the challenges facing landlocked developing countries: a case study ...

First, landlocked countries are dependent on infrastructure levels of their neighboring transit
countries. Neighbors’ infrastructure can be weak for many reasons, ranging from lack of
resources to misgovernance to natural disasters. Regardless of the cause, weak infrastructure
imposes direct costs on trade passing through the country and thus limits the ability of
landlocked country products to compete in global markets. Weak transit infrastructure also
limits the return to investment on landlocked countries internal infrastructure, since market
opportunities are constrained. Second, landlocked countries depend on their political
relations with their transit neighbors. If a landlocked country and its transit neighbor are in
conflict, either military or diplomatic, the transit neighbor can easily block borders or adopt
regulatory impediments to trade. A third form of dependence is less direct but often equally
costly. When neighbors suffer from civil war, transit routes can often be damaged or closed,
requiring rerouting of major trade corridors or, in the worst case, stoppages of transit. Third,
landlocked countries rely on their neighbors’ lack of civil conflict and continuing stability.
When neighbors suffer from civil war, transit routes can often be damaged or closed,
requiring rerouting of major trade corridors or, in the worst case, stoppages of transit. Fourth,
landlocked countries are subject to the administrative burdens imposed in border crossing,
with these often adding the most amount to shipping costs. Crossing a border typically means
passing through customs, requiring long waits and additional paperwork. In some instances,
it also means transferring goods between modes of transport, perhaps because rail lines
change gauge type at a border or even stop altogether. In other instances, weak administrative
systems might lend themselves to corruption and bribe-payments as necessary costs of
business.
Varying combinations of these four factors affect all landlocked countries differently. Some
countries are lucky to have relatively well off neighbors with high levels of infrastructure and
political stability. In such cases, goods can be moved to port quickly and cheaply. This is the
situation for the landlocked countries of western Europe. In contrast, many developing
landlocked countries do not have the luxury of stable and highly developed neighbors. They
are severely affected by varying combinations of weak surrounding infrastructure, political
tensions with their neighbors, civil conflict in transit countries, and high levels of
bureaucracy. In the extreme, a landlocked country can be completely cut-off from trade
routes due to factors entirely beyond its own control.
Given the multiple dimensions of landlockedness, a central theme of this paper is that no
single measure can easily capture the myriad constraints faced by a developing landlocked
country. The capital cities of Kazakhstan and Kyrgyzstan are both more than 3,600km from
the nearest port, posing clear challenges to accessing global markets. However, relative
proximity to a port far from guarantees low costs to landlockedness. Armenia, for instance, is
less than 700km from the nearest port, but has little access due to conflict in or with its transit
neighbors. Meanwhile other countries, like Turkmenistan, face administrative burdens due to
the borders drawn after the main transit routes were constructed. Turkmen vehicles taking the
main road from northern Turkmenistan to eastern Turkmenistan need to pass through Uzbek
borders, with significant associated costs due partially to increased political tensions between
the two countries. Different again is the situation for Bolivia, which is surrounded by
neighbors with good infrastructure, but situated at high elevations where infrastructure
development is costly and still struggling to overcome tense relations with Chile.
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