Backpacking In Bolivia

Reflections

I started this book with a chapter entitled First Impressions, where I discussed the things that struck us most as we toured the Bolivian highlands. After visiting a new place, I enjoy thinking about it to try and make sense of what we saw. Accordingly, I now end it with this one entitled Reflections, where I discuss what seemed most significant to me in retrospect.

Of course, the book will not be completed until we have visited the entire country, which could take years; so, what I have written so far is the first of several sections, dealing only with the area of Bolivia known as the highlands.

Highlanders, regardless of country, are sturdy, hardworking people, toughened by the vagaries of Mother Nature and the hardships of rural life. They respect nature because their livelihood depends on it. They are used to years of sufficiency and years of scarcity and at the start of a new growing season they pray that their efforts will be rewarded with a bountiful harvest. Bolivian highlanders are no exception. They make a subsistence living from working the soil in the same way their ancestors did centuries ago. They barely survive from one season to the next. Adversity has hardened them like steel and made them fiercely independent. I'm talking about rural highlanders, not those living in La Paz, most of whom make a living working for the government either directly or indirectly. Because of government largess, Paceños live a much more comfortable life than their country brethren.

On this trip we had the good fortune of visiting the highlands of Lake Titicaca in both Peru and Bolivia, which gave us the opportunity of comparing the two. There was nothing about the landscape that told us we had crossed the border. But as soon as we checked into the hotel and had a meal, we knew we were in a different country. A comparable hotel and the same lunch special we had in Puno cost us much less in Copacabana. Both are located on Lake Titicaca; why was there such a big difference?

The food was grown on the same highlands, in the same manner that it has been for centuries. We saw no mechanized farm equipment on either side of the border. Yet, in Bolivia food cost significantly less. What it tells me is that the efforts of poor farmers in this country are not compensated as much as their counterparts on the other side of the border. Are Peruvians more efficient farmers? Nothing we saw suggested that they were. So, why was a kilogram of potatoes, grown and harvested the same way, worth more in Peru?

I pondered this question a long time since my return from Bolivia; and the only conclusion I have reached is that there are more potato farmers in Bolivia than in Peru, per unit of population. Therefore, supply in the former exceeds demand. That's based solely on the law of supply and demand, which applies to all free markets. We saw farmers markets in both Puno and Copacabana and noticed no significant difference between the two. Farmers brought their goods to market and city dwellers bought them. The women selling their produce in both cities dressed the same and looked the same. It may seem simpleminded to conclude that there are more poor farmers, per unit of population, in Bolivia than in Peru, but that's exactly the situation. Per unit of population, there are more poor Bolivians than Peruvians. Why is it so?

I also ruminated on this question at length, and my conclusion is that Bolivia has less industrial production per unit of population. That is, on a relative basis, fewer Bolivians are employed in non-farm jobs. As these are better paid than farm jobs, logic suggests that, on average, Bolivians are poorer than Peruvians; and that's why prices and standard of living are lower in the former.

Until recently, the Bolivian government's policy was to export its natural resource wealth out of the country to enrich exporters and the receiving countries. This policy allowed potential industrial jobs to be exported, keeping Bolivians poor. Then it dawned on me that the Canadian government policy is not much different. Foreign corporations are allowed, or even encouraged, to buy our natural resources and export them elsewhere for processing. For example, we used to mine iron ore and coal to make steel in Hamilton, which produced well-paying jobs. But both Stelco and Dofasco were sold to foreign interests, with Government approval, and Canada's steel production has plummeted since. This is how a country's policy impoverishes its people. If this is not sufficient evidence, consider the fact that Western Canada is a big producer of crude oil, but has no refineries. If rather than exporting crude oil we exported refined products, such as gasoline and jet fuel, for example, more Canadians would be employed in well-remunerated jobs. This means that we have exported those jobs to the U.S., where our petroleum is refined and than shipped back to us.

Things are starting to change in Bolivia, but I'm not as hopeful about Canada. I am writing this while vacationing in Salinas, an Ecuadorian beach town, where it costs me $1.28 to buy $1.00 U.S. (Ecuador's currency is the U.S. dollar). Two years ago it was at par. The policy of exporting raw resources, rather than processing them in Canada, ties the dollar to the value of commodities. In industrial Toronto, we have the illusion that Canada is an industrialized country, but the dollar is telling us a different story.

Incidentally, the Ecuadorian Government recently nationalized the country's oil industry and now sells refined products rather than crude oil, as it did for decades. In doing so, it created numerous well-paying jobs and made the country richer. For that, Rafael Correa, the country's president, has been branded a communist. The same policies in Bolivia, which are helping it move many people out of poverty, have attracted international condemnations for its President Evo Morales. Clearly, those blasting the government and labelling its president a communist are those that have lost out on lucrative deals dispensed by corrupted politicians of previous administrations.

The train cemetery outside the town of Uyuni is a stark reminder to all Bolivians of old policies that favoured the country's elites and foreign corporations. Once the Potosí mines were depleted of silver and other minerals, the country had nothing to show for it; the enormous wealth dug from the mines was simply exported outside the country. Potosí is now a mere shadow of what it used to be because its wealth was not reinvested there. When the mines shut down and the trains stopped rolling, poverty skyrocketed. "Never again," said the locals, "that will never happen again!" International companies want to mine the lithium deposits in the Uyuni Salt Flats, and the people have responded with the same refrain – never again. "Bolivian companies will exploit the deposits at a sustainable pace," said the locals. Who can blame them!

Another indicator that things are improving in Bolivia is the increased role of tourism in its economy. The country's many natural wonders are attracting an increasing number of visitors, and creating jobs that are better paying than subsistence farming.

Hopefully, the next time I cross the border from Peru to Bolivia I will not see such a difference in prices. The Bolivian highlanders deserve a better life and I hope they get it. I, for one, will do my part by returning to it so that I can finish this book. Stay tuned, there will be a lot more to come.