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A country without a sea: How much does it cost?

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Bolivia and Paraguay, two of the 44 landlocked countries in the world, have faced considerable difficulties due to their geographical condition

A country without a sea: How much does it costs?

Paraguay and Bolivia are the two landlocked nations in Latin America, a condition that has negatively affected their economies on a large scale. According to the BBC, a common factor among most of the 44 countries that do not have access to the sea is that they are considered developing countries with high poverty rates, excluding, of course, some cases.

Leer en español: ¿Cuánto le cuesta a un país no tener mar?

The reason for this underdevelopment, specifically in the situation of these Latin American states, is the high transport costs that are charged due to foreign trade, one of the most important sources for economies. According to estimates of the Landlocked Countries Section of the United Nations Conference on Trade and Development (UNCTAD), this geographical disadvantage has involved an average cost between 30% and 40% higher in its international trade compared to other countries.

In fact, according to the research "Bolivia: a private country of coastline," the transfer of cargo from China to Bolivia is $ 0.31 per kilometer, while Colombia assumes this same route for $ 0.14. In addition, the cost can be increased up to 75% compared to states that do have access to the sea.

Thus, the economic growth of these countries is lower, since international trade is mostly by sea. The BBC clarifies that these are on average 20% less developed than they could be if you had a coastline.

It is for this reason that Bolivia filed a maritime suit in 2013 against Chile before the International Court of Justice (ICJ) of The Hague since in mid-1800 the coastal country occupied its coast by force. However, in October of this year, the court ruled out that Chile had an obligation to negotiate a sovereign exit to the sea with Bolivia.

On the other hand, Telesur said that this would lead to Bolivia losing the possibility of growing between 1% and 3%, an economic weakening that could be worth between $ 400 and $ 1,000 million annually. In addition, the president of the Confederation of Private Entrepreneurs of Bolivia (CEPB), Ronald Nostas, said that Bolivia loses 1,000 million a year and 2% of its GDP due to the lack of coastline.

Bolivia has the highest transportation costs in Latin America, with 31% higher than the continental average.

Also read: Paraguay and Taiwan: An unlikely but fruitful relationship

The absence of costs forces to look for other solutions

However, it is important to clarify that out of the 44 countries without access to the sea around the world, not all have suffered the consequences of this disadvantage as having the countries of Latin America, Africa, and some Asian nations. The absences of adequate infrastructures, bureaucratic complications, delays, as well as impositions to the load, are factors that have exponentially increased the costs to trade.

Paraguay, on the other hand, has been looking for alternative solutions to this problem. For example, Foreign Minister Luis Alberto Castiglioni affirmed the importance of the insertion of international trade blocs. According to El Economista, Castiglioni also clarified the need to improve Paraguay's trade relations and not resort to protectionism.

In fact, at the end of last year, the country was appointed to chair the Group of Landlocked Developing Countries (LLDC) of the United Nations. The purpose of this body would be, then, to seek to generate fair trade conditions with the countries with access to the sea; seeks to achieve that the impact is not so high for the production of these countries.

 

LatinAmerican Post | Valentina Moya

Translated from: '¿Cuánto le cuesta a un país no tener mar?'

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