It is the year 1879. Tensions are rising in South America. On February 14, troops of the Chilean army occupy the Bolivian port city of Antofagasta, thereby commencing what would later be known as the War of the Pacific. The Bolivian-Peruvian alliance would then suffer a clear defeat against Chile, resulting in painful loss of territory for both countries in the resource-rich Atacama Desert. Fighting over valuable resources and disputes over the often vague borders of the fledgling nations in South America are no casus belli to be considered very unusual at the time. And yet, the outcome of the War of the Pacific remains a national tragedy in the Bolivian memory of the conflict and antagonism in the public towards Chile continues to run deep until today. Since 1978, no official diplomatic relationship exists between the two countries. The loss of the Departamento del Litoral is commemorated in annual celebrations of the Dia del Mar, or “Day of the Sea”. The reason for this is that since the war, Bolivia has been landlocked, meaning it has no sovereign access to the open seas. This is considered a severe problem, and the government continues to lay a claim to obtaining a sovereign portion of the seacoast through what is now Chilean land.
In Bolivia’s case, a Treaty of Peace and Friendship was signed with Chile in 1904, in which perpetual duty-free use of the Chilean ports of Arica and Antofagasta as well as of the (then partly yet to be built) railroads connecting them to La Paz were granted to Bolivia. But even in recent years, several strike waves in said Chilean ports have caused significant harm to Bolivian trade, which Bolivia considers a violation of the treaty. In the Bolivian gas conflict starting in 2002 it also became apparent that there exists strong support to divert trade to the Peruvian port of Ilo by building a new gas pipeline there rather than to Chile, though being the costlier option. In Ilo, Bolivia maintains a special economic zone for free trade, and a similar arrangement exists in Rosario, Argentina. The Bolivian efforts to reach the sea, however, cannot conceal the fact that the country has been lagging behind its neighbors in its development, scoring the lowest HDI out of all countries on the South American continent. Transit countries (like Chile in the case of Bolivia) are not much incentivized to invest in infrastructure for the purpose of facilitating the trade of their landlocked neighbors. The latter essentially have no influence on the political and administrative situation in their neighbor country and face relatively low bargaining power. This issue is especially grave in many of the landlocked nations in Africa, where oftentimes political situations are unstable and economic cooperation is weak. Generally, being landlocked increases the costs of trade due to tariffs and higher transportation costs. Further, trade of landlocked countries often does not extend much beyond neighboring nations, which is particularly unfortunate if that neighborhood suffers from poor overall development, as is the case in most of Africa. This moreover will likely deter foreign investments. Therefore, being landlocked is especially problematic for developing countries. The Convention on Transit Trade of Land-locked States of 1965 recognizes the disadvantageous position of noncoastal states. Transit countries agree not to discriminate against trade from landlocked states.
Nevertheless, the disadvantages persist. An expedient approach to alleviate them is economic integration. The hindrances for trade of landlocked countries in Europe have been largely removed due to close cooperation, mostly within the framework of the European Union’s single market. Switzerland, a landlocked nation, is considered one of the very wealthiest in the world. This can be partly attributed to European integration but also to the type of products it exports, which are mainly either high-value industrial output or service based, like finance. This also shows further complications developing nations face, of which the exports are mainly commodity based. Some landlocked nations also benefit from being located at navigable inland waters. Paraguay, for instance, enjoys an advantage over Bolivia as the Paraguay River and the Paraná River, both large in size and navigable, connect it indirectly with the Atlantic Ocean. The same goes for many European nations with access to rivers like the Rhine or the Danube, both international waterways. A result of this, among others, is that some landlocked countries have navies. Bolivia still maintains a rather sizeable fleet, sometimes seen as a symbol of its claim to sovereign access to the sea. In addition to that, landlocked nations have also been entertaining merchant fleets since this was granted in the Declaration recognising the Right to a Flag of States having no Sea-coast in 1921.
It becomes apparent that having no access to the sea can put a country at a serious disadvantage and hinder development. This makes a strong case for economic integration and the facilitation of trade for the countries concerned. To reduce transportation costs, the most severe impediment to growth, landlocked countries will need to invest in infrastructure and higher value goods more so than their littoral neighbors. Some might want to aspire to become a hub for inland trade. The African noncoastal nation of Botswana is displaying great economic success mostly due to its diamond trade. And even though not every country faces such advantages, it does give hope that the destiny of being landlocked need not be gloomy after all.