Andean Group - April 2026

Bolivia’s President Rodrigo Paz met his Brazilian counterpart Luiz Inácio Lula da Silva in Brasília on 16 March, in their first meeting since Paz took office in November last year. The focus of the meeting was on expanding bilateral cooperation in strategic areas, with the two leaders signing cooperation agreements on energy, tourism, and the fight against transnational organised crime. Their 3,400 km border is the world’s eighth-longest and the second-longest in South America, and Brazil was Bolivia’s second-largest export market after China in 2025, receiving goods worth US$1.24bn. However, Bolivian exports to Brazil are down sharply from US$4.04bn in 2013, at the height of the country’s long-gone natural gas boom.

The two countries are also partners in several major cross-border infrastructure projects, including the Paraguay-Paraná Waterway that connects them with Argentina, Paraguay, and Uruguay, and the Mamoré international bridge, which will connect the Brazilian state of Rondônia with Bolivia’s Beni department. The bridge is expected to be completed in 2027 at a cost of approximately US$70m. Its construction dates back to a 1903 treaty in which Bolivia ceded the Acre region to Brazil, and an agreement was finally reached in 2007 between Lula and Bolivia’s then-president Evo Morales (2006-2019) for Brazil to pay for the bridge.

Once built, as part of Lula’s ‘South American Integration Routes’ project, it will facilitate faster exports of Brazilian commodities through Chilean and Peruvian ports on the Pacific, which are vital for trade with Asian markets, whilst allowing exports from landlocked Bolivia easier access to Atlantic ports through Brazilian territory. In 2004, during his first presidency (2003-2011), Lula inaugurated the first bridge connecting Bolivia and Brazil in the history of the two countries, linking Brasiléia, in Acre, and the Bolivian city of Cobija (Pando department) across the Acre river. Cobija is a key conduit for trade between Bolivia and Brazil and is the site of one of Bolivia’s main duty-free zones.

During Paz’s visit, Lula also emphasised the importance of bilateral cooperation over energy. This is an important issue for Brazil but an almost existential one for the Bolivian economy. Bolivia remains Brazil’s largest supplier of natural gas via a 3,150km pipeline, the largest gas pipeline in South America with an annual capacity of 11bn cubic metres of gas. Meanwhile, Brazil is now the only major recipient of Bolivia’s dwindling natural gas reserves, after Argentina stopped importing Bolivian gas in September 2024. While Bolivia has struggled to meet gas export quotas, Argentina is seeing growing production at its Vaca Muerta shale fields and is now a competitor for the Brazilian market.

President Paz took the opportunity to announce that his government would be presenting a bill to replace the 2005 hydrocarbons law, raised the tax and royalty burden on hydrocarbons production to 50%, while increasing state control over the sector. Without providing much detail, Paz said that the reform would be part of his ‘50/50’ decentralisation plan, which aims for 50% of state funds to be administered by central government, and the remaining 50% by regional and local governments.

He also emphasised the need for Bolivia to attract foreign investment and technology from countries such as Brazil in order to modernise aging hydrocarbons infrastructure and reverse a decline in production. Brazil, Paz said, “has an enormous market that never stops asking for energy, and Bolivia over the coming years needs to generate that energy, not only to meet our internal needs but also to export gas and other types of energy” – a reference to Bolivia’s nascent lithium sector.

The Bolivian president has been clear about his desire to use public-private partnerships to revitalise state-owned companies such as hydrocarbons firm Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), ensuring autonomy, transparency, and professionalism in entities which he claims have long been run as political organisations. It has been clear for some time that for Bolivia to meet its own energy demands, let alone to maintain the natural gas exports upon which its economy has been so reliant, it needs major investment and restructuring of its hydrocarbons sector.

To achieve this, Paz is signalling to investors that he is ready to modify the framework surrounding that sector. He has spoken of offering tax breaks, and he will also be looking to capitalise on Bolivia’s location and strategic infrastructure to make use of further arrangements. One key example of this is the ongoing use of Bolivia’s Gasoducto Norte pipeline in Argentina, which, no longer carrying gas to the Argentine market, has been reversed with Bolivia receiving payments for the transport of Argentina’s gas to Brazil. With Lula speaking during Paz’s visit of his hopes for closer integration of gas markets in the Southern Cone, Bolivia’s YPFB will no doubt be working to ensure it is included.

A further agreement was also signed between the two countries pledging closer electricity interconnection, expanding energy integration through cross-border infrastructure such as transmission lines, particularly between Bolivia’s Santa Cruz department and Brazil’s Mato Grosso do Sul state. The agreement describes the need to expand electricity access in both countries, as well as referring to bilateral cooperation in the production of biofuels and other renewable energy sources.

An agreement was also signed on strengthening cooperation in combatting transnational organised crime, a particularly salient issue for the Bolivians given that one of the major concerns surrounding the increased mobility between the two countries permitted by the new bridges is the capacity of Brazilian organised crime groups to move further into Bolivian territory. The agreement focuses on actions against human trafficking, drug smuggling, money laundering, arms trafficking, illegal mining, contraband, vehicle theft, and environmental crimes.

The private sector in Bolivia welcomed the visit to Brazil, with some 120 business representatives forming part of the delegation that travelled with Paz, before also attending an economic forum in São Paulo on 17 March. The president of the La Paz entrepreneurs federation (FEPLP), Rolando Kempff, said that his organisation particularly welcomed the agreements on electricity integration and promoting tourism, and that they were encouraged by the focus on restoring Bolivian competitiveness and opening the country up to new regional markets.

Paz’s trip to Brazil therefore appears to have been a success. He seemed to strike a positive relationship with Lula, who despite his reputation for diplomatic pragmatism was more ideologically aligned with Paz’s left-wing predecessor Luis Arce (2020-2025), who was arrested on corruption charges late last year and whose legacy is regularly savaged by Paz. He also succeeded in reaffirming his vision for the country’s next steps for those watching from back home. None of the ideas mentioned were new, and the details for proposals such as the hydrocarbons law reform are yet to be fleshed out, but Paz is maintaining the narrative of returning Bolivia to the regional and international economic fold, seeking out private sector investment, and committing to turning around the country’s economic fortunes.