Bolivia’s country risk has increased by more than 600% | Riesgo país de Bolivia creció más de 600%

By El Diario:

In the last 5 years

  • The tourism sector is setting the path to generate $5 billion and over one million jobs.
BOLIVIA URGENTLY NEEDS TO GENERATE REVENUE, AND FOR THAT, THE GOVERNMENT MUST SHIFT ITS FOCUS FROM INCENTIVIZING ONLY THE EXTRACTIVE POLICY AND LOOK AT OTHER SECTORS.

Bolivia’s country risk on February 19, 2020 (five years ago) was only 275 points, but by December 31, 2024, it had risen to 2,087 points. From March 15, 2023, the indicator surpassed the 1,000-point mark, reaching 1,033 points, coinciding with the beginning of the currency crisis, which led to a shortage and illiquidity of dollars in both the public and private sectors, causing the exchange rate to rise in the parallel market.

The lack of fuel, dollar shortages, historic inflation, and the implementation of the ban on beef exports, along with criticism of the lithium contracts the government signed with Russian and Chinese companies, have damaged the country’s credibility and created uncertainty about private investments, contributing to the rise in country risk.

“Ranking at the regional level, Venezuela undoubtedly holds first place with a country risk of 17,813 points, followed by Bolivia with 2,021 points, and Ecuador in third place with 1,319 points. The countries with the lowest risk for investment are Uruguay (86 points), followed by Chile (120 points) and Peru (151 points). Globally, the average is 283 points, and in Latin America, it is 412 points,” explained analyst Fernando Romero.

Bolivia has not always had such a high country risk, nor did it rank second in the continent. In previous years, its EMBI index was below 100 points. However, since 2023, due to the government’s solvency and liquidity issues, this indicator has worsened, eroding confidence in the repayment of external debt.

TOURISM AS AN OPTION

Given this scenario, providing strong incentives to tourism could generate $5 billion annually and create jobs for over a million Bolivians, provided there is legal security and an open-skies policy, according to discussions at the Strategic Tourism Planning Summit held yesterday by the Bolivian Chamber of Tourism (Cabotur).

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