Aiming for the Sea

Aiming for the Sea

Bolivia's longing for access to the coastline it lost through war with Chile involves far more than symbolism. Landlocked countries may face multiple handicaps.
On 23 March each year, Bolivians celebrate el Dia del Mar (the Day of the Sea). 3,600 metres above sea level, on the southwestern shore of Lake Titicaca, a proud navy of almost 7,000 sailors and seventy-three vessels parades to rapturous crowds. The spectacle marks the anniversary of the defence of the port of Calama in 1879, in a conflict between three states in Latin America's Andean cone - Chile, Peru and Bolivia - that would ultimately leave Bolivia landlocked and its pathways to the sea in the hands of its neighbours.

Territorial disputes have a tendency to fester in national psyches, and the 127 years that have elapsed since Bolivia lost its seacoast in the War of the Pacific (1879-84) have not dulled the desire of a majority of Bolivians to regain the land which, they say, was taken unfairly from them by Chile in an aggressive war.

The quest for a sovereign Pacific port has been the foreign-policy priority of every Bolivian administration since. In 1974, President Hugo Banzer Suárez passed the Act of Cochabamba, which identified the question of a seaport as the issue of greatest national importance to all Bolivians.

The new Bolivian president, Evo Morales, is no exception. He places "maritime reintegration" at the top of his list of goals. Diplomatic relations with Chile are still sub-ambassadorial, although Morales's presence at the inauguration of Michelle Bachelet in Valparaiso on 11 March offered some signs that a genuine normalisation of relations between the two countries might become possible.

In any case, the issue of the "mutilated coastline" will not go away. Bolivia's quest to escape its landlocked status reverberates through every area of its political life. The jingoistic showboating on the Day of the Sea is just one facet of a routine anti-Chileanism which, for example, led to a 2002 gas pipeline project worth billions of dollars being scuppered due to its planned route to the Chilean port of Mejillones. The demonstrations against this project became the opening shots of the so-called Bolivian "gas war", a period of social and civil unrest that claimed the lives of dozens of protesters and triggered the resignations of two presidents, Gonzalo Sánchez de Lozada and Carlos Mesa.

For a nation to nurture historical grievances after the loss of territory is not unusual, but it is hard to explain the urgency and intensity of the Bolivian reaction to losing its coast in terms of territorial resentment alone. In fact, however self-destructive and windmill-tilting the Bolivian pursuit may appear, a look at the fate of the world's thirty other landlocked developing countries suggests that Bolivia might be quite right to place such singular importance on access to the sea. Becoming landlocked, it seems, may be among the worst things that can happen to a country.

Bolivia's quest to escape its landlocked status reverberates through every area of its political life. But a look at the fate of the other landlocked developing countries suggest that loosing access to the coast may be among the worst things that can happen to a country.
The tyranny of geography

Consider these statistics. Outside of western and central Europe, the average income of landlocked countries is just $1,771, compared with $5,567 for coastal nations. It has been estimated that growth rates of the world's thirty-one landlocked developing countries (LLDCs) are 0.7-1% lower than they might otherwise have been, as a direct result of their being landlocked. The UN Human Development Index reads like a grim advertisement for the benefits of a coastal existence: life expectancy in LLDCs is 3.5 years lower than in their maritime neighbours, and education index scores are 0.36 lower, on a scale of 0 to 1. Nine of the world's twenty poorest countries are landlocked, and sixteen of the thirty LLDCs are classified as "least developed".

However, there is still a great deal of dispute over the causes of the poor performance of landlocked developing countries, let alone the best remedies for countries in that position. This situation is not helped by the fact that until relatively recently "economic geography" was considered an unrespectable subject in the development community.

The Washington consensus worldview holds that freer trade and globalisation will lead to a "borderless world" in which landlocked countries are at no greater disadvantage than inland provinces of western China, central India or the United States. In the long run, trade liberalisation will lead to borders transforming themselves from barriers into interstices of cooperation and mutual benefit. Arguments from geography, such as that landlocked countries might have special, enduring problems in joining the trade free-for-all, are dismissed as fatalistic. In the long run, this thinking goes, Mali can transform itself into Switzerland.

As John Maynard Keynes retorted to the consensus economists of his own time: "In the long run we are all dead." The failure of IMF and World Bank programmes to promote stability and growth in the developing world has led to a widespread re-examination of the shibboleths of development theory, including renewed interest in the problems faced by landlocked countries.

The most obvious of these problems is the difficulty of trading internationally when access to the sea is expensive or unreliable. World Bank figures indicate that the volume of trade for LLDCs is 60% lower than the average for developing countries, while transport costs are 50% higher. A partial explanation for this is that landlocked countries necessarily have to transport goods a greater distance on land in order to reach ports, and transporting a container over a kilometre of land is over seven times more expensive than taking it the same distance by sea.

This might explain why inland regions of a landmass can have trouble competing with their coastal rivals, but landlocked nations have other, more specific challenges. Studies on freight in north America have found that simply crossing the US-Canadian border - with all the bureaucracy that is involved - adds the equivalent cost of a 1,000-kilometre journey to the transport expenses. How much worse, then, for an country such as the Central African Republic (CAR), whose border with Cameroon is so administratively unwieldy that customs procedures typically last as long as two weeks?

It is common for landlocked developing countries to suffer from "difficult" neighbours.

Africa is the worst place in the world to trade as a landlocked nation. Shipping a container to the CAR costs around $13,000, while shipping the same container to the Ivory Coast costs just $3,000. Small wonder then that the landlocked countries of west Africa have per-capita export earnings just 12% that of their coastal neighbours.

In February 2006, Mali's finance minister made a plea to the United Nations envoy for landlocked countries, Anwarul Chowdhury. Instability in the Ivory Coast had made it increasingly difficult to access Abidjan port, he said, and only 10% of Mali's exports could be administered through the port, compared to 60% before the troubles began.

This total dependency on transit countries makes LLDCs doubly vulnerable. Mali is often held up as one of the most democratic and stable countries in the region, yet the chaotic internal politics of its neighbours has had pulverising economic and social effects, isolating Mali from international trade and deterring foreign investment.

Nor is this an isolated case: it is common for landlocked developing countries to suffer from "difficult" neighbours. Ethiopia's economy has suffered greatly since the country was landlocked by Eritrea's successful completion of its independence struggle in 1993; its only other routes to the sea are via Somalia and Djibouti, but Somalia still lacks a proper government following civil war. The landlocked former Soviet republics in central Asia are plagued by territorial disputes, with borders often defended by landmines and physical blockades. And India's blockade of Nepal's route to the sea helped hasten the overthrow of the Nepalese panchayat government in 1989.

Even when transit countries aren't outright hostile or suffering internal turmoil, they are often themselves very poor and face serious infrastructure problems and economic shortages.

This can seriously hinder landlocked nations' ability to effect change. An obvious solution to the high transport costs of LLDCs would be to make improvements to the transport infrastructure; one study estimated that improving infrastructure from the twenty-fifth to the seventy-fifth percentile might remove a quarter of the disadvantage associated with being landlocked. But often such initiatives are checkmated by the inability of transit countries to upgrade their roads and rail networks accordingly. If the Kenyan rail system were improved, Rwanda and Uganda would both benefit, but this is an unlikely priority for the Kenyan government. And as long as development funds are allocated on purely national considerations, positive externalities like this will go unrealised further inland.

Enter the UN

Considerations like these were enough for the United Nations to make addressing "the special needs of landlocked countries" a Millennium Development Goal in 2000. As a result, an international ministerial conference was convened in Almaty, Kazakhstan in 2003, which produced a set of objectives known as the Almaty Programme of Action.

The programme identifies five priorities for landlocked developing countries:

  • cumbersome customs procedures at the borders of transit states need to change
  • transport infrastructure has to be improved
  • special provisions should be made for landlocked countries in international trade agreements
  • technical and financial assistance should be focused on these countries by donor nations
  • an annual review before the General Assembly was agreed upon, and a monitoring framework set up to track the progress of the Almaty programme.

The emphasis of the Almaty agreement is on regional integration; landlocked and transit states alike are encouraged to cooperate on cross-border infrastructure projects, and donor organisations like the World Bank are exhorted to consider the net benefits of projects such as upgrading the Kenyan rail system.

The hope is also that landlocked countries can turn their geographical handicap to their advantage, by positioning themselves as regional trade hubs. One of the secrets of Switzerland's success is its central location in Europe, and since every landlocked nation is, almost by definition, central to their region, this approach does make a lot of sense. For example, membership of the Andean Community and Mercosur has demonstrably benefited Paraguay and Bolivia (an associate member of Mercosur), and many countries such as Mongolia or Nepal are situated on the doorstep of massive and fast-growing economies.

Unfortunately, the Almaty agreement hasn't yet delivered any spectacular results. Its greatest achievement has been an agreement to develop an Asian highway network that will provide better access to the landlocked countries of the region. It has also spawned a number of useful but modest initiatives, such as regular meetings for African transport ministers and a scheme to cut the number of customs forms in southern Africa from twenty-six to nine.

Almaty gives little succour to the hardest-hit class of landlocked countries, those whose coastal neighbours are hostile or unwilling to cooperate. The UN Convention on Law of the Sea (1982) already provides landlocked countries a right of access to and from the sea, without taxation of traffic through transit states. However, this "right" requires ratification by the transit countries, and for a country in Ethiopia's position is effectively non-existent.

The costs of free trade

Philosophically underpinning the international efforts to help landlocked states is the idea that borders present economic impediments which should be knocked down. But borders aren't merely geographical or economic barriers; they're primarily manmade, palimpsests of the political and military dynamics that define nations.

There is a cruel irony in the need for landlocked countries to liberalise trade and embrace open access to markets. Openness can create instability, and have social costs that outweigh any economic gains that might accrue. Consider the case of a landlocked country with few natural resources, such as Nepal. It will be difficult for this country to follow the path to growth of the Asian tiger economies -industries like electronics that require many imports and have low profit margins will be uncompetitive due to the prohibitive transport costs. Importing can be a lengthy and unreliable procedure unsuited for the just-in-time production style favoured by modern multi-nationals. The only way a country like this can compete with its maritime neighbours is by lowering wages to offset the costs.

Landlocked countries with plenty of resources can also have problems when over-exposed to the global marketplace. The difficulty of importing goods for further manufacture tends to lead to an over-reliance on whatever resources are on hand, specifically on the sort of high-value, low-bulk goods that are least affected by massive transportation costs. Botswana is Africa's wealthiest country due to its well-managed diamond mines, yet suffers from an unemployment rate of 21% and chronic underinvestment in all sectors other than mining. Diamonds provide 84% of Botswana's export earnings and 50% of GDP, leaving the economy vulnerable to the ups and downs in price of a notoriously volatile commodity. The country's president Festus Mogae has often said that it has had "no choice" but to diversify, adding that this is difficult due to Botswana's geography "as a landlocked and semi-arid country with high transport costs", and to the inequalities of global trade.

Landlocked countries with plenty of resources can also have problems when over-exposed to the global marketplace.

Botswana is still the lucky one - expensive, light goods are the key to success for a landlocked economy. Switzerland built its enviable economy on watches, precision instruments and financial services; Bolivia has had to specialise in producing tin, gas, silver, gold, oil and - notoriously - coca; perhaps Afghanistan's position as the world's number one producer of the poppy-seeds that facilitate heroin production is not unrelated to its landlocked status. This is the law of comparative advantage (elaborated by David Ricardo, following Adam Smith's pioneering work) at its most viciously reductive.

There is one type of zero-weight, high-value good that is booming in the developing world, and it is perhaps the most hopeful avenue for landlocked countries. Information technology and telecommunications have transformed economies in the west, with services and the "knowledge economy" replacing industry and agriculture in most rich countries. Many services like call centres, data entry and IT helpdesks are increasingly being outsourced to countries such as India, and it has been estimated that, from the United States alone, at least 3.3 million white-collar jobs, worth $136 billion in wages, will be relocated to low-cost countries by 2015. Can't landlocked nations get a slice of this geography-independent pie?

It will be difficult - compared to other developing countries, for many of the reasons above, the LLDCs on average have a poor IT and telecommunications infrastructure, and a shortage of the skilled and semi-skilled labour that would make outsourcing attractive or a knowledge economy viable. Yet in the long run, nurturing industries with a high service and information content may be the best route for many isolated, landlocked nations. It's a shame that the Almaty programme doesn't address this need in more depth. The UN envoy for LLDCs was asked recently whether cyber commerce was discussed at the ministerial meetings. He replied that few countries were interested.

Fresh hope for Bolivia

This year, there is a sense of excitement and expectation around el Dia del Mar that has not been visible in Bolivia for generations. The election of Evo Morales in December 2005, followed by Michelle Bachelet in January 2006, has swept away longstanding presumptions on how the two countries should be led, and have left many Bolivians hopeful that their landlocked chapter is about to come to an end. At Bachelet's inauguration, Morales said he had difficulty holding back tears after hearing the chants of "Sea for Bolivia" among the Chilean crowds. He told them: "I believe, although I do not want to commit to anything, that this is a good moment to return to the sea."

On the Chilean side, Michelle Bachelet said during the election campaign that she was prepared to discuss "all bilateral topics, even those necessary conditions to facilitate the access of our neighbouring country to the Pacific Ocean." The process seems to have started. On 20 March, the former commander of the Chilean navy, Jorge Arancibia, said he would support a deal to give Bolivia a sovereign port in exchange for gas or water - something Bolivia has consistently said it is willing to do.

If Bolivia does win back its coastline, it will be a defining moment in its history, and in the history of Latin American diplomacy. For other landlocked countries, however, the problems which Bolivia is scrambling from will remain, and the struggle to deal with them - or escape them - will continue.

Contributed by George South, a freelance journalist based in London. Reprinted with permission from openDemocracy.

To read another Global Envision article about economic repurcussions of landlocked countries, see The Promise of Central Asia.

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