Category: Geopolitics

Information about international affairs that can impact the Bolivian economy.

Peru stops importing $260 million worth of food from Bolivia

Peru’s National Agricultural Health Service (Senasa) suspended the import of agricultural products from Bolivia. It triggered concern among national producers and exporters who, according to data from the Bolivian Institute of Foreign Trade (IBCE), register an annual value of at least 260 million dollars from the sale of soy and derivatives, in addition to chia and beef.

Peru suspends imports of agricultural products from Bolivia, affecting 70% of agro-industrial exports

The Ministry of Agriculture and Irrigation of Peru, through the National Service of Agrarian Health (Senasa), decided to suspend the issuance of sanitary and phytosanitary permits for the import and international transit of products of plant and animal origin from Bolivia. The measure taken by Senasa is because there is a breach of an agreement in Bolivia (Senasag), since the beginning of 2020 to allow the entry of potatoes and onions to the Bolivian market and as a retaliation measure Peru prohibits the transit of national products to this market. Between 2010 and 2019, Bolivia exported more than 8.5 million tons to Peru for a value of $4.37 billion. The oilseed complex represented 70% of the exports to the neighbouring country in that period.

CAF-Development Bank initiative enables access to more than $800 million in CO2 reduction projects

The pending climate agenda in Bolivia opens up the possibility of accessing more than $800 million through municipal projects for the reduction of greenhouse gases and the decontamination of freshwater. A diagnosis carried out in the cities of La Paz, Santa Cruz, Tarija, Cochabamba, El Alto and Sucre, through the “Footprint of Cities” project, an initiative of the CAF-Development Bank, establishes the possibility of reducing at least 16 million tons of CO2, through projects that can implement with climate financing.

Fire in Concepción consumes 3,000 hectares and weather conditions make it difficult to control

A severe fire takes shape in the Copaibo Municipal Reserve and already mobilizes the brigades in that area near the town of Concepción. The flames have been burning for three days, and it seems that they will continue to advance because there is much wind and there will still be no rain in 10 days. The fire has already consumed some 3,000 hectares, and the causes are not known. As of this Thursday, the brigades will enter the site to evaluate the event.

Oil: WTI barrel for October delivery up 1.7%

Oil prices closed on Tuesday at their highest level since early March, with the arrival of Hurricane Laura disrupting oil activities in the Gulf of Mexico. In New York, the US barrel of WTI for delivery in October rose 73 cents to $43.35 (+1.7%). In London, the North Sea Brent barrel for October delivery also gained 73 cents to $45.86 (+1.6%).

Forest fire affects 1,700 hectares of Copaibo reserve in Chiquitanía

A forest fire that started on Sunday afternoon affected 1,700 hectares of the Copaibo municipal reserve, located in the municipality of Concepción, in the Chiquitanía, reported the Secretary of the Environment of the Government, Cinthia Asin. The fire emerged after almost a week of controlling and extinguishing the fires that affected other protected areas in the municipalities of Puerto Suarez, Puerto Quijarro and San Matías. According to the report of the Forest Fire Early Warning System (Satif), so far this month 3,093 fires have been registered.

Government and Searpi sign agreement for $1.43 mn to reforest areas affected by fires

The Ministry of Environment and Water and the Service for Channelling the Piraí River (Searpi), depending on the Government of Santa Cruz, signed an agreement in which Bs 10 million ($1.43 mn) will allocate for the reforestation of 171,000 hectares that were affected by the fires. Bs 7 million ($1 mn) will be in charge of the Government and the remaining Bs 3 million ($431,034) will be paid by the Government of Santa Cruz, through Searpi.

Some companies are willing to invest in Bolivia despite the risks

In May 2016, the government proposed an amendment to Law 767 to extend production contracts of oil and gas corporations willing to commit a minimum to $350mn to exploratory drilling or at least $500mn for exploration and production. The amendment is rolling back one of the major tenets of the sector’s 2006 partial nationalisation. In 2012, YPFB awarded exploration concessions to Petrobras (nearly 100,000-hectare area in the department of Santa Cruz) and BG Group, 453,000 hectares in Chuquisaca and Tarija. However, five regions put out to tender by the Bolivian government, with licences for Madre de Dios, La Guardia and Alegria going un-awarded in the international round (YPFB Chaco later picked them up). Some companies are willing to invest in the country’s below-ground potential despite the risks, although investment is likely to remain well below the country’s potential.

The international price of gold is close to $2,000 per troy ounce

The international price of gold is close to $2,000 per troy ounce, something that the national government considers encouraging for domestic production. Gold has become a refuge for investments for the countries’ reserves, due to the stability of its prices. The share of gold in the International Reserves of the Central Bank is 39.3%. Gold exports and commercialization reactivated in the period January to June 2020, reaching 10,203 kilos, with a gross sales value of some Bs 3.6 billion ($519.4 mn), generating Bs 54.2 million ($7.79 mn) in mining royalties.

ECLAC ratifies its forecast that the Bolivian economy will contract by 5.2%

The Economic Commission for Latin America and the Caribbean (ECLAC) ratified, this Thursday, its projection that the Bolivian economy will contract by 5.2% this year. In that line, the director stated that this organization forecasts that the Gross Domestic Product (GDP) of Latin America and the Caribbean will fall 9.1% in 2020, while the indicator in South America will fall 9.4% and in Central America and Mexico it will decrease 8.4%.