Chinese Imports and Contraband Make Bolivia’s Textile Trade a Casualty of Globalization
Domestic manufacturing in Bolivia has been crushed by the influx of cheap foreign goods, mainly from China. Bolivian
products cannot compete in the global market because of the small- s c a l e production, the strict labor law which keeps
labor cost high, and the frequent political unrest which hurt competitiveness by raising costs. The Bolivian economy is
reliant on raw material extraction, and its trade deficit keeps widening. Although the government is making an effort to raise tariffs
and create state-owned companies to save jobs, globalization seems to have caused more bad than good in Bolivia.
Associated Press/Washington Post
July 6, 2012
Matilde Flores haggles with customers about the smartly tailored jackets she’s selling at her street stand in central La Paz
on a chilly morning. “The fabric is Chinese but they’re stitched together domestically,” she tells one shopper, but the
customer is clearly more interested in the price than the origin. Flores is facing up to Bolivia’s new reality: clothes either
wholly produced in China or sewn together locally with Chinese material are increasingly cheaper than anything produced in
Bolivia with the country’s raw materials.
Same for shoes.
“Chinese and now the Peruvian shoes are taking over and they aren’t even leather,” Genaro Torrez said as he hammered a
sole flat for a pair of fine leather shoes in his workshop. “The Chinese shoe is 70 percent cheaper, the Peruvian 40 percent
cheaper than domestic.” Although rich in raw material and skilled craftspeople, this poor, landlocked South American nation
of 10 million can barely compete globally in anything that is not dug out of the earth or grown in a field.
“He who doesn’t advance in globalization retreats and Bolivia has been fully globalized and, rather than benefiting, is
suffering the consequences,” said Gary Rodriguez, director of the Bolivian Institute of Foreign Trade.
“The day we least expect it the domestic markets for our pasta and beer will also disappear,” said Alberto Bonadona, an
economist and newspaper columnist. Domestic manufacturing has been slammed by a double whammy of cheap foreign
goods, mostly from China, and a nearly unfettered flood of contraband that further cripples the ability of Bolivian products to
compete.
“Our raw material is good, but production costs are high because we work by hand,” said Torrez. That’s a big problem when
China can undercut even Bolivia’s labor costs.
The president of an association of small and medium businesses in the eastern city of Santa Cruz, Janeth Coffield, is
sceptical:
“Let’s hope it happens so we can end this crisis, but authorities assured us in the past that the used clothing trade would
disappear and that hasn’t happened.”
(Source:https://archive.globalpolicy.org/globalization/cases-of-globalization/51770--chinese-imports-and-contraband-makebolivias-textile-trade-a-casualty-of-globalization.html%3Fitemid=id.html#652/ /Date Accessed 17th August 2023)
Question 1. (12 Marks)
Critically comment on the situation that has emerged in Bolivia because of Globalization. This also brings to the forefront
the flipside of globalization. Please evaluate the disadvantages of globalization in this context and offer possible remedies for
the situation in Bolivia.
Question 2. (18 Marks)
What in your opinion could be the pull factors for Bolivia? Examine in this context the concept of PUSH and
PULL Factors in Globalization.
