Bolivia - Market ChallengesBolivia - Market Challenges
Although the Bolivian economy continues to grow, Bolivia remains a challenging place to do business. The Movimiento al Socialismo (MAS) party-led government, elected in 2005, continues to advance an economic policy that places the state at the center of economic activity. In 2009, Bolivians approved a new constitution that emphasizes this state involvement in the economy, particularly in the management of natural resources. Since his January 2006 inauguration, President Evo Morales has nationalized companies in the hydrocarbons, telecommunications, electricity, and mining sectors, in addition to a cement plant, an airport management company, and the pension administration system.
President Morales has been relected twice, once in December of 2009 and again in October of 2014, and the political climate has been generally stable during his tenure. In January 2015, he began his third term as president, even though the constitution only allowed for two terms. President Morales was permitted to run for a third term despite the constitutional prohibition because the Constitutional Court deemed his first term occurred under the previous consitution, thus not counting against the two term limit. Morales’ current term lasts until 2020, and he is running for a fourth term in 2019.
The Bolivian government claims to be open to foreign investments, but weak judicial security, complicated regulatory decisions, cumbersome bureaucratic procedures, and political pressures may adversely affect a company’s operations in Bolivia.
Bolivian commercial law does not have any significant technical barriers to trade or tariffs that substantially affect commerce with other countries. The export of certain edible products requires licenses, and in some examples, exports may not be allowed due to priorities placed on supplying the domestic market first.