Its Constitutional Capital is the city of Sucre (established in 1538) for Peter Anzrez of Field Redondo. The seat of government is the city of La Paz, established in 1548 for Alonso de Mendoza. Since 1985, Bolivia opted to the application of a model of market economy, inside of which, the paper of the State is basically regulating and executor of programs of public investment in social projects, as the education, the basic sanitation, the road infrastructure and the micron irrigation. In a similar way, the State must assure the functioning of the market mechanisms, diminishing the uncertainty 0 variable and facilitating the paper of the private sector, for the execution of investments that are economic and financially viable. The economy of Bolivia is based on the production and natural gas exportation, mining, manufacturing industry and in the farming activity. Source: Small Business Finance Exchange.
Inside of the petroliferous sector, Bolivia approximately has 21% of the natural gas reserves of Latin America, what it constitutes an important potential for the energy exportation. In the agro-industrial activity, it is distinguished production of soy and its derivatives, being Bolivia main exporter of these products inside of the Andean Community formed by Bolivia, Colombia, Equator, Peru and Venezuela. Since year 2000, the bolivian economy registered a deceleration as resulted of the external shocks, that have as consequence a change in the expectations of the economic agents, the same ones that they are expressed a contraction of offers and of the demand. The economic growth of Bolivia during year 2002 was of 2,75%, the inflation tax reached 2.45% and the depreciation of the national currency front to the North American dollar was of 9,8%. In relation to the market opening, Bolivia has an open economy and counts on a system of tarifrias taxes simplified. The exportations of Bolivia during year 2002 had been of US$ 1,4 billion and the importations had been of the US$ order 1,8 billion, being its main commercial partners Brazil, Switzerland, the United States, Colombia and Venezuela. .
