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51. Pension Reform in Bolivia: A Review of Approach and Experience

Author:
Federico Escobar and Osvaldo Nina
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
The Bolivian pension reform eliminated the old publicly managed pay-as-you-go system and introduced a fully-funded system. The pension reform was highly influenced by the Chilean reform, adopting a second pension component pillar, based on contributions to individual accounts in pension funds, which are managed by decentralized pension-fund management companies and regulated and supervised by the government. Moreover, the new system has followed the substitutive model, where all contributors to the old system, with no exceptions, were automatically transferred to the new one, while those already retired under the old system continued to receive their pensions from the government. The unique feature of the Bolivian pension reform program was its link to the Capitalization. Under this process the six principal state-owned enterprises were capitalized by foreign companies, and the Bolivian government retained 50% of the shares in the capitalized companies. These shares went into a Collective Capitalization Fund, which is managed by the new pension funds, and the dividends are used to finance the BONOSOL program, which is a universal old age income support to all Bolivians 65 and older.
Topic:
Economics, Reform, Public Policy, and Pension
Political Geography:
South America and Bolivia

52. Regional Integration and Poverty: A Case-Study of Bolivia

Author:
Osvaldo Nina and Lykke E. Andersen
Publication Date:
10-2004
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
This paper investigates the impacts of regional integration processes on poverty in Bolivia. It first demonstrates that regional integration has stimulated a diversion of trade away from traditional US and EU markets towards countries of MERCOSUR and the Andean Community. At the same time, the composition of exports has changed from predominantly minerals towards slightly more elaborated goods, such as vegetable fats, food and beverages. The paper presents econometric analyses of the impact of imports, exports and FDI (by sector, and trade block) on individual labor incomes and household poverty status. The results show that higher exports generally tend to benefit the workers who work in the exporting sectors. However, this result only holds for export sectors that exploit some natural resource rents (mining, hydrocarbons, modern agriculture), and not for those which rely purely on low wages in order to be competitive (most manufacturing sectors). Imports typically have a negative effect on worker salaries, except the imports of capital goods, which do not compete with local production. This implies that the change towards more regional trade of goods with a smaller natural resource rent component is unlikely to contribute to a reduction in poverty. For exports and FDI to be helpful for reducing poverty, they would have to focus on sectors, which are labor intensive and at the same time exploit some natural resource rents. Sectors that might fulfill these criteria are modern agriculture and tourism.
Topic:
Development, Poverty, Economy, and Regional Integration
Political Geography:
South America and Bolivia

53. Employment-Poverty Linkages and Policies: The Case of Bolivia

Author:
Luis Carlos Jemio and Maria del Carmen Choque
Publication Date:
11-2003
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
This study focuses on analysing the linkages between output growth, employment and poverty, at both the macro and micro levels. At the macro level, the linkage between poverty and output growth is conceptualised in terms of the average productivity of the employed work force, which in turn gets reflected in low levels of real wages and low levels of earnings in self-employment. At the micro level of a household, the same linkage between poverty and employment operates through the type and productivity of economic activities in which the earning members of a household are engaged, the low level of human capital of the members of the workforce, the dependency burden that limits participation in the workforce, and the availability of remunerative employment.
Topic:
Development, Economics, Poverty, Labor Issues, and Employment
Political Geography:
South America and Bolivia