Plurinational State of Bolivia 2009 Constitution - Page 15 of 21

Table of Contents

PART IV. ECONOMIC STRUCTURE AND ORGANIZATION OF THE STATE

TITLE I. ECONOMIC ORGANIZATION OF THE STATE

CHAPTER I. General Matters

Article 306

The Bolivian economic model is plural and seeks to improve the quality of life and the well being of all Bolivians.
The plural economy is composed of forms of community, state, private and public cooperative economic organization.
The plural economy articulates different forms of economic organization based on the principles of complementariness, reciprocity, solidarity, redistribution, equality, legal security, sustainability, equilibrium, justice and transparency.
The forms of economic organization recognized in this Constitution may form joint ventures.
The State places the highest value on human beings and assures development through the equitable redistribution of economic surplus in the social policies of health, education, culture, and the re-investment in productive economic development.

Article 307

The State shall recognize, respect, protect and promote community economic development. This form of community economic organization includes productive and reproductive systems of public life, founded on the principles and visions of the nations and rural native indigenous peoples.

Article 308

The State recognizes, respects and protects private initiative that contributes to the economic and social development and the strengthening of economic independence of the country.
Free enterprise and full exercise of business activities, which shall be regulated by law, are guaranteed.

Article 309

The form of state economic organization includes the enterprises and other economic entities that are state property, which shall comply with the following objectives:

To administer property rights over natural resources on behalf of the Bolivian people, and to exercise strategic control of the productive chain and industrialization of these resources.
To manage basic services of potable water and sewer systems directly or by means of public, community, cooperative or mixed enterprises.
To directly produce goods and services.
To promote economic democracy and achieve the food sovereignty of the population.
To guarantee public participation and control over its organization and management, as well as the participation of workers in decision making and in the profits.

Article 310

The State recognizes and protects the cooperatives as forms of solidarity and cooperation, which are not for profit. The organization of cooperatives shall be promoted primarily in production activities.

Article 311

All forms of economic organization established in this Constitution shall enjoy equality before the law.
The pluralistic economy includes the following aspects:
1. The State shall exercise total direction of economic development and the processes of planning.
2. The natural resources are the property of the Bolivian people and shall be managed by the State. Individual and collective property rights in land shall be respected and guaranteed. Agriculture, raising of livestock, as well as hunting and fishing not involving protected species, are activities that are governed by Part Four of this Constitution relating to the economic structure and organization of the State.
3. The industrialization of natural resources to overcome dependence on the export of raw materials and to achieve an economy with a productive base, within the framework of sustainable development in harmony with nature.
4. The State may intervene in every part of the chain of productivity in the strategic sectors, seeking to guarantee its supply in order to preserve the quality of life of all Bolivians.
5. Respect for enterprise initiative and legal security.
6. The State shall stimulate and promote the community area of the economy as a supportive alternative in rural and urban areas.

Article 312

Every economic activity must contribute to the strengthening of the economic sovereignty of the country. The private accumulation of economic power to the degree that it might endanger the economic sovereignty of the State shall not be permitted.
All forms of economic organization have the obligation to generate dignified work and to contribute to the reduction of inequalities and to the eradication of poverty.
All forms of economic organization have the obligation to protect the environment.

Article 313

To eliminate poverty and social and economic exclusion, and in order to achieve well being in its multiple dimensions, the economic organization of Bolivia has the following goals:

The generation of social wealth within the framework of respect for individual rights, as well as the rights of the peoples and nations.
The fair production, distribution and redistribution of wealth and economic surplus.
The reduction of inequality of access to productive resources.
The reduction of regional inequalities.
The productive development of the industrialization of natural resources.
The active participation of the public and community economies in the productive apparatus.

Article 314

Private monopolies and oligopolies are prohibited, as well as any other form of association or public or private legal agreement by Bolivian or foreign persons, who attempt to control and have exclusivity over production and commercialization of goods and services.

Article 315

The State recognizes the title to land of all legal persons that are legally constituted in the national territory, provided that it be used to fulfill the objective of the creation of an economic agent, the generation of employment, and the production and commercialization of goods and/or services.
The legal persons mentioned in the paragraph above that are formed after the adoption of the present Constitution shall have a corporate structure with the number of owners no less than the division of the total surface by five thousand hectares, rounding up the result to the immediately higher whole number.

CHAPTER II. Function of the State in the Economy

Article 316

The function of the State in the economy consists of the following:

To conduct the process of economic and social planning, with the participation of, and in consultation with, the citizens. The law shall establish a system of comprehensive state planning, which shall incorporate all the territorial entities.
To direct the economy and to regulate the processes of production, distribution and commercialization of goods and services, according to the principles established in this Constitution.
To exercise the direction and control of the strategic sectors of the economy.
To directly participate in the economy by way of incentive and the production of economic and social goods and services in order to promote economic and social equity, and to stimulate development, preventing oligopolistic control of the economy.
To promote the integration of different economic forms of production, with the objective of achieving economic and social development.
To promote primarily the industrialization of renewable and nonrenewable natural resources, within the framework of respect for and protection of the environment, in order to guarantee the generation of employment and the economic and social consumption of the population.
To promote policies of equitable distribution of wealth and of the economic resources of the country, for the purpose of preventing inequality, social and economic exclusion, and to eradicate poverty in its multiple dimensions.
To establish state monopoly over productive and commercial activities that are considered indispensable in the event of pubic need.
To periodically formulate, with the participation of and in consultation with the citizenry, the general development plan, the execution of which is obligatory for every form of economic organization.
To administer economic resources for research, technical assistance and transfer of technology to promote productive activities and industrialization.
To regulate aeronautic activity in the air space of the country.

Article 317

The State shall guarantee the creation, organization and performance of a participatory planning entity that includes representatives of the public institutions and organized civil society.

CHAPTER III. Economic Policies

Article 318

The State shall determine the policy for industrial and commercial production that guarantees a sufficient supply of goods and services to adequately cover basic domestic needs and to strengthen export capacity.
The State recognizes and shall prioritize support for the organization of associative structures of micro, small and medium productive enterprises, both urban and rural.
The State shall strengthen the productive, manufacturing and industrial infrastructure and basic services for the productive sector.
The State shall prioritize the promotion of rural productive development as fundamental to the development policies of the country.
The State shall promote and support the export of value added goods and of services.

Article 319

The industrialization of natural resources shall be a priority in the economic policies, within the framework of respect for and protection of the environment and of the rights of the rural native indigenous nations and peoples and their territories. The articulation of the exploitation of natural resources with internal productive apparatus shall be a priority in the economic policies of the State.
In setting the price for the commercialization of strategic natural and energy resources, the State shall consider taxes, royalties and the corresponding participations that must be paid to the public treasury.

Article 320

Bolivian investment shall take priority over foreign investment.
Every foreign investment shall submit to Bolivian jurisdiction, laws and authorities, and no one may cite an exceptional situation, nor appeal to diplomatic claims to obtain a more favorable treatment.
The economic relations with foreign states or enterprises shall be carried out under conditions of independence, mutual respect and equity. More favorable conditions may not be granted to foreign States or enterprises than those established for Bolivians.
The State acts independently in all of its decisions on internal economic policy, and shall not accept demands or conditions imposed on this policy by states, banks or Bolivian or foreign financial institutions, multilateral entities or transnational enterprises.
The public policies shall promote internal consumption of products made in Bolivia.

Section I. Fiscal Policy

Article 321

The economic and financial administration of the State and all of the public entities is governed by its budget.
The determination of expenses and public investment shall be made by means of participatory mechanisms involving the citizenry, technical planning and the state executive. The allocations shall attend especially to education, health, nutrition, housing and productive development.
The Executive Organ shall present to the Pluri-National Legislative Assembly, at least two months before the end of each fiscal year, the proposed law of the General Budget for the following term, which shall include all of the entities of the public sector.
Every bill that implies expenses or investments for the State must establish the source of the funding, the way in which they will be covered, and the manner of their investment. If the bill was not presented by initiative of the Executive Organ, it requires prior consultation with it.
The Executive Organ, through the Ministry of the relevant branch, shall have direct access to the information concerning the expenses that are budgeted and spent in every public sector. This access shall include information on the expenses budgeted and spent by the Bolivian Armed Forces and Police.

Article 322

The Pluri-National Legislative Assembly shall authorize the contracting of public debt when the capacity to generate revenue to cover the capital and interest is demonstrated, and when the most advantageous conditions in the rates, payment schedules, amounts and other circumstances are technically justified.
Public debt may not include obligations that have not been authorized and expressly guaranteed by the Pluri-National Legislative Assembly.

Article 323

The fiscal policy is based on the principles of economic capacity, equality, progressiveness, proportionality, transparency, universality, control, administrative simplicity and ability to collect.
The taxes which belong to the national tax domain shall be approved by the Pluri-National Legislative Assembly. The taxes that belong to the exclusive domain of the departmental or municipal autonomies, shall be approved, modified or eliminated by their Councils or Assemblies at the request of the executive organs. The tax domain of the Decentralized Departments and regions shall be made up of departmental taxes, fees and special contributions, respectively.
The Pluri-National Legislative Assembly shall classify and define the taxes that by law belong to the national, departmental and municipal tax domains.
The creation, suppression or modification of taxes under the dominion of the autonomous governments with taxing authority, shall be effected under the following limitations:
1. No taxes may be created that impose taxes which are analogous to those corresponding to existing national taxes or other departmental or municipal taxes, independently of the tax domain to which they belong.
2. No taxes may be created that encumber goods, economic activity or patrimony outside of their territorial jurisdiction, except revenues generated by their citizens or enterprises outside of the country. This prohibition extends to fees, certificates and special contributions.
3. No taxes may be created that impede the free circulation and establishment of persons, assets, activities or services within the territorial jurisdiction. This prohibition extends to fees, certificates and special contributions.
4. No taxes may be created that generate privileges for residents in a discriminatory manner. This prohibition extends to fees, certificates and special contributions.

Article 324

The debts for economic damages caused to the state never expire.

Article 325

Illicit economic activity, speculation, hoarding, money changing, usury, contraband, tax evasion and other related economic crimes shall be punished by the law.

Section II. Monetary Policy

Article 326

The State, through the Executive Organ, shall determine the goals of the monetary and exchange policies of the country in coordination with the Central Bank of Bolivia.
Public transactions in the country shall be carried out in the national currency.

Article 327

The Central Bank of Bolivia is an institution of public law, with its own legal personality and patrimony. Within the framework of the economic policy of the State, it is the function of the Central Bank of Bolivia to maintain stability of the internal purchasing power of the currency in order to contribute to the economic and social development.

Article 328

In addition to those set forth in the law, the powers of the Central Bank of Bolivia, in coordination with the economic policy determined by the Executive Organ, are as follows:
1. To determine and execute the monetary policy.
2. To execute the exchange policy.
3. To regulate the system of payments.
4. To authorize the issuance of currency.
5. To manage the international reserves.

Article 329

The Board of Directors of the Central Bank of Bolivia shall be composed of a President and five directors designated by the President of the State from lists of candidates presented by the Pluri-National Legislative Assembly for each one of the positions.
The members of the Board of Directors of the Central Bank of Bolivia shall have terms of five years, and are not eligible for re-election. They shall be considered public servants, pursuant to the Constitution and the law. The specific requisites for the position shall be determined by law.
The members of the Board of Directors of the Central Bank of Bolivia shall report and give accounts on the performance of the institution as often as requested by the Pluri-National Legislative Assembly or its Chambers. The Central Bank of Bolivia shall deliver an annual report to the Legislative Assembly and is subject to the governmental and fiscal system of control of the State.

Section III. Financial Policy

Article 330

The State shall regulate the financial system based on criterion of equality of opportunity, solidarity, equitable distribution and redistribution.
The State, through its financial policy, shall prioritize the demand for financial services of the sectors of micro and small enterprises, artisans, commerce, service, community organizations and production cooperatives.
The State shall stimulate the creation of non bank financial entities for the purpose of socially productive investment.
The Central Bank of Bolivia and the public entities and institutions shall not recognize the debts of private banks or financial entities. These banks and entities have the obligation to contribute to and strengthen a fund for financial restructuring, which shall be used in the event of bank insolvency.
The financial operations of the Public Administration, at the different levels of government, shall be carried out by a public banking entity. The law shall provide for its creation.

Article 331

The activities of financial intermediation, the provision of financial services and any other activities related to the management, use and investment of savings, are matters of public interest and may only be exercised with prior authorization of the State, in accordance with the law.

Article 332

The financial entities shall be regulated and supervised by an institution of banking and financial entity regulation. This institution shall be a public law institution and shall have jurisdiction in the entire territory of Bolivia.
The highest authority of the institution for banking and financial entity regulation shall be designated by the President of the State from among a list of candidates proposed by the Pluri-National Legislative Assembly, in accordance with the procedure established by the law.

Article 333

The financial operations carried out by natural or legal persons, whether by Bolivians or foreigners, shall enjoy the right of confidentiality, except in judicial procedures in cases of the alleged commission of financial crimes, those in which fortunes are being investigated and others defined by the law. The entities, which are designated by law to investigate such cases, shall have the authority to obtain information about said financial operations without the need for judicial authorization.

Section IV. Sector Policies

Article 334

In the context of sectoral policies, the State shall protect and promote:

The rural economic organizations, and the associations or organizations of small urban producers and artisans, as supportive and reciprocal alternatives. The economic policy shall facilitate access to technical training and technology, to credits, to the opening of markets, and the improvement of productive processes.
The guild sector, the self-employed, and retail commerce, in the areas of production, services and sales, shall be strengthened by means of access to credit and technical assistance.
Production of crafts with cultural identity.
The micro and small enterprises, as well as the rural economic organizations, and organizations or associations of small producers, which shall enjoy preference in the purchases made by the State.

Article 335

The public service cooperatives shall be non profit organizations of collective interest and submitted to governmental control, and they shall be administered democratically. The election of their administrative and supervisory authorities shall be carried out according to their own statutory norms and supervised by the Pluri-National Electoral Organ. Their organization and operation shall be regulated by law.

Article 336

The State shall provide support to community economic organizations so that they may receive credits and financing.

Article 337

Tourism is a strategic economic activity, which must be developed in a sustainable manner that takes into account respect for the treasures of the culture and the environment.
The State shall promote and protect community tourism with the objective of benefiting urban and rural communities, and the rural native indigenous nations and peoples where this activity is carried out.

Article 338

The State recognizes the economic value of housework as a source of wealth, and it shall be quantified in public accounts.

CHAPTER IV. Assets and Resources of the State and Their Distribution

Article 339

The President of the Republic may only decree payments that are not authorized by the budget law in order to attend to necessities, which cannot be delayed, arising from public calamities, internal disturbance or the exhaustion of resources destined to maintain services, the paralysis of which would cause serious harm. The expenses destined for these objectives shall not exceed one percent of the total expenditures authorized by the General Budget.
The assets that are State patrimony and those of public entities are property of the Bolivian people, and they may not be violated, attached, limited or expropriated; they may not be employed to the benefit of any individual. Their description, inventory, administration, disposition, obligatory registration, and the kinds of claims shall be regulated by law.
The income of the State shall be invested pursuant to the general economic and social development plan of the country, the General Budget of the State and the law.

Article 340

State revenue is divided into revenue of the nation, departments, municipalities and the rural native indigenous peoples, and it shall be invested independently by their Treasuries, pursuant to their respect budgets.
The law shall classify the national, departmental and municipal income and that of the rural native indigenous peoples.
The departmental and municipal resources, and those of the rural native indigenous autonomies, and the judicial and university resources, which are collected by dependent offices at the national level, shall not be centralized in the National Treasury.
The national Executive Organ shall establish the norms for the elaboration and presentation of the proposed budgets of the entire public sector, including the autonomies.

Article 341

The following are the resources of departments:

The departmental royalties created by law.
Participation in the revenue derived from taxes on the Hydrocarbons, according to the percentages set forth in the law.
Taxes, fees, special contributions and departmental certificates on natural resources.
The transfers from the General Treasury of the Nation which are allocated to cover the expenses of personal health, education and social assistance.
The extraordinary transfers of the General Treasury of the Nation, in the cases established in article 339.I of this Constitution.
The internal and foreign credits and loans contracted pursuant to the norms of public debt of the system of the National Treasury and Public Credit.
The income derived from the sale of goods, services and the sale of assets.
Bequests, donations and other similar income.