Since Evo Morales came to power in 2005, Bolivia has gone through noteworthy changes in its political and economic policies, the most drastic of these being the nationalisation of the natural gas sector. Morales also made the fight against corruption a key campaign issue in 2005 and declared a zero tolerance apporach against corruption. His administration has introduced new anti-corruption legislation and set up the Ministry for Institutional Transparency and the Fight Against Corruption (in Spanish) aimed at countering corruption within public administration. In principle, Bolivia offers the necessary conditions for a well-functioning private sector where foreign companies can operate freely. However, according to many sources, in practice Bolivia remains a difficult place to do business, especially due to rampant corruption and state intervention in a number of sectors.
Positive developments in relation to corruption and investment:
- Focus on public sector corruption has increased in recent years, while legislation and several reforms aimed at curbing corruption have been introduced by previous governments.
- With the establishment of an Anti-Corruption Ministry in 2009, a National Policy for Transparency and the Fight Against Corruption has been outlined with the aim of increasing transparency in the public sector and developing a culture of zero tolerance towards corruption.
- In March 2010, President Morales signed the Law against Corruption, Illicit Enrichment, and the Investigation of Assets (in Spanish), which will hold former presidents and officials accountable for past acts of corruption. This initiative allows for a retroactive prosecution of former government officials and establishes procedures to monitor state resources.
Risks of corruption:
- Companies express deep concern about corruption in the customs services, which is characterised by arbitrary decisions and inefficiency.
- Tendering procedures have for many years been subject to accusations that political supporters of the government are being favoured in the bidding process and of politicians receiving kickbacks from these contracts.
- Disputes with tax authorities are mentioned as difficult to settle, as well as disputes with workers and the state over the interpretation of Bolivian labour laws. It is common for companies involved in such disputes to be asked for a bribe by a court official in return for a favourable ruling.