La Paz

Bolivia COUNTRY

757,184 CITY POPULATION

City Council GOVERNMENT TYPE

Introduction

La Paz officially known as Nuestra Señora de La Paz, also named Chuqi Yapu in Aymara, is the seat of government of the Plurinational State of Bolivia. With an estimated 789,541 residents as of 2015, La Paz is the third-most populous city in Bolivia. Its metropolitan area, which is formed by La Paz, El Alto and Viacha, makes up the most populous urban area in Bolivia, with a population of 2.3 million. It is also the capital of the La Paz Department. The city, located in west-central Bolivia 68 km southeast of Lake Titicaca, is set in a canyon created by the Choqueyapu River. It is located in a bowl-like depression surrounded by the high mountains of the Altiplano. At an elevation of roughly 3,650 m above sea level, La Paz is the highest capital city in the world. Due to its altitude, La Paz has an unusual subtropical highland climate, with rainy summers and dry winters.

La Paz was founded on October 20, 1548 by the Spanish conquistador Captain Alonso de Mendoza at the site of the Inca settlement of Laja as a connecting point between the commercial routes that led from Potosí and Oruro to Lima; the full name of the city was originally Nuestra Señora de La Paz in commemoration of the restoration of peace following the insurrection of Gonzalo Pizarro and fellow conquistadors against the first viceroy of Peru. The city was later moved to its present location in the valley of Chuquiago Marka. La Paz was under Spanish colonial rule as part of the Viceroyalty of the Río de la Plata, before Bolivia gained independence. Since its founding, the city has been the site of numerous revolts. In 1781, the indigenous leader and independence activist Túpac Katari laid siege to the city for a total of six months, but was finally defeated. It is also the seat of the Bolivian legislature, the Plurinational Legislative Assembly, and numerous government departments and agencies. The constitutional capital of Bolivia, Sucre, retains the judicial power.The city hosts all the foreign embassies as well as international missions in the country. La Paz is an important political, administrative, economic, and sports center of Bolivia; it generates 24% of the nation's Gross Domestic Product and serves as the headquarters for numerous Bolivian companies and industries.La Paz is also an important cultural center of Latin America, as it hosts several landmarks belonging to the colonial times, such as the San Francisco Church, the Metropolitan Cathedral, the Plaza Murillo and Jaén Street. The city is renowned for its unique markets, particularly the Witches' Market, and for its vibrant nightlife. Its unusual topography offers unique views of the city and the surrounding mountains of the Cordillera Real from numerous natural viewing points. La Paz is also home to the largest urban cable car network in the world.

Data and Facts

Due to its elevation, there are only four months a year during which the temperature in La Paz is, on average, higher than 10 degrees Celsius
Despite being the home to Bolivia's government buildings and its financial centre, it's not actually the country's capital — that distinction goes to Sucre
The big bus station in the center of the tower is actually an Eiffel, as is the Museum of Contemporary Art. Although they may not be as grandiose as the big tower in Paris, they were designed by the same famous architect
At just over 3,300 meters, the La Paz Golf Club is the highest tournament standard course in the world
The clocks run backwards on the House of Congress. The massive public timepiece was configured to run backwards in order to pay homage to Bolivia’s indigenous heritage

Administration

A heavily revised version of the 1967 constitution was promulgated in 1994. According to that document, executive power is vested in a president who is directly elected by popular vote for a five-year term. If no candidate receives an absolute majority of votes, the National Congress must select the president from among the two leading contenders. The bicameral legislature consists of a 36-member Chamber of Senators and a 130-member Chamber of Deputies; members of the legislature are directly elected for five-year terms. The judicial system is headed by a 12-member Supreme Court and a 5-member Constitutional Tribunal, which decides the constitutionality of laws and resolves conflicts between the branches and levels of government. The new constitution required that judges be elected; since 1967 members of both judicial bodies had been appointed by Congress to 10-year terms.

Departments are subdivided into provincias administered by subprefects, and these provinces are subdivided into cantones administered by corregidores. Since the enactment of the Popular Participation Law in 1994, the country has also been divided into municipios , which manage 20 percent of the public sector budget; thus, many communities that had been neglected by the central and provincial governments were able to initiate much-needed public works projects.

Women have voted in Bolivian elections since 1938, but literacy and property requirements nevertheless restricted electoral participation to a tiny proportion of the population until the National Revolution of 1952, when universal suffrage was introduced. The nation’s political system is largely controlled by three political parties; numerous smaller parties ranging in outlook from conservative to left-wing also play a role in the country’s political life.

Economy

The economy of La Paz has improved greatly in recent years, mainly as a result of improved political stability. Due to the long period of high inflation and economic struggle faced by Bolivians in the 1980s and early 1990s, a large informal economy developed. Evidence of this is provided by the markets found all around the city. While there are stable markets, almost every street in the downtown area and surrounding neighborhoods has at least one vendor on it.

La Paz remains the principal center of manufacturing enterprises that produce finished-product goods for the country, with about two-thirds of Bolivia's manufacturing located nearby. Historically, industry in Bolivia has been dominated by mineral processing and the preparation of agricultural products. However, in the urban centre of La Paz, small plants carry out a large portion of the industry. Food, tobacco products, clothing, various consumer goods, building materials, and agricultural tools are produced. "The tin quotations from London are watched in La Paz with close interest as an index of the country's prosperity; a third of the national revenue and more than half of the total customs in 1925 were derived from tin; in short, that humble but indispensable metal is the hub around which Bolivia's economic life revolves. The tin deposits of Bolivia, second largest in the world, ... invite development."

La Paz’s industries are chiefly food processing and the manufacture of textiles, clothing, shoes, and chemicals. The city is connected by railways and highways with seaports in Peru and Chile and also with Argentina and Brazil. Its international airport is located above the city on the plateau.

Business Environment

With more businesses than ever expanding into Latin America and entrepreneurs taking a global attitude towards growth, more and more Western organizations are choosing markets such as Bolivia as part of their international expansion plans. Whilst not the largest or most prosperous nation in the region, Bolivia does boast a strong export market and a number of lucrative free trade agreements, which offer businesses access into other Latin American nations with higher demand and GDPs.

However, with high barriers to entry and a number of negative media headlines painting the country as difficult to invest in (one foreign entrepreneur said he waited months for permits and inspections, which meant he had to spend more money to get his business off of the ground) some have decided against expanding into Bolivia, but this increases the number of opportunities available to businesses with the right strategy and value proposition.

Bolivia is willing to increase its attractiveness as a country full of new opportunities for doing business, as it is showing interest in foreign investments and partnerships in strategic sectors such as hydrocarbons, mining, natural resources exploitation, transport, and communication. Lately, the acting president of Bolivia, Jeanine Añez, announced the initiation of removing Bolivian agro-industrial exportation restrictions set up by Morales. Bolivia currently lags behind some neighboring countries in terms of development and entrepreneurship. However, Bolivia is bouncing back on the World Bank Doing Business 2020 ranking, sitting at 150 (improving 6 places from 2019).

There is great potential for foreign entrepreneurs to step into the gaps in this developing country’s unsaturated market. Bolivia is demonstrating its willingness to become a more entrepreneurial and innovative nation in the business world. There is a growing community of young entrepreneurs helped and formed by different organizations. The goal is to give an impulse and promote innovative minds of young Bolivians to have a positive impact on their country, or ideally on the world. Since the Bolivian government is initiating the reduction of exportation restrictions, Bolivia is going to become more present in the trade market, specifically in the agricultural industry. This would allow the country to generate increased revenues which will contribute to economic growth and also present an opportunity for the government to invest back into certain sectors. Moreover, Bolivian demand for Northern American products is high, opening an opportunity for higher import volumes as well. Here we can figure out that Bolivia is going to play big in terms of trade.

The main export product of Bolivia is petroleum gas, contributing to 32% of total exports. Zinc ore follows, with a total amount of 17% of the total Bolivian exports. Bolivia’s imports are mainly cars with a percentage of 5.7% of their total imports. These are followed by the import of refined petroleum, which accounts for 4.4%. Bolivia’s mining market feeds a significant demand for large construction vehicles. This demand can be a great opportunity for investors to invest in. Bolivia is rich in non-renewable natural resources. Bolivia’s largest export sectors are mining and hydrocarbons. There is still a lot of potential in this market to grow. Next to the already mined minerals such as silver, lead, zinc, natural gas, and tin, Bolivia possesses the largest lithium reserve in the world, which is not currently being used to its maximum benefit.

Doing business in Bolivia is made easier for Northern American companies as Bolivian consumer perceptions of North American products are generally high-quality and innovative. The American brand therefore carries a lot of influence in the Bolivian market. The growing agricultural sector is the most important sector in Bolivia’s economy, contributing about 13% of GDP and accounting for just under 30% of total employment. The need for new technology in the agricultural sector will also increase. As the knowledge of technology is lacking in Bolivia, the growth of the agricultural sector in Bolivia is driving demand for greater international knowledge and technological sophistication.

Bolivia provides low cost labor for foreign companies doing business in the country. Bolivia’s workforce maintains an average salary of BS 2,122 (around US$310). Bolivia’s main labor cost advantages can be found in sectors such as manufacturing and customer service. High-value employees are available on the market. Foreign companies looking to do business in Bolivia, therefore, have greater access to experienced staff at lower prices, keeping overheads low and improving chances of establishing higher profit margins.

Infrastructure

Automobiles and public transportation are the main means to get into the city. In March 2012, more than 1.5 million vehicles were registered. Heavy traffic is common in the city center and traffic jams occur on peak hours. The La Paz-El Alto Highway is a toll road that connects the city of La Paz with the neighboring city of El Alto. It is the city's main highway. It allows easy access to El Alto International Airport. The highway runs 11,7 km and crosses the city of El Alto. The Southern District, one of La Paz's most affluent and commercial neighborhoods, is relatively separated from the rest of the city, including the CBD. The Avenida Costanera and Avenida Kantutani connect the southern district with the rest of the metropolitan area.

It also serves as a focus city for Boliviana de Aviación, Bolivia's flag-carrier and largest airline. The airport is located in the city of El Alto and is south-west of La Paz's city center. At an elevation of 4,061 metres , it is the highest international airport and fifth highest commercial airport in the world. The runway has a length of 4,000 metres . It is one of Bolivia's three main international gateways, along with Jorge Wilstermann International Airport and Viru Viru International Airport.

International carriers serving El Alto International Airport include Avianca, LATAM Airlines and Peruvian Airlines, which offer direct flights from La Paz to cities such as Bogotá, Lima, Santiago and Cusco. However, most international traffic, including flights to Europe, operated out of Viru Viru International Airport in Santa Cruz de la Sierra which is at a much lower altitude and is capable of handling larger aircraft. Airport facilities include ATMs, cafés and restaurants, car rentals, duty-free shops, and free Wi-Fi internet. It is the main gateway for inter-city buses with several daily departures to all the main Bolivian cities, and routes to Chile and Peru. The city is connected by road with the city of Oruro from where there are routes to Sucre, Potosí and the south of the country. Another highway branches off before Oruro to reach Cochabamba and Santa Cruz. Roads to the west go to Copacabana and Tiwanaku, near Lake Titicaca, and continue to Cuzco, Peru via the border town of Desaguadero. There are also roads north to get to Yungas crossing the Andes Mountains.

Departures to smaller cities and towns within the department use informal stations located in Villa Fátima , Upper San Pedro and near the General Cemetery . A system of urban transit aerial cable cars called Mi Teleférico was opened in 2014. Currently eight lines are in operation, and three more lines are in the planning stage.

Technology

Bolivia is a landlocked country in South America with a population of 11 million people and a growing economy. While investors have long been attracted to Bolivia for its natural resources such as silver, lithium, and natural gas, in recent years, the country is undergoing a digital transformation. The Bolivian government, financial institutions, and private companies are incorporating more digital technologies to bring the country up to speed with its South American counterparts. Although Bolivia has yet to develop a robust technology startup scene, new initiatives across the country are teaching the power of entrepreneurship to the next generation.

Bolivia Tech Hub is an early-stage incubator in La Paz that started in 2014. The program provides support for the city’s tech community and helps bring entrepreneurs together to collaborate and share their knowledge with the younger population. This year, the Silicon-Valley based Founder Institute officially launched a pre-seed accelerator program in Santa Cruz de la Sierra. The 200+ software development companies in Bolivia export around US$30 million per year, according to data provided by the Electronic Government Agency and Information and Communication Technologies . This number could be higher due to the unknown number of software and systems engineers who provide their services independently.Although e-commerce in Bolivia is still a developing sector, Bolivian companies that ventured online generated around US$130 million in 2017, a 68% increase compared to 2016. E-commerce presents a number of opportunities for Bolivian businesses to get in front of the large percentage of the population which has a mobile device with an Internet connection . For three years in a row, Bolivia hosted Digital Bank, one of Latin America’s most important fintech gatherings. The event was held in both La Paz and Santa Cruz de la Sierra and brought together both traditional players and startups in the banking sector to showcase their solutions in the areas of mobile payments, electronic wallet, financial education, financial inclusion, and more. Bolivian banks are aware of the importance of digital transformation and more than half have already introduced mobile banking and wallet services.6B Labs, located in Santa Cruz de la Sierra, is a three-month incubator empowering Bolivian entrepreneurs to build global companies with a focus on fintech, crypto, blockchain, SaaS, e-commerce, and mobile applications. Founded by Alejandro Rioja and Ariel Valverde, the program provides technical, marketing, and legal support to help companies launch in Bolivia and then register in the US so they can scale. In an effort to modernize and improve the country’s tax administration system, taxpayers must comply with the electronic invoicing system starting in 2019. Not only will it provide timely access to quality information but it will also help to reduce the cloning and sale of invoices.Blockchain technology and cryptocurrencies remain relatively unexplored in Bolivia. In fact, Bolivia was the first country in Latin America to ban cryptocurrencies in 2014. However, many entrepreneurs and private companies are increasingly exploring the potential of blockchain technology to eliminate some of the socioeconomic barriers that keep so many Bolivians out of formal systems. Bolivia is one of the cheapest travel destinations in the world and a popular destination for digital nomads. There’s no shortage of coworking spaces for meeting new people and getting work done. For entrepreneurs and startup teams seeking a collaborative environment to work, coworking spaces such as Cruzioworks and Central43 in Santa Cruz or CoWork Sopocachi and Squemas Cowork in La Paz are great options.Founded in 2015, Ultracasas was the first Bolivian startup to receive foreign funding, according to its COO, Camilo Eid, raising US$440K in October 2018.

Social Wellness and Human Resources

La Paz's 2020 population is now estimated at 1,857,797. In 1950, the population of La Paz was 319,640. La Paz has grown by 112,598 since 2015, which represents a 1.26% annual change. These population estimates and projections come from the latest revision of the UN World Urbanization Prospects. These estimates represent the Urban agglomeration of La Paz, which typically includes La Paz's population in addition to adjacent suburban areas.

La Paz, officially Nuestra Señora de La Paz, is the national capital of Bolivia. La Paz is the third most populous city in the country after Santa Cruz de la Sierra and El Alto. Today, La Paz is an important cultural center of Latin America. It's host to several colonial landmarks such as the Metropolitan Cathedral, the San Francisco Church, and the Plaza Murillo. About 70% of the population of Bolivia as a whole live in urban areas like La Paz. The country is made up mostly of Quechua and Aymara but there are 37 minority indigenous groups. The most commonly spoken language is Spanish at 60% but dozens of other languages are spoken.

La Paz was founded in 1548 by Captain Alonso de Mendoza, a Spanish conquistador. It was named Nuestra Señora de La Paz, or «Our Lady of Peace,» to commemorate peace after victory against Peru's first viceroy. La Paz was controlled with a firm grip by Spain, and the Spanish King had the final say on any political matters during this time. After a victory over the Spanish army in 1825 during the Spanish American wars, the city saw its full name changing to La Paz de Ayachucho .

Bolivia is South America's poorest nation. Urbanization has rapidly changed the face of the country yet 36% of the population remain in poverty. Outside of cities like La Paz, indigenous communities often lack access to sewage, electricity, and clean water. This has led many indigenous like the Aymara to move to urban centers for jobs and better access to services.