Bolivia, The Poorest South American Economy
By Naldo Camarones
People who reside in Bolivia are faced with having to overcome the fact that they live in the poorest area of South America.
This is surprising to some economists who suggest that Bolivia is sitting on a whole host of natural resources that aren’t being mined. In fact, Bolivia is home to one of the largest natural gas resources in all of South America. Add to that the gold, iron and magnesium reserves and it’s astounding that Bolivia is such a poor country.
Bolivia relies heavily on the financial assistance of other countries. The debt of this country is in the billions and with the strict government control that is present in Bolivia it seems unlikely that this situation will change anytime soon.
The United States is clearly the major trading partner with Bolivia. Exports to the United States include gold and jewelry. Bolivia also imports many products from the United States. In fact, the imports far outweigh the exports.
The fact that Bolivia has such a poor economy has led to increasingly high prices on many essentials. For instance in one of the largest cities in Bolivia, the water supply has been privatized. The government viewed this as a method of earning more profit while it has substantially hurt the private citizen. Because the price of the water is set by one company, the cost can be high. For the average person living in this area of Bolivia this can mean having to make a choice between two essential items such as food and water.
Tracing the economic difficulties back to their source is relatively easy. Many experts suggest that the problems first began when the price of silver took a dip in the 1980s. With silver being one of the largest industries in Bolivia, the hit was hard and deeply felt. Many people lost their jobs during this time, and many companies who mined silver lost a great deal of money. The country never fully recovered from this setback.
Another instance that has shaped the unfortunate economy of Bolivia was when the Cold War ended in the early 1990s. The reason that this impacted Bolivia so strongly was that all foreign aid came to an end. The government of Bolivia had become reliant on this money and suddenly faced a shortfall. Again, the country struggled to regain their financial footing but unfortunately that never happened.
When the ending of Bolivia’s cocoa crops was instituted this became another devastating blow for an already floundering nation. The United States spearheaded this effort because the cocoa plants that were grown in Bolivia were the source of a large portion of the world’s cocaine. The effects of this change was the last straw and it now seems as though Bolivia will never recover.
Today, Bolivia is still a struggling nation. In order to keep the economy moving at all, the prices on many items have had to be increased. This makes it virtually impossible for the average person in Bolivia to afford anything. Understandably this has led to a very high poverty rate.
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