ador Robert GELBARD; Embassy at Banco Popular del Peru Building,
corner of Calles Mercado y Colon, La Paz (mailing address is P. O. Box 425,
La Paz, or APO Miami 34032); telephone p591o (2) 350251 or 350120

Flag: three equal horizontal bands of red (top), yellow, and green with
the coat of arms centered on the yellow band; similar to the flag of Ghana,
which has a large black five-pointed star centered in the yellow band

- Economy
Overview: The Bolivian economy steadily deteriorated between
1980 and 1985 as La Paz financed growing budget deficits by expanding
the money supply and inflation spiraled--peaking at 11,700%. An austere
orthodox economic program adopted by newly elected President Paz
Estenssoro in 1985, however, succeeded in reducing inflation to between
10% and 20% annually during 1987 and 1989, eventually restarting
economic growth. President Paz Zamora has pledged to retain the economic
policies of the previous government in order to keep inflation down
and continue the growth begun under his predecessor. Nevertheless,
Bolivia continues to be one of the poorest countries in Latin
America, and it remains vulnerable to price fluctuations for
its limited exports--mainly minerals and natural gas. Moreover,
for many farmers, who constitute half of the country's
work force, the main cash crop is coca, which is sold for cocaine
processing.

GNP: $4.6 billion, per capita $660; real growth rate 2.8% (1988)

Inflation rate (consumer prices): 15.5% (1989)

Unemployment rate: 20.7% (1988)

Budget: revenues $2,867 million; expenditures $2,867 million,
including capital expenditures of $663 million (1987)

Exports: $634 million (f.o.b., 1989);
commodities--metals 45%, natural gas 32%, coffee, soybeans,
sugar, cotton, timber, and illicit drugs;
partners--US 23%, Argentina

Imports: $786 million (c.i.f., 1989);
commodities--food, petroleum, consumer goods, capital goods;
partners--US 15%

External debt: $5.7 billion (December 1989)

Industrial production: growth rate 8.1% (1987)

Electricity: 817,000 kW capacity; 1,728 million kWh produced, 260 kWh per
capita (1989)

Industries: mining, smelting, petroleum, food and beverage, tobacco,
handicrafts, clothing; illicit drug industry reportedly produces the largest
revenues

Agriculture: accounts for 20% of GDP (including forestry and
fisheries); principal commodities--coffee, coca, cotton, corn, sugarcane, rice,
potatoes, timber; self-sufficient in food