Backing for strengthening Bolivian business competitiveness

The Bolivian government and the CAF signed a loan agreement for $75 million to strengthen the country´s productive and financial sectors.

The Andean Development Corporation and the Bolivian government signed an agreement for a financial operation totaling $75 million for the Competitiveness Strengthening Program in the Bolivian productive and financial sectors. CAF Executive President Enrique García and Finance Minister Javier Cuevas participated in the signing ceremony. President of the Republic Carlos Mesa was witness of honor at the signing.

CAF Executive President Enrique García said that this operation supports Bolivian efforts to build mechanisms to protect national wealth by strengthening viable enterprises that need to improve their solvency, liquidity and degree of competitiveness.

He explained that the Competitive Strengthening Program contributes to the reactivation of the productive base through capital and financial strengthening of companies; development of actions to improve their business environment and competitive profile; support for the government in restructuring viable but financially troubled productive units; and development of a more dynamic, efficient and competitive export sector.

The CAF chief executive said that the program has four objectives: first, to assist compliance with the production pacts between the government, private sector and other leading actors in an effort to eliminate obstacles that limit the competitiveness of the productive chains; second, to strengthen national productivity and competitiveness in an effort to stimulate market penetration, investment promotion, quality certification, among others.

The third objective is to develop a system for pre-incubation of companies aimed at strengthening the entrepreneurial spirit in universities, and technical and micro-entrepreneurial training centers. Lastly, the program promotes the creation of a system of competitiveness indicators to monitor relative competitive development in municipalities and departments (provinces).

The financing approved by the CAF is destined for three components of the program: 1) $50 million to set up a Capital and Financial Strengthening Fund for companies that have begun voluntary restructuring processes; 2) a $23-million line of credit to finance programs for viable non-restructured companies; 3) a $2-million loan to raise company competitiveness.

The funds for the first two components will be channeled through the Nacional Financiera Boliviano (Nafibo), and the third through the Ministry of Economic Development.

In the 1998-2003 period, the CAF approved operations for Bolivia for a global amount of $2.11 billion to finance projects related to infrastructure, social and institutional development, assistance for productive sectors including small- and micro-enterprises, and commerce and working capital programs.