International Business – Bolivia Lithium
William Ratliff
Tarleton State University
Dr. Baeza
BUSI 4344 International Business – Online

The Scenario
The main objective of this assignment is to watch a video clip and answer some of the main questions that are addressed in this particular assignment (Buckley, 2004). This entire video clip is focused on the country of Bolivia and lithium, one of its major natural resources. The salt flats of Bolivia are estimated to contain over six million tons of untapped lithium. According to the video clip, Bolivia is also the poorest country located on South American continent. The acute poverty results in certain issues that need to be addressed, thereby allowing Bolivia to grow into a prosperous nation.
Analysis & Discussion
What are the Main International Management Problem(s)?
After viewing the video, it is found that the major problem lies in the poverty and lack of education of its people and the corruption of its politicians (Buckley, 2009). There are many reasons why other countries, both within and outside of the region, would not want to see Bolivia prosper and increase its financial potential. Many of Bolivia’s neighbors are economically stable and their strength grows yearly. On the other hand, Bolivia itself is going in the opposite direction i.e. the standard of living in this country is extremely low (Eun and Resnick, 2007). One of the biggest problems or issues associated with this managerial problem is the lack of education within the region (Folsom, Gordon and Spanogle, 2001). Many large businesses based in other countries would like to keep Bolivia totally deprived from the education. This lack of education allows them to take advantage of the local population. One reason that is playing a vital role is the fact that most of the foreign businesses leaders believe that if Bolivia begins to develop and educate their people, then they will realize the importance of the natural reserves they have which will increase their core prices of raw material. This will subsequently result in major changes in the current business environment. Apart from this problem, there is yet another important problem that could be associated with this aspect, which is inconsistency among the mindset of two most recent Presidents and their political parties (Hodgetts and Luthans, 2003). The newly elected President and the former President have completely contrasting mindsets regarding the utilization of foreign participation in mining the lithium from their land. Complete consensus from rival political parties and their people is extremely important for Bolivia to bring a positive change in their functionality as well as negotiating these business opportunities with foreign countries and businesses. If these negotiations are handled correctly it will lead to a positive change in the standard of living for the citizens of Bolivia.
What are the Critical Issues?
After analyzing the entire case of Bolivian lithium, it is found that there are number of critical issues that must be addressed for the country to see benefits from this windfall. The video clip highlights two major issues acting as hurdles for Bolivia’s progress. The first major issue that must be addressed is the lack of technological knowledge and technically proficient people within the country itself (Panopto, 2015). If they were able to instruct a sufficient number of technical engineers and miners then they will be able to mine the natural resources on their own without outside contractors. In turn, they could build upon that knowledge and spread the required training at a compounding rate of speed. Unfortunately, only a very small number of people in Bolivia currently have the proper training or equipment to reach the lithium. This training will be an asset that can totally change their lives, almost overnight. In the past foreign companies have taken advantage of this lack of education and used the local labor for backbreaking work while not sharing in the bounty of what comes out of the mines. These companies, with the support of their governments at home, rape the countryside but don’t provide any true investment that will better the lives of the local citizens. The vast majority of the money made from mining in Bolivia is never returned to the citizens. Furthermore, the current mines are very dangerous, and there are limited safety precautions and measures taken, therefore posing life threatening risks for the workers who are willing to take part in this venture. The safety programs in place in most of Bolivia are unregulated and in no way reflect programs similar to OSHA.
What is the Most Desirable Outcome?
The most desirable outcome is to develop the mining of lithium using only local resources or obtaining an agreement to outsource the management of the mining and distribution of the lithium with a foreign business entity that has favorable terms for Bolivia. Most of the people located in Bolivia live below the living standards of their neighbors. The quality of living desperately needs an upgrade. According to the Video Clip, Bolivia contains 25% of the total lithium found in the world, a percentage that is extremely high. If the leaders of the country can take advantage of this windfall they have the opportunity to greatly improve the standard of living and bring it within the expected standard expected in other parts of the world (Panopto, 2015). If the leaders of Bolivia are successful they can will not only allow their citizens to earn a decent wage, they will have the ability to invest money in infrastructure, health care, education, and other important sectors. To make this happen the leaders of Bolivia will need to act thoughtfully in their negotiations with third parties before allowing access to these natural resources. Only by acting with integrity and not accepting bribes, etc. will this be possible.

What are the Possible Solutions to the Problem(s)?
The Bolivian government must establish educational and technical training programs. This training will enable the country to take advantage of this opportunity and establish themselves as a significant player in this market. The current system that allows foreign companies to have the benefit of raping the country for resources without returning a significant portion of the profit to the country must be stopped. This system only benefits the foreign corporations and the politicians whose pockets they line, while risking the health and safety of the local labor force. The first step to eradicating this system is to educate and train the local labor force. This education should include technical trades and allow these people to provide more involvement that simply supplying strong backs for minimum cost.
Secondly, all parties with the authority to negotiate agreements regarding access to the lithium must be tightly monitored. Although many in the countries leadership positions will act in the best interest of its citizens, it is undeniable that corruption exists among some the leaders in most third world countries. Any agreements must be made with the best interests of the citizens as a cornerstone. The current President has stated that anyone wanting to establish business in Bolivia based upon the lithium mining and trade must commit that a minimum of 60% of the profits will be returned to Bolivia for the benefit of its citizens.
Conclusion
Bolivia has been called the Saudi Arabia of Lithium. This natural resource is the country’s ticket out of poverty. Lithium is needed to produce batteries for many uses. A key need will be large batteries as the world’s automobiles slowly change to electric power. By properly managing the mining, processing, and distribution of lithium the Bolivian leaders have the unique opportunity to change the quality of life of the citizens in a manner not seen since oil was discovered in the Middle East. This transformation can only take place with proper education reforms and sensible negotiation with companies that want to take advantage of Bolivia’s abundance of this rare mineral.

References
Buckley, P. (2004). Cartography and international business. International Business Review, 13(2), 239-255. http://dx.doi.org/10.1016/j.ibusrev.2003.08.002
Buckley, P. (2009). Business history and international business. Business History, 51(3), 307-333. http://dx.doi.org/10.1080/00076790902871560
Eun, C., & Resnick, B. (2007). International financial management. Boston: McGraw-Hill/Irwin.
Folsom, R., Gordon, M., & Spanogle, J. (2001). International business transactions. St. Paul, Minn.: West Group.
Hodgetts, R., & Luthans, F. (2003). International management. Boston: McGraw-Hill.
Panopto. (2015). Panopto Viewer. Retrieved 15 November 2015, from https://tarleton.hosted.panopto.com/Panopto/Pages/Viewer.aspx?id=7ced409f-28fd-4fc6-b9e5-fabc6aa38737
Wild, J. & Wild, K. (2014). International Business: The Challenges of Globalization. Prentice Hall, 7th ed. ISBN 13: 978-0-13-306300-4