services.183 Companies engaged in tourism activities must be registered in the 
departmental tourism register fo r the department in which they are carrying out their activities and 
inclusion in the register is free of charge.184 
201. According to the authorities, foreign comp anies providing tourism services must be 
authorized by the tourism unit in the departmental prefecture that is the main site of their activities 
(legal domicile).  Once they have been accredited and authorized to operate in Bolivia, they may open 
branches in any part of Bolivia provided that the re levant requirements are met.  In addition, foreign 
tourism operators providing tour s within Bolivia on an occasional basis must meet certain 
requirements and be in possession of the necessary authorization from the departmental tourism unit 
where the tours are taking place.  Foreign compan ies operating tours are not  properly established or 
accredited in Bolivia to carry out activities on a perm anent basis so they are not legally entitled to 
open branches in any part of Bolivia.  
                                                      
179 Supreme Decree No. 26.973, Article 23. 
180 Supreme Decree No. 26.085, Article 22. 
181 Law No. 2.074, Article 5. 
182 Ministerial Resolution No. 133/01, Article 23. 
183 Idem, Article 21. 
184 Idem, Article 24. WT/TPR/S/154/Rev.1 Trade Policy Review 
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202. Ministerial Resolution No. 136/01 regulates tourist guide services.  In order to be accredited 
as a tourist guide, it is necessary to prove Bolivian na tionality or, in the case of foreigners, have been 
legally resident in Bolivia for a minimum of four years (Article 6).  In addition, a qualification as a 
tourist guide granted by a university or institute recognized by the Bolivian State must be provided.  
203. Law No. 2.074 provides two fiscal incentives for the sector (see Chapter III(4)).  For the 
purpose of paying the bound tariff, equipment to be used in hotels is defined as capital goods (see Chapter III(2)).
185 
204. Bolivia is a member of the World Tourism Orga nization.  It has also signed the Agreement on 
Promotion of Tourism in South America with the MERCOSUR countries, the Andean Community 
and Chile.  Decision 463 of the Andean Community establishes the regime for the development and 
integration of tourism in the Andean Community, and provides that member countries of the Community shall grant free market access and national treatment to suppliers of tourism services from other Community member countries.  The Community countries have also adopted a common tourism regime approved by the Community's Commission.  
205. At the bilateral level, Bolivia has signed tourism agreements with Uruguay (partial scope 
agreement on tourism) and Argentina (first ad ditional protocol on development and tourism 
promotion) in 1986 and 2004 respectively.  Both  agreements lay down the bases for expanding 
tourism between the countries through enhanced c ooperation and coordination.  The agreement with 
Argentina, in particular, seeks the inclusion of cl auses which facilitate investment in tourism in the 
national and/or municipal re gulations in both countries.  
206. Bolivia made commitments within the GATS on ho tels and restaurants, travel agencies and 
tour operators.  These guarantee market access an d national treatment for consumption abroad and 
commercial presence in Bolivia.  Market access and national treatment for na tural persons in these 
sectors depends upon an employment contract with  a company that has a commercial presence in 
Bolivia.  
(vi) Professional services 
(a) Main features 
207. Bolivia does not have any legal provisions regul ating the practice of professions in general 
terms, although certain laws regulate the exercise of some professions.  The process of recognizing professional qualifications obtained abroad is governed  by the General Regulations on Qualifications 
and Grades in the Bolivian university system.  The recognition of degrees and diplomas is the 
responsibility of State universities which have the corresponding syllabus or programme or of the 
Executive Committee of the Bolivian University (CEUB) if there is no such syllabus in any 
autonomous university in Bolivia.  Qualificati ons to be validated must be accompanied, inter alia , by 
specific documentation on the syllabus (plan of stud y, degree, certificate showing qualifications) in 
order to be approved through a resolution by the univers ity's rector (or by the CEUB), subject to legal 
and technical reports by the competent authorities.  
208. In July 2005, the Convention on the Exercise of Liberal Professions, which is an integral part 
of the Montevideo Treaties of 1888-1889 and has b een signed by Argentina, Bolivia, Paraguay, Peru 
and Uruguay, was in force in Bolivia.
186 The Convention provides that persons who have obtained a 
                                                      
185 Law No. 2.074, Article 25. 
186 OAS, information on line. Available at: http ://www.oas.org/juridico/spanish/firmas/f-12.html, 
Montevideo Treaties of 1888-1889 and information provided by the authorities. Bolivia WT/TPR/S/154/Rev.1 
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degree or diploma in the liberal professions in any of the signatory States are entitled to exercise the 
said professions provided that they validate thei r degree or diploma and prove their identity.  
209. Within the Andean Community, Decision 439 provides that each member country shall 
recognize the professional degrees granted by another member country.  Decision 609, inter alia , 
provides that qualifications granted by a member c ountry to captains, officers, radio operators and 
crew of vessels shall be recognized by the othe r Community member countries.  In 2002, Bolivia 
signed an agreement with the MERCOSUR and Chile on setting up an experimental accreditation mechanism for university degrees granted in the ME RCOSUR, Bolivia and Chile, starting with pilot 
programmes for agronomy, engineering and medicine.
187 
210. Bolivia did not make any specific commitment s in the professional services sector under the 
GATS.  In the horizontal commitments, however, it is  specified that only 15 per cent of the personnel 
of any company may be foreigners, and they must be senior management.188 Bolivia did not make any 
specific proposals on negotiations on professional services in the context of the Doha Development Round.  
(b) Legal services 
211. The body governing the practice of law in Boliv ia is the National Association of Lawyers, 
which groups together the various departmental as sociations of lawyers.  The latter regulate and 
supervise the practice of law at the regional level and keep a register in which all lawyers practising in 
the corresponding region must be listed.  The author ities indicate that the cost of inclusion in the 
register varies depending on the department.  
212. The practice of law is based on Decree-Law No. 16.793 of 10 July 1979.  In July 2005, 
amendments to the Law were under consideration.   This Decree-Law specifies that only Bolivian 
nationals may practise law in Bolivia (Article 6) , and foreigners may not set up a legal office in 
Bolivia.  Degrees granted abroad are recognized provi ded that the studies have been validated in a 
specific resolution by the competen t authority (see above) and that treaties on professional reciprocity 
are in force (Article 4).  Lawyers may set up companies only with other lawyers who are members of 
the association and not with people from other professions (Article 27).  
(c) Engineering 
213. In Bolivia, engineering services are governed by  Law No. 1.449 of 15 February 1993, whose 
regulations were approved by Supreme Decree No . 26.582 of 3 April 2002.  The exercise of the 
engineering profession is regulated by the Bolivian Society of Engineers (SIB).
189 The SIB, inter alia , 
administers the National Register of Engineers (RNI) and regulates and supervises all aspects of 
exercise of the profession.  In particular, it lays down the requirements for obtaining licences, validating engineering degrees obtained abroad, and giving licences to foreigners to exercise the 
profession in Bolivia.  
214. All engineering companies must have an engin eer registered and authorized by the RNI as 
their technical head and all services provided must be  carried out by engineers duly registered in the 
                                                     
 
187 MERCOSUR/RME Acta No. 1/2002;  presentation at  the Hemispheric Confer ence on Professional 
Certification and Accreditation. Experimental mech anism for the accreditation of programmes for the 
recognition of university-level degrees in MERCOSUR countries, Bolivia and Chile. Available at: 
http://www.cnap.cl/actividades/conferencia _hemisferica/archivos/M_Sanabria.ppt. 
188 WTO document GATS/SC/12 of 15 April 1994. 
189 Law No. 1.449, Article 7. WT/TPR/S/154/Rev.1 Trade Policy Review 
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RNI.  Neither Law No. 1.449 nor its regulator y decree impose limits on foreign ownership of 
engineering firms in Bolivia.  
215. Law No. 1.449 allows foreigners to practise as engineers in Bolivia under certain conditions.  
It provides that government companies and instituti ons may recruit foreign engineers only when there 
are no specialized Bolivian engineers and under speci al agreements (reciprocity) (Article 8).  All 
government institutions signing foreign loan contract s or foreign technical consultancy contracts for 
the purpose of developing the infrastructure must include in the contract a clause on the mandatory 
participation of Bolivian engineers in the st udy and execution of the project (Article 18).  
216. A foreigner in possession of a degree from outside  Bolivia and wishing to provide services in 
Bolivia must obtain an annual permit for which he must submit, inter alia , his professional 
authorization in the country of origin, together w ith an employment contract, and must pay US$500 to 
the SIB.  The permit for foreigners may be renewe d once, and thereafter engineers must have their 
professional diplomas validate d by a Bolivian university.  
(d) Architecture 
217. The governing body for the architectural profession in Bolivia is the Bolivian Association of 
Architects (CAB).190 The CAB, inter alia , administers the National Register (RN) and oversees and 
regulates all aspects of the profession in Bolivia.  The profession of architect is governed by Law 
No. 1.373 of 13 November 1992, which is regulated  by Supreme Decree No. 25.905.  Law No. 1.373, 
inter alia , requires that all architects should be registered in the RN.  The authorities indicate that, in 
order to be registered, it is necessary to submit, inter alia , the academic degree, the national diploma, 
a certificate showing the marks obtained, a certificate that the final examinati on has been passed, and 
a Bolivian identity card.  
218. Law No. 1.373 allows foreigners to practise as architects with some restrictions.  Foreign 
architects may only be recruited as consultants, rese archers, lecturers or for temporary special works 
and must be registered with the RN on a temporary basis.  Their services are strictly confined to 
fulfilling the contract (Article 8).  In the ab sence of specific agreements, government sector 
institutions may only recruit foreign architects wh en there are no specialized Bolivian architects 
(Article 18).  Government companies and instituti ons which sign foreign loan contracts or foreign 
technical consultancy contracts for the purpose of developing the infrastructure must include in the 
contract a clause on the mandatory participation of Bolivian architects in the study and execution of 
the works (Article 19).  Law No. 1.373 does not limit participation by foreigners in the management 
and ownership of architectural firms set up in Bolivia.  
                                                      
190 Law No. 1.373, Article 7. Bolivia WT/TPR/S/154/Rev.1 
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