The Lincoln Plawg - the blog with footnotes

Politics and law from a British perspective (hence Politics LAW BloG): ''People who like this sort of thing...'' as the Great Man said

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Wednesday, November 19, 2003

Bolivia's landlocked-ness

The Spanish word is mediterraneidad - which conjures up a world at the antipode (more than just geographically!) of the Bolivian reality: the promiscuous and profitable clashing and combining of cultures through proximity and ease of transport which characterise the northern hemisphere's version.

For Bolivia, being landlocked is a condition forced upon it - Chile snatched its Pacific coastline and Atacama Desert hinterland in the 1879-84 Guerro de Pacífico and the 1904 treaty (which I discussed on October 29). The site has a robustly biased but interesting piece, ¿Es la falta de mar la razón del retraso boliviano? retracing the history, and telling the Bolivians, more or less, to pull themselves together and make the best of their situation.

(It points out, for instance, the contrast with Paraguay, also landlocked, with which Bolivia fought the disastrous 1932-5 Chaco War. According to the CIA Factbook, Paraguay has almost double the (PPP-adjusted) per capita GDP that Bolivia enjoys. Fair comparison? Deficiency of knowledge precludes a judgement on the matter!)

A 2003 study by Harvard economist Jeffrey Sachs (as reported in El Deber of Santa Cruz (July 31)) put the cost in lost growth of Bolivia's geographical situation at 1.5% a year. A loss which, of course, compounds over time [1].

A short article (PDF) in the Chilean Revista de Marina, house rag of the Chilean Navy, under the title Mediterraneidad de Bolivia, summarises the history, and, in a triumph of hope over nearly 200 years of experience of the dire-to-catastrophic quality of Bolivian governance, suggests that, by taking action through international fora, and with the gas wealth as the incentive, Bolivia might succeed in obtaining some kind of maritime outlet.

Taking a step back for a moment, the idea that a country needs to own the territory through which it trades seems at first sight untenable. An internal empire (not to mention Andean-sized tariff barriers!) was no end of help in establishing US industry as #1 in the course of the 19th century; on the other hand, Russian industrialisation was the most laggardly of the European Great Powers before 1914.

Central and Eastern Europe has a concentration of landlocked countries, whose economic performance have varied widely for (one might infer) reasons other than their landlocked-ness. Which, in any case is relative: Bulgaria and Romania have Black Sea coastlines - but Black Sea traffic is liable to be choked off at the Bosphorus by Turkey. In theory, at least.

Perhaps my layman's instincts on the matter are unjustified, though. A January 2001 piece, Prisoners of Geography in Foreign Policy by Harvard professor Ricardo Hausman discusses more generally the effect of a country's geography on its economic potential. It says that
A recent study found that shipping goods over 1 additional kilometer of land costs as much as shipping them over 7 extra kilometers-of sea. Maritime shipping is particularly suited to the bulky, low-value-added goods that developing nations tend to produce...

And not only physical geography:
Studies on trade between U.S. states and Canadian provinces find that simply crossing the U.S.-Canadian border is equivalent to adding from 4,000 to 16,000 kilometers worth of transportation costs.

(Instinctively, I'm sceptical about that last point.)

One must also consider the size and growth of the population. Bolivians, not to put too fine a point on it, breed like rabbits. According to the CIA Factbook table, the fertility rate is 3.23 children per woman; a bit better than Kenya (3.47), but beaten by Bangladesh (3.17), Egypt (3.02), India (2.91), Indonesia (2.50), and Vietnam (2.24). (The US is a balanced 2.07, the UK below replacement level at 1.66.)

There has been movement from the altiplano to the easier terrain of Santa Cruz and Tarija departments - a summary (PDF) from the 2001 census is shows that, whilst population growth nationwide in the 1990s averaged 2.74% a year, in La Paz department the number was 2.29%, and, in the once fabulously rich but now poorest department, Potosí, growth averaged 1.01%.

And Bolivians go abroad to work: the Hausman paper puts the proportion at 20% or so.

With these factors at play, is it possible over the medium term to bring per capita GDP - increases in which only go into positive territory at 2.74%! - up to the level even of Paraguay? On the basis of stuff I've seen, I'm dubious.

But - the research goes on!

  1. For instance, an economy that grows at 2% a year for 100 years will be 7 times its original size at the end; growth at 3.5% would make that 31 times.


It sounds, on further thought, paradoxical to suggest that a country with the low population density of Bolivia - around 8 per square kilometre - could be overpopulated. My layman's guess is that excessive population density is a relative concept. Hong Kong can be crammed like a Tokyo subway train in the rush-hour and work fine; County Tipperary - not so much.

One has the cautionary tale of the homesteaders offered the tempting prospect, under the Enlarged Homestead Act of 1909, of 320 acres in the wild splendours of Montana. To an Easterner - still more a farmer from Central or Eastern Europe - 320 acres sounded like quite a spread.

But the holdings they were given were not viable in the long term. (There is some stuff online - from the Montana Heritage Project, for instance. Also a couple of papers - this and this - which link the creation of the 1930s Dust Bowl to the bad agriculture that homesteading forced on farmers.)

On migration within Bolivia, there's a paper (PDF) which suggests that the movement of peasants into the cities is probably a good idea on balance (but is unspecific on how the peasants, once moved, are to be made economically viable). And a more general paper (PDF) on migration concludes that, unusally, the tropical areas of Bolivia (such as Santa Cruz Department) have higher welfare levels than the altiplano - where capital La Paz and its Siamese twin El Alto are located; and that departments with lower poverty levels have been more successful in reducing them (over the period 1976-1992).

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