Chinese trade and investments in Bolivia during Evo Morales administrations: South-South or dependency relations?

Valeria Marina Valle

Introduction

Bolivia trade relations with China have increased over the last two decades, especially in the energy and mineral sectors. Whereas in 2000, China was Bolivia’s 18th exporting partner, by 2009 it had reached 11th place, in 2011 it rose to 8th and in 2014 to 5th.1 Moreover, "between 2000 and 2014, annual bilateral trade between China and Bolivia increased dramatically, from US$75.3 million to US$2.25 billion. China has become the fifth largest market for Bolivian exports, mostly raw materials such as minerals, hydrocarbons, wood and soybeans”.2 The purpose of this chapter is to explore the evolution of trade relations; analyse what the most important traded goods are, especially in the mining and energy sector; and predict the behaviour of bilateral investment, coimnercial trends, and terms of trade, especially related to the extraction of lithium. The main research question is whether China’s economic relations with Bolivia have represented South-South or dependency relations during Evo Morales administrations (2006-2019).3

In the first part, a contextual and theoretical framework identifies the major characteristics of Bolivia as a country rich in natural resources but immersed in poverty and inequality. This section offers a geogr aphical and social panorama of the regional division in the country. The theoretical framework explains basic features of Bolivia- China relations. The second part analyses the evolution of trade flows between Bolivia and China from 2007 to 2016 estimates and identifies the main products traded, especially in the energy and mineral sectors. Here, unbalanced terms of trade are evidenced. The third part analyses Chinese interest in the extraction of Bolivian lithium, Chinese investments in its industrialization and its potential socioeconomic and environmental consequences for local communities. Contrast between the philosophy oiBuen ViviiA and neo-extractivist practices will be evidenced. Conclusions indicate big contradictions within Bolivia and in the relation between Bolivia and China. Data analysis suggests negative socioeconomic and environmental implications of lithium extraction in local communities should be prevented.

1 Context and theoretical framework

Bolivia is the poorest country in South America, with approximately 38.6% of the population living on less than the international standard of two dollars per day.

The country is not only the poorest of its sub-region but also the most unequal. Bolivia occupies the 28th place in the world out of 158 countries in the Gini index, which measures the distribution of family income, with a score of 47/100 (2016 estimations).5 Bolivia is divided geographically into economic and social terms. The four richest departments are in the east and south, in a zone called la Media Luna (Half Moon), which comprises four rich departments: Pando, Beni, Santa Cruz and Tarija. The elite of European descent and upper classes live in these lowlands, mainly in the city of Santa Cruz. In the west, at the Andes mountain range, the lower classes and indigenous communities have a stronger presence than at Half Moon. In this area, between the departments of Oruro and Potosi, the Uyuni salt flat is located, where lithium is extracted. The western side of the country is poor but rich in mineral resources.6

Throughout the history of Bolivia, the white elite dominated the executive power, until December 2005, when Evo Morales was elected president. Morales is of Aymara descent and was the first indigenous Bolivian president. He intended to empower the poor, indigenous majority.7 Nevertheless, tensions between social classes have increased between the Amerindian populations of the Andean west and the nonin- digenous communities of the eastern lowlands, hi 2006, Morales nationalized the hydrocarbon industry, so the state reinforced control of its strategic resources.8

2 Bolivian energy and mineral resources

Bolivia is endowed with large reserves of hydrocarbons. Estimations from 1 January 2017 indicate that Bolivia had 211.5 million barrels of proven reserves of crude oil, occupying position number 57 in the world ranking. As for natural gas, it was the 31st world producer and had proven reserves that reached 295.9 billion m3, occupying position number 40 in the world ranking.9

The country has the second-largest reserves of natural gas in South America, but there have been long-running tensions over the exploitation and export of the resource. Indigenous groups say the country should not relinquish control of the reserves, which they see as Bolivia’s sole remaining namral resource.10

Before Morales took office, “the political fallout from the issue had helped to topple two presidents and had led to calls for regional autonomy, including the prosperous oil producing Santa Cruz”.11 A clash of interests could also develop between indigenous communities and the actors who will extract lithium at the Uyuni salt flat.12

Most of Bolivia’s mineral resources are located in regions where most indigenous communities live. In the Potosi department, where lithium is located, especially at the Uyuni salt flat, other minerals are also being extracted; for examples, lead, silver and tin. The community that could be most affected by the extraction of these minerals is the Quechua, who are aware of the lithium potential. Solar de Uyuni is

The world’s largest salt flat and unexploited lithium reserve, with the metal sitting just a few centimetres below the surface. In 2017 the Bolivian government claimed that it had 70% of the world’s lithium reserves, piquing the interest of many international companies.13

Chinese companies have shown great attentiveness. Extraction of natural resources comes with a cost. Pressure on water supply is one example that harms the environment and local communities, and also damages to the area’s natural beauty, which could affect tourism.

3 Theoretical framework of Sino-Bolman relations

As relations between Bolivia and China are interstate, Political realism is a useful theory that explains that nation-states are the most important actors in the international system. The concepts of balance of power, anarchy and national interest, taken from the work of Hans Morgenthau in 1948 can be considered to analyse inter-state relations, such as China-Bolivia ones. Classical realism states that the international system is anarchic because there is not a supranational authority that creates international rules that are binding for all nation-states. Thus, every state pursues its own national interest in terms of power.14 In the case of the China- Bolivia relations, China (as well as Chinese companies) follows its national interest, this is, extracting energy resources, and not necessarily promoting Bolivian development. For Classical Realism, the nation-state is unified in the person of the Head of Government. In this case, in the period studied here, the interest of Evo Morales during his administrations would be considered the best interest of the Bolivian state.

Classical realism, nevertheless, does not explain that relations between nations can be unequal. To analyse this, other theoretical perspectives should be addressed. Raul Prebisch and other proponents of economic structuralism analyse the causes of imbalanced terms of trade. Latin America participates at the International division of labour as part of the periphery of the world economic system as a provider of raw materials for the great industrial centre. This entails negative consequences, as benefits from increased productivity have not reached the periphery, but only the economic centre. Moreover, there are big differences between the standards of living of the masses of the former and the latter and the manifest discrepancies between their respective abilities to accumulate capital. This provokes a disequilibrium, which destroys the basic premise underlying the schema of the International division of labour.15 This analysis can be used to explain China-Bolivia relations in the period studied. Bolivia exports energy and mineral raw materials, including lithium, to China and imports manufacmred goods. Thus, Bolivia suffers unbalanced terms of trade. Considering Bolivia is an unequal country, the benefits of growing exchanges with China may not be allocated to poor indigenous communities, especially to those that live where energy and mineral resources are located.

One of the main concepts of Structural realism or Neorealism is balance of power, as explained in Kenneth Waltz’s work.16 This concept is useful to explain Bolivia-China relations, promoted by President Evo Morales as a means to counter-balance influence of the United States (US) in Bolivia. At a discourse level, Bolivia and China during Morales administrations were against the Western “way of life” and had a common rival: the United States. Before becoming president, Morales was a trade union leader in the Cochabamba region, where the coca leaf is produced. The United States has conditioned international cooperation with Bolivia on the eradication of coca plantations, what caused a clash between Morales and the United States, particularly in 2008, when Morales expelled Drug Enforcement Administration (DEA) agents and the US ambassador, arguing that they were conspiring against his government.17

The Bolivian and Andean concept of “living well” (Buen Vivir) opposes the Western capitalist individualistic logic. It is an indigenous proposal that refers to the plenitude of life and to social, economic and political wellbeing. It is based on reciprocity, cooperation and complementarities. It yearns for a harmonic life between human beings and nature. This Andean philosophy resists the idea of “living better” because it implies that one group or individual lives better at the expense of another.18 In theory, the concept of neo-extractivism is opposed to Buen Vivir. The term neo-extractivism “should not be restricted to countries with progressive governments but be applied to all Latin American societies that, since the 1970s and especially since the year 2000, depend predominantly on the exploitation and exportation of nature”.19 Lithium extraction in Bolivia can certainly be analysed through these theoretical lenses.

David Llistar Bosch explains one of the causes of anti-cooperation practices between northern and southern countries. Northern countries need to guarantee access to resources and capacities.20 He mentions categories to describe what the north wants from the south: oil, gas and coal; strategic minerals; fertile land; wood, fisheries, among other resources.21 Bolivia is endowed with strategic minerals and China is particularly interested in a strategic resource, lithium. According to Llistar Bosch, strategic minerals are basic for a wide range of technologies and productive processes in different fields, including transportation. Controlling them is a synonym of power. Multinational corporations create a geopolitical North-South game design to guarantee access to these strategic resources. As companies need vast quantities of materials and energy, they seek state protection in the countries they invest. Once these companies detect external resources and their location, they exploit the soil, they abandon wastes or provoke negative environmental side effects, and they expatriate resources.22 The Case of China here will be treated as a country from the Global North, and not from the Global South, as present at a discourse level from Chinese governmental officials. When analysing governmental officials’ rhetoric, through discourses from Bolivian and Chinese politicians in the period studied, links between both countries are presented as based on South-South even relations. For example, in May 2018, Wang Yi explained that the nature of bilateral relations was framed as South-South cooperation, where both parties look for an equal relationship of mutual benefit.23 Moreover, during the signature of the “Strategic Partnership” between both countries in Beijing, in July 2018, when Chinese Premier Li Keqiang met Evo Morales in Beijing, the former expressed “China-Bolivia cooperation is an integral part of

South-South cooperation”.24 Rhetoric, then, emphasizes there are even win-win relations.

In academia there is literature supporting both arguments; that is, portraying China-Bolivia relations as South-South equal ones and, on the other hand, as an example of uneven relations that are led to dependency and are similar to North- South relations. Christian Orozco, on his paper entitled “The role of the Chinese External Direct Investment in Latin America and the Caribbean: South-South Cooperation?” dedicated a section to answer this question related to this interregional relation: “South-South Cooperation or core-periphery relations?” There, he presents a literature review to discuss which argument has more support among scholars. He shows that there are few articles written that back the South-South Cooperation claim and are optimistic on the Chinese role in Latin America and the Caribbean (LAC). Authors, such as Arrighi25 and Nolan,26 argue that China has implemented South-South cooperative anti-imperialistic initiatives and Chinese companies have played an important role in developing countries. Stress is put on Chinese building of roads, ports, railroads, dams, bridges, hotels, sportive stadiums, hospitals and housing. On the other hand, there are critical authors that analyse limitations of these unbalanced relations. Katz argues China is a key player in the capitalist system and it has not questioned any neoliberal practice.27 He indicates agreements between China and the Third World do not differ with the ones promoted by the United States, Europe or Japan. He also identifies authors28 who sustain that the intensification of Sino-Latin American economic relations in the last decades have implied the substitution of the “Washington Consensus” for the “Beijing Consensus”. Svampa also denominates the latter as the “Commodities Consensus”.29 Thus, authors that consider China-Latin American relations as South-South believe this kind of relations are even and bring positive aspects related to the creation of infrastructure in Latin America; whereas the critics sustain there are unbalance relations based on uneven terms of trade (where Latin American countries export to China basically raw materials and import value-added goods, sendees and infrastructure).30

Although China has had an increased importance for Bolivia, the Asian giant is not the top trading partner for the South American country. Although Bolivian- Chinese trade relations have grown faster than Bolivian-US ones, the United States has still been more important trading destination for Bolivia than China. Following data will show this fact.

4 China-Bolivia bilateral trade and investments

Sino-Bolivian trade has increased exponentially since China entered the WTO in 2001. Trade is projected to grow in the near future, mainly because of Chinese interest in Bolivian energy and mineral resources. Table 9.1 illustrates that Bolivia has increased the percentage of its exports to China. While in 2007, Bolivia only expoi-ted 1.2% of its total goods to China, estimates for 2016 show that Bolivia exported 6.6% to the Asian giant.

Table 9.1 Bolivia exports (in thousands of USS and as % of total)

Years

Total

China

China (%)

2007

4,889,705

57,544

1.2

2008

7,058,008

129,381

1.8

2009

5,486,406

130,602

2.4

2010

7,052,128

208,636

3.0

2011

9,215,280

336,615

3.7

2012

11,991,133

316,485

2.6

2013

12,371,615

322,712

2.6

2014

13,034,220

441,837

3.4

2015

8,923,115

468,249

5.2

2016 est.

7,228,168

478,888

6.6

Source: Author elaboration based on data from Bolivia. Instituto Nacional de Estadistica (2018a).

Table 9.1 figures show an upward trend. If the trend continues throughout the years, China may become in the coming years Bolivia’s main destination for Bolivian expoxts.

Table 9.2 shows that Bolivian imports from China have increased steadily since 2007. While in 2007, Bolivia imported 8.7% of its total goods from China, estimates for 2016 show that Bolivia imported almost 20% of its total from that country. These figures show an upward trend.

A comparison between Bolivian exports and imports shows unbalanced terms of trade between the two partners. According to IMF database, between 2006 and 2017, Bolivia exported to China US$3.39 billion but it bought four more times from China (US$13,356 billion), so Bolivian deficit with China peaked to US$9,966 billion.31 The CIA World Factbook (2018) indicates that Bolivia's exports partners in 2017 were: Brazil 17.9%. Argentina 16%, United States 7.8%, Japan 7.3%, India 6.6%, South Korea 6.3%, Colombia 5.8%, China 5.1% and United Arab Emirates 4.7%. Bolivia exports totalled US$7,746 billion (2017 est.) and comprised mainly commodities: natural gas, silver, zinc, lead, tin, gold, qui- noa, soybeans and soy products. Bolivian imports totalled US$8,601 billion (2017 est.) and were mainly value-added goods such as machinery, petroleum products, vehicles, iron, steel and plastics. Bolivian Imports partners in 2017 were: China 21.7%, Brazil 16.8%, Argentina 12.6%, United States 8.4% and Peru 6.5% (2017).32 Tables 9.3 and 9.4 illustrate the kinds of products traded by Bolivia and China in 2017.

Table 9.3 shows that in 2017 Bolivia exported to China basically raw materials without value added.

Table 9.4 illustrates that Bolivia imported manufactures from China in 2017.

Both quality and quantity of traded goods show Bolivia is particularly dependent upon Chinese imports. In the studied period, it is clear that the China-Bolivia relation has been unbalanced in terms of trade. Impacts of lithium extraction will be analysed in the following section.

Table 9.2 Bolivia imports (in thousands of US$ and as % of total)

Years

Total

China

China (Ho)

2007

3,587,9520

312,1050

8.7

2008

5,100,167

445,044

8.7

2009

4,577,380

415,523

9.1

2010

56,038,740

652,756

11.6

2011

7,935,746

1,112,571

14.0

2012

8,590,086

1,293,636

15.1

2013

9.699,046

1,458,976

15.0

2014

10,674,101

1,884,242

17.7

2015

9,843,078

1,780,109

18.1

2016 est.

8,515,082

1,695,763

19.9

Source: Author elaboration based on data fiom Bolivia. Institute Nacional de Estadistica (2018b).

Table 9.3 Main exported products from Bolivia to China in 2017 (in USS)

Products

Value

1

Zinc minerals and concentrates

160,129,387

2

Silver minerals and concentrates

125,673,903

3

Lead minerals and concentrates

55,123,778

4

Copper minerals and concentrates

21,503,359

5

Natural sodium borates and concentrates (even calcined)

8,017,054

б

Rest

30,938,164

Total 48 products

401,385,645

Source: Author elaboration based oil data fiom IBCE (2018, June 28).

Table 9.4 Main imported products by Bolivia from China in 2017 (in USS)

Products

Value

1

Machines

91,931.718

2

Trolleybus

79,069,045

3

Motorcycles with 50 and 250 cmJ cylinder engines

33,217,891

4

New tires for buses or trucks

32,870.900

5

Vehicles maximum tow 20 Tn

32,493,069

6

Rest

1.757,334,810

Total 4,233 products

2,026,917,433

Source: Author elaboration based on data fiom IBCE (2018, June 28).

5 Chinese interest in the extraction and industrialization of Bolivian lithium

Lithium, popularly called “white gold”33 is employed in the construction of aircraft and in cextain types of batteries. Lithium-ion batteries are an essential component of lightweight, rechargeable power for laptops, phones as well as other digital devices. It is also used in the pharmaceutical sector to treat mental health

(mainly depression, bipolar disorder and suicide prevention).34 It is worth mentioning that battexy production has become an important use for the metal, which is particularly used in the growing electric and hybrid vehicle industry.35 Moreover, lithium is valued for having the lightest weight, highest voltage and greatest energy density of all metals.36

The largest lithiimx reserves can be found in Latin America in the "Lithium Triangle”, an area spanning Argentina, Bolivia and Chile, which holds around 60% of the world’s lithium reserves.37 In Bolivia, the Uyuni salt flat covers more than 10,000 km2 and is considered the most extensive in the world. Lithium salts have great commercial potential. The Uyuni salt flat contains 9 million tonnes of lithium, more than a quarter of the world’s known resources, which could rise to around 50% if lithium is extracted in more than 30 other salt flats and lagoons in the south-western region of the country.38

The Bolivian state-own company, Bolivian State Lithium Deposits (YLB in Spanish), the Chinese Xinjiang TBEA Group Company and America-Baocheng Desarrollo у Tecnologia del Salar signed an agreement to produce lithium at the salt flat of Coipasa, at Oruro, and Pastos Grandes, at Potosi. Xinjiang TBEA Group Co Ltd. will hold a 49% stake in the joint venture with YLB.39

Demand for lithium "is projected to increase tenfold over the next decade, leading all three countries (Argentina, Bolivia and Chile) to double down on being world leaders in this ‘white gold’”.40 Consequently, it is understood why Evo Morales has seen an opportunity in exploiting the metal, considering the amount of reserves under Bolivian soil and its potential, especially in the growing electric and hybrid car industry. Nevertheless, lithium is a commodity and raw material prices are volatile, as claimed by the structuralist theory. Lithium exploitation and industrialization in Bolivia has been promoted by Evo Morales and supported by foreign companies, mainly from China and Germany in 2019. For example, in February 2019, YLB and the Chinese consortium Xinjiang Tbea Group and Boacheng signed an agreement to invest US$2.3 billion dollars in lithium and other products' exploitation and industrialization projects in two salt flats: Coipasa and Pastos Grandes. It was expected that in four or five years it could be possible to produce potassium sulphate, lithium carbonate and hydroxide, lithium carbonate, boric acid, sodium bromate and metallic lithium. This agreement also included the construction of lithium-ion batteries, with the participation of YLB.41

After the signature of said agreement, the Chinese ambassador in Bolivia expressed that this alliance "signed by China, the mayor world vehicle producer, with Bolivia, the country that possesses the major world reserves of lithium, is a very important strategic alliance in the world and it means great potentialities fox- cooperation in the future”42. He also informed China produced more than 30 million cars a year and it had an annual demand of 800,000 tons of lithiuxn. He stressed that “this alliance in the industrialisation of lithium is a proof of our profound mutual political trust axxd it shows the level of development of relations among both countries”.43 This rhetoric reinforces the governmental perspective that both countries subscribed a South-South Cooperation modality.

But China has not been alone. Germany has been a great competitor of China related to lithium extraction and industrialization in Bolivia. The German firm, ACI Systems GmbH, has signed a joint venture agreement to extract Bolivian lithium and to build a battery manufacmring plant.44 Other companies from Japan, South Korea, France and Spain have also been interested in Bolivian lithium. Nevertheless, since China is Bolivia's largest bilateral creditor, the Asian giant may become the main investor for lithium extraction and industrialization, especially since the country has already shown interest to pay high prices to promote the electric vehicle market.45

Besides the interest shown by foreign companies in Bolivian lithium, rhetoric from the Bolivian government argued exploitation and industrialization would be administered mostly by Bolivian hands. This could be interpreted as a lack of dependency of Bolivia on foreign companies. Nevertheless, Bolivia has lacked the expertise, technology and skilled labour in order to achieve such a task alone. Governmental voices have been optimistic and analysts sceptical. For example, Laura Millan Lombrana published an article entitled: “Bolivia’s Almost Impossible Lithium Dream” 46 She based her argument on the failure of past agreements between the Bolivian government with South Korean and Japanese companies to extract and industrialize lithium. The case of the former FMC and steelmaker- giant POSCO “have in the past attempted to ink deals with Morales’ government that would have set up lithium operations in Uyuni. Those attempts failed, with talks stalling and investors walking out in the face of uncertainty or unreasonable government demands”.47 Other failed attempts occurred in 2012, when South Korean Chonnam National University and Korea Resources Corp (KORES) sent a sample of the brine from the Uyuni salt flat to a laboratory in Gwangju, South Korea. The technical part was successful, as it was possible to develop processing techniques to separate high-quality lithium carbonate from other compounds. However, the cormnercial aspect appeared to be complicated. Finally, KORES decided to cancel the project. “There was speculation that this was due to the geological complexity (especially lack of water), poor infrastructure, and fear of renationalization”.48

Millan Lombrana also explains Bolivia is quite risky in relation to other parts of the world for lithium investment. She quotes Chr is Berry, who expressed “Investors are concerned with both return on capital and remrn of capital”. Other difficulties pointed by this author are related to labour conditions and logistics to export lithium: .. workers will spend two weeks at the Uyuni salt flat... before they remrn home for a seven-day rest”. They work “on top of the Andes Mountains, about 12,000 feet above sea level at the heart of landlocked Bolivia. The nearest port is at least 500 kilometres and a border crossing away”.49 The author refers to the Chilean port of Iquique. It is worth recalling another limitation for Bolivia: the country has had a long-term dispute with Chile claiming access to the sea. In October 2018, the International Court of Justice ruled against Bolivia in this dispute. Although the decision is binding and final, Evo Morales declared “Bolivia will never give up”.50

In this section, it has been analysed that Chinese and Bolivian governmental officials are quite optimistic on signed agreements to exploit and industrialize lithium. Nevertheless, there are a number of negative externalities derived from this process. In the next section, social and environmental negative consequences of lithium extraction will be presented.

6 Potential social and environmental negative consequences

of lithium extraction for local communities

In the literature it is possible to identify negative social and environmental consequences of lithium extraction in Bolivia. Apart from analysing points of views from the critics, it is important to understand where lithium is found, how it is extracted and then analyse which are examples of negative social and environmental consequences of this extraction. Lithium is mixed (in water) with mud and salt sitting beneath salt flats. To extract it, miners pump the brine into big ponds, where lithium is left to evaporate for months. The concentrated liquid is carried to industrial chemical plants for processing, where it is turned into lithium carbonate or lithium hydroxide.51 Moreover, “Precipitating lithium carbonate from the brine requires massive fresh water evaporation pools”.52 So, the main critical element is the possibility of water shortage. Bolivian academic Raul Prada, who helped conceptualize Bnen Vivir and was vice-minister of strategic planning in the first years of the Evo Morales government, left his position when he realised the government did not prioritize indigenous initiatives. Prada argued that industrialization would take water resources that are crucial for rural economies. Moreover, the pilot plant sits on the periphery of the salt flat, where communities take water from the San Geronimo River and Rio Grande delta in order to grow quinoa and raise livestock. This type of agricuhure contributes to food security in Potosi, a department that faces high levels of extreme poverty.53

Several social and environmental consequences of lithium extraction are not new; they have been identified a decade ago. Indeed. Rebecca Hollender and Jim Shultz wrote a special report for The Democracy Center in 2010 where they warn: “The region already suffers from a serious water shortage, impacting quinoa farmers, llama herders, the region’s vital tourism industry, and drinking water sources”. Moreover, they also indicated water, air and ground pollution were other maj ox- concerns. Huge quantities of toxic chemicals would be required to process tons of lithium per year.54 As for the specific impact on the tourism industry, Rafael Ibanez, a tour guide in Uyuni, who is concerned with the impact for this business, expressed: “People who work in tourism are in total disagreement of this project”. This is so because factories and evaporation pools have an impact on the natural scenery of the salt flat, hurting tourism, and thus risking economic resources for local communities.55

Also, the Uyuni salt flat region is a breeding ground for rare flamingos, which could be affected by lithium extraction. Another serious impact would be on local communities' health. A study conducted by Karin Broberg of Lund University,

Sweden, in four villages in the Argentinian Andes has evidenced that women ingest large quantities of lithium from groundwater and consequently suffer symptoms such as weight gain, fatigue, depression and memory loss. The researcher- suggested these conditions may also be suffered by patients being treated with lithium for bipolar disorder and expressed willingness in studying the problem of lithium exposure in drinking water in Bolivia.56

7 Bueii Vivir or neo-extractivism?

After the reform of the Bolivian Constitution in 2009, it can be observed what Rickard Lalauder defines as “the paradox of extractive development”. On the one hand, the new Constitution incorporated the indigenous philosophy of Bnen Vivir and National development policies have strengthened the ethnic-ecological profile of the Morales administrations. On the other hand, in practice, ethnic and environmental rights have often been degraded. While indigenous rights were reinforced at the new Constitution, these rights contrast with constitutionally recognized rights of the National State to extract and commercialize natural resources (mainly hydrocarbons and minerals) under the redistributive justice, social reforms and common good flag.57

Moreover, the 2017 report of the Observatory of Mining Conflicts in Latin America (OCMAL, in Spanish) states that environmental control flexibilization and incentives to promote private investment have generated a tense relation between the Bolivian State and social, indigenous and women movements that have questioned extractive practices contraries to Btien Vivir.58 This scenario was intensified with the ratification, in 2014, of the Mining and Metallurgy Law, which contains articles that restrain the right to a previous, free and informed consultation. This normative, at ai-ticles 99 and 100, establish as crime those individual or collective actions that enable mining activities. Moreover, Law 367 against mining subjugations proclaimed in May 2013, punishes with six to eight years of jail to those who invade mining areas and impede the exploitation of deposits.59 These articles and laws are against Article 30, number 15 of the 2009 Bolivian Constitution, which states that .. the right of mandatory and previous consultation will be respected and guaranteed, by the State, in good faith and in a concerted way, in regard to the exploitation of non-renewable natural resources in the territory they inhabit”.60

Apart from these contradictions in the law, at discursive level, the Bolivian government promised community leaders that lithium would be strategically exploited for value-added products. But, in practice, foreign contractors who operated mining projects disregarded labour norms, community concerns, and enviromnental laws in Bolivia. The question is whether Bolivia will watch that foreign companies stick to rigorous standards.61

Conclusion

After all the arguments exposed at the development of this chapter, it is time to answer the question whether China has been, during Evo Morales administrations, a South-South provider or if Bolivia could be dependent upon Chinese trade, investment and credits, especially associated to lithium extraction and industrialization. It seems to be a disconnect between rhetoric from governmental officials, who believed in the South-South even “strategic partnership”, and what happened in practice. Reality shows unbalanced terms of trade between both partners, being Bolivia the commodity exporter and China the one providing value-added products, technology, investments and credits. Consequently, it can be affirmed that during the Morales administrations Sino-Bolivian relations have followed a logic similar to North-South (dependent) relations, more than South-South equal ones.

Nevertheless, there could be some elements to consider a certain room to manoeuvre for Bolivia: (1) lithium could have commercial potential considering the booming electric and hybrid car industry in China and in other industrialized countries; (2) Bolivia is endowed with important percentages of lithium world reserves; (3) when signing joint ventures, the Bolivian national company, YLB, has taken the majority of stakes (51% versus 49% for the foreign company) and (4) there has been, during Evo Morales administrations, a political and ideological affinity with Chinese govermnents. In Classical and Structural Realist perspectives, these relations among Heads of States purse a common national interest and counterbalance the power of the United States. So, ideologically, Bolivia has been seen as an ally.

However, there are also other reasons why Bolivia has not been seen as a “strategically” in practice, during the period studied and in the near future, especially concerning lithium extraction and industrialization: (1) companies from other competitive countries (Japan and South Korea) have failed in their attempt, so the same may occur with China; (2) reasons for failure to create joint ventures to extract, coimnercialize and industrialize lithium could be varied: lack of sufficient water supply, poor infrastructure, fear of renationalization, perception of quite a high risk, difficult labour conditions, complicated transportation logistics and opposition from local communities and organizations, among others.

Additionally, negative consequences of lithium extraction have been evidenced through this chapter. Social as well as environmental negative impacts are not minor. A serious problem is related to health problems derived from lithium water intake and from toxic chemicals in water, air and ground pollution. Water shortage is critical, as it provokes social, environmental and food security problems. It affects quinoa and livestock producers, the tourism industry, llama herders and rare flamingos.

Moreover, a worrying aspect is the big contradiction in Bolivia, a country rich in energy and mineral resources and at the same time the poorest and most uneven one in its region. While the philosophy of Buen Vivir promoted balance between human beings interests and Mother Nature, on the other hand, the Bolivian government during Evo Morales administrations created incentives to neo-extractivist practices and restrained basic human rights, such as previous consultation, freedom of expression, a healthy life and a protected and sustainable environment.

If local communities do not find channels to protest and claim for their rights, then National interests conceived from the ones in power will be preserved.

Classical realism, then, will have a great explanatory power and rhetoric will keep playing the South-South cooperation song.

Notes

  • 1 CEPAL (2011); Achtenberg (2017).
  • 2 Idem.
  • 3 On 10 November, 2019, Evo Morales resigned, after almost 14 years in power. He was succeeded by Jeanine Anez. Although her administration is not analyzed here, consequences of lithium extraction in Bolivia continued after 2019.
  • 4 See infra on this concept.
  • 5 CIA World Factbook (2018).
  • 6 Valle and Cueto Hohnes (2013:95).
  • 7 CIA World Factbook (2018).
  • 8 Valle and Cueto Hohnes (2013:96).
  • 9 CIA World Factbook (2018).
  • 10 BBC News (2018b, January 10).
  • 11 BBC News (2012).
  • 12 Valle and Cueto Holmes (2013:101).
  • 13 The Guardian (2017, January 17).
  • 14 Morgenthau (1948).
  • 15 Prebisch (1950:1).
  • 16 Waltz (1979).
  • 17 BBC News (2011).
  • 18 Llistar Bosch (2009:45-46).
  • 19 Brand etal. (2016:126)
  • 20 Llistar Bosch (2009:13).
  • 21 Idem, p. 66.
  • 22 Idem, pp. 69, 77.
  • 23 Bolivia. Ministerio Relaciones Exteriores (2018, May 29).
  • 24 Xinhua (2018).
  • 25 Arrighi (2007:Epilogue).
  • 26 Nolan (2014:69).
  • 27 Katz (2011).
  • 28 Slipak (2014); RedLat'FNv (2010); Nacht (2013); Leon Manriquez (2006); Svampa (2013).
  • 29 Svampa (2013).
  • 30 Orozco Suarez (2018:63-64).
  • 31 IMF database (https://data.imf.orgI). See also IBCE (2018, June 28).
  • 32 CIA World Factbook (2018).
  • 33 Horvath and Romero Medina (2019, April 4).
  • 34 American Society of Health-System Pharmacists (2015).
  • 35 Addison (2012).
  • 36 Van Schalkwijk and Scrosati (2002).
  • 37 Horvath and Romero Medina (2019, April 4).
  • 38 Highfield (2011).
  • 39 Ramos (2019, February 6).
  • 40 Horvath and Romero Medina (2019, April 4).
  • 41 Sputnik (2019).
  • 42 Liang Yu quoted in Idem.
  • 43 Idem.
  • 44 Sanchez Mohna (2018), Nienaber (2018).
  • 45 Szarek (2018).
  • 46 Millan Lombrana (2018).
  • 47 Idem.
  • 48 Szarek (2018).
  • 49 Millan Lombrana (2018).
  • 50 BBC News (2018a, October 1).
  • 51 Millan Lombrana (2018).
  • 52 Szarek (2018).
  • 53 Idem.
  • 54 Hollender and Shultz (2010:47).
  • 55 Szarek (2018).
  • 56 Highfield (2011).
  • 57 Lalander (2018:34).
  • 58 OCMAL (2017:67).
  • 59 Idem.
  • 60 Bolivia, Constitucion Politica del Estado (2009:3).
  • 61 Szarek (2018).

References

Achtenberg Emily. 2017. “Financial Sovereignty or a New Dependency? How China is Remaking Bolivia”, Rebel Currents, August 8 (http://nacla.org/blog/2017/08/ll/ financial-sovereignty-or-new-dependency-how-china-remaking-bolivia).

Addison John. 2012. “Electric Car and Hybrid Car Sales will Triple in Next Six Years”, Clean Fleet Report, January 23 (www.cleanfleetreport.com/electric-car-sales-triple/).

American Society of Health-System Pharmacists. 2015. “Lithium Salts”, Drugs.com, December 1 (https://www.drugs.com/monograph/lithium.html).

Arrighi Giovanni. 2007. Adam Smith en Pekin: origenes у fundamentos del siglo XXI, Madrid, Akal.

BBC News. 2011. “Bolivia’s Morales Insists No Return for US Drug Agency”, November 9 (www.bbc.co.uk/news/world-latin-america-15649399).

-. 2012. “Bolivia Country Profile”, August 2 (http://news.bbc.co.Uk/2/hi/ americas/

country_profiles/1210487.stm).

-. 2018a. “Bolivia sea dispute: UN rules in Chile’s favour”, October 1 (www.bbc.

com/news/world-latin-america-45708671).

-. 2018b. “Bolivia Country Profile”, January 10 (www.bbc.co.uk/news/world-latin-

america-18727507).

Bolivia. 2009. Constitucion Politica del Estado, Gaceta Oficial del Estado Plurinacional de Bolivia (www.oas.org/dil/esp/Consti.tucion_Bolivia.pdf).

Bolivia. 2018. “Ministerio Relaciones Exteriores”, May 29. (www.cancilleria.gob.bo/ webmre/node/2538).

Bolivia. Instituto Nacional de Estadistica. 2018a. “Comercio Exterior. Exportaciones” (www.ine.gob.bo/index.php/comercio-exterior/introduccion-2).

-. 2018b. “Comercio Exterior. Importaciones” (www.ine.gob.bo/index.php/comercio-

exterior/introduccion-3).

Brand Ulrich, Dietz Kristina, Lang Miriam. 2016. “Neo-Extractivism in Latin America. One Side of a New Phase of Global Capitalist Dynamics”, Ciencia Politica, Vol. 11, No 21, pp. 125-159.

CIA World Factbook. 2018. (www.cia.gov/library/publications/the-world-factbook/geos/ bl.html).

Comision Economica para America Latina у el Caribe (CEPAL). 2011. La Republica Popular China у America Latina у el Caribe. Hacia una nueva fase en el vinculo econdmico у commercial, Santiago de Chile, June (www.cepal.org'Publicaciones/).

The Guardian. 2017. “Electric Car Boom Fuels Interest in Bolivia’s Fragile Salt Flats”, January 17 (www.theguardian.com/sustainable-business/2017/jan/17/white-gold-com panies-search-lithium-bolivia).

Highfield Roger. 2011. “The Saudi of lithium", New Scientist, Vol. 210, No 2816, June 11, pp. 24-25.

Hollender Rebecca, Shultz Jim. 2010. Bolivia and its Lithium Can the “Gold of the 21st Century" Help Lift a Nation out of Poverty’? A Democracy Center Special Report. The Democracy Center, May 25 (www.academia.edu/8217089/Bolivia_and_its_Lithium_ Can_the_Gold_of_the_21st_Century_Help_Lift_a_Nation_out_of_Poverty).

Horvath Eniko, Romero Medina Amanda. 2019. “Indigenous People’s Livelihoods at Risk in Scramble for Lithium, the New White Gold”, Reuters Events. Sustainable Business, April 4 (www.ethicalcorp.com/indigenous-peoples-livelihoods- risk-scramble-hthium-ne w-white-gold).

Instituto Boliviano de Comercio Exterior (IBCE). 2018. Boletin Electronico Bisernanal, No 708, June 28 (http://ibce.org.bo/ibcecifras/index.php?id=652).

ICatz Claudio. 2011. Bajo el imperio del capital, Buenos Aires, Ediciones Luxemburg.

Lalander Rickard. 2018. “Indigeneidad, descolonizacion у la paradoja del desarrollismo extractivista en el Estado Plurinacional de Bolivia”, Revista Chilena de Derecho у Cien- cia Politico, Vol. 8, No 1, May, pp. 1-40.

Leon Manriquez Jose Luis. 2006. “China-America Latina: una relation economica diferen- ciada”, Nueva Sociedad, Vol. 203, Buenos Aires, pp. 28-47.

Llistar Bosch David. 2009. Anticooperacion. Interferencias Norte-Sm: Los problemas del Sur Global no se resuelven con mdsayuda internacional. Barcelona, Icaria Editorial.

Millan Lombrana Laura. 2018. “Bolivia’s Almost Impossible Lithium Dream”, Bloomberg, December 3 (www.bloomberg.com/news/features/2018-12-03/bolivia-s-almost-impos sible-lithium-dream).

Morgenthau Hans. 1948. Politics among Nations, New York, Knopf.

Nacht Pablo Alejandro. 2013. El dragon en America Latina: las relaciones economico- comerciales у los riesgos para la region, iconos, Revista de Ciencias Sociales, Quito, FLACSO Ecuador 45, pp. 141-154.

Nienaber Michael. 2018. “Germany secures access to vast lithium deposit in Bolivia”, Reuters, December 12 (www.reuters.com/article/us-germany-bolivia-lithium/germany- secures-access-to-vast-lithium-deposit-in-bolivia-idUSKBN10B206).

Nolan Peter. 2014. 6Esta China comprando el rnundo, Madrid, Traficantes de Suenos.

Observatorio de Conflictos Minerosen America Latina (OCMAL). 2017. Mineria, vio- lencia у criminalizacion en America Latina. Dinamicas у tendencias, Santiago, Chile, November 21 (https://cedib.org/wp-content/uploads/2017/ll/Informe-OCMAL-final- PDF-l-l.pdf).

Orozco Suarez Christian Rafael. 2018. “El papel de la IED China en America Latina у el Caribe: ^Cooperation Sur-Sur?”, Papeles de Europa, Ediciones Complutense, Vol. 31, No 1, pp. 57-67.

Prebisch Raul. 1950. The Economic Development of Latin America and its Principal Problems, New York, United Nations Publication, April 27 (http://archivo.cepal.org/pdfs/ cdPrebisch/002.pdf).

Ramos Daniel. 2019. “Bolivia Picks Chinese Partner for S2.3 Billion Lithium Projects”, Reuters, February 6 (www.reuters.com/article/us-bolivia-lithium-china/bolivia-picks- chinese-partner-for-2-3-billion-lithium-projects-idUSKCNlPV2F7).

RedLat FNv. 2010. Las relaciones economicas geopoliticas entre China у America Latina: 6Ahanza estrategica о interdependencia asimethca? Sao Paulo (https://issuu.com/ observatorio_social/docs/chinaxal_trilingue).

Sanchez Molina Pilar. 2018. “Bolivia Hires ACI Systems for its First Lithium Factory”, PV Magazine, April 25 (www.pv-magazine.com/2018/04/25/bolivia-hires-aci-systems- for-its-first-lithium-factory/).

Slipak Ariel. 2014. “America Latina у China: ^C'ooperacion Sur-Sur о ‘consenso de Beijing’?”, Nueva Sociedad, Vol. 250, pp. 102-113, Buenos Aires.

Sputnik. 2019. “Bolivia у China se asocian en proyecto de litio que profundiza alianza estrategica”. February 6 (https://mundo.sputniknews.com/america-latina/2019020610 85291871 -como-beneficiara-la-explotacion-e-industrializacion-de-litio-a-bolivia-y- china/).

Svampa Maristella. 2013. “Consenso de las commodities у lenguajes de valoracion en America Latina”, Nueva Sociedad, Vol. 244, pp. 3-4, Buenos Aires.

Szarek Jessica. 2018. “Bolivia’s Massive Supply of Lithium, and the Implications for the Local Community of Potosi”, The Upstream Journal, May (www.upstreamjournal.org/ bolivia-lithium/).

Valle Valeria Marina, Cueto Hohnes Hector. 2013. “Bolivia’s Energy and Mineral Resources Trade and Investments with China: Potential Socioeconomic and Environmental Effects of Lithium Extraction”, Latin American Policy, Vol. 4, No 1, PP- 93-122, Malden, MA: Wiley (https://onlinelibrary.wiley.com/doi/abs/10.1111/lamp. 12007).

Van Schalkwijk Walter, Scrosati Bruno (eds.). 2002. Advances in Lithium Ion Batteries, New York, Kluwer Academic Publishers.

Waltz Kenneth. 1979. Theoiy of International Politics, New York, McGraw-Hill.

Xinhua. 2018. “China, Bolivia to Deepen Cooperation”, June 20 (http://engUsh.scio.gov. cn/topnews/2018-06/20/content_52754140.htm).

 
Source
< Prev   CONTENTS   Source   Next >