Mineral Trading And Informal Labour In Bolivia

In developed countries, there is extensive literature on the effect of foreign trade on the informal sector. In developing countries, the analysis requires a different approach due to its structural characteristics and historical significance. In Peru and Bolivia, the recent boom (2006-2014) in the export prices of minerals has led to four phenomena: a) growth in informal and often illegal work in mining; b) increased labour exploitation; c) conflicts among formal and informal miners, and peasants; d) conflicts with international companies and with the state. We show that the recent growth of informal work in the mining industry is different from the one caused by past crisis in the sector. We analyse the economic logic of the export-oriented mining activity in order to determine how it has given rise to the informal sector. In a first step, we show how the recent export price boom led to growth in informal labour in the mining industry. Subsequently, we explain the importance of mining and international trade to Bolivia as well as the historical roots of labour informality caused by mining crises. We explain some important characteristics of the informal sector and its political empowerment. We conclude by weighing the importance of labour informality as a shock absorber during crises in the mining sector. To the best of our knowledge, no studies have previously examined labour informality in the mineral trade economy.