The “landlocked” poverty trap

Switzerland is a landlocked country, but it is wealthy because it is surrounded by good an prosperous neighbours. Uganda, on the other hand, is a landlocked country with bad neighbours, and this creates a type of trap which prevents the country from working its way towards wealth. “Landlocked with bad neighbours” is the third of four poverty traps outlined in Paul Collier’s book The Bottom Billion. Last week I discussed the natural resource trap, and the week before I discussed the conflict trap.

Whereas a coastal country has direct geographical access to the rest of the world’s markets, a landlocked country has direct access only to the markets of its neighbours. This is problematic if those neighbours do not provide good markets. To reach the rest of the world’s markets, a landlocked country is reliant on the infrastructure, such as roads and ports, of its neighbours, and poor infrastructure in neighbouring countries creates an enormous increase in the cost of trade.

Collier suggests nine strategies for landlocked countries: increase neighbourhood growth spillovers, improve neighbours’ economic policies, improve coastal access, become a haven for the region, don’t be air-locked or e-locked (have good air transport and telecommunications services), encourage remittances, create a transparent investor-friendly environment for resource prospecting, rural development, and try to attract aid. None of these gives a great deal of hope if the country’s neighbours remain bad neighbours.