Bolivia reduces its dependence on Chile's ports with alternatives in Peru and the Atlantic waterway

The ports of northern Chile have been the usual gateway for entrance and departure of maritime goods with origin or destination in Bolivia, putting into practice the port and transit facilities provided for in the treaty that ratified the borders between the two countries more than a century ago. However, Bolivia is developing logistical alternatives that provide less dependence on Chilean ports. Thus, the Issue of Bolivian cargo shipped in Chile has been reduced in recent years, from 74.4% of exported tons in 2018 to 64.4% in 2020. The increase in traffic through ports in southern Peru and the increased use of the Paraguay-Parana waterway, although totaling little Issue, expand the Bolivian room for maneuver.

The latest period of political friction between Bolivia and Chile, following the Bolivian attempt to have the International Court of Justice in The Hague force its neighbors to sit down at a negotiating table to talk about their mutual borders, has had its consequences in the area of trade. In October 2018 the Court ruled that Bolivia's loss of access to the sea as a result of the War of the Pacific (1879-1884) is a matter Closed and Chile cannot be forced into any cession. The diplomatic tension led the Bolivian government to an interest in promoting greater trade through Peruvian ports, something that was also assisted by an increase in tariffs in the Chilean port of Arica, which is the main traffic port for goods linked to Bolivia.

Although Chilean-Bolivian relations have returned to normal, the existence in Peru of a politically and sociologically like-minded government - the indigenism of the Andes unites Pedro Castillo and Luis Arce - has accentuated Bolivia's desire to further explore alternative routes, especially to the Peruvian port of Ilo. In addition, there is a public-private partnership between the government and the private sector to develop the docks that give access to the Paraguay-Paraná waterway, which reaches the Atlantic via the Río de la Plata.

In 2018, Bolivia exported a total of 5,140,467 tons of goods (hydrocarbons transported by pipeline are excluded). Of that Issue, the flow of Bolivian cargo through ports in Chile -first Arica and then Antofagasta, both in the north of the country- was 3,825,222 tons (74.4%), and 383.716 tons (7.4%) corresponding to Peruvian ports -basically Ilo and Matarani, in southern Peru-; the rest went to the Atlantic agreement with the figures collected by the Bolivian authorities in the last report of the Administration of Port Services-Bolivia (ASP-B).

In 2019, of total exports of 5,590,761 tonnes, 3,732,130 were transported through Chilean ports (66.7%) and 605,185 through Peruvian ports (10.8%). Between 2018 and 2019, the flow through Peruvian ports increased by 57.7%.

high school In 2020, due to the confinements of the Covid-19 pandemic, world trade traffic decreased and Bolivian exports dropped to 4.57 million tonnes: the decline affected transit through Chile the most, which fell to 2.9 million tonnes (63.4% of total exports), while that through Peru remained at 0.6 million (13.3%), according to the Bolivian Foreign Trade Agency (IBCE) on its bulletin transport and logistics website. IBCE bulletins show that almost all Bolivian exports are exported by sea, although the journey to shipment involves various means of transport.

"What moves through Peru does not even represent 15%", emphasised the president of the National Chamber of Customs Brokers of Bolivia, Antonio Rocha, as reported on the ASP-B's report . In his opinion, "the dependence persists and it will be very difficult to break it in the short term deadline", so that "if Peru is to be promoted, efforts and investments must be made to improve storage, dispatch and cargo reception capacity".

ASP-B has held meetings with Peruvian authorities to try to improve the conditions for the flow of goods linked to Peru's southern ports, at least so that Bolivian companies have more logistical options. In any case, it also depends on Peru to strengthen these facilities by improving road access and possible future connections by rail (Ilo is connected to Brazil via an inter-oceanic road that avoids Bolivian territory).

With the same goal it has also explored possibilities for development of facilities at points along the Paraguay-Paraná waterway, which connects with the Río de la Plata. Specifically, it is developing the commercial docks of Aguirre, Gravetal, Jennefer and Puerto Buch.

Bolivia does not have a riverbank on the Paraguay River, but accesses it, as it passes through Brazil, via the 11-km Tamengo Canal. The flow of cargo through this route has been steadily increasing over the last decade; in 2019 it reached 1,370,903 tonnes in exports and 740,473 tonnes in imports, figures that decreased slightly in 2020 due to pandemic restrictions.

agreement 1904 and Bolivian Port Services

The competitiveness of Chile's ports for Bolivian imports and exports has to do with their greater proximity and a tradition of economic and administrative advantages that have historically attempted to remedy the territorial amputation suffered by Bolivia not long after its independence (Bolivia lost Antofagasta and Peru, Arica).

The 1904 Treaty of Peace and Friendship, by which Bolivia settled for the loss of access to the sea resulting from the War of the Pacific, set out how Chile was to compensate its north-eastern neighbour: build two railway lines linking Bolivia's interior with the sea (the Arica-La Paz and the Antofagasta-Oruro railways; both were operational for a time and then closed; the former was reactivated again in 2013 for cargo transport); allow free transit through Chile without levies (customs duties, taxes, transit fees); and grant the right to erect customs agencies of its own in certain ports (in Arica and Antofagasta; today it only exists in the former).

As the Chilean Naval War College's Revista de Marina reminds us, Bolivian cargo has a reduced tariff regime for the use of the dock, while import cargo storage is free of charge for up to one year and export cargo for up to sixty days. In Arica, which is the closest and most accessible port for La Paz and El Alto area and was their port of reference letter during the colonial era (it is 488 km from that conurbation; Ilo in Peru is 512 km away), Bolivia has special offices for its own customs, a port access control service, storeroom and cargo warehousing. In the vicinity of Antofagasta, a port that connects with the Bolivian Altiplano hinterland (there is a distance of 643 km between Uyuni and this port), Bolivia has a 4-hectare area for the storage of minerals in transit. In addition to these two ports, free transit is also being considered for the port of Iquique, located between the two.

In order to try to negotiate better opportunities for Bolivian trade and to bring together the demand of national import and export companies, the government of La Paz created the Port Services Administration-Bolivia in 2015. ASP-B's services handle the transport of more than one million tonnes, between exports and imports, although it is the latter that it handles the most, as companies can entrust ASP-B with customs operations, directly in the port of Arica or at the country's border points.

ASP-B's activity has also been registering the reduction in tonnage at the Chilean docks and the increase in the Peruvian ones already seen above in the total figures. In the Chilean port of Arica, through which ASP-B moves most of the import and export goods it manages, the flow to position of this Bolivian public entity fell from 1,801,656 tonnes in 2017 to 1,716,014 in 2018 and 1,460,353 in 2019 (in Antofagasta it moves a much reduced amount). In contrast, although at a great distance, the port of Ilo went from barely moving any quantity to mobilising 21,915 tonnes in 2918 and 48,594 in 2019 (the movement in Matarani is reduced). Thus, between 2017 and 2019, Bolivian foreign trade served by ASP-B through the Chilean port of Arica fell from 89.8% to 71.2%, while through the Peruvian terminal of Ilo it rose from 3.3% to 8.1% in the same period.

ASP-B also operates non-significant tonnages at docks along the waterway, such as in Puerto Villeta (Paraguay) and Nueva Palmira (Uruguay); it had also been doing so in Rosario (Argentina), but has moved its offices there Closed .