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Bolivia in the Flat World
By Lykke E. Andersen*,
La Paz,
29
January
2007.
In China, when you are one in a million – there are 1300 other
people just like you”
Microsoft saying in Beijing
Globalization has recently shifted into warp drive, integrating
the world and increasing competition in a way we have never
experienced before. Many services that used to be non-tradable
(like accounting), are now being done just as well on the other
side of the globe at a fraction of the cost. And many services
that previously could only be supplied by large organizations
can now be done just as well, or better, by independent
individuals (news reporting, for example). Barriers are tumbling
down all over the world, and everybody with an Internet
connection and an imagination can do really well
(1).
While developed countries have good reasons to worry about the
effects of the integration of a billion well-educated and highly
motivated Asians into their labor markets, poor countries, such
as Bolivia, might as well despair.
What can Bolivia possibly produce better or cheaper than the
Chinese? Let’s take a look at Bolivia’s comparative advantages.
We clearly cannot compete on labor, as skilled labor is scarce
and unskilled labor is not very interested in working long hours
at low wages for somebody else. Capital is also scarce, which
leaves natural resources as our one abundant production factor
and possible comparative advantage.
While our natural gas exports currently make macroeconomic
indicators look healthy, it is not exactly an export product
that generates employment and reduces poverty
(2). We do have one export product which could potentially
do that, but unfortunately it has been declared illegal
(3).
What Bolivia has in abundance is nature and culture, and those
two things are going to be rarer as the rest of the world
globalizes and homogenizes. A long term development plan ought
to take that into account, and start developing Bolivia’s
potential as a friendly, safe, and cheap destination for etno-eco-adventure
tourism.
It has all the basic conditions in place to become that, but
safety is a key concern and has deteriorated dramatically during
the last few years. Bolivia used to be one of the most peaceful
and safe places in Latin America, and if the country wants to
become a major eco-tourist destination, it has to be able to
guarantee the safety of visitors. This means that road blocks
cannot be tolerated and fake policemen ripping off tourists have
to be eliminated before Bolivia gets a permanent bad reputation.
This is obviously a job for the government, and the longer it is
neglected, the more difficult it will be to fix.
There are a lot of other things the government could do to
stimulate the development of eco-tourism, and which would
encourage private, complementary investments. They could mark,
improve and protect hiking trails, highlight natural
attractions, set up waste bins and construct public toilets in
strategic locations, develop maps and tourist guides, open
tourist offices, certify tour operators and guides, educate and
train people in the tourist business, etc.
In a flat, fully integrated and super-competitive world, it may
not be so bad to stand out with majestic mountains, towering
waterfalls, vast rainforests, ancient ruins, and colorful
people.
(*) Director, Institute for Advanced Development Studies, La
Paz, Bolivia. The author happily receives comments at the
following e-mail:
landersen@inesad.edu.bo.
(1) For numerous concrete examples and captivating reading, see
Friedman, Thomas L. (2006) “The World is Flat: A Brief History
of the Twenty-Fist Century.” First updated and expanded edition.
New York: Farrar, Straus and Giroux.
(2) See
INESAD’s research on the distributional effects of the natural
gas boom.
(3) Coca, of course.
Ó
Institute for Advanced Development Studies 2006.
The opinions expressed in this newsletter are those of the
author and do not necessarily coincide with those of the Institute.
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