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Bolivia is one of least developed countries Southern America. This country population is estimated to be10, 227,299 people. Her annual population growth rate is 1.8 %( 2005-2010). Its literacy level is estimated to be 90.74%. By the year 2007, its work force was estimated to be 6.4 million with agriculture sector taking 2.4 million, mining 994,995: services 977, 635 and public administration 109,054. She is a plurinational state. Bolivia economy GDP by the year 2009 was around $17.5 billion with a growth rate of 3.7%. Her per capita income was 1,767. Most of her natural resources include hydrocarbons such as natural gas and minerals (silver, zinc, lead, iron, and gold) which contribute for 14.26% of her GDP. Agricultural products include soybeans, beef, cotton, beef, potatoes, corn, quinoa, sugar cane, and rice. This contributes around 10.44% of GDP. Manufacturing sector produces goods such as food and beverages, wool and textiles. Transport and communication sectors contribute to 8.41% of the GDP. (UN 2010; U.S Department of State2010)
Imports and Exports
Bolivia major exports include natural gas, zinc, tin, silver, coffee, gold, wood, soy beans, jewelry, and soy products. Her major export markets include Brazil whose share is approximately 31.47%, Korea Republic whose share is 9.34%, US takes 7.72%, Argentina takes 8.15%, export to Japan is 5.73% and Peru takes 5.39%. In 2009 her exports amounted to $5.3 billions. (UN 2010; U.S Department of State2010)
Bolivia main imports include machinery, transportation equipments, construction and mining equipment, and consumer products. Its imports comes from Brazil which contributes to 17.64%, Argentina which contributes to 13.92%, U.S.A contributes about 13.26%, China contribute to 8.43%, Peru contributes to 7.19%, Venezuela contributes to 7.04%, Japan contributes around 6.97% while Chile contribute around 5.37%. In 2009 she enjoyed a trade surplus of $900million. (UN 2010; U.S Department of State2010)
Bolivia exports of goods and services contribution to her GDP was 34.3%, 37.8%, 37.3% and 41.8% for 2005, 2006, 2007 and 2008 respectively. Her current account balance (US$ m) were 625, 1,297, 1,591, 2,051, and 620 for years 2005, 2006, 2007, 2008, and 2009 respectively. (DFAT 2010)
Current development in agricultural sector
This sector accounts for 10.44% of Bolivia’s GDP. Cultivation of land is increasing. Use of modern farming techniques is increasing rapidly especially in most parts of Santa Cruz where the climate is suitable for two planting seasons per year. This has been part of land use plan for the department of Santa Cruz. The government has also been subsidizing farm inputs to encourage more agricultural production. Bolivia is also in process of extensively developing her forests and farms. The government is also enhancing it support for agricultural research, training, extension services and community participation in this sector. Poor tradition farming methods such as slash and burn cultivation method are being discouraged while environment friendly modern farming methods are being encouraged. (IEG 2001; U.S Department of State2010)
Analysis: Impact of these agricultural developments on Bolivia economy.
Agricultural sector is one of the core sectors of her economy. Bolivia government encouragement of modern agricultural farming will definitely have an impact on GDP. Production of products such as soybeans, beef, cotton, beef, potatoes, corn, quinoa, sugar cane, and rice will increase. This will increase its exports to her trading partner. Increase in exports will lead to increase in cash inflows to the country. This will be an increase in level of its ability to import capital goods that will enhance the production process in the economy. Similarly, cash inflows owing to increase in agricultural exports will increase employment to those involved in this sector. High employment to the economic agents (households) involved in this sector will increase their income and purchasing power. This means increase in demand for other sector of the economy. On the other hand, high demand in the economy is an incentive to investors and firms. Increase in investments and production activities will result. Consequently, there will be increase in employment, demand and output. Thus, effort to develop the agricultural sector in Bolivia will eventually increase her GDP and in long run foster her development in a great way.
However the government must strategically address some of the structural constraints that face this sector. According to IEG (2001), there exist wide disparities in agricultural enterprise and farming systems which are mirrored and emphasized at level of local development agencies. Agencies, and organized groups, strongly affect allocation of natural resources such as land for cultivation. This definitely has an impact on the development of agricultural sector.
Analysis: Prospects of well being and development of Bolivia
As per research above, it is apparent that Bolivia is one of the economy endowed with great natural resources which if well utilized may lead to great development of this economy. Her efforts to ensure economic reforms such as encouraging private sector participation, opening up its economy, opening up and utilizing idle land, and ensuring structural reforms may in future result into economic development. This country has a number of resources which she can utilize to boast up development of other sectors. Mining sector and hydrocarbon resources-natural gas, silver, zinc, lead, iron, and gold may play a great role in development of Bolivia. First, these products are usually not vulnerable to changes in world prices. Gold, silver, iron, lead and natural gas are valued commodity in the world market. Bolivia is capable of enhancing production of these commodities, increase their production and exports so as to ensure a better balance of payment.
Utilizing income from such exports, Bolivia will be able to enhance growth in terms of transport and communication infrastructures, health and education facilities, increase her spending in agricultural sector, and promote the overall economic growth. Her efforts in agricultural sector may in future have a great impact on her economy. Production increase in this sector will in long run lead to economic growth. However, this blight future is subject to a number of factors. Political will and accountability in ensuring that corruption is curbed, and that government’s spending is sanctioned to its plans will count a lot. Her international trade policies will also have a great influence. Bolivia has to open up her economy and avoid unnecessary barriers to international trade. She should also need to diversify her exports from the traditional ones. All this done, it may happen that Bolivia will be enjoying substantial development in future. (Seynabou & Calvo-Gonzalez 2008)