LEARNING FROM MISTAKES / BOOK: A WHOLE NEW MIND / MARKET SUMMARY: HONOLULU / DESTINATION PROFILE: BOLIVIA Magazine of Worldwide ERC November 2017 PERSONAL TOUCH CUSTOMIZING YOUR MOBILITY PROGRAM ACCELERATING IMMIGRATION TIPS TO GET ON THE FAST TRACK RETURN ON ENGAGEMENT MEASURE IT MAXIMIZE IT EMPLOYEE CAREGIVERS CHALLENGES OF RELOCATION
DESTINATION PROFILE: BOLIVIA A rising South American economy By M. Diane McCormick and Jorge Pereira I n the pantheon of South American countries, Bolivia could be the sleeper. It s a country on an upward trajectory, full of surprises and contradictions. The landlocked nation of nearly 11 million people occupies the middle of the continent, surrounded by Brazil, Peru, Paraguay, Argentina, and Chile. Most of the population lives in a high-altitude, coolweather western plain known as the Altiplano. Another population center is Santa Cruz, on the eastern side of the Andes Mountains. Natural resources have always been Bolivia s calling card, along with agriculture and its remarkable crafts. Natural gas flows to Brazil and Argentina, in particular. Gold, silver, and tin are mined in abundance. The world s largest lithium deposits remain untapped, but those resources are buried under breathtaking scenery attractive to tourists, setting up a potential for conflict in a lithium-hungry world. From 2013 to 2016, the Bolivian economy grew by an average of 5.3 percent a year. Nominal GDP climbed from $33.3 billion in 2015 to $34.1 billion in 2016, driven by growth in financial services, construction, manufacturing, transport and telecommunications, and electricity, water, and gas distribution, according to the U.S. Embassy in Bolivia. With all this growth, Bolivia s middle class is on the rise, but here is where the contradictions come in. Growth spurred by 1990s reforms that encouraged private investment and hacked away at high poverty rates was undermined by instability in the mid-2000s. A 2005 hydrocarbons law significantly increased royalties and required foreign firms to turn over all production to the state energy company in exchange for a predetermined service fee. In 2012, the Bolivian government terminated a U.S.-Bolivia bilateral investment treaty, although the treaty covered existing investments of the time for 10 years. However, the U.S. remains one of Bolivia s top three trade partners, after Brazil and Argentina. Exports to the U.S. include silver and jewelry, crude oil, tin, Brazil nuts, and other agricultural products. WorldwideERC.org Mobility 71
DESTINATION PROFILE: BOLIVIA a katz / Shutterstock.com President Evo Morales Economic Policy Economic growth has been positive since the mid- 2000s, and even as the country strives to improve its health and development, many analysts see inherent potential in this resource-rich country. The Washington Post recently said President Evo Morales may be the last socialist standing among South American leaders. While retaining his leftist credentials with such moves as the 2008 expulsion of the U.S. ambassador and Drug Enforcement Administration, he makes savvy policy moves regarding business and economic development. Recently, Morales began advocating for government supports and laws to boost exports of Bolivian wines and the unique, beloved Bolivian brandy known as singani. He has supported private industry, such as winemakers, and reinvested revenues from soy, natural gas, and mineral exports into social and infrastructure programs. Morales and his cabinet say they encourage foreign direct investment, and the president has built up the nation s reserves of foreign exchange, a sign of financial stability that provides for shelter from the consequences of falling commodity prices. The global decline in oil prices has taken its toll, pushing down the price Bolivia receives for exported gas. In 2015, Morales passed an investment law and promised not to nationalize additional industries, in hopes of attracting foreign investment. 72 Mobility November 2017
Doing Business in Bolivia Santa Cruz, with about 1.5 million residents, is Bolivia s largest and fastest-growing city, called the economic engine of the country. Its ties to American oil companies, which first arrived in the 1950s, have helped foster institutions serving expats, including international schools and clubs. La Paz is the administrative capital, while Sucre is the legislative and judicial capital. Following proper etiquette can help ensure that expats successfully conduct business in Bolivia. Bolivians usually prefer working in person with people they know and trust, held tightly within the family and social circle. Social dealings are often formal, and business interactions even more so. Professional but friendly demeanor is a must. Begin meetings with a firm handshake, eye contact, and a smile. Introduce colleagues by their titles, and don t address anyone by their first name until they have used your first name. When Bolivians make introductions by first name to colleagues, it s a sign that the person being introduced is trusted and is being recommended for future business dealings. When speaking Spanish, remember to use the formal usted for you, and follow your contact s lead on switching to the informal tú. If the informal address never appears, there s no need to worry. Some Bolivians simply stick to the formal in all situations. Personal gifts that can be shared and talked about, such as cigars, books, art, or high-end spirits or chocolate, are customary. Being 15 to 30 minutes late for social affairs is considered acceptable, but punctuality is expected in business. Deadlines are more important to Bolivians than some expats realize, but red tape can often cause delays, and the pace of business can be slow. And one final note: Business is never completed until a formal contract is signed and notarized. It should be noted that the World Bank does not give Bolivia high marks for ease of doing business. Dealings are challenging in such areas as receiving construction permits, getting credit, and trading across borders, and Bolivia ranks 149th overall among 190 countries. However, recent reforms have improved procedures for starting new businesses and enforcing contracts. In its Corruption Perceptions Index 2016, Transparency International listed Bolivia 113th out of 176 nations worldwide. The dominant Spanish influence, dating to the Spanish conquest in the 16th century, remains evident in Bolivia s primary official language of Spanish, spoken by 60 percent of Bolivians. Other cultural seams running through the nation reach back to the Quechua and Aymara people, part of the Andean tradition lingering from the Inca Empire. With a diverse mix of peoples and ethnic groups, Bolivia has about 60 official languages, including Quechua, spoken by 21 percent of Bolivians, and Aymara, 14 percent. Santa Cruz, Bolivia WorldwideERC.org Mobility 73
DESTINATION PROFILE: BOLIVIA Matyas Rehak / Shutterstock.com Visas / Work Permits Expats living in Bolivia for work purposes must acquire a Specific Purpose Visa, or Visa de Objeto Determinado. The initial visa is good for 30 days, renewable upon request to the immigration office in Bolivia. To receive a visa, expats must submit an application, a recent photo, proof of financial solvency, a photocopy of tickets or itinerary, a passport valid for at least six months, and an employer s letter of introduction stating the purpose of travel, means of subsistence, and information on the company. Expat spouses may not work, but they may do volunteer service and, in some cases, be recognized with a remuneration not considered a wage. It s also worth noting that in February 2017, the Bolivian government announced a new requirement that foreign nationals register with the National Registry of Foreigners, as a means for Bolivian officials to know the number of expats in the country. At the time, mobility companies advised employers to make sure that any employees covered by the decree register in order to avoid adverse immigration consequences. 74 Mobility November 2017
Family / Living In Sucre, in addition to the thriving cities of Santa Cruz and La Paz, apartments are easily available, especially when acquired with help from real estate agents or inmobiliarias. Typically, Bolivia s cities and towns pivot around a central plaza that s a hub for socializing, worshipping, and accessing government offices. Homes, too, often occupy compounds where residents gather in walled, internal patios to cook, eat, and socialize. International schools based on American and international curricula can be found in Cochabamba, La Paz, and Santa Cruz. Most consumer goods, such as electronics and bicycles, can be purchased in large, open periodic markets known as mercados. In Santa Cruz, the huge Mercado Barrio Lindo sprawls with affordable furniture, clothing, and electronics, and Siete Calles Market is the place for clothing repairs and tailor-made outfits. In Sucre, Mercado Central is the place for fresh, exotic foods, plus huge bunches of flowers to serve as centerpieces for the meal. La Paz s unique Witches Market is just that the place for potions, medicinal plants, spells, and spiritual advice, offered by healers practicing Aymara folk wisdom and beliefs. La Feria de El Alto, open Thursdays and Sundays, offers everything from needles to huge truck motors, almost all secondhand, and prices are negotiable. For food, entertainment, and enlightenment, festivals abound throughout Bolivia. Santa Cruz, for example, hosts festivals almost every month, from sacred religious pageants to the January Achachairu Festival in nearby Porongo, celebrating the harvest of the achachairu, a native and much beloved orange fruit. Achachairu WorldwideERC.org Mobility 75
DESTINATION PROFILE: BOLIVIA Transportation Getting around Bolivia can be challenging. Drivers must navigate poor roads, chaotic conditions, and poor signage. Public transportation is considered affordable but not up to the expectations of the developed world. For quick, scenic transport over the mountains from La Paz to the city of El Alto, tens of thousands of riders daily rely on the new Mi Teleférico aerial cable car system. The subway in the sky has even come to symbolize Bolivia s efforts to bridge stubborn social gaps between the indigenous poor and the middle class. Health The risk of infectious diseases, including dengue fever and malaria, is very high, and active local transmission of the Zika virus has been reported as of August 2016, according to the U.S. Central Intelligence Agency World Factbook. Proof of yellow fever vaccination is required at entry. Medical facilities in large urban areas provide acceptable care, but quality can decline in outlying areas. Expats would be wise to research the private hospitals that provide better care and to make sure their insurance policies cover treatment outside Bolivia. Expats are reminded that the populous Altiplano is 12,000 to 14,000 feet (3,700 to 4,300 m) above sea level for comparison, exceeding Denver, the Mile- High City, by more than 7,000 feet. Even Bolivia s valleys average 8,500 feet (2,600 m) above sea level. 76 Mobility November 2017
Financial Matters One U.S. dollar is equivalent to almost 7 Bolivian boliviano. Monthly living expenses in La Paz can be incredibly cheap. A three-bedroom apartment in center city averages $577 a month, while that three-bedroom space in the outskirts averages $511. Fitness club membership averages $49 a month. You can buy a movie ticket for $5.69. However, expats shouldn t expect to snap up their everyday consumer goods at bargain prices. A pair of Levi s runs $72, and a pair of midrange Nikes costs $73. In addition to its relatively low cost of living, Bolivia also levies one of the world s lowest income taxes, a 13 percent flat tax. The corporate tax rate of 25 percent is 74th-lowest in the world. To open a bank account, expats need a residence permit. Finding ATMs is usually easy, especially in larger cities. Unexpected Bolivia Expats who accept an assignment to Bolivia are rewarded with a real treasure some of the most spectacular scenery in the world. Whether they re exploring the Uyuni Salta plains, the towering Cordillera Real, or vigorously protected stretches of the Amazonian rainforest, adventurous expats will find themselves in breathtaking surroundings. Indigenous Bolivians, who compose 70 percent of the population, are also passionate about preserving their culture, opening opportunities to explore wondrous musical, religious, and ancient traditions. M M. Diane McCormick is a freelance writer in Harrisburg, Pennsylvania, and a frequent contributor to Mobility. She can be reached via mobility@theygsgroup.com. Jorge Pereira is assistant director, LARM Bolivia, in La Paz. He can be reached at +591 2 2442442 or bolivia@larmgroup.com. The Cordillera Real from La Paz REPRINTED WITH PERMISSION FROM THE NOVEMBER 2017 ISSUE OF MOBILITY, PUBLISHED BY WORLDWIDE ERC WorldwideERC.org Mobility 77