Archive for the ‘Economics and Business’ Category
Mountain Roads
Filed under: Bolivia, Economics and Business | Tags: Bolivia, Brazil, Economics, Infrastructure
Leave a Comment It snowed the other night in the hills around Cochabamba, and the mountains now look beautiful on my walk to work. It also snowed near La Paz, and, though I’m sure the mountains look nice and get a skier like me excited, the snow has shut down the highways connecting La Paz with Cochabamba and Oruro. This exemplifies one of the biggest hurdles in the development of Bolivia: keeping the country connected.
The country is largely in the Andes, where roads twist and turn, and it generally takes a long time to get from point A to point B. And then it snows and the capital is cut off from much of the rest of the big economic centers of the country. This hurts the ability to move things around Bolivia and generally keep the economic wheel turning. And there’s no quick solution.
That’s why projects such as this highway to connect the Cochabamba department and the eastern part of the country to Brazil are really important. They will open up new possibilities of commerce and roads that stay open even when La Paz can’t be reach.
Bolivia’s Economy: Not Too Shabby
Filed under: Bolivia, Economics and Business | Tags: Bolivia, Economics, Evo Morales, The Economist
Leave a Comment The other day I wrote about how an Economist article distorted the picture of Bolivian opposition groups to Morales. These groups are free market in ideology and support foreign capital investment, while Morales is a statist and wary of Western nations in general. Unsurprisingly, The Economist treats Morales critically while implicitly supporting the opposition groups. There’s also the usual assumption that Morales and his socialist policies are running the Bolivian economy into the ground.
But he’s not! So far Bolivia’s economy has done alright for itself. Between setting records for currency reserves (over $8 billion now), and surviving the global slowdown with a positive growth rate intact, Bolivia’s economy is not in a bad spot. Perhaps the biggest criticism of Morales is his inability to get ATPDEA trade preferences reinstated. But that’s more a function of a strange political calculation in Washington and Morales has responded with export subsidies to help businesses dependent on the U.S. market. Morales can still stumble and I don’t know how well the nationalization card will play out, but Bolivia’s economic outlook is definitely positive.
Bolivia Completes Oil and Gas Nationalization
Filed under: Bolivia, Economics and Business | Tags: Bolivia, Evo Morales, Nationalization, Oil
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Chart of the Day
Filed under: Bolivia, Economics and Business | Tags: Argentina, Bolivia, Brazil, Charts, Chile, GDP, Paraguay, Peru
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Bolivia and Peru are doing the best out of the bunch, and the hardest hit economies are also the biggest, Argentina and Brazil.
Can I Get A Beach With That?
Filed under: Bolivia, Economics and Business | Tags: Bolivia, Evo Morales, Trade, Uruguay
Leave a Comment One of Bolivia’s recurring geo-political goals is to gain sovereign rights to a seaport. Ever since the War of the Pacific, where Bolivia lost a province to Chile, access to the sea, and became a land-locked country, Bolivia has dreamed of regaining a strategic seaport to control it’s export supply chain better. This is a sensitive issue in Bolivia. For example, the public upheaval against Lozada, which led to him fleeing the country, stemmed in part because he moved ahead to export Bolivian natural gas through Chilean ports.
Today in Montevideo, Presidents Evo Morales and Tabaré Vázquez of Uruguay met to negotiate a deal where Uruguay would provide Bolivia with access to the Atlantic Ocean in exchange for Bolivian natural gas. This may seem a bit roundabout, and it is, as Bolivia is much close to the Pacific than the Atlantic Ocean, but longstanding animosity towards to Chile, as well as a current maritime border dispute between Peru and Chile in the International Court of Justice, makes sea access in Uruguay much more attractive.
Russian Interest in Bolivia’s Lithium Reserves
Filed under: Bolivia, Economics and Business | Tags: Bolivia, Lithium, Russia, Trade
Leave a Comment Russia is the latest player to show interest in the lithium fields in Bolivia. Under the Salar de Uyuni, the largest salt flat in the world, sits the world’s largest reserves of lithium (approximately half of the world’s reserves.) Interest in lithium is based on expectations that it will become a key ingredient in electric car batteries. Russia’s team of experts is only the last group to express interest in the fields, including France’s Bolloré and Japan’s Sumitomo and Mitsubishi. But the Russian visit highlights an important aspect of international relations today: power vacuums get filled, and quickly at that.
In 2008 Bolivia expelled the U.S. ambassador, declaring him a persona non grata. The U.S. replied in turn by expelling the Bolivian ambassador from Washington. Bolivia officially expelled our ambassador for attempting to overthrow Evo Morales government, but was the capstone of steadily deteriorating relations between the U.S. and Bolivia throughout the Bush Administration.
With the collapse of U.S.-Bolivian relations, other players are stepping in to fill the void. During the boom years, Venezuela was a reliable patron state, and is a more unsteady one now (or until oil prices balloon again.) Russia and China have both increased diplomatic attention on Bolivia as well. The U.S. would benefit by opening up diplomatic relations again. Despite Bolivia’s continued dependence on the U.S. economy, with the Morales government’s focus on state control of resources, U.S. companies will not be able to compete with foreign firms without diplomatic support.
Update:
Today Los Tiempos is running an article on a statement from Russia’s ambassador, highlighting military assistance Moscow plans to provide Bolivia in the future.
Paradoxes of a Bolivian Socialist
Filed under: Bolivia, Economics and Business, United States | Tags: Bolivia, Economics and Business, Evo Morales, United States
Leave a Comment In December 2008, Bush suspended trade preferences for Bolivia under ATPDEA (Andean Trade and Drug Eradication Act.) This is a program that gives trade preference to the four Andean nations, Peru, Colombia, Ecuador, and Bolivia and helps coordinate U.S. support for coca eradication. Bush ostensibly suspended Bolivia for failure to be vigilant against coca production, but was a direct result of the breakdown in relations when La Paz and Washington expelled the American and Bolivian ambassador, respectively. This directly hurt the Bolivian economy, as the U.S. is Bolivia’s second largest trading partner.
Morales, ever railing against the imperial yankees, is introducing export credits for the goods destined for the U.S. to help industry that was battered by a loss of U.S. trade preferences. This makes electoral sense, as helping struggling small and medium-sized businesses in the export sector will help Morales when he faces reelection later in the year. It’s somewhat harder to square with his statements regarding Bolivian economic independence and the cutting off ties with the imperial North American power. Simple economics, however, pretty much precludes any other option.
