This page should give the reader a better understanding of the various industries that involve the residents of La Paz and the surrounding regions, such as Manufacturing, Mining, and Farming. There are many other industries and sources of employment, of course, which are not mentioned here. One such up-and-coming industry is that of tourism. As Bolivia has become more stable in recent years, tourists have started to flock to this country and its grand primate city to experience authentic Bolivian culture. The more stable economy has also allowed for more infrastructural improvements to take place.

La Paz has struggled to bring in industry to employ the masses of people that live within its boundaries. This has been difficult, due to the poor state of the economy and lack of infrastructure such as machinery. Despite these hardships, La Paz remains the principle center of manufacturing enterprises that produce finished-product goods for the country, with about two-thirds of Bolivia's manufacturing located nearby. (In general, Bolivia has a very small manufacturing sector.) The majority of the industries focus on food processing, textiles, and other basic consumer goods.

"The manufacturing sector which currently accounts for 14% of GDP is under-developed and mainly serves the domestic market, with few products save canned produce, leather goods, clothing, shirts, beer and soft drinks destined for export. Manufacturing does have tremendous potential given the country's access to natural resources offering industry a good supply of raw materials, competitively priced energy, and relatively cheap labor.  Industrial output doubled in the period 1990-1995 according to figures released by the National Institute for Statistics." - (American Chamber of Commerce of Bolivia)

Historically, industry in Bolivia has been dominated by mineral processing and the preparation of agricultural products. However, in the urban center of La Paz, small plants carry out a large portion of the industry. Food stuffs, tobacco products, clothing, various consumer goods, building materials, and agricultural tools are produced. Numerous workshops (laboratories) are engaged in processing and refining cocaine. While cocaine is considered illegal in Bolivia, drug trafficking has provided a huge addition to the country's gross national product. (An estimated $5 billion worth of cocaine was exported yearly in the early 1980's alone.)

The largest factories in La Paz are the Cervacería Boliviana Nacional S.A. brewery that produces beer for the rest of the country and a huge mineral water company called Mineragua. Both of these companies export goods, too.

 "The tin quotations from London are watched in La Paz with close interest as an index of the country's prosperity; a third of the national revenue and more than half of the total customs in 1925 were derived from tin; in short, that humble but indispensable metal is the hub around which Bolivia's economic life revolves.  The tin deposits of Bolivia, second largest in the world, ... invite development." (Marsh 1) 
This quote from a book published in 1928 shows the importance of mining, and in particular, of tin in the economic development of post- colonial Bolivia.  Mining has provided the most money income, exports, and government revenue for the country. La Paz benefited from the country's tin revenues in the form of increased rail and road transportation, thus connecting the city to the surrounding regions.  Tin is principally located in the northern region of the Altiplano, just outside of La Paz. Tin production peaked in the mid-1940's, with a high of just over 43-thousand metric tons being exported, nearly 20 percent of the world's supply of tin. Before the end of the nineteenth century, silver was Bolivia's principal mineral product, though.

However, mining did not come easy for Bolivia, as the mines, mainly shaft-mines in the Andes regions, are all above 14,000 feet in altitude, necessitating the use of large amounts of cheap labor.  The costs of development, maintenance, and transport of materials to and from the mines are very high, compared to more accessible pit-mines in other countries. As a result of these types of mines, large, internationally-funded mining corporations have established themselves in the area.

The collapse of the world market in tin in the 1980's was a major downfall in the Bolivian economy. Since then, natural gas has become the country's leading export. Other minerals, as well as tin, still account for a large portion of the country's export trade.

Most of the indigenous peasant people who practice agriculture on the Altiplano are primarily subsistence farmers.  Most of their effort is dedicated to growing enough for themselves and their families to eat, not for export or trade.  Many still use their own, hand-made tools.  Any surpluses are traded for other necessities in La Paz, or sold in street markets.  The Altiplano is actually extremely difficult for agriculture, yet this was the area that was first highly developed in the seventeenth century into a complex system of haciendas. 

The lands near Lake Titicaca, just North of La Paz, have the richest soils and grow the majority of the country's temperate crops.  The two most important crops for the peasants' livelihood are the potato, a native of the High Andes, and quinoa, a grain crop related to millet.  "The indians make a kind of soup out of this grain, and they also distill it to make chicha, the indigenous intoxicating beverage." (Alexander 20)  Small quantities of wheat, barley, and oca, an indigenous tuber, are also grown.

Most farmers are also herdsmen, with the primary animals being the native alpaca and llama, as well as sheep.  The indigenous people use the animals for labor, wool, and occasionally meat.  The animals are prized and people are judged based on their herd sizes, so slaughtering them is not very popular.

Agrarian reform in the 1950's led to the redistribution of land from large, private landowners to the peasants.  This allowed for more freedom of work, but also caused a decline in the surpluses available in urban centers.  The idea of farming principally to grow products for sale has spread only slowly on the Altiplano.  In addition, little has been done by the governmental authorities to develop facilities for marketing the peasants' produce or to warehouse it. 

Wages and salaries vary depending on the worker's educational level and skills. The minimum wage is approximately US$45 per month. The wage will depend on the geographical location (rural or urban) and on the skill level required for the job. The average number of residents per household in the urban area is of 4.35 people, with an average income per household of US$122.8 per month. 

Source: Instituto Nacional de Estadistica, 1995.

Currency Stability

The Bolivian peso has remained stable following the introduction of free market economic reforms in 1985. The peso is undergoing a slow process of devaluation which has taken it from 3.77 pesos per US dollar in January 1992 to 5.66 pesos per US dollar in January 1999. The 4.39% rate of inflation reported for 1998 is the lowest since 1971. (In 1981 the inflation constantly grew at a rate of 1000% every day!)  The rate of inflation also now stands below the 4.7% rate of GDP growth, for the first time since 1975. Bolivia's Gross Domestic Product is US $23.1 billion, with a GDP per head of US $3,000.

Current Investment Climate

"Bolivia's novel capitalization program (50% partial privatization) is having a better than expected effect on foreign investment inflows. Since 1995, nine international companies and consortia have 50% partially privatized state-owned companies for electricity, telecommunications, the national airline, the railways and the oil & gas sector's production and transport divisions." - from the American Chamber of Commerce of Bolivia

• Bolivia Business Online - Statistics Page
• American Chamber of Commerce of Bolivia