Bolivia is a resource-rich country that boasts substantial reserves of zinc, silver and lithium. More important, though, are its hydrocarbons: In 2014, oil and natural gas exports accounted for 54 percent of Bolivia's total export revenues and 8 percent of the country's GDP. Natural gas, Bolivia's most strategic resource, made up the bulk of these revenues.
Much of Bolivia's natural gas resources and infrastructure are located in the eastern lowlands, the country's agricultural and economic core. Traditionally, whoever controls Bolivia's lowlands also controls the country's primary profit center.
In the past decade, Bolivian President Evo Morales' ability to consolidate power in the country's east — and by extension, over its natural gas resources — has enabled him to pursue his populist-driven agenda of nationalizing the country's energy and mining industries. Since 2006, Bolivia has managed to sell its natural gas to its primary consumers, Brazil and Argentina, for increasingly high prices. Morales reinvested some of those energy revenues into social packages that benefited his political constituents, gaining enough backing to win both the 2009 and 2014 presidential elections.
But Bolivia's natural gas-driven boom has begun to slow, which will limit Morales' options in the coming years. Over the past decade, Bolivia ramped up its natural gas production to meet growing demand in Brazil and Argentina. However, the global decline in commodity prices, due in part to China's dwindling demand amid its own economic slowdown, has put pressure on the Brazilian and Argentine economies and cut back on their demand for Bolivian natural gas. As a result, Bolivia's natural gas exports amounted to just $2.1 billion between January and June, a drop of more than $1 billion compared with the same period in 2014.
