TRADE SURPLUS GENERATION TRHOUGHT OVERCOMING LOGISTIC PROBLEMS

TRADE SURPLUS GENERATION TRHOUGHT OVERCOMING LOGISTIC PROBLEMS

Bolivia is a plurinational state, located in South America, it’s the only country in South America which doesn’t have sea access and have a very limited foreign trade with a few partners and (most of them are countries from the same region, although there is an important share from eastern countries) This is an economy based on the mining and energy industry, exporting mainly natural gas in gaseous state, besides the percentage share of this product is so far from the ones that follow it in export volume.

According to the above, Bolivia has a very short foreign trade, adding just little added value to their exports products, however in the last few years; the soy production has driven to increase the percentage share in the exports within the Bolivian trade balance. Its principal trading partner, Brazil, manages the extraction and refining of gas exported by Bolivia. Thus, the country has a very uncompetitive infrastructure and doesn’t have national firms that are available to do those industrial processes required by these minerals. Accordingly there is a contrast between the poor own infrastructure and the resources abundance that the country has, this is an appealing scenario for the penetration of foreign investment; it can be seen as an employment generator within the country.

Bolivia is part of three trade associations, which allowed it to gain relevance in the economic scenario of the region (CAN, MESCOSUR and ALADI) the latter generated in Bolivia a deficit trade and in the CAN, a surplus. Although its exportable supply is highly concentrated, the country has a major global role for the extraction of minerals, letting it to have an important global role and a relatively stable economy. Although it would be good to generate an own infrastructure enabling the country an important advance in terms of research and development to then lead to improvements that make that the country may be more competitive in the extraction and refining of minerals with own industry.

An absolute logistical disadvantage is the fact that this country does not have own coasts, it’s possible to think that this is the main reason for not having partners in different parts of the world, although it is also important to consider paragraph of phytosanitary standards that are not positive to Bolivian products, it is very important to analyze the costs that represent land or air transport involving one higher cost in the international market and therefore less competitiveness. The Bolivian geographical position gives a light close to the Pacific Ocean that can be exploited through the generation of treaties that may grant rights of use of the continental shelf in the area (Chile and Peru).

The commercial alliances that Bolivia possesses are divided into bilateral agreements, which owns with another nation, a pattern of unilateral tariff preference with different countries such as Japan and the United States, as well as the European Union, and economic integration which lies in free trade zone with the CAN which has a common external tariff, and seeks a total tariff reduction from a large number of products within the integration; the above gives us a perception a little divided on economic preferences given by the country, there are treaties with 4 countries and MERCOSUR, but all these are treated with countries in the region, countries in similar conditions and that can exchange most agricultural products and some light industry, but is requiring important processes of research and development. It would be interesting if the country could leave the region and seek treaties with European countries or eastern countries, producers of heavy industry, which products could arrive to the country more economical and then, in turn, more accessible.

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