Bolivia, long one of the poorest and least developed Latin American countries, reformed its economy after suffering a disastrous economic crisis in the early 1980s. The reforms spurred real GDP growth, which averaged 4% in the 1990s, and poverty rates fell. Economic growth, however, lagged again beginning in 1999 because of a global slowdown and homegrown factors such as political turmoil, civil unrest, and soaring fiscal deficits, all of which hurt investor confidence. In 2003, violent protests against the pro-foreign investment economic policies of President SANCHEZ DE LOZADA led to his resignation and the cancellation of plans to export Bolivia's newly discovered natural gas reserves to large northern hemisphere markets. In 2005, the government passed a controversial natural gas law that imposes on the oil and gas firms significantly higher taxes as well as new contracts that give the state control of their operations. Bolivian officials are in the process of implementing the law; meanwhile, foreign investors have stopped investing and have taken the first legal steps to secure their investments. Real GDP growth in 2003-05 - helped by increased demand for natural gas in neighboring Brazil - was positive, but still below the levels seen during the 1990s. Bolivia's fiscal position has improved in recent years, but the country remains dependent on foreign aid from multilateral lenders and foreign governments to meet budget shortfalls. In 2005, the G8 announced a $2 billion debt-forgiveness plan over the next few decades that should help reduce some fiscal pressures on the government in the near term.

GDP/PPP (2005 est.): $23.73 billion; per capita $2,700. Real growth rate: 3.4%. Inflation: 4.9%. Unemployment: 8% in urban areas with widespread underemployment. Arable land: 3%. Agriculture: soybeans, coffee, coca, cotton, corn, sugarcane, rice, potatoes; timber. Labor force: 4.22 million; agriculture n.a., industry n.a., services n.a. Industries: mining, smelting, petroleum, food and beverages, tobacco, handicrafts, clothing. Natural resources: tin, natural gas, petroleum, zinc, tungsten, antimony, silver, iron, lead, gold, timber, hydropower. Exports: $2.371 billion f.o.b. (2005 est.): natural gas, soybeans and soy products, crude petroleum, zinc ore, tin. Imports: $1.845 billion f.o.b. (2005 est.): petroleum products, plastics, paper, aircraft and aircraft parts, prepared foods, automobiles, insecticides, soybeans. Major trading partners: Brazil, U.S. Venezuela, Peru, Argentina, Colombia, Chile, China, Japan (2004).