Bolivia losing in the ICJ: a drastic turn for the January 2019 elections
Bolivia’s blowing defeat in the ICJ’s Obligation to Negotiate Access to the Pacific Ocean (Bolivia v. Chile) case, delivered on October 1st, may cost President Evo Morales his presidency. In the judgment, the court ruled that Chile did not, in fact, have a legal obligation to negotiate sovereign access to the Pacific Ocean for Bolivia. This will have repercussions on the Bolivia’s economic development and will increase the political risk and lack of stability in the country.
Historical context
“Bolivia is not asking to be granted a wish. Bolivia demands that its sovereign right to the sea is returned”. With these words, President Evo Morales instilled upon his people feelings of hope for the much-awaited exit to the sea that would fuel the country’s economic development, and, at the same time, achieve a victory against its longstanding enemy across the border: Chile.
The enmity between Santiago and La Paz dates back to 1879, when tensions between Chile and Bolivia, who had vast access to the sea, rose after the Bolivian government increased the price of exports, violating the trade deal of 1874, which established that Bolivians would not increase taxes on exports for 25 years. Chile responded by invading 120,000 square kilometres of Bolivian territory and the entire 400 kilometres of Bolivia coastline during the War of the Pacific between Bolivia and Peru on one side, and Chile on the other, which lasted until 1884.
Source: Wikimedia Commons
After 20 years of institutional tensions, a peace treaty was struck in 1904, which stated that the Chilean sovereignty extended to the border with Peru, and that Bolivia would not have an exit to the sea. However, Bolivia was granted the right to commercial transit through Chilean territory and through the Pacific ports of Arica and Antofagasta.
Yet, according to President Evo Morales, Chile systematically violated the treaty, and the treaty did not guarantee the “free right of people and commercial transit” for Bolivians. Moreover, he argued that Chile must comply with the offer made by Augusto Pinochet in the 1975 “negotiation of Charaña” to facilitate a sovereign exit to the sea. Although the offer did not end in a deal, due to domestic and external opposition, the government of Evo Morales believed it would be upheld in court in the form of “expectation” rights, “expecting” that Chile would be forced to negotiate “in good faith” the “sovereign” exit of Bolivia to the sea. This was formalised in April 2013, when the Bolivian government filed a lawsuit before the International Court of Justice (ICJ).
As of October 1st, 2018, the ICJ stated that expectation rights cannot be qualified as legally binding and hence do not generate legal obligations. This decision ruled in favour of Chile and crushed the aspirations of the Andean country to have sovereign control over the coastal region.
Why is an exit to the sea so important for Bolivia?
A lack of access the sea will lead to Bolivia losing between 1% and 3% of its gross domestic product growth, which implies an economic damage of between $400 million and $1 billion dollars per year, according to the economist and general manager of the Bolivian Institute of Foreign Trade (IBCE), Gary Rodríguez.
Moreover, the bureaucratic obstacles and the transit costs of imports and exports through Chilean ports makes Bolivian products less competitive in the global markets. For example, the transfer of cargo from Bolivia to China is up to 75% more expensive compared with neighbouring coastal countries. Transportation costs in Bolivia are the highest in South America.
The severity of this situation has become even more palpable due to one specific resource: lithium. The lightest of all metals, lithium is the key element in rechargeable batteries. In order to keep up with the technological evolution, the battery industry has doubled over the last few years. According to the U.S. Geological Survey, Bolivia holds 43% of the world’s reserve base of lithium.
Still, the potential of the “Saudi Arabia of lithium” is limited due to the lack of industry and infrastructure to produce the metal on a large scale. In addition, the delays in borders, charges and impositions on cargo, and the problems of domestic transit, generate a disproportionate increase in the costs of imports of technologies and material for extraction, as well as the expertise needed to improve lithium production.
President Evo Morales sought to keep lithium from being exported as strictly raw material. Moreover, he also sought to maintain the production and commercialisation of lithium for Bolivian companies. However, with the recent decision of the ICJ, Morales will not be able live up to these aspirations. This will negatively affect the economic development of the country, and could cost Morales his future as Bolivian President.
The end of the Bolivian coastal dream: a hit to Morales’ popularity
The political cost for Evo Morales after his defeat in court is expected to be high. The loss of such an opportunity for economic development foretells a difficult future for Morales’ administration. Moreover, he is seen as the sole individual responsible for Bolivia’s humiliating loss to Chile. The timing could not be worse.
Only months ahead of the next elections (January 2019), the popularity of Morales, has dropped significantly. According to a survey published in the newspaper, Siete, 40% of voters surveyed would not vote for Morales in 2019. This statistic favours ex-President and candidate, Carlos Mesa, who, according to a survey conducted in August 2018 by the IPSOS, has 27% of the vote, only 2% behind Morales, and would become the first force in five crucial cities of the country.
On social media, the disappointment is evident and has already shown the polarisation that Bolivia is experiencing. The messages display a range of feelings, from optimism instilled by the administration, to disappointment as a result of the defeat in the ruling, to anger over staggering financial costs, to humiliation in the face of Chile.
The demand for an exit to the sea was and remains a pivotal milestone for Morales’ administration, and, after the loss in court, the opposition has found a way to tap into public frustration. “We need an explanation of why we reached this result”, opponent Samuel Doria Medina wrote on Twitter. “We have to face the future in a new, renewed way” proclaimed Carlos Mesa in a video posted on his YouTube account.
Forecast
The discussion about the responsibilities of the government, and personalities that are arising as alternatives to the “old” government, have already created major political polarisation in the country. Carlos Mesa, with his leftist Revolutionary Front party, represents a suitable alternative for the Bolivian administration. But he does not have the support of the opposition parties.
Therefore, the electorate must be won with collective proposals and coalitions, and the candidates must avoid falling into the trap of false promises. The coming months will reveal the intensity of the electoral campaigns in one of the country’s most polarised elections in its democratic history.
