income of the bottom 40 per cent of the population increased by 15 per cent per year between 2002 and 2011, three times higher than the average income growth. This is at the root of the strong poverty reduction that passed from 63 per cent of the population in 2002 to about 43 in 2012, while extreme poverty fell from 37 per cent in 2002 to 21 per cent in 2012. The Gini coefficient1 has also decreased from 0.60 in 2002 to 0.47 in 2012. In this context, after winning the Octo-

 Some 10,000km of Bolivia’s primary road network is either gravel or dirt roads

work; delivering routine maintenance on the whole of the primary road network. The first and last elements have received most attention in the past few years, while ABC is seeking to balance its focus with attention to the second element of the strategy. Of the primary 16,000km road network

more than 6000km are paved, while the remainder is either gravel or dirt roads. Bolivia’s highway network is not yet “mature” and still requires significant devel- opment to address the mobility needs of the country’s remote areas. However, in the past seven years, the paved part of the pri- mary road network has expanded by about 2,000km, a development that in a relatively short period has absorbed the doubling of allocations to the road sector, in nominal terms, between 2006 and 2013. In 2013, about US$550 million of treasury alloca- tions went to roads. A concerted effort is underway to build

up the part of the road network designated as Corredor Bioceanico, connecting Brazil to the ports of Arica and Iquique in Chile in the west, by a road connection through Bolivia via two corridor entry points in the east of the Department of Santa Cruz: San Matias (northern corridor) and Puerto Suarez (southern corridor). This project, if successful, will benefit the

population in the area by providing better local connectivity and transit traffic facili- tation. The government is now focused on a larger effort to build up the Corredor Bioceanico. The World Bank is financing this because it wants to eliminate extreme pov-

erty and boost the welfare of the bottom 40 per cent of the population – in direct and indirect ways.

THE ROAD TO SUCCESS At the most direct level, employment oppor- tunities are created in road rehabilitation works. Moreover, improving the quality of sub-standard highway and bridges will reduce time and costs associated with trans- portation, resulting in more trips of less dura- tion along the improved corridor connector, as well as lower prices for the transportation of goods. The project is expected to gener- ate multiplier effects in the local economies particularly through forward linkages, which often include the spending of earnings dur- ing construction in food outlets and shops located at project sites. Bolivia has taken advantage of a dec-

ade of high commodity prices to generate strong growth and build robust macro- economic indicators. Boosted by gas and mining exports – linked to massive earlier investment – as well as by rapidly increas- ing public investment, growth has aver- aged around 5 per cent per year since 2004. Good economic performance has

allowed for a substantial reduction of pov- erty and inequality. Higher commodity and food prices and a dynamic domestic demand allowed for a rapid increase of rev- enues and a reduction in unemployment, both in rural areas – where most of the poor are located – and for non-tradable sectors in urban areas, particularly those engaging low-skilled workers. As a result, the average

ber 2014 general election with over 61 per cent of the votes, President Morales began his third five-year mandate in January 2015. The ruling party has also ensured a two- thirds majority in the Legislative Assembly. In August 2013, the Government presented the ‘ 2025 Patriotic Agenda’ , which aims to eradicate extreme poverty and translating growth into ‘ living well’ , a country-specific measure of shared prosperity. Despite these positive results and reduc-

tions in poverty and inequality, Bolivia still faces numerous development challenges. The country still has one of the lowest GDP per capita levels in the region while other social indicators, which have improved since the 1990s, are still below those in neighboring countries. High export con- centration makes economic growth, and the fiscal and external balances, vulnerable to the decline in commodity prices. In fact, the fiscal balance is expected to turn into a deficit in 2014, for the first time since 2006 while the current account surplus declines. Despite strong public investment,total investment remains low, thus also affecting growth prospects as private investment is among the lowest in the region, despite the exceptional recent history.

Gordon Feller is the Co-Founder of Meeting of the Minds, a global thought leadership network and knowledge-sharing platform focused on the future of sustainable cities, innovation and technology

Meeting of the Minds 2017 dates announced: events/motm2017


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