Bolivia is not a national landlocked country. It was a maritime state till 1884. It was the War of the Pacific which culminated in the defeat of Bolivia and rendered it a landlocked country of South America. In the war, Bolivia lost Atacama province to Chile. Wars are always catastrophic and the war of Chaco brought more miserable days for Bolivia when it lost most of Gran Chaco to Paraguay in 1938.
In the contemporary world, Bolivia happens to one of the poorest countries of South America. Bolivia is known as the "Tibet of the Americas", being the highest, mountainous and remotest in South America. Landlockedness plows poverty practically. According to Mackellar et al (2000), 9 out of the 20 poorest countries of the world are landlocked. Transport cost and geographical remoteness tend to raise the cost of exports and imports.
If Niger is the largest landlocked country of Africa, Bolivia is the largest landlocked country of South America, covering a surface area almost equal to Pakistan and Afghanistan combined. Mining and hydrocarbon exports happen to be the largest constituents of Bolivian exports. In 2006, high earnings for mining and hydrocarbons pushed the current account surplus to almost 12% of GDP. Minerals, oil and gas activities account for 47.5% of Bolivia's total exports. In HDI, Bolivia is at 117 out of 177 countries surveyed in 2007.
GDP per capita in purchasing power parity is $4000, according to the CIA World Factbook. Bolivian's external debt $5bn is 40% more than the only other landlocked country of the region which is Paraguay. According to Snow, Fey et al 2003 (UNDP) Bolivia has the poorest state of roads and rail networks in the whole Latin America. Estimates vary. Bolivia has 5%, and 20% of paved roads according to UNCTAD and EU respectively. Whereas 70% of intra-regional transport within the Andean community is channelled by roads.
Issues like poor topography; social upheavals, low population density, lack of forwarders consolidating cargo, depressed economy and bad management of the system make Bolivian trade profile more costly and less competitive in the region and beyond. Cargo exchange is further slowed with disruptions in Peru, Chile and Argentina. All this paint a dismal picture for the export and import merchandise of Bolivian traders.
Bolivia is a member of the CAN (Andean community), MERCOSUR and OAS (Organisation of American States) and currently operates a number of Tax Free Zones in La Paz, Santa Curz and Puerto Suarez. These ports allow free entry of duty-free goods to be transformed and then exported. Bolivia has signed a general system of preferences with US, EU and Japan. However, in the last days of President Bush's regime, America severed its relations with Bolivia.
Diplomats of both countries were declared as personas non grata. President Bush suspended trade benefits assigned to Bolivia and alleged that Bolivia has "failed to cooperate in drug control and thus Bolivia is ineligible to export jewlry, textiles and other manufactured duty-free items to USA, under the Andean Trade Promotion and Drug Eradication Act. According to the New York Times, with this measure, 50% of duty-free exports, bound to the USA, would be affected, registering more adverse effects against the Bolivian economy.
Some 20,000 labour has been laid off and more than 30,000 truck drivers' career is at risk. President Obama has decided to uphold the decision of his predecessor George W Bush recently. Bolivian government has termed this action of the US Government as "unfair" by quoting that cocaine has just rose to 7% in Bolivia and 27% in Colombia. Colombia is unharmed, and the largest beneficiary of US Government, with billions of aid.
Jose Ribero, General Manager of Bolivian's National Chamber of Exporters said "not politicians but the poor Bolivians are paying the price of this political rift". Paraguay is the second landlocked economy of South America. Paraguay, according to the UNCTAD data of 2008, is one of the few countries which have shown a downward trend in its GDP. Its GDP was at a pinnacle in 1996, with $9600m which slided to $8300m in 2000, $6800m in 2004 and $6700m in 2004. However, its HDI ranking was 88 out of 177 countries in 2007, far better than the other landlocked economy of Bolivia.
Its import bill ($2600M) was 60% more than its exports proceeds ($1657m) in the year of 2004. With $3210m; its external debt is lower than other countries like Brazil, Argentina, Bolivia and Chile of the same region. Paraguay is much ahead of Bolivia in the maintenance of paved roads, which are 50.8% of total road network.
In exports, Paraguay's mainstay is food items (75%) followed by energy and fuel (13%). Its exports are destined to Brazil (34.2%), Uruguay (19.6%) and Switzerland (7.8%).Its major imports are manufactured goods (46%), followed by energy and fuel (15.6) in accordance with UNCTAD (2008). Among import partners, Brazil is a big brother and responsible for (32.4%), Argentina (21.6%) and China (12.7%).
According to Snow, Fay et al 2003(UNDP) Paraguay is the only landlocked country in the world that has duty free sheds in four neighbouring, but coastal countries, with the following details:
-- Buenos Aires and Rosario in Argentina
-- Rio Grande do Sul Paranagua and Santos in Brazil
-- Montevideo and Nueva Palmira in Uruguay
-- Antogafasta in Chile
These points are being used to store and distribute Paraguayan imports and exports (Castellon2001). Paraguay uses road transport for its 80% of trade merchandise. A road from Asuncion to the duty-free port of Parangua, Brazil serves as the main route for both imports and exports. Since much of the trade of Paraguay takes place within the region so it does not have to travel long and bear the costs of border crossings and customs based delays.
Despite all these attempts to augment exports, Paraguayan trade has witnessed a decline in the Brazilian Real and meat exports to EU markets. Paraguay is the only MERCOUSER country which has been denied the Hilton Quota by the EU and thus EU markets are beyond its access.
In 2000, the Brazilian Government increased border enforcement and narrowed duty-free purchases to Paraguayan traders. It resulted into a doubling of the trade deficit for 2001(Castellon 2001). According to the International Rivers (2009) a five nations plan, Hidrovia, was initiated in 1997 to minimise transport costs for trade and facilitate interconnection of the region.
The plan although controversial to economists and environmentalists, however almost collaboration of the five countries of the La Plata Basin to converge the Paraguay and the Paraná rivers into an industrial shipping channel. It is being funded by the UNDP and Inter-American Development Bank.
It traverses through a 2,100 mile river system, from Cáceres, Mato Grosso, Brazil to Nueva Palmira, Uruguay. The fortune of the hidrovia is still uncertain, However, if ever completed it would connect Bolivia and Paraguay to the Atlantic Ocean, burying their dependence on maritime neighbours for international trade and other navigational benefits, under international law of the sea (1982).
The landlocked states have a special status in the Charters of the GAAT, WTO and UNO.UNCTAD, Negotiated Group on Trade Facilitation (NGTF),UN-OHRLLS, ADB, WB are some of the specialised institutions, which are working on trade liberalization and protecting the rights of landlocked economies world-wide. These key players enjoy the backing of all members of the United Nations.
According to UN Documents (2009), the United Nations Millennium Declaration, adopted by heads of State and Government on 8 September 2000, put down a set of development goals which calls for the creation of an environment at national and international levels conducive to development.
It documented the special needs and problems of the landlocked Developing countries, which were also, addressed by a series of events such as United Nations Conferences such as the Third United Nations Conference on the Least Developed Countries (Brussels, 2001), the International Conference on Financing for Development (Monterrey, 2002) and the World Summit on Sustainable Development (Johannesburg,2002).
The International Ministerial Conference of Landlocked and Transit Developing Countries and Donor Countries and International Financial and Development Institutions on Transit Transport Co-operation has been convened, pursuant to General Assembly Resolution 56/180, entitled "Specific actions related to the particular needs and problems of landlocked developing countries", to review the current situation of transit transport systems, including the implementation of the Global Framework for Transit Transport Co-operation of 1995 and to devise appropriate policy measures and action oriented programmes aimed at developing efficient transit transport system.
The Almaty Declaration (2003) and its associated Almaty Programme of Action is the most consolidated effort on the issues of the landlocked world under the espousal of United Nations and its sister organisations.
The objective of the present Programme of Action is to address the special needs of landlocked developing countries and establish a new global framework for action for developing efficient transit transport systems in landlocked and transit developing countries. Almaty Programme of Action takes into account the concerns of both landlocked and the coastal developing world.
THE PROGRAMME OF ACTION AIMS TO: Secure access to and from the sea, by all means of transport, according to applicable rules of international law reduce costs and improve services so as to increase the competitiveness of their exports reduce the delivered costs of imports address problems of delays and uncertainties in trade routes develop adequate national networks reduce loss, damage and deterioration en route open the way for export expansion improve safety of road transport and security of people along the corridors.
All these are fine endeavours, but it is a fact that these two landlocked countries of the Caribbean community have not gained the amount of attention by the United Nations and its sister organizations as other Asian and African landlocked countries have engaged United Nation for the sensitisation of their rights and problems, cropped up with their coastal neighbours.
The diplomatic and governmental channels of these countries have also not been as proactive as Mongolia, Kazakhstan and Nepal have been, as individual countries. Mongolia has emerged as a leader of the landlocked community by setting up a full-fledged think tank in July 2009 in its capital, solely for the common issues of the landlocked countries.
One of the appreciable outcomes of UN involvement in the issues of landlocked countries is that no such incident of unilateral blockage was repeated, after India blocking Nepal trade in 1989 on the basis of political differences with the Government of Nepal. India closed down its borders and passage for the heavily dependent, landlocked Nepal for more than a year.
Under international pressure, it had to provide passage to Nepal trade in August 1990. Anwarul K. Chowdhury, the then High Representative for the Least Developed Countries, Landlocked Developing Countries, Small Island Developing States and Under Secretary General of the United Nations, on 12 March, 2003.
While addressing the International Ministerial Conference on Latin American Regional Meeting of landlocked and Transit Developing Countries on Transit Transport Co-operation said that "United Nations is fully aware of the high expectations of these countries and has entrusted me to mobilise all parts of the United Nations to assist the landlocked and transit developing countries to arrive at a focused, measurable and action-oriented outcome, at the Conference". The promises made in the conference held in the capital of Paraguay need action and "action now".
(M Zafar Haider Jappa is a member of the Civil Service of Pakistan and based in Islamabad. He focuses international political economy. He writes nationally and abroad.)