Chile and Bolivia

Patricio Navia @patricionavia

Buenos Aires Herald, February 11, 2014


As one of the oldest and most complex bilateral tensions in Latin America, relations between Bolivia and Chile will remain cold until both countries stop looking at the past and concentrate on the immense opportunities that lie ahead if both countries choose to deepen integration and trade.

Ever since they lost the War of the Pacific against Chile in 1879-1883, relations between Peru and Bolivia and its southern neighbour have been affected by war legacies.

Peru and Bolivia lost the Atacama Desert, rich in minerals (the largest source of Chilean copper production today). Bolivia was left a landlocked country. Several treaties signed in the late 19th and in the 20th century gave Chile sovereign rights over those territories, but Bolivia — and, until recently, Peru — have continued to claim as theirs some of the area taken by Chile.

Now that Peru feels satisfied after the International Court of Justice in The Hague ruled that the sea border between Chile and Peru has to be redrawn in favour of Lima, the Bolivian government has grown hopeful about its own case brought to the ICJ against Chile over sovereign access to the Pacific Ocean.

Bolivian President Evo Morales, who first came to power in 2005 partly on an anti-Chilean platform, has exploited the long-held claim that Bolivia’s underdevelopment is caused by being landlocked. Though his critics argue that Morales uses the anti-Chilean rhetoric when his approval falls, many Bolivians believe that its landlocked condition explains why their country is the least developed in South America. The nationalist card in Bolivia works well every time it is pointed at the loss caused by the War of the Pacific.

Unfortunately for Morales, Bolivia’s legal claim stands on a much weaker ground than Peru’s. Moreover, the Court’s ruling was far less favourable to Peru than the Peruvian government hoped and anticipated. The ruling confirmed the land border between the two countries and kept the existing maritime border for the first 129 km. Though the outer maritime border will be redrawn to favour Peru, Chile’ loss is far less significant than the gain of having Peru accept the existing border and the benefit of ending pending border issues. If the recent ruling predicts the chances the Bolivian case will have against Chile, there should be more celebrations in Santiago than in La Paz.

The fact that Chile has been brought to The Hague by the two countries that lost territory in the War of the Pacific speaks volumes about Chile’s diplomacy. The southern country has been unable to find innovative and creative ways to help its northern neighbours focus on the opportunities that lie ahead rather than on the pending issues from more than a century ago. To be sure, relations with Peru have improved in recent years. Notwithstanding the case brought by Peru to the International Court, bilateral relations between Chile and Peru are stronger than ever. Trade integration, growing bilateral investments and a growing Peruvian population in Chile have dwarfed the tensions produced by the maritime border dispute.

Relations with Bolivia are much cooler. There is very limited trade between the two countries and, in fact, they don’t even have embassies in each other’s capitals nor are there non-stop flights between La Paz and Santiago.

Chilean authorities argue that Bolivia needs to abandon sovereign access claims to the Pacific Ocean. Though there is political will to facilitate access to Bolivia — and Bolivian goods can already be shipped tax-exempt from Chilean ports —, Chile believes it owes nothing to its neighbours. In turn, Bolivians seem more concerned with the symbolic element associated with ending its landlocked condition than with the practicalities of having unrestricted access to ports on the Pacific.

Those rigid positions have blinded Chile and Bolivia about the opportunities that more integration would bring about. Bolivia has a large gas supply whereas Chile is in dire need of cheaper energy. Water-starved copper mines in Northern Chile could also benefit from Bolivian water. In turn, Northern Chile is severely underpopulated and economic activities are too dependent on mining. Bolivia and Chile would benefit from an arrangement that gave Bolivia access to the ocean and gave Chile access to Bolivian gas and water. Yet, the feud over sovereignty has so far blocked any progress on a bilateral deal. Moreover, the fact that standing treaties require that Peru must give its consent if Chile cedes any former Peruvian territory to Bolivia makes a deal much more difficult.

Bolivian President Evo Morales and soon-to-be Chilean president Michelle Bachelet would be wise to begin negotiations independent of ICJ ruling — expected several years from now. The two countries stand to gain much more than the pride to be lost if Chile cedes non-sovereign territory to Bolivia and Bolivia drops its claim against Chile. Economic opportunities will abound. Northern Chile and Bolivia will flourish with growth and development. Also, a deal that ends Bolivia’s landlocked status would certainly make the two presidents leading candidates for the Nobel Peace Prize.