Bolivia's economic reform and investment climate (with David Weston, David Gura)

Bolivia's new president Rodrigo Paz aims to reform the economy, attract foreign investment, and develop lithium reserves. However, violent protests, fuel subsidy cuts, 14% inflation, and political instability create a challenging environment. Investors are cautious but some see opportunity in bonds.

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Bolivia 2.5
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Rodrigo Paz 6.5

Bolivia's economic reform and investment climate (with David Weston, David Gura)

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Bolivia is a small frontier market with high political risk and protests. The uncertainty and instability suggest no clear directional move for small-cap indices like the Russell 2000 in the short term.

David Gura

Introduces Bolivia's new president Rodrigo Paz, elected after two decades of socialist rule, with a mandate for economic reform and closer US relations.
Rodrigo Paz

Bolivia possesses the highest concentration of minerals in the world but generates only $6 billion annually, compared to Peru's $50 billion and Chile's $65 billion. 'Why do we choose to be poor?'
David Gura

Describes violent protests and blockades in La Paz, with protesters calling for Paz to resign. The interview was postponed due to the crisis.
Rodrigo Paz

In 5 years, Bolivia will be an advanced nation with new institutions, a frontal assault on corruption, controlled fiscal deficit, and an open economy governed by clear laws.
David Gura

Paz has public support from the Trump administration. Secretary Rubio stated the US stands squarely in support of Bolivia's government.
Rodrigo Paz

Bolivia's vision is pragmatic. We will collaborate and be part of a global vision.
Hans Humes

Markets give a positive tailwind when a right-of-center government comes in. Bolivia's bond sale raising $1 billion was a good signal. The commodity story is compelling.
David Gura

Doing business in Bolivia has not been easy. Lithium plant runs at 15% capacity. Contracts with Chinese and Russian companies haven't been ratified.
Jorge Chow

Foreign investors are wary that their rights won't be respected. Bolivia left the ICSID convention and was reluctant to enter international arbitration agreements, giving investors pause.
David Gura

Asks what needs to happen in a year for Bolivia to get on track.
Hans Humes

They need to see results. Pulling away subsidies was the right thing but poorly managed. Paz should have negotiated timing and slow-walked it. He didn't have the national support that a leader like Malay had.
David Gura

Asks what Paz would say to prospective investors about Bolivia's current welcoming stance.
Rodrigo Paz

We were promised 20 years of becoming a Switzerland. Instead, they left a shattered economy. We possess abundant hydrocarbon reserves but lack investments and security. We need clear rules and laws for a safe investment environment.
David Gura

Bolivia held its first dollar-denominated bond sale in almost 5 years. Asks Humes what it would take for him to invest personally.
Hans Humes

We own some bonds. I'm not going to buy a lithium mine. Risk-reward is tricky but the macro story is good. I'll keep the focus there.

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