• Continued protests imperil production and shipping activities in Bolivia

    12 November 2019

    Since October 20, Bolivian anti-government protests resulting in major road blockages in several cities across the country, including La Paz and Santa Cruz, have disrupted land freight movements as well as flight operations at El Alto Airport. Together with interrupted cargo shipments from the industrial hub of Cochabamba and delays at border crossings with neighboring countries, the overall estimated losses from the unrest are in the nine-figure range and increasing.

    Despite the resignation of Evo Morales on November 10, the political crisis in Bolivia is unlikely to be resolved in the coming weeks. Supply chain managers are advised to consider possible further road-obstructing protests and violent clashes when planning shipments to, from, or throughout Bolivia.

    Escalation of protests

    On October 20, the Bolivian general election led to a contested result that prompted incumbent President Evo Morales to declare a re-election victory ahead of an official audit by the Organization of American States. Shortly after the result announcement, protests commenced due to longstanding public opposition to the Morales campaign and victory claim.

    Road-obstructing protests had broken out intermittently throughout the country in isolated instances during the run-up to the election. The major escalations reportedly began on October 22 in La Paz and later expanded to Bolivia’s major cities including, but not limited to, Sucre, El Alto, Potosi, Cochabamba, and Tarija. On October 23, the first of multiple border closures occurred at Puerto Suarez, Santa Cruz, bordering Corumba in the Brazilian state of Mato Grosso do Sul.

    Further border roadblocks were reported a few days later at individual locations across the Santa Cruz and Beni departments which neighbor Brazilian states, ranging from Mato Grosso do Sul through Rondonia. As clashes escalated and Morales started to dig in, protesters began to block major highways between the aforementioned cities. The most recent event was an ultimatum by Santa Cruz-based opposition leader Luis Fernando Camacho that led to a nationwide general strike on November 6, exacerbating the roadway closures and threatening further border closures through all of Santa Cruz.

    Impact on economy

    As of November 6, the Government of Bolivia has estimated total losses, due to impeded commerce and looting, at USD 167 million (EUR 150,83 million). As of November 5, nearly USD 16 million (EUR 14.51 million) of these losses were attributable to shipping difficulties and production halts in Cochabamba, the agricultural and industrial hub of Bolivia and home to considerable assets in the country’s chemical, automotive, technological, and raw materials industries.

    Shipments to neighboring countries have been impacted, with roadblocks on many intercity axes across the country having been strengthened; the situation has been compounded by continued and growing border closures with Brazil and Paraguay, as well as unrelated port disruptions due to protests in neighboring Chile at Bolivia’s leased Port of Arica. Flight disruptions at El Alto International Airport, one of three principal international airports in Bolivia, have prevented shippers from transporting cargo beyond South America. As a result, avenues for uninterrupted shipping in and from Bolivia are gradually diminishing.

    Outlook

    Despite the resignation of Evo Morales on November 10, the likelihood that the political crisis will be resolved in a peaceful and expedient manner is rather unlikely for the immediate future. Morales was originally ineligible for a fourth term per Article 168 of the 2009 constitution, yet maneuvered through Bolivia’s Supreme Tribunal of Justice to eliminate term limits. On Sunday, November 10, he was asked to resign after the Organization of American States called for a new presidential election, citing irregularities in the October 20 vote.

    Following the resignation of a leader who had been in power for almost 14 years, Bolivians now face a new challenge, accompanied by uncertainty before the next elections. In view of the indications that violent groups have attacked Morales’ house, his supporters are also likely to defend the controversial Bolivian leader.

    Further protests and violent clashes are likely and pose a threat to ground and air freight movements. Shippers with cargo in Bolivia are advised to stay abreast of the latest developments near at-risk areas, including El Alto, Sucre, Santa Cruz, and Cochabamba, and be mindful of the possibility of escalating protest activities in connection to the election. Where possible, customers are advised to plan accordingly.

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