Agricultural and Agroindustrial Sectors

30% of the national territory has agricultural potential. At present, less then 3% of the land is being exploited, leaving a wide margin for both intensive and extensive expansion.

The wide climate range in the country makes Bolivian agriculture competitive. Corn, quinoa and tubers are grown in the Andean mountain range. Sheep and camel (llama and alpaca) stock is also bred in the region. Vegetables and fruit are grown in the valleys along with milk-producing cattle. Cotton, sugar cane, soybeans, sunflower, tropical fruits, coffee and cocoa are produced in the tropics. This region also has large extensions of land for cattle grazing and breeding.

The country has comparative advantages for the growth and export of fruit to international markets. Fruits like apricot, kiwi, apple, strawberries, raspberries and grapes are examples of these. Grapes grown in the southern regions of the country are the basis for a growing high-quality wine industry.

There is also great potential for products like garlic, asparagus, quinoa and amaranth. Many of these products are already benefiting from "off-season market" advantages in North America, Europe and Asia.

In the eastern part of the country, the agroindustrial sector uses modern production techniques that allow it to reach international-level productivity. This sector is one of the main, responsible for the significant growth of non-traditional exports in the country and is mainly made up of soybean and sunflower oils and soybean grains.

Lakes and rivers hold important fish reserves. Production experiences for certain species aimed at export markets, especially trout, have been carried out in Lake Titicaca and rivers across the northern part of the Amazon basin. An alternative development program grants important incentives to companies interested in investing in the region.

Agricultural Sector

The main products grown in different departments of the country are:

· Cereals - Corn in grain, rice, wheat, barley, quinoa and sorghum (approximately 775 hectares)
· Stimulants - Coffee (31 hectares)
· Fruit - Bananas, oranges, peaches, tangerines, pineapples and grapes (111 hectares)
· Vegetables - Beans, corn, peas, chili-beans, onions, garlic and tomato (118 hectares)
· Industrial crops - Soybeans, sunflower, sugar cane, cotton and peanuts (86 hectares)
· Tubers - Potatoes and manioc (188 hectares)
· Forage - Barley and alfalfa (102 hectares)

Farming and Livestock Sector

Cattle are bred mainly in the departments of Beni and Santa Cruz. The largest portion of the cattle production comes from the Nelore and Bos Indicus species. Successful projects have been developed including Rimoriu, Angus and Charolarie breeds, among others, with the purpose of obtaining industrial crossbreeding.

The national herd is estimated at a total of 6.064.000 heads of cattle (based on 1998 statistics). 78% of the herd is concentrated throughout Beni (3.5 million heads) and Santa Cruz (1.7 million).

A five-year plan for the eradication of "Hoof and Mouth" disease is presently being executed. This will allow for the opening of beef export windows to European Union countries and the United States.

Sheep are bred on the Andean high plateau and the surrounding valleys. The national herd is estimated at a total of 8.6 million heads. An estimated 3 million are located in La Paz, 1.8 million in Oruro, over 1.5 million in Potosí and approximately 1.3 million in Cochabamba.

Pork breeding is destined mainly to the production of meat for mass consumption and/or industrial sausage production. There are about 1.7 million heads in the country. Most of these are located in Santa Cruz, Chuquisaca, Tarija, Cochabamba and La Paz.

Camelids originated in the Andean mountain range, the high plateau areas and part of the high valleys. There is a considerable number of llamas (2.4 million heads approximately), alpacas (over 410 thousand animals), vicuñas and guanacos.

The poultry sector is concentrated mainly in Cochabamba and Santa Cruz. It has a production capacity of 70.6 million units and 800 million eggs per year. The sector has integrated top technology to its production allowing for greater efficiency and export capacity destined to Perú and Chile.

Rabbit breeding is destined mainly to the manufacturing of fabrics for the garment industry. It is one of the activities that has expanded the most in recent years, particularly in the departments of Tarija, Cochabamba, Oruro and La Paz.

Goats are bred mainly in the southern part of the country, namely Tarija and Potosí.

Fishing Sector
Rivers and lakes in Bolivia, both in the Andean region and the Amazonian basin, hold important fish reserves. There are specific experiences breeding trout in Lake Titicaca and start-up activities of fishery complexes, specializing in exotic species, on rivers across the northern Amazonian basin of the country.

The gross national fish production is estimated at 6.000 metric tons per year and is concentrated in Beni, followed by La Paz, Tarija, Cochabamba and Pando. Export windows have been identified in the United States, the European Union and Japan.

Textiles and garments
The manufacturing industry has grown significantly over the past few years, as a result of improved competitiveness and the expansion of markets for finished products. Textiles and leather garments stand out among these.

The benefits that can be obtained from manufacturing products in Bolivia are attractive and are fundamentally generated by a competitive labor force that has low rotation rates, is easy to train, has excellent manual dexterity and earns competitive wages.

Foreign companies purchasing quality garments will find an attractive installed capacity and several companies with which to negotiate contracts under the temporary entry-for- export regime or the "full package" system.

· Alpaca and llama
The alpaca and the llama belong to the camel family and live in the Andean high plateau at an altitude of 4,000 meters above sea level and in temperatures ranging from -30ºC to 24ºC.

For over 4.500 years, these animals have provided food, transportation and clothing for the Andean natives. To this day alpaca and llama wool is sheared and woven by native women, using millenary techniques. There are two types of alpaca: suri and huacayo and they produce different types of wool ("suri alpaca" and "plush alpaca") that combine the elegance of velvet with the softness and shine of silk. Because of the extreme weather conditions of the alpaca environment, its wool presents unique characteristics. It is durable, it maintains its natural luster and because of its lanolin content, is also water-repellent. The most attractive quality of alpaca wool, however, is its thermostatic capacity, which enables it to stay warm when the weather is cold and fresh under the sun. Another important quality is the variety of natural colors of the fiber.

The largest population of llamas in South America is found in Bolivia. The llama has characteristics similar to the alpaca. It has very fine, resistant and silky hair, allowing for the production of cloth of the highest quality and softness.

The vicuña, another member of the camel family, is a protected species. An environmental license has been issued to develop a pilot plan that will make its industrial use possible in the future.

Many companies are currently processing sheared alpaca and llama wool in Bolivia, combining the best of traditional techniques with the advantages offered by modern technology. The advantage of the Bolivian textile companies lies in the excellence and competitiveness of their labor force combined with the talent of internationally renowned designers.

Other fabrics manufactured in Bolivia include Angora, which is recognized all over the world. Bolivia also produces traditional fibers such as sheep wool and cotton. The textile industry combines these fibers with exotic and synthetic fibers to make high-quality fabrics with thermal and absorbent properties.

Bolivian companies produce and export high quality yarn, fabrics and cotton garments to the demanding European Union and United States markets. The country also produces and exports cotton fiber in bales.

Bolivian textile products have preferential access to different markets and have no quota restrictions for access into the U.S. market.

· Leather
The characteristics of Bolivian leather with regard to thickness, color, texture and finish make it highly competitive in foreign markets.

Bolivian and foreign investors, relying on the skill and cost of local manpower, as well as access to high quality raw materials, export leather goods to the demanding European market. The Bolivian specialty is leather goods that require extensive manual labor.

The Bata Shoe Organization, the world's largest manufacturer of shoes, was established in Bolivia over 50 years ago and uses the latest technology available to supply the local and international markets.

Jewelry Sector
Bolivian-made jewelry is the result of an optimum combination of precious minerals, semi-precious stones and the precision, creativity, dexterity and skill of the local craftsmen. The century-old tradition in this industry dates back to pre-Colonial times and has been handed down from one generation to another

Bolivia is rich in gold, silver, platinum and semi-precious stones, some of which can only be found in the country. This is the case of "Bolivianita" (Ametrino), a stone where the violet color of the amethyst and the yellow of the citrine are mixed

Foreign and national companies have found significant advantages for the production of jewelry in Bolivia. They employ thousands of excellent workers and obtain earnings above those averaged in other countries.

Gold comes from the departments of La Paz (northern part) and Oruro. After being purified, it is constituted into 9, 10, 14 and 18 karat-alloys. Each jewelry company uses and produces approximately 70 kilograms of gold jewelry per week, representing an average of 4.2 tons of jewelry per year.

Bolivia exported 8.8 tons of gold jewelry to the United States in the year 2000, supplying only 13% of that market. 50% of Bolivia's total jewelry production is made up of hollow and solid rolled chains. Other products include "casting" of earrings, rings, bracelets, "tube", "bangles", "stamping" and jewels with embedded semi-precious stones. Some of the more specialized tasks that go into jewelry production are outsourced to independent workshops, generating jobs for more than 2,500 chain "weavers" in the city of El Alto alone.

Forestry Sector
Bolivia has the largest certified tropical forest on the planet due to its privileged location within the Amazon Basin. There are over 200 tree species in Bolivia, among them, the ochoó (Hura crepitan-Euphorbiaceae), cedar (Cedrela sp.-Meliasea), oak (Amburana cerensis-Papilionaceae), the cambará (Vochysia sp.-Vochysiaceae), mahogany (Swietenia macrophylla-Meliaceae) and many others that make the Bolivian forestry sector indisputably attractive to potential investors.
Forests occupy 50 percent of the Bolivian territory (approximately 53 million hectares), which gives an idea of the enormous timber resources available in the country. Currently, only five million hectares are designated for utilization and development under a forest concession system. There are an additional 30 thousand hectares of forest plantations.

Bolivia's certified tropical forests offer excellent businesses prospects for companies that are environment-friendly and are willing to preserve the biodiversity. The laws governing the forestry sector, such as the Forestry Law, Environmental Law, Biodiversity Law, Investment Law and others have one objective in common: to promote sustainable development.

The priorities for the sector, all within a natural resource conservation framework, are the following:

a) The preservation of biodiversity
b) The sustainable use of forest resources
c) The implementation of carbon monoxide seizure and fixation methods, through clean development mechanisms
d) The improvement of access of the rural population, particularly women, small farmers and indigenous people, to forest resources and the reduction of poverty levels and improvement in the living conditions of the population

The leading timber companies support the sustainable use of forest resources and manufacture and export certified products to the United States and Europe. Furthermore, many rural and indigenous communities are accepting the certification of their territories, which will increase the availability of certified species.

The local and foreign timber industry takes advantage of qualified labor, competitive salaries and easy-to-train workers to maximize profit. Bolivian exporters are very competitive in high-quality, labor-intensive wood products such as reproductions of 18th century furniture, hand-carved furniture in fine woods, wooden carvings and finishes. Solid wooden doors, moldings and window frames are also exported successfully.

Other investment opportunities in non-wood products with established markets such as Brazilian nuts, hearts of palm, exotic fruits and cacao are also available.

The use and development of the medical potential provided by plants found in the Bolivian forest also offers investment opportunities.

Mining Sector
Bolivia is a country with a long mining tradition, where gold and silver have been exploited since pre-Hispanic times. It is estimated that only 10% of the existing mineral reserves have been exploited so far. There are great mineral reserves in the region near the Chilean border with characteristics similar to those found in the La Escondida and Chuquicamata mines belonging to Chile.

The vast Pre-Cambrian shield, which takes up one third of the country's surface, is considered one of the richest mineral deposits in the world. This area has not been exploited intensively and holds an invaluable potential.

Allied Deals PLC, Newmont Mining Corp., Rio Tinto Zinc, Minproc, Minnova and Jordex are some of the international mining companies operating in Bolivia. Other companies from Australia, the United Kingdom, Canada, Spain, Hong Kong and Ireland have invested in gold, silver, platinum, antimony, copper, zinc, lead, tin, sulfur, potassium, lithium, borates and semi-precious stones. Strategic metals such as indium and germanium are also found in Bolivia.

In order to minimize the effect of the drop in international mineral prices in the past few years, the government has developed policies to provide tax incentives for investors in the mining sector. These policies have made the San Cristóbal Mining Project possible. This represents a US$ 413 million investment. Starting in the year 2002, an open pit operation scheduled to produce 40 thousand tons/day, will double the Bolivian production of zinc, silver and lead. San Cristóbal will be the largest open pit silver producer in the world. As a result of this project, Andean Silver, the concession holder, was able to raise US$ 100 million in the New York Stock Exchange.

Other investments in the mining sector include a joint venture between COMIBOL (State-owned mining company) and Allied Deals PLC (Foreign capital) for the exploitation of the Huanuni mine.

Pan American Co. has already started exploration work in the San Vicente mining project with an investment of US$ 600,000. The Don Mario Mining Company has also hired the operation services of the Potosí Metallurgical Plant with an investment of US$ 2.1 million over a twelve-month period, to exploit COMIBOL's washed-mineral deposits located on the skirts of the Cerro Rico in Potosí.

Vista Gold Company has signed a US$ 25 million investment contract with the Bolivian Government to reactivate the Amayapampa project. Investment in this venture will be made as soon as international gold prices recover.

Another important investment in the sector was made by the consortium set up between COMSUR (Compañía Minera del Sur) and Great Britain's CDC (Commonwealth Development Corporation). The consortium was awarded a privatization public tender contract for the Vinto Antimony Metallurgical Smelting Company (Oruro) in November 2000. The smelting company will be transferred to the Colquiri Mining Company for US$ 1.1 million. This foundry will be reconditioned to process tin instead of antimony.

Hydrocarbon Sector
The most recent Hydrocarbon Law passed in 1996, the privatization of YPFB (State-owned oil company) and the signature of the natural gas purchase/sale contract with Brazil have created a favorable environment for national and foreign investment in this sector.

The right to explore and exploit oil fields and to commercialize their products is exercised by the State through YPFB. YPFB must necessarily enter into joint venture contracts, for limited time periods, with national or foreign individuals or collective entities, according to dispositions set forth in the Hydrocarbon Law.

Hydrocarbon refining and transportation and natural gas distribution by means of a pipeline network is subject to administrative concessions for limited time periods, in favor of national or foreign individuals or collective entities and is granted by the Hydrocarbon Superintendence, which is part of the Sector Regulation System (SIRESE). At present, the ENRON-SHELL-PETROBRAS-YPFB consortium manages the entire natural gas pipeline network in the country in addition to the gas pipeline to Brazil.

Hydrocarbon refining and industrialization, as well as product trading, is open to any person, individual or collective, national or foreign, through the corresponding registration documents issued by the Hydrocarbon Superintendence and in compliance with legal dispositions regulating these activities.

Bolivia has two well-defined oil production zones: the sub Andean and High Plateau zones. The High Plateau zone has various structures, with good possibilities of containing oil, in the departments of La Paz, Oruro and Potosí. The sub Andean zone concentrates, at present, exploration works in the northeastern (San Buenaventura), central (Chapare), south-central (Santa Cruz and the Boomerang area), southeastern (Roboré) and southern regions of Bolivia (Chuquisaca and Tarija).

Bolivia has proven reserves of 140 million barrels of crude oil and 50 trillion cubic feet (TCF) of natural gas in addition to some 66.6 TCF of potential reserves.

The hydrocarbon sector has had significant growth as a result of natural gas production. The discovery of new gas deposits has caused an increase in hydrocarbon production. On the other hand, oil production in the country dropped because exploitation of this product is conditioned to higher levels of investment.

Significant investments have been made in the exploration, production and commercialization of natural gas to Brazil. During the year 2000, a total of 382 billion cubic feet of natural gas were exported to that country. Additionally, certified reserves increased from 25.5 TCF (in 1999) to 32.2 TCF (in 2000) through the certification of new deposits belonging to PETROBRAS, in the San Alberto and San Antonio wells in Tarija.

The higher level of certified reserves ensures compliance with the purchase/sale contract signed with Brazil in addition to meeting the domestic market demand. These commitments represent approximately 60% of the proven reserves, generating the need to identify new markets in the future.

Direct foreign investment in the sector rose to US$ 221.5 million during the first semester of the year 2000, which represents 65% of the total direct foreign investment in the country for that period. The main components of direct foreign investment are exploration and exploitation activities (joint venture contracts) and gas pipeline and compression station construction (San Miguel-Cuiabá pipeline).

Sector policies seek to stabilize oil byproduct prices in the internal market, to encourage the expansion of the external natural gas market and other derived products and the completion of the YPFB (residual) privatization process.

The expansion of the natural gas market is a priority in the nation's Strategic Development Plan. To this effect, pre-investment licenses have been granted for thermoelectric power generation projects in Puerto Suárez. These were consolidated in December of the year 2000.

The privatization of YPFB (residual) has the transfer of service stations and gas-bottling plants, for byproduct wholesale distribution, pending.

The gas and oil reserves in the country offer attractive investment opportunities in the hydrocarbon sector. These, along with the barely exploited hydroelectric sector, will give the country self-sufficiency, security and will allow the exportation of electric power.

There are plans to build a liquid gas pipeline to the port of Ilo, on the Peruvian Pacific coast and projects to export electric power to supply the high demand in Brazil, the north of Chile and southern Perú.

Natural gas exports to Brazil have also drawn the interest of the petrochemical industry. U.S. investors are in the process of building plants near the town of Warnes, some 30 kilometers from downtown Santa Cruz, using natural gas to fuel their projects.

The most advanced project is an ammonium nitrate plant with a 100,000-ton capacity, built by Austin International at a cost of US$ 25 million. The Corporación Boliviana de Recursos' urea plant is expected to reach a production of 110,000 tons per year. The natural export markets for this product are Brazil and Paraguay.

Based on all the above, Bolivia could become the most important energy distribution center in South America in the near future. Presently, the production of crude oil in Bolivia is used almost entirely for internal consumption, with the exception of a few minor exports to Chile.

Tourist Sector
Bolivia is a land of many contrasts with high mountains, extensive valleys and vast Amazonian plains. Its tourist attraction is, therefore, based on a wide range of natural resources, that are an open invitation to discover an extraordinary biodiversity with various ecological plateaus and the exclusive fauna and flora of the High Plateau and the Bolivian Amazon basin. The country also offers archaeological, architectural, artistic and folkloric attractions, along with the cultural diversity of its people.

There are over 1,300 tourist attraction sites in Bolivia. 30% of these are natural attractions while 70% are cultural sites.

Bolivia has 26 protected areas including natural parks, reserves, biological stations, and wild life reserves. These areas cover approximately 8% of the national territory, where eco-tourism has a great development potential.

Financial Sector
The Bolivian financial sector is made up of banking institutions, insurance companies, pension funds, private financial funds and brokerage firms that handle the sector's resources. These institutions are supervised by the Banking and Financial Institutions Superintendence as well as the Pension, Assets and Insurance Superintendence.

Banco Santander Central Hispano (Spain), Banco de Crédito (Perú), Banco Real (Brazil) and Citibank (USA) are among those financial institutions who have invested in Bolivia.

The new private pension system has generated savings in excess of US$ 1,000 million along with over US$ 3,000 million in deposits raised by the banking system.

(Information provided within this page has been obtained from Centro de Promoción Bolivia - CProbol)