Effects of Globalisation on Bolivia in the last 5 years PowerPoint Presentation

Effects of Globalisation on Bolivia in the last 5 years - PowerPoint Presentation Example In the 2009 elections, he again came in to power by winning the election with a huge margin and now making attempts to change the system of his country. Figure 1: Map of Bolivia Source: Central Intelligence Agency. The World Fact Book, 2011 Bolivian Economy: Bolivia is among the poorest and the most undeveloped country in the Latin American region. There was a devastating economic crisis in Bolivia in the early 80s but then the economic reforms were made which improved the economy as well as reduced the poverty in the country. In the time period between 2003- 2005, there was political disturbance in the country along with racial clashes mainly on the issue of export of natural gas to northern hemisphere region. In 2005, newly elected government passed the hydrocarbon law according to which the royalties were raised significantly resulting in the withdrawal of all the local companies from the sector and foreign companies started to operate in the country. In 2008 due to higher rates o f oil and gas, the surplus was significantly higher but in the later years, the economy started to decline due to following factors; i. Global Recession. ii. Decreased prices of oil and gas worldwide. iii. Poor infrastructure of the country. iv. Economic sanctions imposed by USA on Bolivia. a. GDP: Figure 2: GDP from 2000-2009 Source: Index Mundi, 2008. b. Exports and Imports: The main exports of the country include natural gas which constitutes the main financial reserve of the country and apart from this; the other exports include soybeans, crude petroleum, zinc ore and tin. Major countries which are involved in importing these items from Bolivia are Brazil which constitutes the largest export partner of Bolivia followed by USA, Japan, Columbia, South Korea and Peru. Main imports of the country include petroleum products, paper and plastics, aircrafts and their parts, ready to serve foods, automobiles and insecticides. The main partners in imports are Brazil, Argentina, USA, Chile and Peru. Figure 3: Exports of Bolivia Source: www.amchambolivia.com Figure 4: Imports of Bolivia Source: Index Mundi, 2008. c. Investment Opportunities: Direct Foreign Investment (DFI) is the main contributor to the growth in the private investment sector in the country. It has grown from 169 million US$ to about 1,000 million US$ in just seven years from 1992 to 1999. It represents about 10% of the GDP. The rapid increase in DFI in these years was basically due to process of privatization which was completed in 1999 and afterwards the DFI started to fall. In addition to this, the economic conditions got better in the neighboring countries and as a result, the DFI fell further in the years after 1999. The government from 2005 is working to have good economic conditions which support the interests of foreign investors. As a result of this commitment, irrespective of the social and political unrest in the country, GDP has grown to about 4% in last seven quarters. The overall deficit had narrowed and there was a surplus of 4.2% in 2006, the main reason for this improvement is the government policy about the hydrocarbon sector increasing its exports. Other factors include better revenue system as well as reform in