Bolivia watch: highway completion, Fitch outlook

Bolivia is about to finish several key highways, as President Evo Morales is scheduled to open the US$90mnTrinidad-San Ignacio de Moxos highway in Beni department on July 31, governor Alex Ferrier said.

The 70km road will link the northeastern jungle with neighboring La Paz department in the central highlands, state news agency ABI reported.

At the same time, work is nearing completion on the 74km Caracollo-Confital highway linking Oruro and Cochabamba departments, state highway agency ABC said. Built by China’s Nanjing Group, the road is 90%-complete, ABC manager Edwin Gonzales said.

“We’re working on the final kilometers of this road which will integrate Bolivians and is part of the bi-oceanic corridor that links us to several countries,” Gonzales said in a statement.

Morales has launched some major infrastructure initiatives in recent years, including the Cochabamba railway, Puerto Busch port, regional airports, highways and hospitals. The government, which allocates about US$2.5bn/y to infrastructure projects, plans to earmark US$6.5bn to public spending in 2019, according to the finance ministry.

OUTLOOK

Fitch Ratings, however, cut Bolivia’s outlook to ‘negative’ from ‘stable,’ citing falling hydrocarbons revenue and output, a rising fiscal deficit and a decline in central bank international reserves.

Bolivia’s economy faces risks from “low per capita income and governance scores, high commodity dependence, and a weak private investment climate rendering growth reliant on expansive policies,” Fitch, which maintained its ‘BB-’ sovereign rating for Bolivia, said in a report.

The ‘BB-’ rating is three levels below investment grade.