ILO and ITC analyse the sectors in Bolivia with greater potential for export growth and job creation after the pandemic
Exports of animal and plant products, and to some extent also of wood and paper products, showed the most resilience during the COVID-19 crisis and the highest growth during the recovery phase.
La Paz — Considering Bolivia's trade patterns and the global changes caused by the pandemic, a recent study carried out by the ILO and the International Trade Centre (ITC) seeks to determine the sectors and markets with the greater growth potential for the country's exports.
Although the COVID-19 pandemic affected Bolivian exports strongly in 2020, the rapid recovery in the first eight months of 2021 made them surpass pre-pandemic levels.
“Results projected for 2025 indicate that, even taking into account the effects of the pandemic, there is ample potential for growth for Bolivian exports. This potential is associated with existing frictions in current trade and expected growth in the next few years.Chandni Lanfranchi, Technical Officer for SME development and formalization
According to the study, 70% of the growth potential in exports is concentrated in eight main products: oilcake of soya-bean oil, crude and refined soya-bean oils, unwrought tin, shelled Brazil nuts, undenatured ethyl alcohol, dried or fresh bananas, and some types of jewellery of precious metal. For Brazil nuts and refined soybean oil, the room for growth in exports lies mostly in existing markets, while for the remaining main products, growth could occur mainly through market diversification.
The remaining 30% of growth potential is spread across multiple sectors. For example, peanuts, sesame, and chia seeds have the potential to increase their exports significantly.
Likewise, growth potential is identified in exports of cereals and legumes. In the case of cereals, this refers to, among others, Andean grains (quinoa, kiwicha and cañihua).
Lastly, the study also highlights the promise that the sector of apparel of fine hair holds to diversify apparel exports to higher value-added segments. Bolivia has the largest population of llamas and the second largest population of alpacas in the world. This places the country at an unparalleled comparative advantage, despite low productivity records in fibre extraction in the past and the strong effect the pandemic had on the apparel industry globally.
Impact of export growth on job creation
Export growth can have a very different impact on total employment depending on what sector increases its exports. In the case of Bolivia, the sectors with the greatest potential to generate employment in the entire economy per dollar of exports are cereals, fruits, and meat.
If the potential for export growth mentioned earlier fully materialized, the resulting job creation would be at most of 402,487 new jobs. 10% of them would be generated directly in the sectors that increase their exports, while 29 and 61% would be created in other sectors due to the associated increases in the demand for inputs and final demand, respectively.
Among the eight products with the greatest potential for growth in exports, products derived from soybeans would be the ones to generate the most employment. This would not occur in their own sector, since more than 98% of new employment would be generated through the higher demand for inputs and higher final demand.
In contrast, Brazil nuts and bananas are likely to generate more employment directly but to have fewer effects outside their own sector.