Bolivia is a country known for its great contrasts, and that reputation also applies to the country's economy. An often cited remark attributed to an early traveler is that Bolivia is a "beggar sitting on a golden throne." There is a core of truth to this comment. Its fabulous riches have often served Bolivia badly. Since independence in 1825, Bolivia has lost close to 50 percent of its national territory, including its Pacific coast, to its neighbors who coveted the riches. But Bolivia is still rich in resources. In March 2001, the excellent newspaper La Razón of La Paz stated that Bolivia has recently been identified as the country with the largest petroleum deposits in South America. It reported that Bolivia has a possible 70 trillion cubic feet of reserves, surpassing those of Venezuela. Yet Bolivia is among the 2 dozen countries in the world that has been classified as a highly indebted poor country (HIPC) by the World Bank. Bolivia is one of 8 countries that is now receiving full HIPC
Traditionally Bolivia's main economic sector was mining, and a decline in mining brought severe hardships aggravated by political instability, nationalist rhetoric, and a rapid increase in the cultivation of coca to serve as a basis for cocaine. In recent years, however, the economy has been diversified, led by increased agricultural production, especially in the fast developing eastern lowlands, with much of the output destined for export. Nearly all of the illegal coca production has been curtailed. Natural gas and oil are developing. For example, according to La Razón, exports of natural gas to Brazil increased by 170 percent from early 1999 to early 2001.
Reducing the high level of poverty is a priority of all economic and political sectors and is supported by ample foreign aid from many countries who welcomed Bolivia's economic prudence in the 1990s.