Strengthening Bolivian Competitiveness: Export Diversification and Inclusive Growth (World Bank Country Study)

Contents......Page 5
Preface......Page 10
Acknowledgments......Page 11
Abbreviations and Acronyms......Page 12
Main Findings......Page 14
Policy Implications......Page 17
Notes......Page 19
Table 1.1. Share of Value Added by Sector (Percent)......Page 21
Trade, Macroeconomic, and FDI Policies since the 1985 Liberalization......Page 27
Diversification and the Optimal Export Strategy for Bolivia......Page 40
Notes......Page 42
Table 1.A.1. Import Tariffs Applied by Bolivia (Percent)......Page 44
The Concentration of Exports and Potential for Diversification......Page 47
Table 2.3. New Products, by Rauch Categories: Bolivia vs. Other LAC Countries......Page 53
Conclusion......Page 55
Notes......Page 58
Table 2.A.1. Contribution of Different Demand Components to Real GDP Growth in Bolivia......Page 59
Annex 2.2. CGE Models......Page 63
Figure 2.A.1. Andean Non-Oil Exports to the United States: Distribution of Preferences Granted by Product......Page 69
Table 2.A.16. Impact of Deepening MERCOSUR Integration on Exports and Employment......Page 78
Annex 2.5. Effects on Poverty......Page 80
Table 2.A.22. Poverty Measures: MERCOSUR Integration, Agriculture......Page 85
Linkages between Trade, Growth, and Employment in the Past......Page 87
Table 3.8. Total Effects on Poverty and Welfare-MERCOSUR Integration......Page 110
Annex 3.1. Transports and Logistics......Page 114
Table 3.A.1. Leading Nontraditional Export Products, 2006–07......Page 115
Export Competitiveness in Bolivia......Page 116
Transport and Logistics......Page 126
Notes......Page 141
Is There a ‘Productivity Premium’ for Bolivian Exporters?......Page 143
What Factors Affect Exporters?......Page 148
Figure 5.4. Perceptions of Bolivian Exporters on Governance Issues......Page 151
Policy Implications......Page 155
Notes......Page 157
References......Page 158
Table 1.2. Value Added and Labor Share in Selected Economic Sectors (Percent)......Page 23
Table 1.3. Key Policy Mechanisms of Bolivian Integration......Page 28
Table 1.5. Utilization Rate, ATPA/ATPDEA, 1997–2005......Page 29
Table 1.A.2. Tariffs that Bolivian Exporters Face Abroad (Percent)......Page 45
Table 1.A.3. Trade Taxes that Bolivia’s Exports Face Abroad (Percent)......Page 46
Table 2.1. Bolivia’s Main Export Markets (2007 and 1998)......Page 48
Table 2.2. New Products, Observed and Predicted Values: Bolivia vs. Other LAC Countries......Page 52
Table 2.A.4. Pairwise Granger Causality Tests......Page 60
Table 2.A.7. Results of Johansen Cointegration Tests for Nontraditional Exports and GDP......Page 61
Table 2.A.8. Pairwise Granger Causality Tests, GDP and Nontraditional Exports......Page 62
Table 2.A.9. Sectors Modeled......Page 64
Table 2.A.10. Impact of Different Trade Liberalization Scenarios on Bolivian Exports, Selected Sectors, Percentage Change......Page 65
Table 2.A.11. Impact of Different Trade Liberalization Scenarios on Bolivian Imports, Selected Sectors, Percentage Change......Page 66
Table 2.A.12. Impact of Different Trade Liberalization Scenarios on Bolivian Output, Selected Sectors, Percentage Change......Page 67
Table 2.A.13. Impact of Different Trade Liberalization Scenarios on Labor Demand, Selected Sectors, Percentage Change......Page 68
Table 2.A.14. ATPDEA Utilization Rates for Top Ten Bolivian Exports 2000–06......Page 71
Table 2.A.15. Supply Comparison of Andean Countries in Jewelry, Apparel, and Crude Oil......Page 74
Table 2.A.17. Probit Regression Results, Selection Equation (Prob. Unemployed)......Page 83
Table 2.A.20. Poverty Measures: MERCOSUR Integration, Manufacturing......Page 84
Box 3.1. Estimating Manufacturing Jobs in Bolivia: 50,000 or 500,000 Jobs?......Page 92
Table 3.2. Impact of Different Trade Policy Scenarios on Bolivia’s Macro Indicators......Page 96
Table 3.3. Scenario 1—Impact on Bolivian Exports to Selected Partners......Page 98
Table 3.5. Impact of a Hypothetical 10 Percent Increase in the World Price in Selected Commodities......Page 101
Table 3.6. Trade and Employment Effects of ATPDEA Elimination......Page 105
Table 3.7. FTA: Simulated Expenditure Change......Page 109
Table 4.1. Export Volumes and Values by Main Exit Points, 2005–06......Page 127
Table 4.2. Typical Truck Tariffs between Main Transport Nodes......Page 129
Table 4.3. Main Parameters for Exports of Wood from Northern Bolivia......Page 130
Box 4.5. Cochabamba’s Many Small-Scale Nontraditional Exporters......Page 132
Figure 5.1. Labor Costs, Capital Stocks, and Revenue of Exporting and Nonexporting Firms in Enterprise Survey for Bolivia......Page 145
Table 5.2. Bolivian Exporters’ Premium on Wages, Capital, and Sales after Controlling for Size, Industry, and Location......Page 146
Table 5.3. Productivity Premium of Bolivian Exporters......Page 147
Table 5.4. Estimated Factors Affecting the Probability to Export......Page 154
Figure 1.1. Sectoral Breakdown of GDP......Page 22
Figure 1.2. Bolivian Export Product Structure......Page 24
Figure 1.3. Bolivia’s Share of World Exports......Page 25
Figure 1.4. Foreign Trade, Selected Indicators for 1985 and 2005......Page 26
Figure 1.6. Twelve-Month Inflation and Depreciation......Page 31
Figure 1.7. Central Bank Domestic Debt......Page 32
Figure 1.8. Multilateral Real Exchange Rate of Total Trade, and Traditional and Nontraditional Exports......Page 33
Figure 1.9. Multilateral Real Exchange Rate of Nontraditional Exports and Selected Bilateral Real Exchange Rates......Page 34
Figure 1.11. Customs and Other Duties on Imports as a Share of Tax Revenues (Percent)......Page 35
Figure 1.12. FDI and Export Volume in Selected Sectors......Page 37
Figure 1.13. Main Features of Bolivia’s Business Environment......Page 38
Figure 1.15. FDI in Manufacturing Sector by Product, 1996–2005......Page 39
Figure 2.1 Bolivia’s Export Concentration......Page 49
Figure 2.2. Growth of Bolivia’s Export Markets......Page 50
Figure 2.3. New Products and Concentration in Bolivia’s Exports......Page 51
Figure 2.4. Actual vs. Predicted Imports and Exports, Bolivia, 1992–2005......Page 54
Figure 2.6. Over-Importing and Under-Exporting vis-à-vis Brazil, Argentina, and Chile, 1992–2005......Page 56
Figure 2.8. Over-Importing and Over-Exporting vis-à-vis CAN, 1992–2005......Page 57
Figure 2.A.3. Bolivia’s Distribution of Exports to the United States, by Preferential Program......Page 70
Figure 2.A.4. Exports’ Evolution of Andean Countries in Main Bolivian Export Markets......Page 72
Figure 2.A.6. Bolivian Exports of Apparel and Raw Cane Sugar to the United States......Page 75
Figure 2.A.7. Simulation of Impact of Tariff Change on Bolivian Export Revenues (in Apparel)......Page 76
Figure 3.2. Export and Import Growth, 1971–2006 (Annual Growth Rates of Exports and Imports of Goods and Services in Real Terms)......Page 88
Figure 3.3. Long-Run Evolution of Real Exports and Real GDP (Variables in Natural Logarithms)......Page 89
Figure 3.4. Bolivian Exports by Groups of Products, 1962–2006 (US$ Millions)......Page 90
Figure 3.5. Distribution of Employment Growth, by ISIC Industry......Page 91
Figure 3.6. Export Growth and its Correlation with Employment......Page 93
Figure 3.7. Change in Exports to the U.S. Attributable to the Elimination of ATPDEA......Page 104
Figure 4.2. Logistics Performance (Overall Logistics Performance Index, Higher is Better)......Page 119
Figure 4.3. Gross CEDEIM Issuing and Nontraditional Exports......Page 122
Figure 4.4. Imports under RITEX......Page 123
Figure 5.2. Factors Perceived to be Major or Severe Problems for Firm Performance......Page 149
Figure 5.3. Perceptions of Bolivian Exporters on Key Factors for Firm Growth and on Infrastructure and Network Services......Page 150
Figure 5.5. Differences in the Predicted Probability to Export among Bolivian Firms under Different Scenarios......Page 156
Box 1.1. Beyond Diversification: The Export Strategy of Bolivia as a Resource-Rich Country......Page 41
Box 3.3. The GTAP Database......Page 97
Box 3.4. Methodology Used for the Partial Equilibrium Analysis of the Impact on Employment......Page 103
Box 3.6. Poverty in the 2005 Household Survey......Page 107
Box 4.1. The International Market for ICT and Other Service Exports......Page 118
Box 4.2. Obstacles Limiting Exports of Services–New Survey Evidence......Page 120
Box 4.3. International Experiences with Export Promotion Agencies......Page 125
Box 4.4. Legal Framework for Bolivian Trucks Using Chilean Ports......Page 131
Box 4.6. Institutional Arrangements for Managing the Paraguay-Paraná River Waterway (“Hidrovia”)......Page 135
Box 4.7. Design Road Pavements to Withstand Overloaded Trucks......Page 136
Box 4.8. Priorities of the Aduana Nacional de Bolivia......Page 138
Box 4.9. Transport International Routier System......Page 139
Box 5.1. Why Are Exporting Firms More Productive? A Review of the Theoretical Arguments......Page 144
Box 5.2. Econometric Methodology to Estimate the Export Propensity among Bolivian Firms......Page 153