July 26, 2005

La Playa, Bolivia

"How to sell a car on the black market in South America."

Up at 8:00AM Saturday morning the 23rd of July, heading for the "playa" just outside of the 4th Anillo (ring road), Santa Cruz de la Sierra, oil-town Eastern Bolivia.

I was driving my spruced up, if ageing, Mitsubishi Montero from the workshop where a gentle and very helpful Chilean man had been attempting to sell it for me using advertisements in the local paper. The advertisements were somewhat unspecific as we earnestly searched for a mechanism to sell the car on the gray market if not the squeaky clean one.

Come Saturday I had had enough of this politeness and gentlemanly conduct. It was time to get down and dirty; to drop the price, cop an attitude and drive to the black market where business is done on a strictly cash basis.

The playa is a field at the end of a dirt road where thousands of transactions are completed annually for millions of dollars worth of vehicles. All this takes place in the open air without cash registers, a roof, a wall, or a single cent of tax being paid in the blinding dust of the urban-jungle in Santa Cruz, Bolivia.

Not so squeaky-clean US dollars, all in hundreds, is the currency of choice. How they get there is anyone´s guess, but allow me to hazard a good one. It might be that many of those dollars have been made available from the hectic cocaine paste trade with Colombia. Wherever they come from, they have been accumulated in exchange for some prime vehicles, many of which are stolen 4WDs from Brazil. All business is transacted in an established business environment, complete with its own thriving downstream industries: legal functionaries, car washing and the ubiquitous car traders.

By lunch time the deal was done, a bargain for the dealer who will simply pay off cops to use the car for now. Soon he will get legal Bolivian plates, how soon is not quite so obvious, it could be four to eight months (depending on who you contact in the Aduana). The Bolivian plates are made available through a process of Nationalization, an amnesty that brings together a car without papers with its legal new Bolivian plates. The amnesty is held approximately annually though Joe Public never knows exactly when it will happen (much like the Chinese break with the dollar last week) because of the huge effect these events have on the local illegal car market. Prices are inflated just before the event and deflated immediately after. Whenever it happens (the last one was just two months ago) anyone can walk in off the streets to the government´s dodgy customs office. This visit transforms unregistered vehicles into legal cars with Bolivian plates no questions asked. No vehicle identification number, no plates, no papers, no problem!

Such is the loophole that makes Bolivia a country of some of the fanciest stolen 4x4s in Latin America. Having been stolen in Brazil, they´re transported over the leaky borders of Paraguay or straight over the Amazonian Brazilian frontier in the north. These cars move fast — straight to the richer mining towns of eastern Bolivia and then on to markets nationwide and beyond.

This morning my fancy Montero with natural gas conversion, worth about $12,000 in Argentina or Brazil, $5,500 here in Bolivia with plates and $3,000 without Bolivian plates or papers (bárbaros, in the local lingo) was sold for $2,900 in not so crisp $100 bills.

Markets they are crazy things but where would we be without them?

Postscript:

Selling the vehicle this way seems curiously appropriate as it turns out that I bought this vehicle, in the legal US stolen car market that is: San Francisco City Tow. The bargain I got there was at the significant cost and tribulation of a poorer neighbor of mine who was down on her luck. City Tow gave me the car at about a third of market price while it still tried to extort her for their inflated parking rates.

Whatever about my little transaction. Even more salient is the curious fact that this stolen car trade subsidizes driving for the Bolivian masses in much the same way that the dirt cheap exports of gas to Brazil subsidize driving for those Brazilians who convert their vehicles to gas. And who says karma doesn’t play a part in economics?

If there is a moral to this story, which might seem extremely unlikely, it might be: “Parking your new Mitsubishi L300 on the street too close to a Paraguayan border may be expensive to your local insurance company.”

Posted by Tony Phillips at 07:31 PM | Comments (2)