BOLIVIA PROGRAM FOR IMPROVING CENTRAL BANK REPORTING AND PROCEDURES ON REMITTANCES SEPTEMBER 2010

C E N T R O D E E S T U D I O S M O N E T A R I O S

BOLIVIA

ON REMITTANCES

SEPTEMBER 2010

www.cemla-remesas.org

PROGRAM FOR IMPROVING

CENTRAL BANK REPORTING AND PROCEDURES

ON REMITTANCES

PROGRAM FOR IMPROVING

CENTRAL BANK REPORTING AND PROCEDURES

ON REMITTANCES

BOLIVIA

CENTER FOR LATIN AMERICAN MONETARY STUDIES

MULTILATERAL INVESTMENT FUND OF THE

First English Edition, 2010

Also published in Spanish

Derechos exclusivos es español conforme a la ley © Centro de Estudios Monetarios Latinoamericanos, 2010

Durango 54, México, D.F. 06700 ISBN 978-607-7734-13-0

Printed and made in Mexico

Foreword

The importance of international remittance flows to Latin American and Caribbean economies has increased substantially, both in terms of macroeconomic stability given the magnitude of these capital inflows, and of economic development in view of their impact on financial inclusion and poverty alleviation.

The Center for Latin American Monetary Studies (CEMLA), with the support of its central bank members, has played a proactive role in the field of remittances. The organization of several capacity-building and technical assistance events by CEMLA, has clearly shown central banks interest in obtaining improved information on the size and characteristics of these flows.

More reliable data is needed to have a proper understanding of the market structure for remittances and the behavior of involved agents. Such information allows to foster the implementation of policies and regulations aimed at reducing the cost of money transfers, providing greater security and transparency, and avoiding unsuitable practices that may deter an efficient development of the market.

In mid-2004, CEMLA and the Multilateral Investment Fund (MIF) began designing a program aimed at improving the statistical measurement of international remittance flows. MIF’s financial contribution was approved by its Donors Committee in February 2005 under the title “Improvement of Central Bank Information and Procedures in the Area of Remittances’’ (RG-M1059). In April of the same year, CEMLA’s Board of Governors meeting in Cartagena, Colombia, formally approved the Center’s participation as executing agency for the project. The institutional arrangements for the Measurement Program (as it is referred to) comprise a Working Group on Remittances (WGR) formed by experts from central banks in Latin America and the Caribbean, and a Remittances International Steering Committee (RISC) comprising experts from extra-regional central banks and international organizations. Twenty-three of CEMLA’s thirty regional central bank members signed up for the project.

The first phase of the project identified limitations on the availability and quality of data on remittances markets and flows, thus serving as the starting point for the design of the Program. Some of the detected shortcomings were: i) the absence of an agreement on basic balance of payments definitions; ii) a lack of precision in measuring the flows; iii) insufficient compilation of statistical data via direct reporting; iv) a deficit of information on the structure of international remittance operators, and v) the need to clarify regulatory and jurisdictional aspects applicable to the providers of these services.

In view of the above, the Program seeks to improve central bank data and procedures in the area of remittances, evaluating and recommending steps to lift the foregoing restrictions. In addition, the Program is expected to contribute to: the use of formal remittance transfer systems by originators and beneficiaries through financial literacy campaigns; cost transparency among regulators in both originating and beneficiary countries; a better understanding of the microeconomic dynamics in remittances markets; and the dissemination of best practices and lessons learned from the studies that were carried out in the region.

In the pursuit of these objectives, the Program includes Country Missions for the analysis of different aspects pertaining to the measurement of remittance flows and the functioning of this market. Deliverables include public reports describing central bank procedures and other relevant aspects of the remittances market. In addition, the Program contemplates the organization of sensitization events, training courses and technical assistance. These activities all benefit from the technical cooperation of WGR and RISC.

The present Report, International Remittances in Bolivia, is one of the descriptive documents in the series, and was prepared with the active participation of the Banco Central de Bolivia.

Javier Guzmán Calafell General Director

CEMLA

Julie T. Katzman General Manager

Acknowledgements

This report is based on the findings of the Mission that visited Bolivia in June 2008, comprising two teams. The international team was led by René Maldonado from the Center for Latin American Monetary Studies and included Xiomara Hurtado de García (Banco Central de la Reserva El Salvador) and John Wilson (Remittances Programme consultant). The international team worked in close coordination with the local team formed by Freddy Gumiel, Denise Salazar and Jonathan Cáceres, from Banco Central de Bolivia.

This report was prepared by René Maldonado, assisted by Melina Saldaña, Raúl Morales and the Banco Central de Bolivia team, and benefited from comments by other mission team members.

INDEX

1 ECONOMIC BACKGROUND AND THE REMITTANCES CONTEXT ...1

1.1 Macroeconomic Performance ... 1

1.2 Labor Environment and the Migratory Process ... 5

1.2.1 Labor Environment ... 5

1.2.2 Migratory Processes ... 6

1.3 Evolution and Importance of Remittances ... 8

1.4 Measurement and Provision of Remittances Services ...11

2 INSTITUTIONAL ASPECTS ... 12

2.1 General Legal Framework...12

2.1.1 Financial Regulations ...13

2.1.2 Payments Systems Regulations ...13

2.1.3 General Norms and Regulations for the Foreign Exchange Market in Bolivia ...14

2.1.4 Tax regulations related to remittances ...15

2.1.5 Main information reporting requirements ...15

2.1.6 Anti-Money Laundering Regulations ...15

2.2 Regulation, Supervision and Oversight Authorities ...16

2.2.1 Role of the Banco Central de Bolivia ...16

2.2.2 Superintendencia de Bancos y Entidades Financieras ...16

2.2.3 Ministry of Foreign Relations...18

2.3 The Role of other Relevant Organizations ...19

2.3.1 Ministerio de Hacienda ...19

2.3.2 Instituto Nacional de Estadística ...19

2.3.3 Unidad de Análisis de Políticas Sociales y Económicas ...19

2.3.4 Superintendencia de Empresas ...19

2.3.5 Ministerio de Trabajo ...20

2.3.6 Ministerio de Justicia ...20

2.3.7 Asociación de Bancos Privados de Bolivia ...20

2.3.8 Asociación de Entidades Financieras Especializadas en Microfinanzas ...21

2.3.9 International Migration Organization ...21

2.3.10Asociación de Cooperación España y Asociación de Migrantes Bolivia-España ...22

3 DESCRIPTION OF REMITTANCES ... 23

3.1 Definition and Concept of Remittances ...23

3.2 Description of Originators ...23

3.3 Description of Beneficiaries ...27

3.4 Remittance Indicators in Bolivia ...30

4.2 Registered Institutional Providers ...34

4.2.1 Commercial Banks ...35

4.2.2 Private Financial Funds ...36

4.2.3 Mutual Savings and Loans ...36

4.2.4 Savings and Credit Cooperatives ...36

4.3 Unregistered Institutional Providers ...36

4.3.1 Couriers ...37

4.3.2 Exchange Houses ...37

4.3.3 Specialized Transfer Entities ...37

4.4 Non-Institutional Providers ...37

4.4.1 Cash Transported by Travelers ...38

4.4.2 Cash Transported by Messengers ...38

4.4.3 Other Means of Transport and Payment of Remittances ...38

5 MEANS OF PAYMENT FOR REMITTANCES ... 39

5.1 Cash ...41 5.2 Cheques ...42 5.3 Account Deposits ...42 5.4 Postal Instruments ...43 5.5 Payment Cards ...44 5.6 Electronic Money ...44

6 SYSTEMS AND CHANNELS FOR THE TRANSFER AND PAYMENT OF REMITTANCES ... 45

6.1 Information Transfer Systems ...46

6.2 Systems Abroad ...46

6.3 Cross-Border Systems ...48

6.4 Local Systems ...48

6.5 Large Value Payment Systems ...49

6.6 Low Value Payment Systems ...50

6.6.1 Cheque Clearing House ...51

6.6.2 Clearing House for Electronic Transfers ...51

6.6.3 Clearing House for ATM Networks and International Debit, Credit and Stored Value Cards ...52

6.7 Other Systems and Channels ...53

7 COSTS, TIME AND ACCESS ... 54

7.1 Remittance Costs ...54

7.2 Commission Charges ...54

7.3 Exchange Rate Differential ...55

7.4 Tax Costs ...56

7.5 Access Costs ...57

8 MEASUREMENT METHODOLOGY ... 59

8.1 Responsibility and Coordination ...59

8.2 Measurement by Channels ...59

8.3 Registered Institutional ...60

8.3.1 Reports by Financial Intermediaries ...60

8.4 Non-Registered Institutional ...63

8.4.1 International Card Administrators ...63

8.5 Non- Institutional ...63

8.5.1 Cash ...64

8.5.2 Postal Service...64

8.6 Data Validation and Confrontation ...65

8.7 Trends, Progress and Challenges ...65

9 TRANSPARENCY AND DATA PUBLICATION ... 66

9.1 Official Information ...66

9.2 Information Supplied by RSPs ...67

ANNEXES ... 68

Annex 1. Statistical Annex ...68

Annex 2. Financial entities form ...72

Annex 3. Current legislation in Bolivia ...73

Annex 4: Remittances, number of transactions and values for selected countries, 2004-2007 ...74

LIST OF TABLES Table 1. Balance of Payments and International Investment Position ... 4

Table 2. Macroeconomic indicators ... 5

Table 3. Total remittances in Relation to Other ITEMS ... 9

Table 4. Remittances Legislation in Bolivia, as of July 2008 ... 12

Table 5. Current Norms Governing Migratory and Consular Matters ... 18

Table 6. Regulated Entities Paticipating in the Remittances Market ... 34

Table 7. Commercial Banks Participating in the Remittances Market ... 35

Table 8. Market Share of Remittance-Disbursing Banks ... 35

Table 9. Remittance-Disbursing Private Financial Funds ... 36

Table 10. Remittance-Disbursing Mutual Savings And Loans ... 36

Table 11. Remittance-disbursing exchange houses ... 37

Table 12. Financial Services Offered by Financial Intermediation Institutions ... 43

LIST OF FIGURES Figure 1: GDP per capita, Gross National Income and Private Consumption ... 2

Figure 2. Variation in the National Consumer Price Index and Inflation Trend Indicators ... 2

Figure 4. Main Items on Current Account ... 3

Figure 5. Net International Reserves at BCB ... 4

Figure 6. Open Unemployment Rate ... 6

Figure 7. International Migratory Flows of Bolivians ... 7

Figure 8. Bolivians Living Abroad ... 8

Figure 9. Main Countries in Which Bolivian Migrants Reside ... 8

Figure 10. Total Remittances ... 9

Figure 11. Remittance Inflows and FDI in Bolivia ... 10

Figure 12. Receipt of Remittances by Country Groups ... 10

Figure 13. Originator Shares by Country of Residence ... 24

Figure 14. Share in the Flow of Remittances by Country of Origin ... 25

Figure 15. Remittance Flows by Place of Origin and Gender ... 25

Figure 16. Distribution of Migration by Age ... 26

Figure 17. Occupation of Bolivians at Time of Migration ... 26

Figure 18. Originators and Income by Educational Level ... 27

Figure 19. Income Uses by Bolivian Migrants in Spain ... 27

Figure 20. Family Relationship between originators in Spain and Bolivian Beneficiaries ... 28

Figure 21. Beneficiary Households by Income LeveL ... 28

Figure 22. Distribution of Beneficiaries by Educational Level ... 29

Figure 23. Percentage Distribution of Beneficiaries by Occupation ... 29

Figure 24. Remittances Use ... 30

Figure 25. Average Remittance Amount by Country of Origin ... 30

Figure 26. Distribution of Remittances Received from Spain ... 31

Figure 27. Frequency of Reception of Remittances from Spain ... 31

Figure 28. International Remittance Service Providers ... 32

Figure 29. Shares of Registered Institutional Providers in the Remittances Market ... 33

Figure 30. Market Share of Registered and Unregistered Agents ... 34

Figure 31. Remittances Market Shares by Type of Instrument ... 39

Figure 32. Distribution of Remittances by Currency ... 39

Figure 33. Distribution of Remittances by Currency and Disburser ... 40

Figure 34. Distribution of Remittances by Means of Payment ... 40

Figure 35. Dollarization of Deposits and Large and Small Value Foreign Currency Transactions ... 49

Figure 36. Evolution of Commissions Charged by Remittance Originators ... 55

Figure 37. Exchange Rate Differential by Type of Entity ... 56

Figure 38. Evolution of the Monthly Exchange Rate ... 56

LIST OF CHARTS Chart 1. Remittances Path through the Payments System ... 45

Chart 3. Transfer of Remittances Originating as Cash Deposits at Agencies ... 47

Chart 4. Transfer of Remittances Originating as Non-Cash Deposits at Agencies Abroad ... 47

Chart 5. Remittance Path through Cross-Border Systems ... 48

Chart 6. Low Value Payment Systems ... 50

Chart 7. Use of Cards for Sending Remittances ... 52

Chart 8. Forms RF 1 and 2: Money Transfer Operators and Banks under Agreements with Remittance Companies ... 61

Chart 9. Form for Money Orders, Bank Transfers, Cheques and other Types of Electronic Transfers ... 62

1 ECONOMIC BACKGROUND AND THE

REMITTANCES CONTEXT

1.1 M

P

The real growth rate of Bolivia’s gross domestic product (GDP) averaged 4.4% during 1990-1998, resulting in 2% growth in per capita GDP. The best performance was produced by hydrocarbon and industrial activities, especially the natural gas subsector. During 1999-2001, however, the level of economic activity was affected by both internal and external factors. On the external front, price movements in the majority of export products affected the performance of the mining, agricultural and industrial sectors. Furthermore, external demand was impacted by the devaluation of the Brazilian real in early 1999, the deceleration of the US

economy in 2000 which worsened in 2001 and the lower rate of expansion in European countries. On the domestic front, the finalization of the gas sales contract with Argentina and the conclusion of the construction of the gas pipeline to Brazil stand out in 1999. During 2000 internal production and demand were affected by the eradication of coca plantations, the customs reform and social conflict. By 2001 these factors were reflected in reduced activity in commerce and manufacturing, as well as by weakness in private construction.

The international context was favorable in 2003 –in contrast to the previous year– due to lower international inflation as well as lower interest rates on international markets. The internal environment, however, was characterized by weakness in private consumption and the low levels of gross capital formation, due mainly to the decline in foreign direct investment. GDP

expanded by 4.2% in 2004 –the highest growth rate since 1999– with a positive impact on per capita output. The GDP growth rate of 4.4% in 2005 responded to the performance of the extractive sector (hydrocarbons and mining). Exports of natural gas to Brazil and Argentina grew significantly that year and the hydrocarbon sector expanded by 15.1%. The 4.8% growth rate obtained in 2006 was due to greater exports of raw materials in response to the acceleration of growth in Asia (mainly China).

During 2007, growth reaches 4.6% in spite of the adverse impact of the El Niño phenomenon on the agricultural sector. Internal demand was the main driving force for economic growth that year, on the strength of private consumption and public investment. Output continued to grow in 2008 –at a 6.15% rate– based mainly on internal demand and the expansion of the extractive sector. Metallic and non-metallic minerals (56.3%), construction (19%), retail (4.7%) and financial services (4.8%) were the sectors exhibiting the highest growth.

On a separate note, with the enactment of Banco Central de Bolivia (BCB) Law No. 1670 in 1995 the Central Bank acquired the primary responsibility for attaining stability in the internal purchasing power of the local currency. The BCB currently employs a regime of intermediate quantitative targets by setting ceilings on its net domestic credit. Said variable must evolve in keeping with the established inflation target. Since the central bank has no direct control over the intermediate target, monetary policy actions are implemented by means of an operational target consisting of the excess liquidity of the financial system, defined as excess bank reserves at the BCB. A target inflation range fluctuating between 3% and 5% was established in 2006.

FIGURE 1: GDP PER CAPITA, GROSS NATIONAL INCOME AND PRIVATE CONSUMPTION

Source: Instituto Nacional de Estadística and Banco Central de Bolivia. Note: (e) stands for estimated values. FIGURE 2. VARIATION IN THE NATIONAL CONSUMER PRICE INDEX AND INFLATION TREND

INDICATORS

Source: Banco Central de Bolivia. Notes: IPC is the consumer price index; IPC-N is the core consumer price index; IPC-S is the underlying consumer price index and IPC-SA is the annualized underlying consumer price index.

During 2003-2007 inflation showed a rising trend, reaching 11.73% by December 2007. This was due mainly to supply shocks, imported inflation and the increase in aggregate demand. Despite measures adopted by BCB to reduce inflation, by December 2008 it had reached 11.85%.

The exchange rate of the boliviano (BOB) with respect to the United States dollar (USD) exhibited an increasing trend from the second half of 2005 through October 2008. There has also been a notable widening of the margin between buying and selling rates, as a result of a

894 950 1,010 1,182 1,328 1,651 1,707 1.9 2.9 3.3 4.1 4.2 6.0 0 1 2 3 4 5 6 7 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2003 2004 2005 2006 2007 2008 2009 (e) % USD millions

decision by the monetary and exchange authority aimed at contributing to re-monetize the economy. By end-2008 the nominal exchange rate had fallen to its lowest level in recent years with the local currency trading at 7.07 bolivianos per dollar.

FIGURE 3. EXCHANGE RATES FOR SELECTED ECONOMIES

Index: January 2003=100

Source: Banco Central de Bolivia.

FIGURE 4. MAIN ITEMS ON CURRENT ACCOUNT

Source: Banco Central de Bolivia.

Figure 3 shows the behavior of the exchange rates of Bolivia and other countries in the region for the period January 2006 through June 2009. It may be observed that Bolivia’s exchange rate remained stable throughout this period. In contrast, the exchange rates of other countries

-3,000 -2,000 -1,000 0 1,000 2,000 3,000 2002 2003 2004 2005 I/2006 _II/2006 II I/2006 _IV/2006 I/2007 _II/2007 II I/2007 _IV/2007 I/2008 _II/2008 II I/2008 _IV/2008 I/2009 _II/2009 II I/2009 _IV/2009 USD millions Exports Imports

Current Account Privante transfers

showed greater fluctuations: appreciation until September 2008 followed by depreciations and then new appreciations until end-2008.

TABLE 1. BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION

In USD millions

2005p 2006p 2007p 2008p

I. Current account 622.5 1,317.6 1,591.2 2,015.0

II.A Capital and financial account –118.8 197.9 361.1 359.1

II.B Capital and financial account (excludes errors and

omissions) 203.7 303.1 471.8 378.3

Errors and omissions –322.5 –105.2 –110.7 –101.4

III. Total balance of payments (I + II.A) 503.6 1,515.5 1,952.3 2,374.0

IV. Financing –503.6 –1,515.5 –1,952.3 –2,374.0

Source: Banco Central de Bolivia. (Economic Policy Department - External Sector Area). Note: p stands for preliminary data.

In recent years, Bolivia’s balance of payments is characterized as follows: a) an important rise in the value of merchandise exports; b) growing inflows of family remittances, although these fell with respect to gross domestic product (GDP) during 2008 and 2009; c) a high current account surplus in the balance of payments, following significant deficits until 2002; d) a moderate surplus on the capital and financial account, and e) strong accumulation of international reserves: by the end of 2008 reserves had reached USD 7,772 million, equivalent to 16 months of imports of goods and services.

FIGURE 5. NET INTERNATIONAL RESERVES AT BCB

Source: Own elaboration, based on BCB data. Note: coverage refers to the ratio of net international reserves to merchandise imports.

245.5%274.8% 349.8% 347.9%375.5% 412.5%440.6% 449.7% 514.9% 511.2% 509.1% 500.6% -1,000 1,000 3,000 5,000 7,000 9,000 11,000 I/2006 _II/2006 II I/2006 _IV/2006 I/2007 _II/2007 II I/2007 _IV/2007 I/2008 _II/2008 II I/2008 _IV/2008 I/2009 _II/2009 II I/2009 USD millions Reserves Coverage

As a HIPC1

TABLE 2. MACROECONOMIC INDICATORS

, Bolivia benefited from substantial debt relief between 1998 and 2008. Thus, in 1998 the Executive Boards of the International Monetary Fund (IMF) and the World Bank approved the so-called Completion Point for Bolivia in the HIPC 1 framework. From that point forward, the international financial community began effecting the relief that had been committed within the framework of said initiative. Furthermore, in 2000 the Boards of the World Bank and IMF authorized the Completion Point for Bolivia for the enhanced HIPC

Initiative (HIPC II) and, subsequently, the so-called Post-HIPC which awarded additional debt relief. In 2005, 2006 and 2007 the country benefited from the Multilateral Debt Relief Initiative as debts totaling approximately 3 billion dollars with the IMF, World Bank and IADB were written off.

2002 2003 2004 2005 2006 2007p 2008p 2009p

GDP (in BOB millions) 56,682 61,904 69,626 77,024 91,748 103,009 120,694 115,393

GDP (growth in constant

BOB) 2.49 2.71 4.17 4.42 4.80 4.56 6.15 –4.40

Imports (in USD millions)a _{1,831.9 1,692.1 1,887.8 2,343.2 2,824.2 3,430.4 5,680.2 3,622.7}

Exports (in USD millions)a _{1,372.7 1,676.6 2,265.2 2,810.3 4,223.3 4,848.6 6,947.5 3,922.7}

Current account balance

(as a percentage of GDP) –4.42 1.05 3.84 6.5 11.44 12.04 12.00 10.00

Change in CPI (end of

period) 2.45 3.94 4.62 4.91 4.95 11.73 11.85 NA

Average unemployment

rate (of the EAP) 5.5 5.5 5.4 5.4 8.0 7.8 NA NA

Public sector deficit (as a percentage of nominal GDP)

–8.8 –7.9 –5.5 –2.2 4.5 1.7 3.2 NA

Interest rate (end of

period) 9.11 11.69 6.76 4.82 3.80 4.10 5.60 4.20

Nominal exchange rate

(end of period) 7.48 7.82 8.04 8.00 7.93 7.57 6.97 7.07

Source: Banco Central de Bolivia and Instituto Nacional de Estadística. Note: p stand for preliminary values. a corresponds to official figures. NA stands for non-available.

1.2 L

E

M

P

1.2.1 Labor Environment

During the first half of the previous decade the unemployment rate in Bolivia remained around 5.5% but began climbing in 2006 when it reached 8%. For several years the government has been implementing programs in order to allay the effects of unemployment. Thus, the Employment Emergency National Plan (PLANE) was introduced on September 15, 2001 with the aim of alleviating the impact of reduced income from job losses on the poorer population segments. PLANE is financed with international aid resources. Subsequently, the Social Protection Network (January 31, 2004) and the Program against Poverty and in Support

1 2 3 4 5 6 7 1996 1997 1999 2000 2001 2002 2003 2005 2006 %

Open unemployment rate (OUR) Unemployment rate for men Unemployment rate for women

of Social Investment (PROPAIS) were established, aimed at implementing small neighborhood and communal infrastructure and equipment projects.2

1.2.2 Migratory Processes

In recent years, particularly since 2003, there has been significant external migration of Bolivians. These flows contain a temporal South-South component, mainly to Argentina, where large numbers of migrants do not go to settle but simply cross the borders periodically to work and then return once the high employment demand season is over in this country. More recently there has been a change in destinations for Bolivian migration, with a pronounced trend towards Europe.

FIGURE 6. OPEN UNEMPLOYMENT RATE

Percentage, 1996-2006

Source: Instituto Nacional de Estadística y UDAPE. Note: p stands for preliminary data.

As in most Latin American countries, there is no accurate official information on the number of nationals living abroad. This is for a variety of reasons, such as the presence of informal migration or the use of non-transparent channels for border crossing, that leave much of this migration beyond the reach of the local compilers. There are various estimates of the total number of Bolivians living abroad that place total migration by 2007 between 2 and 2.5 million. There are now some official initiatives, however, that seek a more precise quantification of the migratory phenomenon. The Foreign Ministry, for example, used its Embassies to compile information from the consular registries and calculated that in 2007 there were 1.7 million Bolivians living abroad. . If one takes into account the non-permanent migratory flows to bordering countries the Figure is probably higher and closer to the unofficial estimates.

2 _{Further detail may be found at www.rps.gob.bo/rps/pages/RPSPPropaís.htm.}

0 1 2 3 4 5 6 7 8 9 1996 1997 1999 2000 2001 2002 2003 2005 2006 (p) %

Urban unemployment rate Rural unemployment rate

The data from the consular registries shows that in 2007 most Bolivians abroad were in South America, a region that hosts 64% of migrants (52% in Argentina), while 21% were in Europe, 14% in North America, and less than 1% in Central America and the Caribbean. It is not expected that migration to the United States will increase significantly in the future in view of the labor and migration restrictions imposed by this country. Other traditional migrant destinations such as Brazil and Chile have maintained their shares of 4% and 3%, respectively. One should note the growing importance of Spain as a destination for Bolivian migrants, while new countries such as Italy and England appear to be joining the list of destinations and have increased their shares in recent years to reach somewhat more than 1% in each case by 2007.

FIGURE 7. INTERNATIONAL MIGRATORY FLOWS OF BOLIVIANS

Source: Own elaboration, with data from Instituto Nacional de Estadística.

The above data from the consular registries shows that in 2007 most Bolivians abroad were in South America, a region that hosts 64% of migrants (52% in Argentina), while 21% were in Europe, 14% in North America, and less than 1% in Central America and the Caribbean. It is not expected that migration to the United States will increase significantly in the future in view of the labor and migration restrictions imposed by this country. Other traditional migrant destinations such as Brazil and Chile have maintained their shares of 4% and 3%, respectively.

-100,000 0 100,000 200,000 300,000 400,000 500,000 1998 1999 2000 2001 2002 2003 2004 2005 2006

Net (D-A) Arrivals Departures

-250 -200 -150 -100 -50 0 50 100 150 1998 1999 2000 2001 2002 2003 2004 2005 2006 % flow % accumulated Arrivals Departures

new countries such as Italy and England appear to be joining the list of destinations and have increased their shares in recent years to reach somewhat more than 1% in each case by 2007.

1.3 E

I

R

Total remittances received in Bolivia over recent years have attained significant volumes, reaching USD 1,097.2 at the end of 2008. While there is an outflow of remittances abroad, these are diminishing as they represented 37.5% of inflows in 2002 but only 7% in 2007. In this sense Bolivia is predominantly a recipient country of remittances.

FIGURE 8. BOLIVIANS LIVING ABROAD

Source: Consular registries, Foreign Ministry. Note: Preliminary figures at 2008. FIGURE 9. MAIN COUNTRIES IN WHICH BOLIVIAN MIGRANTS RESIDE

Source: Consular registries, Foreign Ministry. Note: Figures at 2007.

6,720 123,228 365,950 1,173,467 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 Central America

and the Caribbean North America Europe South America

0 200,000 400,000 600,000 800,000 1,000,000

Other countries in Central America and the Caribbean Sweden Mexico Cuba Canada Other countries in South America Switzertland Other countries in Europe United Kingdom Italy Chile Brazil United States Spain Argentina Number of Bolivians

Income from remittances has increased year after year and it is expected this trend will continue. Remittances grew from USD 83 million in 2002 to USD 1,021 million in 2007. Income from remittances reached USD 1,097 in 2008 despite the slowdown in the world economy and the retraction in migratory flows, especially to Spain where since the end of 2007 visas are required for Bolivians.

The observed increases in remittance flows are both the result of the larger migration flows and of the change in migrant destinations, with a significant increase in the migration of Bolivians to Europe where the average remittance tends to exceed that coming from neighboring countries such as Argentina, Brazil and Chile.

FIGURE 10. TOTAL REMITTANCES

Source: Banco Central de Bolivia.

TABLE 3. TOTAL REMITTANCES IN RELATION TO OTHER ITEMS

In percentages

2002 2003 2004 2005 2006 2007 2008 2009

Total remittances: Income (in USD millions) 83 138 178 304 569 1,020 1,097 1,022

GDP 1.05 1.70 2.03 3.17 4.94 7.72 6.53 6.26

Net national income 1.03 1.66 2.01 3.10 4.77 7.22 6.25 NA

Household consumption 1.42 2.39 2.99 4.78 7.87 12.21 10.49 5.04 Current income 4.02 5.38 5.61 7.49 10.43 15.29 12.63 NA Exports 5.34 7.01 6.96 9.25 13.09 20.58 15.79 26.01 Goods 6.39 8.61 8.31 10.88 14.70 22.89 17.02 28.79 Services 32.33 37.78 42.82 62.10 119.48 204.34 219.57 271.23 Imports 4.01 6.71 7.65 10.59 16.47 24.63 19.32 28.21 Goods 4.68 8.51 9.67 13.00 20.24 29.54 22.03 32.87 Services 27.92 31.76 36.60 57.15 88.39 148.24 156.77 198.91

Total current transfers 22.34 29.03 36.31 51.98 69.26 80.60 85.44 113.10

Foreign Direct Investment 12.31 70.56 215.77 NP a _{205.02 281.67 216.16 339.53}

International reserves 9.72 14.09 15.87 17.71 17.92 19.18 14.21 13.09

Sources: Banco Central de Bolivia and Instituto Nacional de Estadística.

Notes: a _{FDI was negative that year. NP stands for non-applicable and NA for non-available data.} 0 200 400 600 800 1,000 1,200 1,400 2002 2003 2004 2005 2006 2007 2008 2009 % USD millions

Family remittance flows have become more relevant in recent years, particularly in certain regions of the world where they represent an important source of external finance. Total remittance flows to Latin America and the Caribbean grew by 6% in 2007 and represented 1.9% of regional GDP. For Bolivia the inflow of family remittances in 2007 represented 7.5% of

GDP compared to 1.1% in 2002.

Remittance flows to Bolivia have contributed to improving living standards of beneficiary families. In addition, remittances represent an important source of income on the current account of the balance of payments, representing 12.6% of current income and more than 84% of current transfers in 2008. They were also equivalent to 19.3% of total imports and 15% of exports of goods and services, while they were more than twice the inflow of foreign direct investment. Furthermore, as may be observed in Figure 12, remittances exhibit lower volatility than foreign direct investment inflows.

In 2005 the relative importance of remittances with respect to GDP in Bolivia was comparable to that observed in middle income remittance receiving countries. By the end of 2007, however, there was a notable increase in this ratio for Bolivia, which greatly surpassed that for low income economies.

FIGURE 11. REMITTANCE INFLOWS AND FDI IN BOLIVIA

Source: Banco Central de Bolivia.

FIGURE 12. RECEIPT OF REMITTANCES BY COUNTRY GROUPS

Source: UDAPE. -400 -200 0 200 400 600 800 1,000 1,200 2002 2003 2004 2005 2006 2007 2008 2009 USD millions

Total remittance inflows

0 1 2 3 4 5 6 7 8

Bolivia 2007 Low income Bolivia 2005 Middle income OECD

industrialized % of GDP

1.4 M

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Changes to migratory legislation in the various host countries of Bolivian migrants should be reflected in the structure by country of origin of remittance inflows. In particular one would expect a sustained increase in the share of flows from Europe –especially countries such as Spain. It is estimated that in 2008 approximately 20,000 Bolivians obtained documents allowing them to live and work legally in Spain. In this context, certain associations such as Bolivia Spain Cooperation (ACOBE) are making efforts to allow for the legalization of Bolivians in the latter country by providing the administrative social insertion procedures at no cost to those who arrived in 2004 and for whatever reason were unable to regularize their situation in 2005 and thus remain undocumented in Spain.

The Spanish Naturalization Act establishes as requisites for social insertion that the foreigner have resided continuously for at least three years in the country, have a current employment contract, have no criminal record either in Spain or Bolivia, and have relatives living in Spain or be able to provide a social insertion report from the City Council.

It is worth mentioning that Supreme Decree 29739 of October 15, 2008 establishes and promotes measures so that Bolivian citizens residing in Spain and Italy under irregular migratory status may obtain official documents such as a passport and certificates of birth, marriage, non-inscription of marriage and criminal records. In addition, the National Accord for Bolivians Abroad of December 18, 2008 consolidates a permanent dialogue mechanism on migratory matters, with policies catering to and supporting Bolivian citizens residing abroad.

2 INSTITUTIONAL ASPECTS

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The Table 4 summarizes the current legislation governing the remittances market in Bolivia.

TABLE 4. REMITTANCES LEGISLATION IN BOLIVIA, AS OF JULY 2008

Legislation Objective Date

Decree Law 14379 Bolivian Code of Commerce: establishes mechanisms for the creation and operations of commercial entities in Bolivia.

25/02/1977

Law 1182 Investment Law, establishing a free Foreign Exchange market. 17/09/1990

Supreme Decree

(DS) 24000 Regulates the creation and establishment of Private Financial Funds. 12/05/1995

Law 1670 Banco Central de Bolivia Act, establishing the functioning, organization responsibilities, obligations and rights of the Monetary Authority.

31/10/1995

DS 24439 General Law for Cooperatives Societies, regulating the functioning of Credit

Cooperatives. 13/12/1996

DS 24771 Rules governing the Financial Investigations Unit according to Law 1768 modifying

the Penal Code. 31/07/1997

Law 1864 Property and Popular Credit Law, establishing government support for broadening

coverage and services by entities such as Cooperative and others.

15/06/1998 Law 1488 Text as amended of Law Nº 1488 of Banks and Financial Entities, modified by Law No.

2297 of December 20th_{, 2001.}

25/04/2002

Law 3446 Financial Transactions Tax (ITF) Law. 21/07/2006

Source: Own elaboration, based on Bolivian legislation.

There is no specific regulation of the international remittances market in Bolivia that establishes a legal framework for these activities. There is, however, legislation corresponding to other entities and activities directly related to international remittances. For example, if entities engaged or desiring to engage in cross-border remittance transactions belong to the supervised financial intermediation system, they are governed by the same law which regulates bank and financial entities. Other players, such as specialized money transfer firms and paying agents that do not form part of the financial market, are unregulated with respect to their operations and activities, except to the extent they must comply with general regulations regarding the provisions they must make as in the case of any other business engaging in general commercial activity.

In this sense, in Bolivia there is no prohibition of engaging in activities related to remittances and thus this activity may be engaged in by any kind of entity, except that if it is supervised by any Supervisor it must comply with the rules and regulations set down by the controlling agency.

By law the Banco Central de Bolivia is the only monetary and exchange authority in the country, setting down policies for the payments system and with powers to regulate financial cross-border transactions. Although to date there has been no regulation of remittances as part of the small value cross-border payments system, the BCB is contemplating the definition of a regulatory framework for these activities in the short term, pending the approval of a Payments Systems Law which is currently under parliamentary discussion.

2.1.1 Financial Regulations

As participants in the remittances market, those financial intermediaries supervised by the Superintendencia de Bancos y Entidades Financieras (SBEF, Bolivian banking and financial entities supervision agency) are subject to the provisions of Law 1488 which indicates in its article 5 that “No natural or legal person may habitually undertake in the territory of the Republic those activities pertaining to financial intermediaries and supporting financial services, described in said Law, including acts of commerce set out in clauses 4, 5, 8, 12 and 20 of article 6 of the Code of Commerce, without prior authorization for incorporation and operation issued by the Supervisory Agency with the formalities of this Law”. In this case, articles 38 and 39 of the above law specify the permitted transactions, which include remittances within the country and abroad.

Article 25 of Law 1864 –Property and Popular Credit Act–, which refers to the promotion of cooperatives, indicates in clause c) that “the State must support the broadening of services and coverage by financial intermediation cooperatives as set out in the Third Title of this Law”, thus allowing cooperatives to widen their financial services to include the payment of remittances. Similarly, Supreme Decree 24000 sets out those transactions that may be undertaken by private financial funds, including remittances.

2.1.2 Payments Systems Regulations

Article 54, clauses b) and o) of Law 1670 establish that it is an attribution of the Board of BCB

to regulate the administration of payments systems among authorized financial intermediaries, and to approve, modify or interpret the BCB’s Statutes and Regulations. Within this framework, RD Nº 070/2001 created the Sistema de Pagos de Alto Valor (SIPAV, the large value payments system) and approved the corresponding Regulations. In 2004 these regulations were updated by RD 166/2004, adapting them to the new conceptual design and developments in information technology. This Resolution regulates the functioning and transactions of the

SIPAV and establishes the rights, obligations and responsibilities of the administrator and the participants. Subsequently in August 2007 the Board of the BCB, via RD 109/2007, approved the inclusion of non-bank entities supervised by the SBEF among SIPAV participants. In this way the coverage of electronic payments services was expanded to include these entities.

In February 2008 the new Regulations on Electronic Clearing House and Clearing and Settlement Services came into force, with the aim of regulating the operations of electronic clearing houses and establishing the general framework for the clearing and settlement of payments instruments.

Important future changes are anticipated in legislation relating to payments systems, given that the BCB has submitted a Payments Systems Bill which, among other aspects, provides BCB with the powers to supervise and control those unregulated entities which form part of those payments systems covered by the Law, which will eventually comprise remittance transfer and payment systems. Once the bill is enacted, BCB plans to implement the regulations required for the remittances market with respect to the registration of participants, the requisites for providing these services and the control of financial risks.

2.1.3 General Norms and Regulations for the Foreign Exchange Market in

Bolivia

Law 1182 guarantees the freedom of foreign exchange transactions, with no restrictions on the inflow or outflow of capital or on the remittance abroad of dividends, interest and royalties on the transfer of technology or other commercial concepts. All repatriations or transfers are subject to the payment of specific taxes.

Article 3 of Law 1670 establishes in turn that BCB shall formulate the general policies applicable to monetary, foreign exchange and payment system matters in the pursuit of its objectives. Its article 14 indicates that BCB shall seek to strengthen International Reserves so as to ensure the normal operation of Bolivia’s international payments systems, for which purpose article 19 defines BCB as responsible for establishing the exchange rate regime and executing exchange rate policy, regulating the convertibility of the Boliviano with respect to the currencies of other countries, and the procedures for determining the exchange rates for the local currency which must be published daily. Finally, article 20 empowers BCB to regulate cross-border financial transactions undertaken by individuals and public or private entities. In this context BCB established since December 2007 1% commission on all transfers of funds abroad by financial entities through the monetary authority’s accounts. Board Resolution Nº152/2007 of December 11, 2007 established that, as from January 2, 2008, BCB would charge no commission on remittances of USD 1,000 or less that were channelled through the national financial system. To this effect External Circular SGRAL Nº 003/2008 laid out the procedure to obtain the exemption as follows:

“Remittances to customers of financial entities shall not be subject to the 1% commission charged by

BCB for transfers of funds from abroad, for payment of remittances of USD 1,000 or less received from abroad for their customers on a fifteen-day frequency or lower. To this effect the financial entity may transfer funds from abroad to the BCB account at Standard Chartered Bank, New York, consolidating all payments made and requesting the transfer of funds from abroad via

BCB, attaching a list with the individual details on remittances sent during the period with the following information: i) transaction date; ii) transaction code, and iii) USD amount. The financial entity must certify that the final beneficiaries were not charged the 1% commission. With this information and the deposit on the BCB account abroad, the corresponding amount shall be credited to the financial entity’s current and reserve requirement account without deducting the 1% commission.

Remittances through money transfer operators are not subject to the 1% BCB commission of the transfer of funds from abroad, corresponding to the amounts credited to the accounts of the money transfer operators, so long as they are channeled through accounts declared to BCB. For this purpose, BCB sends a note to the financial entity specifying the legal name and account number of the money transfer operator authorized to engage in transactions exempted from the payment of the commission. The financial entities process the transfers of funds from abroad for payment into the accounts notified by BCB, which are exempt from the 1% commission. The commission-exempt amount on each global transfer is communicated by note to the money transfer operator by the financial entity, and copied to BCB. Every fifteen days or more, the financial entity may transfer funds from abroad to the BCB account at Standard Chartered Bank, New York, consolidating all payments made into the accounts notified by

not subject to the 1% charge reported by each money transfer operator. With this information and the payment into the BCB account abroad, the corresponding amount is credited to the financial entity’s current and reserve account, without deducting the commission. The detailed information on payments made to final beneficiaries by money transfer operators must be sent directly by these companies to BCB, with no responsibility borne by the financial entities.”

2.1.4 Tax regulations related to remittances

As from 2006 Law 3446 established a temporary (36 month) Tax on Financial Transactions (ITF) setting a 0.15% levy on the value of all transactions with foreign currency accounts and domestic currency inflation-indexed accounts, while exempting all transactions in current and savings accounts (in foreign or inflation-indexed domestic currency) with balances below USD

2,000 or equivalent as well as the payment of remittances from abroad. This ITF was preceded by Law 2646 of 2004 which also had a temporary nature (24 months).

2.1.5 Main information reporting requirements

Banks and other financial intermediaries are required to report directly to the BCB all information of a monetary nature and in their capacity as creditors that the latter may request, as well as any data on the financial situation of an entity that the President of the BCB may directly request. Article 40 of this Law indicates that the SBEF is obliged to provide BCB with all the periodic information it receives from banks and other entities in the financial system. At the request of the BCB president, the bank supervisor must provide all detailed information on the financial and net worth situation of any given financial entity, including any on-site inspection reports.

Article 42 of Law 1670 in turn establishes that BCB must periodically publish statistical and economic information on the economic and financial variables comprising its field of influence.

2.1.6 Anti-Money Laundering Regulations

Similarly, there are other public entities with the power to compile information on participants in the remittances market on an obligatory basis, among them the Financial Investigation Unit (UIF) which by virtue of Law 1768 and Supreme Decree 25771 receives information on transactions undertaken by all entities under its control.

In order to ensure universal coverage of obligated entities, the UIF issued Instruction 004/2008 during the second quarter of 2008 according to which all entities providing auxiliary financial services comprised by the application of Law 1768 as from May 2008 and engaging in the payment of remittances –such as exchange houses, money transport companies and courier services– must comply with the legal norms. To this end they must designate a Compliance Officer as the nexus between the company and UIF to ensure the sending of the suspicious transaction reports (ROS) when called for.

To coordinates these reports, companies providing auxiliary financial services such as the above must provide UIF with the corresponding documentation on their incorporation and

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2.2.1 Role of the Banco Central de Bolivia

The legal basis for the Banco Central de Bolivia is Law 1670 which entrusts it with the objective of seeking stability of the internal purchasing power of the domestic currency. Its main functions are to:

a. Establish the exchange rate regime and implement exchange rate policy.

b. Regulate cross-border financial transactions undertaken by individuals and public or private entities.

c. Implement monetary policy and control the money supply. d. Act as financial agent of the government.

e. Promote the strengthening of international reserves.

f. Publish statistical and economic information on the economic and financial variables comprised in its sphere of activities.

The latter function establishes BCB as the official compiler of statistics on family remittances in Bolivia.

2.2.2 Superintendencia de Bancos y Entidades Financieras

In 1987, in order to regulate the financial system, the government of Bolivia issued Supreme Decree 21660; additionally this legal diploma awarded independence to the SBEF with complete powers in the deployment of its attributes and responsibilities.

Supreme Decree 21660 established:

 The restoration of the autonomy and attributes of the Bank Supervisory Agency, providing that within six months of the appointment of the Bank Supervisor the agency should reassume with complete powers those functions and attributes granted by the General Banking Law.

 A well-defined framework for private, national and foreign banking activities.  A regulated financial structure for the banking system.

 The creation of controls and penalties for the financial system.

 The regulation of state banking activities and the liquidation of Banco de la Vivienda S.A.M.

 The need for an agreement with foreign private creditors on the treatment of the country’s external debt, with a view to its conversion.

The six month operational deadline was brought forward by a new Supreme Decree (DS) No. 21889 of March 8, 1988 and its Charter Law were approved on May 26, 1989 by DS 22203. The latter establishes that the objective of the SBEF is to “comply with and enforce all laws, decrees and regulations relating to the national financial system, to monitor the stability and solvency of the entities therein, and to ensure the prudent management of the public’s deposits and savings in order to control the development of an appropriate assignment of credit resources to the various sectors of economic activity in the country”.

The SBEF is empowered to supervise banks (including the BCB), financial funds, cooperatives, mutual funds and financial non-governmental organizations (NGOs) (since March 2008) and savings cooperative and credit societies (since June 2008). Amongst those institutions currently operating in the family remittances market, the following are not covered by any current regulation: exchange houses, international remittance operators (money transfer operators –

MTOs) and couriers.

According to article 40 of the BCB Law, the SBEF is obliged to provide the Banco Central de Bolivia with periodic information on regulated financial entities, and this provision is employed for the compilation of statistics on family remittances which are partially gathered by means of an SBEF circular.

Separately, the SBEF has created the Office of Financial Consumer Rights, where complaints are lodged and efforts are made to defend the consumer rights of clients of institutions regulated by law. A user of family remittance service payments provided by regulated institutions may therefore have recourse to this Office in case of problems.

Customer Complaints Service

Financial entities are obliged to attend to their customers’ complaints in accordance with the

SBEF Regulations governing the Customer Complaints Service (SARC). This is a free assistance service that Banks, Mutual Funds, Cooperatives and Private Financial Funds provide their customers with in response to their complaints and claims.

Clients or users may submit their claims verbally or in written form to the SARC at the corresponding entity, attaching the documentation they consider necessary:

 Claims are registered by staff at the financial entity in the SARCIT Module.

 The client or user accessing the SARC will receive written acknowledgement of the complaint, specifying the date of response.

 The usual deadline for a response is within approximately five working days.

The SBEF only looks at the complaints once all other means of solution and service have been exhausted at the financial entities. Likewise, it cannot intervene in legal suits between entities and their clients or customers, which must be resolved in court since the SBEF lacks attributes to resolve conflicts that exceed the administrative or regulatory environment.

Financial Investigations Unit

Bolivia’s UIF was created within the Supervisory Agency for Banks and Financial Entities by Law 1768. Its attributes and functions are defined under Supreme Decree 24771. Although Law 1768 established it as an administrative unit for intelligence on financial activities in 1997, it did not become completely operational until July 1999. The main responsibility of the UIF is to gather and analyze specific data on suspected money-laundering and other financial crimes and to solicit specific information on the financial sector at the request of attorneys from the Public Ministry who are investigating and prosecuting money-laundering cases.

The UIF is responsible for implementing anti-money laundering controls and is empowered to penalize financial entities within its jurisdiction for non-compliance with laws. Banks, insurance companies and securities brokers are among those entities falling within its jurisdiction. All

apparent economic justification or licit purpose) or suspicious (when a client refuses to provide information or an explanation and/or when the submitted documentation is clearly inconsistent or incorrect). The UIF began to receive some of these reports electronically during 2004.

After analyzing suspicious transaction reports and any other relevant information it may receive, the UIF informs all detected illegal activity to the Public Ministry. The UIF is also empowered to request additional information from the obliged financial institutions in order to aid prosecutors from the Public Ministry in their investigations.

Under current legislation, these entities are not required to inform on cash transactions below a given limit, as is common practice among the anti-money laundering regimes in many countries. The UIF has recently requested general information from non-regulated agents who participate in the market as payers of remittances, and hopes to include them as obligated reporting agents. In 2002 the Economic and Financial Investigation and Analysis Group (GIAEF) was created within the Special Anti-Narcotics Force (FELCN) to investigate the laundering of drug-related funds. The UIF, Public Ministry, National Police and FELCN have established mechanisms for the exchange and coordination of information, including the official sharing of information covered by bank confidentiality.

The Supreme Decree 29681 of August 20, 2008 establishes the obligation for all natural or legal persons –whether public, private, mixed, national or foreign capital– to declare the physical transport of foreign exchange into or out of the country to the national customs, and that these transactions be regulated and controlled.

2.2.3 Ministry of Foreign Relations

The Foreign Relations Service is the instrument aimed at executing the foreign policy of the Bolivian state. The General Directorate for the Consular Regime, one of the dependent agencies reporting to the Vice-Ministry of Foreign Affairs, is working through Bolivian consulates abroad to implement mechanisms that will allow obtaining information on migratory flows and remittances.

TABLE 5. CURRENT NORMS GOVERNING MIGRATORY AND CONSULAR MATTERS

Decreto Supremo núm. 25356, de 19 abril de 1999 (arancel consular) (Supreme Decree, No. 25356, of April 19, 1999 –consular fees)

Requisitos para la obtención de visas de ingreso a Bolivia (Requisites for obtaining entry visas to Bolivia) Reglamento Consular (Consular regulations)

Régimen Legal de Migración (Legal migration regime)

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2.3.1 Ministerio de Hacienda

The current attributes and functions of the Ministerio de Hacienda (Ministry of Finance) were established by the Executive Branch Organization Act (LOPE) –Law 3351 of February 21, 2006– and DS 28631 of March 9 ordering the LOPE Law 1178 regulates eight systems which are grouped according to administrative process.

The Vice-Ministry of Pensions and Financial Services is one of the vice-ministries dependent on the Ministry of Finance, and it is currently working on the improvement of the remittances market as part of the financial services provided in the country.

Another entity that depends on the Ministry of Finance is the National Customs, whose role is to facilitate and control the international flow of goods and to collect taxes in the framework of a State policy for the productive and social development of Bolivia.

2.3.2 Instituto Nacional de Estadística

The National System of Statistical Information Act –included in Legislative Decree 14100 of November 5, 1976– grants Instituto Nacional de Estadística (INE, statistics national institution) the responsibility to direct, plan, execute, control and coordinate statistical activities within the system, to promote the use of administrative registries for obtaining statistical data in both public and private agencies, and to train human resources and create a national statistical conscience.

Even though INE has organized censuses during the last decade and undertakes household surveys, to date no special section has been included to disseminate knowledge on the migration and remittances phenomena. However, there is currently a growing and manifest interest in these topics that lead to believe that they will be included in INE’s future plans. In fact, INE currently participates as a member of the Migrations Committee.

2.3.3 Unidad de Análisis de Políticas Sociales y Económicas

DS 24847 of September 20, 1997 allowed UDAPE (Social and Economic Policy Analysis Unit– created in 1983) to expand its functions into the social area, charging it with carrying out research, studies and proposals in matters of social policy. In 2004 UDAPE was assigned as a decentralized unit of the Ministry of Economic Development. In the social area this unit analyzes and designs policy actions in topics such as health, education, housing, basic sanitation, employment and the struggle against poverty.

2.3.4 Superintendencia de Empresas

The Superintendencia de Empresas (SE, Superintendence of Companies) was created by Law No. 2427 of 2002 and has jurisdiction and national competence to regulate individuals and companies in matters of voluntary restructuring and liquidation, the preservation of

Institutions participating in the family remittances market which are not regulated by the SBEF

fall under the jurisdiction of the SE. However, the latter has no monitoring powers nor attributes for the protection of consumer rights.

2.3.5 Ministerio de Trabajo

The Ministerio de Trabajo (Ministry of Labor) is an institution that guarantees compliance with the rights of workers and contributes to the achievement of full employment. The Ministry of Labor is empowered by Law No. 3351 for the Organization of the Executive Branch (LOPE) of February 21, 2006 with the following attributes in order to comply with its institutional mission:

 To guarantee the effective defense of workers’ rights within the country.

 To monitor the enforcement and compliance with national legislation and international treaties in labor affairs.

 To restore the right to organize to all workers.

 To generate policies and programs aimed at eradicating the exploitation of child labor.

 To coordinate the generation of policies and programs aimed at guaranteeing equality in access to and conditions of labor between men and women.

 To coordinate and develop policies for the eradication of any form of indented servitude.

 To promote the economic and productive development of cooperatives, monitoring their organization and operations in the framework of the General Cooperatives Law.

2.3.6 Ministerio de Justicia

The Viceministerio de Justicia y Derechos Humanos (Vice-Ministry of Justice and Human Rights) –which lies within the Ministerio de Justicia (Ministry of Justice)– has the following functions:

 To formulate judicial policies and those for the defense, protection and promotion of human rights, undertaking action that will contribute to their implementation.

 To contribute to the court and administrative protection of human and collective rights, when their violation proceeds from the public authorities or from the actions of individuals that affect the interests of the population in a generalized manner.

 To put forward and manage a national policy for the defense, protection and promotion of human rights, and to ensure the application of international treaties and agreements in said matters.

In addition, the Ministry of Justice is designated by the President of the Republic to preside over the Inter-Institutional Council for Human Rights, which is the body which deals with the topics of migration and remittances.

2.3.7 Asociación de Bancos Privados de Bolivia

The Asociación de Bancos Privados de Bolivia (ASOBAN, Bolivian private banks association) is a non-profit, private-law institution incorporated under the Bolivian Civil Code and comprising all national and foreign private banks established in Bolivia. In 1957 it was legally recognized via Supreme Resolution No. 75168. Its objective is to propose, design and program policies

aimed at developing the banking business in Bolivia, as well as to preserve and safeguard the sector’s interests and priorities in the process of economic development.

ASOBAN owns the Administradora de Cámaras de Compensación y Liquidación (Clearing and Settlement Management Corporation) for the operation of cheque and electronic transfer clearing houses. In the field of information, it publishes a monthly Information Bulletin and a Statistical Report every semester.

2.3.8 Asociación de Entidades Financieras Especializadas en Microfinanzas

The Asociación de Entidades Financieras Especializadas en Microfinanzas (ASOFIN, an association of financial entities specialized in microfinance) was created in 1999 as a non-profit, private-law civil association. It is the highest national representative of the regulated microfinance sector in Bolivia. It is the maximum Bolivian national entity representing the regulated microfinance sector. Its legal personality has been recognized by means of Prefectural Resolution No. 424 of August 20, 1999 and its operations are governed by its Statutes and Regulations.

Its list of active members currently comprises eight financial institutions of which two are banks, five are Private Financial Funds and the remaining one is a currently unregulated NGO

which is expected to come under SBEF regulation in the near future. The following are some of ASOFIN’s functions:

 To represent its affiliated financial entities specializing in microfinance before the public powers of the State, the Banco Central de Bolivia, the SBEF and political-administrative, departmental, national and international entities.

 To strengthen, promote and safeguard financial intermediation and auxiliary financial services activities.

 To facilitate, propose, design and manage the implementation of programs aimed at strengthening the development of the sector.

 To promote institutional links with international organizations and entities, and to maintain cooperation with and complement national or foreign organizations.

 To analyze all types of regulations and matters that may affect the sector, publicizing its position.

 To adopt policies tending towards the establishment of mutual support and collaboration amongst its affiliates in defense of their interests.

 To undertake any activity that may be indispensable to the fulfillment of its objectives in keeping with current legal provisions.

2.3.9 International Migration Organization

The International Migration Organization (IMO), created in 1951, is the principal inter-governmental organization in the field of migration. Its goal is to promote humane and orderly migration for the benefit of all. In this context it offers services and advice to governments and migrants. IMO’s work consists of ensuring an orderly and humane management of migration;

migratory problems; and to offer humanitarian assistance to migrants in need, whether refugees, displaced or uprooted persons. The IMO charter explicitly recognizes the link between migration and economic, social and cultural development, as well as the respect for the right of freedom to the movement of persons.

IMO engages in four broad areas of work in migration management: migration and development, facilitated migration; regulation of migration and forced migration. Among concomitant activities one can point to the promotion of the international right to migrate, the political debate and orientation, the protection of migrant rights, migration and health, and the gender dimension in migration. Additionally, work takes place in close collaboration with governmental, inter-governmental and non-governmental associates.

2.3.10 Asociación de Cooperación Bolivia-España y Asociación de Migrantes

Bolivia-España

The Asociación de Cooperación Bolivia-España (ACOBE, Bolivia and Spain Cooperation Association) is a non-profit organization comprising Bolivians, Spaniards and people of other nationalities who have united to promote the integration of Bolivian immigrants in Spain. The Asociación de Inmigrantes Bolivia-España (AMIBE, Bolivia and Spain Migrants Association) is part of ACOBE, and its purpose is to contribute to and support development in Bolivia so as to bridge family support between both countries for the purpose of reducing the disintegrating impact of migration.

In Spain ACOBE offers various services such as legal orientation with respect to alien status and in support of migrant regularization, capacity-building services through its Active Employment Search program, psychological counseling, and social, cultural and athletic activities aimed at the Bolivian community. All these services are aimed at the labor insertion and social integration of immigrants from various countries, and in particular of the Bolivian community in Spain.

In turn, AMIBE provides information and advisory services with regard to alien status as well as orientation with regard to socio-cultural and labor market topics and those relating to family reunification in Spain. AMIBE works by sensitizing migrant families to the problems of migration, providing children and teenagers suffering from migratory abandonment with psycho-social assistance, and in the areas of human rights, cooperation for development and co-development, migratory policies, etc.