The Fall in Gas Exports, International Reserves and Economic Growth in Bolivia

Abstract

The objective of this article is to offer an overview of the deterioration of Bolivia's economic growth, in the period 2013 to 2022, mainly of the macroeconomic variables of study such as gross domestic product, natural gas exports, net international reserves, external debt and imports of diesel and gasoline fuels. Each of these variables are dependent on the foreign currency dollars. In this understanding, the deterioration is mainly due to the fall in gas exports since 2015 that the country's gas production falls because the government on duty, allocated more investment to exploitation than to exploration, generating a decrease in foreign exchange earnings dollars to the country, failing to cover subsidies for diesel and gasoline fuels imported in dollar foreign currency. This is mainly due to the fact that half of Bolivia's GDP growth in the last 15 years is due to the sale of gas to Brazil and Argentina in foreign currency in dollars, since it does not cover the subsidies of imported fuels with gas, net international reserves are used to exhaust them at their maximum level. At the same time, the gradual increase in external debt in foreign currency dollar. The fall in gas exports and the increase in imports of diesel and gasoline fuels due to the growth of the vehicle fleet, as reflected in historical data and where we identify the four stages of inflection. In the last stage, it was characterized with a shortage of dollars and a high demand for it by citizens and the government, added to the lack of transparency in the disclosure of information of net international reserves and dependence on non-renewable resources results in a deterioration of the economic growth of the gross domestic product. In addition, Bolivia is characterized by not promoting science, knowledge, qualified human capital, research, development and technological innovation, which led to a high level of informal employment and insufficient productive sustainability in foreign currency.