Foreign Assistance

Foreign Assistance

As the poorest country in South America, Bolivia received generous amounts of multilateral and bilateral foreign assistance. The most important multilateral lenders were the IMF, the World Bank, and the IDB, all of which furnished mostly concessionary loans. The IMF and the World Bank provided several hundred million dollars to the Bolivian government for the restructuring of the financial system, debt management, balance of payments support, the Emergency Social Fund, and various other projects. In 1988 Bolivia received US$187 million in World Bank funding under the Enhanced Structural Adjustment Facility, a new loan mechanism available only to the poorest members of the bank. The IDB, another major multilateral donor, has lent the country in excess of US$1 billion since the early 1960s for projects in infrastructure, mining, industry, agriculture, energy, health, education, and other fields. In the late 1980s, the IDB's project funding focused on repair to the Cochabamba-Santa Cruz highway, export financing, small farming projects, tax reform, and the informal sector. Other multilateral organizations present in Bolivia were the Andean Development Corporation, the United Nations, and the Organization of American States.

Bilateral overseas development agencies in the first half of the 1980s granted Bolivia an average of US$170 million a year, or about 6 percent of GDP, and the United States on average provided a quarter of grant monies. As with multilateral agencies, bilateral agencies responded favorably to the orthodox policy reforms attempted by the Paz Estenssoro government. The United States, which had provided US$1.18 billion from 1946 to 1986, remained Bolivia's single most important bilateral donor in the late 1980s. AID transferred over US$61 million to the country in 1988 and earmarked US$77 million for 1989. Over half of that assistance was directed at PLZ480 Food for Peace programs, and another third went into specific development projects. An increasing percentage of assistance was being targeted for balance of payments support in the form of Economic Support Funds. AID supported market-oriented policy reforms, assisted in narcotics control and coca eradication efforts, and funded health, education, and informal sector projects to mitigate the effects of the economic crisis. Other United States agencies, including the Drug Enforcement Administration, the Department of Defense, and the Inter-American Foundation, also provided economic assistance to the country. The Peace Corps, which was expelled by the Bolivian government in 1971, hoped to return in the early 1990s. Japan, Canada, and most West European countries also extended bilateral assistance. The Soviet Union provided Bolivia with an estimated US$204 million from 1954 to 1987.

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