Environment versus Investment: The Bolivian Mining Industry

• Author: Nelson Altamirano
• DOI: 10.1177/107049659500400110
• Published date: 01 January 1995
• Date: 01 January 1995
• Subject Matter: Articles

Environment

versus

Investment:

The

Bolivian

Mining

Industry

REGIONAL

REPORT

Bolivia

BY

NELSON

ALTAMIRANO

Sustainable

development

and

mining

recovery

are

two

objectives

of

the

Bolivian

government

today.

These

objectives,

however,

cancel

one

another

out

when

they

are

combined

with

the

Bolivian

privatization

plan.

We

illustrate

this

phenomenon

by analyzing

how

the government

managed a

case

in

which

antimony

concentrates

were

denounced

as

hazardous

in

July

of

1994.

From

the facts

of this

case,

wefound

three

misconceptions

underlying

the

conflict

between

sustainable

development

and

the

recovery

of

the

mining

industry:

poverty

versus

clean

environment,

mining

investment

versus

environmental

protection,

and

competitiveness

versus

environmental

costs.

We

show

that

these

misconceptions

are

manifested

in

the

long-term

environ-

mental

action

plan

of

the

Secretariat

of

Environment,

and

we

contrast

this

approach

with

that

of

the

Thai

government.

Introduction

The

crisis

of

the

mining

industry

in

Bolivia

challenges

scholars

and

policymakers.

Very

low

prices

of

tin

and

other

ores

in

international

markets

have

limited

the

opportunities

to

restructure

mines

without

massive

layoffs.

In

addition,

low

prices

nearly

cancel

the

effects

of

environmental

protection

efforts

in

the

mining

industry.

As

a

result,

both

labor

and

environment

are

adversely

affected.

What

policies

can

promote

the

development

of

the

Bolivian

mining

industry

without

negatively

affecting

labor

and

the

environment?

The

Bolivian

government

has

embarked

on

two

different

strategies

to

solve

this

problem.

Since

1985,

most

state-owned

mines

have

been

closed

and

most

others

have

been

privatized.

The

government

hopes

that

through

privatization

it

can

reorganize

the

mining

industry.

In

order

to

achieve

development

with

equity,

the

government

has

com-

mitted

itself

to

a

strategy

of

sustainable

development.

Nevertheless,

mining

recovery

and

environmental

protection

are

not

necessarily

Nelson

Altamirano

is

a

master’s

candidate

at

the

Graduate

School

of

International

Relations

and

Pacific

Studies

at

the

University

of

California,

San

Diego.

Journal

of Environment &

Development

4,1(Winter

1995).

IR/PS,

UCSD,

Mail

Code

0519,

9500

Gilman

Drive,

La

Jolla,

CA

92093-0519

(U.S.A.).

E-mail:

envdev@ucsd.edu.

@

1995

by

the

Journal

of

Environments

Development:

A

Review

of

International

Pohcy

Produced

at

the

University

of

Californza.

186

compatible.

The

objective

of

this

paper

is

to

identify

the

conflicts

that

have

arisen

between

the

strategies

of

sustainable

development

and

privatization

in

Bolivia.

I

will

first

describe

the

world

mining

industry

today,

and

how

its

conditions

have

changed

the

behavior

of

governments

in

Latin

America

during

recent

years.

Then,

I

will

discuss

how

the

Bolivian

government

justifies

environmental

degradation

because

of

poverty,

and

low

prices

of

tin

and

other

ores

in

international

markets.

In

order

to

illustrate

this,

a

controversy

over

concentrates

of

antimony

which

occurred

in

July

1994,

and

an

environmental

action

plan

published

by

the

Secretariat

of

Environment

in

July

1993,

are

discussed.

It

is

easy

to

identify

mistakes

and

contradictions

in

the

Bolivian

experience,

but

it

is

difficult

to

find

solutions

that

resolve

the

conflicts

between

environment

and

investment,

competitiveness

and

poverty.

For

a

comparative

analysis,

a

discussion

of

the

Thai

government’s

policies

towards

the

mining

industry

will

be

presented.

Mining

indus-

tries

in

Bolivia

and

Thailand

have

some

common

structural

character-

istics

but

government

policies

follow

opposite

paths.

Finally,

in

the

last

section

I

will

present

some

policy

suggestions

that

might

aid

the

Bolivian

government

in

circumventing

the

conflict

between

sustainable

development

and

privatization.

The

International

Mining

Industry

Today

Unpredictable

demand,

low

ore

prices,

and

aggressive

plans

for

privatization

and

foreign

investment

are

the

main

characteristics

of

the

mining

industry

in

developing

countries

today.

Unpredictable

demand

and low

ore

prices

became

a

significant

problem

in

the

wake

of

the

1980-

1982

recession.

Mineral

demand

in

the

industrialized

countries

not

only

diminished

considerably

throughout

the

1970s,

but

also

experi-

enced

negative

growth

beginning in

the

1980s.1 In

Table

1,

this

tendency

can

be

observed

by

product.

Furthermore,

ore

demand

has

become

unpredictable.

&dquo;The

earlier

representations

of

global

long-term

de-

mand

for

metals

and

for

fertilizers

[exponential

growth]

have

become

obsolete,

and

what

is

more,

the

traditional

correlation

between

eco-

nomic

growth

and

mineral

raw

materials

consumption

which

used

to

form

the

basis

for

demand

analysis

no

longer

exist.,,2

The

privatization

of

state-owned

mining

firms

in

developing

coun-

tries,

and

the

resulting

flow

of

investment

and

technology,

have

been

occurring

since

1990.

Privatization

has

been

the

main

strategy

govern-

ments

have

used

to

adapt

to

new

demand

conditions.

However,

most

current

supply

strategies

date

back

to

the

1950s,

when

revolutionary