Bolivia Dealing with Contraband Surge During Pandemic

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Authorities in Bolivia this month have seized several large contraband shipments, as the country’s economic struggles with the COVID-19 pandemic continue to increase demand for black market goods.

Cigarettes, alcohol, vehicles and agricultural products are being smuggled into Bolivia from Peru and Chile, among other neighboring countries – the possible result of shifting border dynamics and widespread unemployment caused by the pandemic.

In just one week, more than 70 vehicles were captured during numerous operations in Oruro, a department bordering Chile. Close to 60 tons of wine, beer and other alcoholic products were confiscated by Bolivian authorities at the Argentine border.

In mid-November, over 180 sacks of contraband potatoes were seized on their way to La Paz, after having entered the country from Peru. Other agricultural and dairy products – as well as pork and beef – have also been commonly smuggled in from neighboring countries.

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“The reason that we in Bolivia have problems with development and strengthening the economy is contraband. It drives down prices and we deal with third-rate products,” Colonel Gonzalo Rodriguez, a senior official at the Vice Ministry for the Fight against Contraband, told InSight Crime.

The smuggling of food products specifically has forced industry leaders to speak out as their profit margins shrink. According to the Agricultural Chamber of Eastern Bolivia (Cámara Agropecuaria del Oriente – CAO), pork producers are reporting a 20 percent decrease in their farm production.

Insight Crime Analysis

While the flow of contraband into Bolivia is not a new phenomenon, it appears to be ratcheting up as a result of the COVID-19 pandemic, which complicated illicit cross-border operations earlier in the year and intensified the demand for cheap essential goods.

Many products are brought in through border checkpoints on transportation trucks, which hide the contraband among legally registered goods, a security expert in Bolivia told InSight Crime. But when the country began to close its borders in mid-March, it became much more difficult for trucks to continue the practice. Only once border restrictions started relaxing later in the year did the contraband begin to flow again, often at an expedited pace in order to make up the loss.

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Agricultural contraband tends to flow from Peru, while vehicles and electronics enter from Chile, with alcohol and flour coming from Argentina, the expert said. Grains also tend to enter from Brazil, but at a much smaller scale.

Some of that contraband also makes its way into Bolivia via informal border points that receive little or no oversight. According to the Vice Ministry for the Fight against Contraband, smugglers were active in these routes throughout the pandemic, since black markets were immediately ready to supply residents as soon as they started to emerge from quarantine.

This suggests that Bolivia’s black market continues to be driven by economic need. Right now, the country’s Center for Labor and Agrarian Development is reporting some of the worst spikes in unemployment and poverty in decades – largely due to COVID-19. In addition to purchasing cheap contraband goods, residents are relying on the black market for temporary employment.

This puts the government in a difficult position as it continues to combat smuggling but has yet to provide its citizens with other economic opportunities. Frustration boiled over at the end of November, when residents attacked Ministry of Defense officials that were visiting Opoqueri, a town along a prolific contraband route.

In July, the interim government announced a plan to subsidize thousands of employee salaries. But incoming President Luis Arce said a complete economic recovery might still take until 2022, meaning that demand for informal goods could continue to be a driver of smuggling activity in Bolivia for years to come.

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