Bolivia’s Market in Smuggled Electronics

In a world where Apple, Sony and Samsung are worshipped as deities, Bolivia is a God-forsaken place. There is a distinct dearth of certified dealers – Apple has no official store in the entire country – and the only viable means of obtaining a smartphone through authorised channels involves ruinously expensive mobile phone contracts.

Buying online from abroad is no solution, as import costs for electronics are expensive and Aduana Nacional, the national customs authority, is known to be slow and bureaucratic. On top of this, there are notoriously long waits for home delivery and the arrival of products several months after purchase is not uncommon.

It is not the same elsewhere. In the US, one can walk into a store and come out with an armful of electronic devices, ready for use, at much lower prices. An iPad Air 2 can be found for $629 in the US. In Bolivia, the same model would cost over $1000.

Some people in Bolivia see this frustrating situation as an opportunity. Those acting legally bring items from the US, stomaching the costs to get them here, and still manage to sell them at a profit. Those acting illegally circumvent customs entirely. Both operations are part of what is known as the ‘grey market’.

Unlike on the black market, selling goods on the grey is not technically against the law, as the items themselves are not illegal.  After all, smartphones and laptops do not pose as obvious a threat as weapons and drugs do. Despised by manufacturers and service providers alike for its potential damage to their reputation, the grey market is unofficial and unauthorised, but fundamentally within the law.

This unofficial business is booming in Bolivia and elsewhere. Conservative estimates in a study by KPMG place the value of computer electronics in the global grey market between $20 billion and $40 billion yearly, with South American markets being amongst the largest in the world for these products. According to the World Bank, in 2004 Bolivia’s informal economy, which comprises the grey market and other unregulated sectors, constituted 67.1% of the country’s gross national income, compared to a global average of 32.5%.

The Aduana Nacional office at El Alto airport is cluttered. The air is dusty. Discontent importers sit in a waiting area, resigned to a lengthy delay. Some have been waiting for weeks to get items through customs. One man, who merely wanted to bring in 1kg of dish detergent samples, has been waiting for twenty-one days.

Another, Jesus Chavez, who imports computers legally from Miami, has been red-flagged by the customs office but doesn’t know why. After two years in the business, grey market importing has become his main source of income.

Jesus’ concerns are familiar. He says Aduana Nacional is incompetent, the process is inefficient, and the time taken to nationalise imports can be incredibly frustrating. He tiredly asserts that, all too frequently, it’s not what you are bringing in, but who you know in the customs office.

There is, of course, the illegal alternative, which Jesus is unwilling to explore. It is with undeclared importation that the grey market strays into illegality.

Customs laws dictate that only personal devices can be brought into Bolivia for free; for everything else, charges, sometimes extortionate ones, apply. Circumventing these charges is simply a matter of persuading officials that the items being imported are for personal use. With sizeable shipments of computers this is understandably tricky, but with smaller shipments, phones and tablets stuffed into suitcases for example, the possibility of bringing them into Bolivia under the radar, without paying any duty at all, is tantalising.

Though illegal, undeclared importing is not always the shady, dangerous business one might imagine. Anyone in Bolivia who regularly flies abroad will attest that access to the US market means being inundated with requests by friends and family to bring back smartphones, or tablets, or laptops. It does not take long for them to realise the economic potential.

One individual who seized this opportunity is Margaret (not her real name), a working single mother living in a small apartment in Cota Cota. She is friendly and open about what she does – less of a criminal than a hardworking woman trying to keep her family afloat.

Like many, the money Margaret earns importing is an enormous help when times are tight. ‘I work in consulting usually’, she says, ‘but when there aren’t any jobs, the money I make from bringing things back from the US is really, really helpful. It’s enough for a month’s living costs.’

‘I have been afraid going through customs before with so many different things,’ she admits, ‘but I have never felt guilty, because customs here is terrible. Terrible, terrible, terrible.’

Margaret is determined not to push her luck. ‘There are some people with offices, who import things illegally as a career’, she says. ‘I remember one man tried to bring $50,000 of electronics back in a suitcase, and he was caught.’

Whether people do it as a career or a side-job, grey market importing (both legal and illegal) represents an estimated $1.2–4.8 billion annual loss to manufacturers and authorised distributors across the world. To combat this growing threat, leading American technology companies formed the Alliance for Grey Market and Counterfeit Abatement in 2001, which is still active today.

The Alliance aims to counter large-scale importers in the grey market, but it does not seem worthwhile to spend resources tackling small-scale importers like Margaret who, individually, hardly pose a threat to global corporations. Cumulatively, this prevalent practice might affect corporate profit margins, but the truth is many importers keep things modest, bringing back only what they need to sustain their standard of living.  

‘I could charge more, and bring more back, but then it is more of a risk’, Margaret confesses. ‘I’ve never been in trouble because I never bring back too much. I’m not greedy and that’s why I’m successful.’

The Battle of the Ovens

In many areas of Bolivia, particularly the most rural, breakfasts consist of a simple offering of tea and bread. Different areas tend to have their bread of choice: marraquetas (similar to a sourdough roll), allullas (a round flat roll) or even industrial sliced-white, to name but a few.

To some, bread is a simple concept: flour, water, yeast, salt. Not much to it at first glance. However, look a little deeper and you’ll discover that for many, the act of making bread is either an art or a science, or both.

In recent years, there have been untold technological advancements in the culinary field, but to what extent does this affect the quality of the end product? Can a ‘super oven’ with a built-in boiler and countless complex settings really produce a higher-quality product than the simplistic technology of a wood-fired oven? Where do we draw the line between efficiency and the artisanal? Let’s make this a good clean fight: technology versus tradition – who’ll come out on top?

Alvaro Manuel Sanchez, 25, is the man to see about the latest in baking technology. Sitting in a shop on El Prado, surrounded by a plethora of gleaming modern ovens, he chats with me about what makes his prize offering, the Advance Plus, so impressive. Sanchez claims that a specific feature of this oven, its built-in boiler, is what makes it stand apart from traditional ovens that struggle to create the humidity necessary for making good bread. ‘Those that use a pan of boiling water to create humidity have found an answer,’ he says, ‘but it’s not the optimal one.’

He goes on to describe the seemingly endless list of impressive features the oven has before we get into the nitty-gritty. Clearly, there is some scepticism surrounding the considerable price of the oven itself, as for many it would be a huge investment. Sanchez assures me that the immense capabilities, efficiency and speed of this oven can reduce personnel and increase productivity, and as such the initial investment is returned rapidly. ‘You’re going to double your productivity, you’re going to sell lots more’, he says. ‘If you have around eight people working in your bakery, you’re only going to need five or six.’

Meanwhile, in Laja, a pueblo outside of La Paz famed for its delicious artisanal flatbread, things are very different. Gustavo Naruaez and a select few lajeños are keeping things traditional by following an old recipe using a wood-fired oven. The oven itself is simple in design, made from bricks with sand placed under its floor to keep a steady temperature and kept burning with scraps of wood. When asked about the importance of the oven, Gustavo says that a more sophisticated oven would detract from both the flavour and the very essence of his bread, saying, ‘It wouldn’t be pan de laja anymore.’

While everyone carries out their individual roles – stretching the bread, stoking the fire, introducing and removing the bread – the oven churns out batch after batch of perfect flatbread, filling the room with an intoxicating freshly baked smell.

After an hour with Gustavo, it is clear how important his team is to him. This could be because his team is made up of his family: both his son and daughter work at the bakery, making for a very proud father. He goes on to tell me with great satisfaction that they sell enough bread in Laja to not need to offer it anywhere else.

Finding a balance between artisanal practices and technological advancements will always divide opinion. It seems clear each of these ovens serves a purpose in its own field. One being much more industrial, with a desire for uniformity and precision; the other more traditional, family- and flavour-focused. It’s for each business to decide which route they take in this ever more mechanised world. Art or science? Technology or tradition? The choice is yours.

Don’t Flush That TP

When I first arrived in Bolivia, I constantly forgot that I wasn’t supposed to flush toilet paper down the loo, like at home. At first, I thought it might just be a cultural norm, but when I looked into why you have to throw after you go, I found out it’s for a different reason.

I talked to Enrique Torrezo, an employee of Bolivia’s Ministry of Environment and Water, about why toilet paper just isn’t flushable.

‘We have information that toilet paper that is manufactured here isn’t of the quality of that manufactured in other places,’ said Torrezo, ‘like in the United States, where the paper is designed so there aren’t any problems.’

Toilet paper in countries where flushing it down is the norm is designed to break down once it is flushed, so it won’t cause clogs. However, most of the toilet paper used here – particularly the brands that are cheapest – are made of more fibrous material that won’t disintegrate fully once down the drain.

Blockages from toilet paper are actually uncommon here. In public places such as restaurants, hotels and schools, people tend to heed warnings not to flush toilet paper after completing their business. Real problems arise, Torrezo says, when people flush worse things down the drain, like sanitary pads and diapers.

Fortunately, the city of La Paz has installed cameras in the plumbing system to spot clogs and to direct some lucky workers to go clean out the mess.