Bolivia is stable but uncertainty persists.

The situation in Bolivia as of mid-2007 is clearly illustrated by the graph above. Both inflation and Purchasing Power Parity (PPP) per capita income are headed down. Growth in the rate of inflation itself (about 4.6 percent) is expected to peak in 2007 at about 6.5 percent for the full year 2007, and begin a decline through 2008 with inflation growing in that year at a 6.0 percent rate. Source: International Monetary Fund (IMF) estimates as of April 11, 2007.

Per capita income in 2006 was us$2,904, set to grow to us$3,017 in 2007, an increase of 3.9 percent-again, according to IMF estimates. The rate of growth in per capita income slackens in 2008 to 3.1 percent, or us$3,110.

Nothing dramatic appears to be happening-certainly nothing as dramatic as the spectacular (and heartening) drop in the growth of the rate of inflation between 1996 and 1997, as shown in the graph. And nothing as discouraging as the contraction of per capita income of minus 0.5 percent in 1999 is on the horizon.

There are positive developments in Bolivia. A May 18, 2007 story in Latin Finance Magazine (Coral gables, FL USA) highlights an announcement from the Inter-American Development Bank (IADB) of a loan of us$120-million to Bolivia toward construction of a highway network in the "Northern Corridor" of the country.

According to the IADB, "The project is aimed at opening up access to the isolated Amazon region of the country." This adds to other infrastructure development financed by Bolivia's revenue from hydrocarbon exports.

Bolivia's geography has long been a barrier to a sense of unity in the country, and infrastructure projects, especially all weather roads engineered to overcome the difficult terrain, are particularly welcome. Roads benefit consumers by allowing farmers, and other small to mid-sized enterprises, access to distant markets and provide a productivity incentive, which has the potential to lower prices to consumers.

In another positive development, reported in an April 30, 2007 story distributed by the Inter Press Service (IPS) (Rome) the Bolivian government has established a unit (the Ministry of Production and Microenterprise) to begin to deal with Bolivia's huge informal sector.

IPS says Bolivia's informal sector, "currently employs 83 percent of the working population." Citing an official of Bolivia's National Statistics Institute (INE) as its source, IPS said, "An estimated 800,000 productive units are now operating informally."

Such a huge informal sector not only deprives a government of tax revenue, but also hinders development and growth. "Workers are unregistered and neither contribute to nor receive social benefits."

In spite of these positive developments, and Bolivia's widely reported macroeconomic stability, a sense of disquiet emanates from the country's situation.

Several outlets consulted for this review reported "common" civil unrest with the current government unable to reconcile differences between indigenous populations.

Additionally, a separate May 17, 2007 IPS file said that foreign direct investment (FDI) in Bolivia in 2006 was only us$237-million compared with us$1-billion in the late 1990s. Quoting "experts" IPS said the low FDI jeopardizes growth of the Bolivian economy.

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