Bolivia at a Crossroads: Value-Aggregation through Extractivism, or Paradigm Shift?

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–Researched and written by Simon Bannister–

As vaccines are distributed and quarantines lifted, global and local economies are beginning to stabilize and recover, and decisions must now be made as how to best handle this period of transition. Guiding these decisions for many Latin American countries will be the elevated prices of raw materials, with metal prices in particular skyrocketing. Bolivia, which by virtue of its geography owns half of the world’s lithium reserves, now confronts the difficult question of how best to capitalize on this enormous material wealth. Some see in Bolivia the potential to evolve beyond mere exportation of raw materials, to become not just a producer of lithium, but a manufacturer of lithium products. Others worry that such ambitious long-term schemes will cause the country to miss its brief window of opportunity to become the world’s chief exporter of lithium and would prefer to simply dig up and sell as much of the metal as possible. Perhaps most controversial is the view that extractivism and mining should be abandoned altogether, in favor of an economic model that seeks growth in human development and environmentalism. Bolivia stands at a crossroads and attempts to decide in which direction it should go.

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