Bolivia achieves very low overall compliance with international standards and codes, with a score of 8.33 out of 100 in our Standards Compliance Index. The predominance of standards for which there is insufficient information makes an accurate assessment of the current situation in Bolivia very difficult. In total, there are only four standards where the availability of information allows the assignment of levels of compliance. With respect to macroeconomic data dissemination, the country has stated its intention to subscribe to the Special Data Dissemination Standard prescribed by the International Monetary Fund. In accounting and auditing, the Inter-American Development Bank approved the funding for a project to aid with the adoption of International Financial Reporting Standards and International Standards on Auditing in Bolivia. On the negative side, a 2006 mutual evaluation of Bolivia's Anti-Money Laundering and Combating the Financing of Terrorism regime found it in non-compliance with the majority of the standard's requirements. Lastly, although there was evidence of progress in the area of financial regulation and supervision during 2005, when the Congress strengthened the autonomy and powers of the country's banking regulator, no further evidence of reforms in this area is publicly available.

Macroeconomic Policy and Data Transparency

Bolivia is not yet a subscriber to the International Monetary Fund's (IMF) Special Data Dissemination Standard (SDDS), although it does participate in the less rigorous General Data Dissemination System (GDDS) since the year 2000, as is evident from the GDDS website. In 2007 the IMF released a Report on the Observance of Standards and Codes (ROSC) covering Bolivia's data dissemination regime. The report notes that Bolivia has plans to subscribe to the SDDS at some future time. The ROSC found that Bolivia's statistics are generally adequate for monitoring purposes, and that some of the required and encouraged data sets meet requirements of timeliness, coverage, and periodicity, but added that significant deficiencies remain to be addressed. While the principle statistical agencies of Bolivia, including the National Institute of Statistics, the Ministry of Finance, and the Central Bank of Bolivia maintain websites on which statistical material is posted, these sites provide data in Spanish only. More »

There is little information available regarding the specifics of Bolivia's monetary policy transparency practices beyond that offered in passing in IMF reports covering monetary policy content and execution, and there is no direct assessment of Bolivia's compliance with this standard, either overall or at the level of individual constituent principles as set forth in the IMF's Code of Good Practices in Monetary Policy. Bolivia is not yet a member of the IMF's SDDS, although it has participated in the less stringent General Data Dissemination System since 2000. A 2007 IMF Report on the Observance of Standards and Codes does allude to Bolivian intentions to subscribe to the SDDS at some future time. More »

In several of its reports, issued during the period 2005-2007, the IMF has repeatedly noted Bolivia's authorities have committed themselves to fiscal and financial sector reforms, many of which the Fund itself has recommended. Among the prospective reforms, first elaborated in the IMF's 2005 Sixth Review under the Stand-By Agreement, were the promulgation of a new Organic Budget Law to address deficiencies in the budget process across all levels of government; reforms to the tax law; and the implementation of a registration program covering public sector workers and pensioners; as well as the creation of a registry of sub-national debt obligations. In 2007, the IMF issued its Article IV Consultations report and a Report on the Observance of Standards and Codes (data module), both of which assert that Bolivia has made some progress toward fiscal reforms that would result in greater transparency, but note that deficiencies remain, and did not elaborate on the previously planned, more comprehensive reforms. Their fate, especially given the political instability in Bolivia, remains unclear. Some reforms, such as reforms to tax legislation, must await the results of the referenda on the new constitution, which as of October 2008 was scheduled for December 2008. Overall, the publicly available information does not address Bolivia's compliance with the IMF's Code of Good Practices on Fiscal Transparency. More »

Institutional and market infrastructure

According to a 2004 World Bank presentation available on the Internet, Bolivia passed a new Voluntary Reorganization Law in 2003 in order to allow troubled but still-viable firms avoid liquidation. However, the World Bank's current Doing Business Project webpage devoted to Latin American insolvency reforms notes that the voluntary workout option is no longer available, leaving only the lengthy and costly liquidation process as the only insolvency option in the country. The United Nations Commission on International Trade Law website discloses that Bolivia has not adopted the Model Law on Cross-Border Insolvency. Beyond these facts, however, there is insufficient publicly available information directly addressing Bolivia's compliance with the Principles and Guidelines for Effective Insolvency and Creditor Rights Systems developed by the World Bank. More »

In March 2006, the Inter-American Development Bank (IDB) approved the funding of a project aimed at providing assistance to the adoption of International Financial Reporting Standards (IFRSs) and International Standards on Auditing in Bolivia. Although Bolivia has its national accounting standards, the IDB Donors Memorandum issued in 2006 explains that the Bolivian standards are not consistent with IFRSs. Moreover, the domestic accounting framework is incomplete since Bolivia has 14 accounting standards as compared to more than forty IFRSs. The main objective of the project, as mentioned in the IDB Memorandum, is to ensure that business financial reporting in Bolivia is "technically reliable" and transparent. The 36-month long project is expected to harmonize Bolivian standards with international standards and provide access to the harmonized standards to Bolivian accounting professionals. In addition, a project primarily funded by the Swedish International Development Cooperation Agency was also underway with the objective to develop the Uniform Chart of Accounts (PUCs) and thereby enhance Bolivia's legal, regulatory, and institutional structures by means of standardized PUCs. More »

In November 2003, the Organization for Economic Co-operation and Development (OECD) published a White Paper on Corporate Governance in Latin America in which it provides a summary review of Bolivia's initiatives on corporate governance. According to the paper, the Bolivian government drafted a bill in early 2003 titled the "Law on Governance of Stock Companies" which was presented to the Bolivian congress in November 2003. The White Paper notes that many companies expressed opposition to its content. As of 2008, no further information was available on the status of the above-mentioned bill. Further, the paper points out that in 2002, as an outcome from the privatization process, the government enacted a law specifically for "capitalised" public companies, which covers various aspects of corporate governance. In addition, the banking regulations include various governance requirements for banks and other financial institutions with regards to creation of audit committees, participation of directors on credit committees, regulation of activities of internal supervisors and rotation of external auditors. A Donors Memorandum available on the Inter-American Development Bank website points out that the securities exchange is in an early stage of development in Bolivia. The Memorandum explains that this is not only due to the size of the companies but also because of an "adverse business culture" that lacks transparency and accountability. Overall, there is insufficient publicly available information directly addressing Bolivia's compliance with OECD's principles of corporate governance. More »

According to the 2006 Inter-American Development Bank Donor's Memorandum, the existing accounting and auditing framework in Bolivia is incomplete. Bolivia has approved just five auditing standards and none of the Bolivian standards are consistent with the International Standards on Auditing (ISAs) promulgated by the International Auditing and Assurance Standards Board. Therefore, in March 2006, the IDB approved the funding for a project to aid the adoption of International Financial Reporting Standards and ISAs in Bolivia. The 36-month long project is divided into three main components comprising (1) the alignment of national standards with international standards, (2) dissemination and training on the application of the newly developed standards, and finally (3) a voluntary certification system to improve the quality of Association of Auditors of Bolivia professional services. Upon completion, it is expected that Bolivian accounting and auditing standards will be harmonized with the international standards. More »

The Financial Action Task Force of South America Against Money Laundering (GAFISUD) conducted a mutual evaluation of Bolivia's Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime against the Financial Action Task Force (FATF) 40+9 recommendations and special recommendations. GAFISUD published its findings in a 2006 report, in which it concludes that Bolivia is compliant with 3 recommendations and special recommendations; largely compliant with 7; partially compliant with 15 and; non-compliant with 24. The GAFISUD mutual evaluation cites several areas where Bolivia's AML/CFT regime could be enhanced. Perhaps the most important of these is that Bolivia still lacks legislation that specifically criminalizes the financing of terrorism. Therefore, Bolivian authorities also lack the ability to identify, freeze or seize assets linked to terrorist individuals or organizations. The 2008 U.S. Department of State report observes that, in 2006, the Office of the Superintendence of Banks and Financial Institutions (SBEF) received a draft law to criminalize terrorist financing. However, as at the release of the report in March 2008, the bill had not yet been submitted to Congress for further consideration. Furthermore, the mutual evaluation rates Bolivia as non-compliant with all the FATF recommendations pertaining to Designated Non-Financial Business and Professions (DNFBPs), due partly to DNFBPs not being under the supervision of any regulatory body for compliance with AML/CTF standards. Money laundering is criminalized pursuant to Law No. 1768 of 1997, which modifies the Bolivian Penal Code and contains three categories of predicate offenses: narcotics trafficking, organized criminal activities, and public corruption. More »

The Sistema de Pagos de Alto Valor (SIPAV) is the large-value, time critical payment system in Bolivia. This interbank payment system was launched in 2001 as a real-time gross settlement system by the country's central bank, the Central Bank of Bolivia (BCB). A joint 2006 report by the Center for Latin American Monetary Studies and the World Bank implies that Bolivia considers the SIPAV a systemically important payment system. The SIPAV is owned, operated and overseen by the BCB. There is, however, little publicly available information that addresses Bolivia's compliance with the Core principles for Systemically Important Payment Systems promulgated by the Committee on Payment and Settlement Systems. More »

Financial Regulation and Supervision

There is insufficient information publicly available regarding Bolivia's compliance with the Basel Core Principles for Effective Banking Supervision. The IMF conducted a Financial Sector Assessment Program (FSAP) for Bolivia in 2003, the results of which were not published. A 2007 IMF report mentions the FSAP recommendations, and enumerates the steps taken by the country to implement them. The report notes that the autonomy and regulatory role of the Superintendency of Banks and Financial Institutions (SBEF), the country's financial sector supervisor, have been strengthened and regulations on prompt corrective action, central bank intervention in bank resolution, and liquidity risk, have been issued and enforced. However, some important recommendations pertaining to consolidated supervision, anti-money laundering, deposit insurance scheme, risk management, and corporate restructuring have not been acted upon. The report does point to ongoing efforts by Bolivia to implement these recommendations including the plan of the SBEF to issue prudential regulations to deal with market risk. More »

The Superintendency of Pensions, Securities and Insurance (SPVS) is the securities supervisor in Bolivia and is listed as an ordinary member on the International Organization of Securities Commissions (IOSCO) website. However, there is insufficient information publicly available regarding Bolivia's compliance with the Objectives and Principles of Securities Regulation promulgated by the IOSCO. More »

Bolivia is listed as a member on the International Association of Insurance Supervisors (IAIS) website. However, there is insufficient information publicly available regarding the country's compliance with the Insurance Core Principles (ICPs) promulgated by the IAIS. The Inter-American Development Bank partially sponsored a technical assistance project (2000-2005) for Bolivia with the ultimate objective of consolidating insurance market operations in the country by strengthening the legal, regulatory and supervisory framework for insurance activities in line with the 1997 Core Principles of Insurance Supervision for Emerging Markets established by the IAIS. The project aimed at implementing the 1998 Insurance Law of the Republic of Bolivia and formulating its enabling regulation. The goal also included enhancing the supervisory capacity of the insurance supervisor, the Superintendency of Pensions, Securities and Insurance, in terms of its staff resources, its technical infrastructure, computer systems, and the supervisory methodologies it employed. However, as of August 2008, there is insufficient information as to the implementation or achievements of the project that reached completion in 2005. More »

Legend:

Credit Ratings

Moody's B3/Stable

Fitch B-/Stable

Standard & Poor's B-/Stable

Macroeconomic Data

2007 GDP (Current Prices): 13.192 billion USD (IMF)

2007 GDP (Per Capita): 1,342 USD (IMF)

2008 GDP (Growth Forecast): 4.7% (IMF)

2008 Inflation (CPI): 15.1% (IMF)

2007 Unemployment: 8% (CIA)

2006 Foreign Direct Investment

FDI (Inward): 0.24 billion USD (UNCTAD)

FDI (Outward): 0.003 billion USD (UNCTAD)

2006 Official Development Assistance

ODA (Received): 581 million USD (OECD)

ODA (Disbursed): N/A million USD (OECD)