Bolivia's growth road-blocked


Roads: A heavy burden of debt keeps Bolivia from building the highways it desperately needs for economic development.

April 05, 2000|By James Langman | James Langman,SPECIAL TO THE SUN

CHUSPIPATA, Bolivia -- At the summit of the harrowing one-lane Unduavi-Yolosa highway, some Bolivian drivers seek to ensure their safe passage by chewing coca leaves and sprinkling a local brandy on the road as an offering to pachamama, Mother Earth.

The road hugs the cliffs of the Andean mountain range as it descends nearly 11,800 feet from Bolivia's capital, La Paz, into the lush tropical jungles of the northern Yungas region. Dubbed by the Inter-American Development Bank "the world's most dangerous road," the highway has claimed thousands of lives. For most of the past 60 years, hardly a week has passed without at least one vehicle plunging off its sheer sides.

The highway is a telling symbol of Bolivia's struggle for development -- and of the indebtedness, corruption and poverty that combine to keep it one of the world's least-developed countries.

Built by prisoners of the Chaco War, which was fought between Bolivia and Paraguay from 1932 to 1935, the dirt road remains virtually the only way for farmers of the Yungas region to transport their tropical fruits, coffee and coca to market in La Paz.

The road's wicked hairpin turns are in some sections no more than 10 1/2 feet wide. Hanging cliffs menace the roofs of trucks and buses. Rain transforms mud puddles into small rivers and loosens the soil, causing landslides. Large rocks sometimes fall, while fog slides across the jungle canopy to the mountain passes, limiting visibility to a few feet.

Last May, a bus carrying 35 passengers backed up on a narrow ledge to let another vehicle pass and went screaming over the side into a gorge far below, killing all on board.

The accident led the government to establish a system to regulate traffic on the road. From 8 a.m. to 3 p.m., vehicles may travel downhill only; the rest of the time they may only ascend. According to statistics from Bolivia's national police, the number of deaths and accidents has declined by almost 75 percent because of this rule change.

But on a rainy, misty day at the Chuspipata police checkpoint, the gateway to the most dangerous portion of the highway, an old Bolivian curse called corruption mocks the laws.

Nine cars, trucks and buses have arrived just after 3 p.m., only to be told to turn around. The drivers flash Bolivian pesos and keep increasing the number of bills until the policemen finally smile heartily and let them go down.

Bolivia's police are poor and underpaid. Corruption is endemic in the police force and in other areas of government and society. Bolivia is the second-poorest country in Latin America, and about half of the nation's 8 million residents live in conditions of misery.

Just 10 percent to 15 percent of Bolivia's roads are considered passable, and only 1,860 miles -- 30 percent of the main arteries -- are paved. By comparison, Cuba, a country one-10th the size of Bolivia, has more than 10,500 miles of paved roads.

Lack of money is given as the reason the country doesn't build more and better roads. Five years ago, for example, work began on a paved alternative to the Unduavi-Yolosa highway, but an unforeseen need for an expensive tunnel stopped the project in its tracks.

The shortage of funds is caused by the country's crushing foreign debt -- $4.6 billion, nearly a quarter of its gross national product.

Andre Hofman, an economic-development specialist for the United Nations Economic Commission on Latin America, says the debt burden in effect disqualifies Bolivia from getting the multilateral bank financing it needs to build basics such as roads.

"Until very recently, there were no paved roads out of the country," Hofman notes. "Bolivia's low economic growth is due mostly to poor education -- and to a weak interaction between urban and rural sectors,which is partly because of the lack of roads."

In 1996, the International Monetary Fund and the World Bank launched the Heavily Indebted Poor Country (HIPC) program for debt relief. Bolivia was one of 41 developing countries included.

The program reduced Bolivia's foreign debt by about $450 million. The United States had canceled $372 million of bilateral debt in 1991 and is considering writing off the remaining bilateral debt with Bolivia, about $71.2 million, this year.

Bolivia has repaid most of its commercial debt to foreign banks. The bulk of its remaining outstanding loans, $2.8 billion, are with multilateral banks, particularly the Inter-American Development Bank, its biggest creditor.

The effect of this indebtedness remains immense. More money each year is spent on repaying foreign debt than on education, health and other social programs.

Bolivia, like other Latin American countries, borrowed heavily for development in the 1970s. But economists agree that many of the loan funds were mismanaged or spent on projects of dubious worth. When the inflationary 1980s hit, interest payments on the foreign debt skyrocketed, with the result that Bolivia owes much more than it originally borrowed.

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