Entrepreneurship in Bolivia
Background & History
Bolivia is the largest landlocked country in the Southern Hemisphere and 7th largest landlocked country in the world. Located in Western Central South America, bordered by Brazil in the north and east, Paraguay in the southeast, Argentina in the south, Chile in the southwest and Peru in the northwest. Sucre is the constitutional capital, and La Paz is the executive capital and the seat of government. Santa Cruz de la Sierra is the largest city in Bolivia.
Bolivia has a population of approximately 11 million people, with Spanish as its official language. Prior to the Spanish invasion in the 16th century, the Western Andean region of Bolivia was part of the Inca Empire, and the northern and eastern lowlands were inhabited by various tribes. The Spanish rule ended in 1825 making Bolivia independent republic and deriving its name from Simon Bolivar the Venezuelan leader in the Spanish American Wars of Independence. Over the course of the 19th and 20th century Bolivia lost most of its peripheral regions to neighbouring countries, hence making it a landlocked nation as it is to date.
Economy
Bolivia is the fastest growing economy in South America in terms of GDP. The main economic activities in Bolivia are agriculture, forestry, fishing, mining, and manufacturing goods such as textiles, clothing, refined metals, and refined petroleum. Bolivia is very rich in minerals such as tin, silver, lithium, and copper. The Spanish empire expanded due to the silver that was extracted from the Bolivian mines.
Bolivia has the second largest natural reserves in South America, the US Geological service estimates that Bolivia has approximately 5.4 million cubic tons of Lithium, which accounts to about 50-70% of the world reserves. But mining it is a challenge as it would involve disturbing the salt flats which is an important natural attraction in the region for tourists. Sustainable extraction methods for mining lithium are being tested, as the resource an important material for batteries in Electric Vehicles. Tourism generates good revenue for Bolivia, the most visited places include Nevado Sajama, Torotoro National park, Madidi National park, Tiwanaku and the city of La Paz.
In terms of trade Bolivia exports petroleum gas and zinc ore which contribute 32% and 17% of total exports respectively. Mining minerals and non-renewable natural resources for exports to Brazil and Argentina is also contributing hugely. Agriculture contributes 13% of GDP and accounts for 30% of total employment
Entrepreneurship and Startups
In terms of Entrepreneurship development and opportunities, Bolivia lags behind compared to some of its neighboring countries. The government is promoting measures that make it easy to start and do business in Bolivia. As per the world bank doing business report 2020 Bolivia ranks 150, improving 6 places from its 2019 standing, but a long way to go to attain higher and better ranking and a suitable business environment at least in terms of the rankings.
Bolivia was branded as an unfavorable business destination once, but with the implementation of new laws regarding foreign investments, it now attracts companies to invest in Bolivia, and the country attracts more foreign investments currently, in comparison to its neighbours. However foreign companies need to manage their investment cautiously with help from local experts.
The eco system to develop entrepreneurship has huge scope, as most entrepreneurs operate their businesses informally. The 50 day period to set up a legal entity to conduct business can be daunting to anyone, hence the easier route or operating informally. To assist entrepreneurs and aspiring entrepreneurs, Social Entrepreneur Allison Silva runs a platform Bolivia Emprende through which she offers training and resources to help Bolivian entrepreneurs to conduct and grow their business formally.
Some prominent startups in Bolivia include:
Ultracasas a real estate and property listing website founded in 2015, enabling users to easily list and / or browse through various listings based on price, location and size.
TicketsBolivia an online bus ticket booking platform for domestic as well as nearby international destinations.
TodaysWeb an online website development platform
Amerpages an online business directory in Latin America with over 15 million registered advertisers.
DiscoveReel an online collaborative platform that facilitates idea validation and development through user traction and resource acquisition.
Tumomo Bolivia’s biggest and local ecommerce marketplace.
Conclusion
The government needs to ensure ease of doing business, by reforming the business registration process, which will encourage a better formal business environment. Foreign entrepreneurs have an opportunity to tap into the developing countries unsaturated market. Big opportunity lies in the sustainable mining of lithium, as Bolivia has the world’s largest lithium reserves. Agri tech sector looks promising for penetration into the Bolivian Agriculture sector.
References
Opportunities for Doing Business in Bolivia
Challenges of Doing Business in Bolivia
State of Entrepreneurship in Bolivia
