Bolivia : The Hydrocarbons Boom and the Risk of Dutch Disease

Author/Editor:

Eugenio M Cerutti ; Mario Mansilla

Publication Date:

June 1, 2008

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The hydrocarbons sector has become one of the most dynamic economic activities in the Bolivian economy and the main driver of improved export performance and international reserve accumulation. The central role of the hydrocarbons sector in the economy is attributable to the high levels of investment made in the late 1990s, which permitted much higher production levels, particularly of natural gas. However those positive developments in the hydrocarbons sector have given rise to the possibility of a new case of "Dutch disease." While Bolivia's economy has already seen many benefits from its higher gas exports, especially in terms of lower external vulnerability and improved fiscal stance, the new resources could also limit the development of other economic sectors in terms of output and factor income. This paper explores the transmission channels of Dutch disease, as well as its main symptom, the appreciation of the real exchange rate

Series:

Working Paper No. 08/154

Subject:

English

Publication Date:

June 1, 2008

ISBN/ISSN:

9781451870121/1018-5941

Stock No:

WPIEA2008154

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

20

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