Wednesday, December 21, 2005

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Open Bolivia thread

I would be remiss in not mentioning that Bolivia just elected a former coca farmer turned socialist politician as president. Among his many campaign pledges are to decriminalize coca production and to renationalize the commanding heights of the national economy.

Comment away on the implications of this power transition in Andean region. Noah Millman offers various reasons for why this should concern the United States.

[Hey a few years ago you were pretty sanguine about the rejection of the neoliberal model in Latin America. How about now?--ed.] Well, the spread of Chavez-like politicans throughout Latin America would be intrinsically bad. At the same time, this Associated Press report suggests just how difficult it will be to foster regional solidarity by pursuing a policy of economic nationalism:

The winner of Bolivia's presidential elections has repeated his vow to nationalize oil and gas and said he will void at least some contracts held by foreign companies "looting" the poor Andean nation's natural resources.

Indian coca farmer Evo Morales said he will not confiscate refineries or infrastructure owned by multinational corporations. Instead, his government would renegotiate contracts so that the companies are partners, but not owners, in developing Bolivia's resources, he said....

On Monday, Morales said Brazilian oil company Petrobras must turn two refineries it owns in Bolivia back to Bolivian control.

Morales announced that he had asked Brazilian President Luiz Inacio Lula da Silva to return the refineries, which Petrobras purchased in the last decade. Petrobras bought the two refineries from Bolivia's state-owned oil company in 1999 for roughly $100 million....

The top investors in Bolivia are Petroleo Brasileiro SA, known as Petrobras, Spain's Repsol YPF, France's Total SA, British Gas and BP PLC . Foreign energy firms have invested $3.5 billion in Bolivia since 1996. But after the passage of the new hydrocarbons law in May, and amid increasing calls for an outright nationalization of the energy industry in Bolivia, they this year have mostly frozen any new investments. (emphases added)

So, the new Bolivian president's first move is to alienate his top foreign investor, who happens to be.... Brazilian. The last paragraph suggests that staying this course will retard other foreign investors. And note that no U.S.-based multinational appears on that list.

Even if Hugo Chavez lends a hand, I don't think this strategy is going to inspire a lot of solidarity elsewhere in the continent.

posted by Dan on 12.21.05 at 04:13 PM


OPK, enough about the global political economy. I notice no commentary on your part regarding the pending signing of Johnny Damon by the New York Yankees.

What's up with that?

posted by: Jay on 12.21.05 at 04:13 PM [permalink]

At least here in Chile the "neoliberal" model is still respected, even by the outgoing "socialist" president Ricardo Lagos. Michelle Bachelet, his successor who seems to be more left-wing, has proposed a 1% corporate tax hike but not much else that would go against the model. And Sebastian Pińera, the other contender in the presidential runoff next month, is solidly in the neoliberal camp. Bolivia under Evo is viewed by many Chileans (and other neoliberal Latin Americans), in the words of Mario Vargas Llosa in this past Sunday´s La Tercera (2nd most popular newspaper in Santiago, behind the even more neoliberal El Mercurio) as "inviable in the 21st century".

posted by: Sean on 12.21.05 at 04:13 PM [permalink]

Dan, I doubt there are three words in the English language less likely to prompt comments on a blog message board than "Open Bolivia Thread."

posted by: Zathras on 12.21.05 at 04:13 PM [permalink]

Zathras: What about "Open Uruguay Thread"?

posted by: Nathan Sharfi on 12.21.05 at 04:13 PM [permalink]

About all I can offer is a repeat of my own comments on my blog. I hate trolling like this, but I tend to see Morales' election as, in a sense, the people of Bolivia expressing their dissatisfaction with the previous government's inability to govern. And that’s the good side of democracy. Where it becomes a bad idea is in the choice the people made next: a heavy-handed socialist like Morales is not what Bolivia needs to heal the ethno-regionalism and economic stagnation (in the form of black market drug exports) at work. The Morales government is a strengthening of the state without a strengthening of the institutions of the state.

In other words, it's addressing the wrong problem. Bolivia's problems aren't that government wasn't strong enough, it's that their institutions were broken. Morales won't fix that.

posted by: Josh on 12.21.05 at 04:13 PM [permalink]

Personally, I think what Evo Morales accomplishes over the next six months will be a far better indication of how his election will shape the Latin American region than his election alone. Brazil’s Lula, for example, has become the moderate leader of the region, where once he was considered a radical socialist. Peru’s Toledo arrived with much fanfare as the first indigenous president elected in Latin America and dashed his country’s hopes amidst corruption and incompetence. Now, Evo Morales has a natural chance to emerge as a leader in the region if only he can govern with the same élan that he campaigned with. But first, he must master the herculean task of governing Bolivia.

In terms of the effect of Evo’s election on Bolivia, the effect can’t be understated. Never before has an indigenous president guided Bolivia. In fact, he is only the second indigenous president in Latin America ever voted into power. Most news media outlets are carrying the indigenous angle of the story. Almost no one is carrying the following headline:

Never before has a Bolivian President won election with a 50+% of the popular vote. Most Bolivians expected that the presidency would be decided as it typically is decided, by Congress, between two candidates each with a minority share of the vote. Since Evo Morales won with a clear majority in the first round, there is a strong indication that the people of Bolivia are actually behind their president.

With the turnover in presidents at its quickest pace ever in the last three years, Bolivia finally has a chance to build itself into a nation. Notice, I did not say, rebuild itself into a nation. Bolivia has never been a single nation. The country came into being as an amputation from Peru. Corrupt and/or authoritarian leaders seized power through coups nearly 200 times. Not until the early 1950s did Bolivia were voting restrictions to allow full indigenous participation in presidential elections.

Recently, although no one wanted to admit the fact, Bolivia was on the brink of a civil war. Protests, clashes, and demonstrations are common throughout Latin America. Complete government shutdowns, talks of succession, and five presidents in four years are not common. Bolivia isn’t out of the clear yet, as long as Santa Cruz and the eastern provinces demand autonomy, there is risk of a violent fissure. However, for the first time in its existence, Bolivia has a President who holds a popular mandate.

posted by: Craigk8 on 12.21.05 at 04:13 PM [permalink]

I believe Chavez is an indigenous president who has been popularly elected several times.

And, in terms of nationalizing assets, when you have a country that is as poor and suffering as in Bolivia, if Evo can use those assets to actually help the lives of people, it is probably worth the risk to upset some multinationals. If he runs a corrupt system and steals and all that jazz, then this will be a big problem, because nothing will have changed and he will have isolated the country. It is undoubtedly true that the current control of natural resources in Bolivia is unfair. If he can use those resources fairly and honestly, it seems to me that the most basic needs of a suffering population are more important then the profit margins of some Brazillians.

oh, and, you have to hand it to Evo. He did get off on the right foot, being that his first order of business as president-elect was to go on aljazeera and call Bush a terrorist. Maybe Latin America still has hope, though they should worry about another round of American coups and terrorism if they keep acting so damned democraticly.

posted by: hkg on 12.21.05 at 04:13 PM [permalink]

My 2 cents value comment. It is largely irrelevant and inconsequential who governs Bolivia. Let them get high on altitude and on coca and fighting off foreign devils. One state minister was complaining that his salary was lower than a New York janitor´s. You are being overpaid, I told him. That was time ago but still holds.

posted by: jaimito on 12.21.05 at 04:13 PM [permalink]

Latin American politics are never dull and with oil in the mix and wannabe Castros to boot ! What a hoot !

posted by: Paul on 12.21.05 at 04:13 PM [permalink]

hkg, Chavez definitely has indigenous ancestors, however, he wouldn't classify as indigenous according to Latin definitions. Being raised by his middle-class parents according to Western values would put him squarely in the amorphous "mestizo" category. Toledo and Morales, on the other hand, speak an indigenous language - Quechua and Aymara (respectively) - in addition to Spanish. Probably more importantly as well, both Toledo and Morales were greeted with a widespread feeling of historical ascendancy by the indigenous majorities in their Andean countries.

How long the popular wave for Morales lasts will be one of the most interesting features to watch over the next few months. Plus, will it propel Ollanta Humala into the Peruvian presidency? Even before Morales's election, Humala was running a close second in the polls.

posted by: Craigk8 on 12.21.05 at 04:13 PM [permalink]

Ollanta Moisés Humala Tasso is the leader of Movimiento Etnocentrista. The Tasso family is of Italian origin, so they say, and many have light green eyes. After 500 years of Spanish presence in Latin America, no one is ¨pure¨ anything. It is a fact that native leaders are rising in all the Andean countries and their ideology reflects the teachings of the people who voluntarily came to live with them and had a lasting impact: Catholic priests, Evangelical preachers, volunteers from the NGOs, leftist school teachers, mochileros, foreign political organizers like el Che Guevara. I dont think they are a menace to the USA, on the contrary.

posted by: jaimito on 12.21.05 at 04:13 PM [permalink]

Speaking of Bolivia, I love their marching powder. Anybody have any?

posted by: Tad Allagash on 12.21.05 at 04:13 PM [permalink]

Good insights Craigk8, thanks for posting

posted by: jprime on 12.21.05 at 04:13 PM [permalink]

Bastiat on the Chávez/Morales phenomenon:

"Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter -- by peaceful or revolutionary means -- into the making of laws. According to their degree of enlightenment, these plundered classes may propose one of two entirely different purposes when they attempt to attain political power: Either they may wish to stop lawful plunder, or they may wish to share in it.

Woe to the nation when this latter purpose prevails among the mass victims of lawful plunder when they, in turn, seize the power to make laws!

Until that happens, the few practice lawful plunder upon the many, a common practice where the right to participate in the making of law is limited to a few persons. But then, participation in the making of law becomes universal. And then, men seek to balance their conflicting interests by universal plunder. Instead of rooting out the injustices found in society, they make these injustices general. As soon as the plundered classes gain political power, they establish a system of reprisals against other classes. They do not abolish legal plunder. (This objective would demand more enlightenment than they possess.) Instead, they emulate their evil predecessors by participating in this legal plunder, even though it is against their own interests.

It is as if it were necessary, before a reign of justice appears, for everyone to suffer a cruel retribution -- some for their evilness, and some for their lack of understanding."

posted by: Sean on 12.21.05 at 04:13 PM [permalink]

As soon as the plundered classes gain political power, they establish a system of reprisals against other classes.

One shining exception to this (on the official level at least) was South Africa. Regardless of how one feels about Nelson Mandela, one must acknowledge the fact that there were not official reprisals waged against white South Africans. I would imagine that one of the reasons for this were the number of whites from all classes who opposed apartheid. Few things warm my heart more than seeing black and white South African players singing N'Kosi Sikelel'l-Afrika before a Springboks match.

Some in Morales own party have acknowledged that he has a brief honeymoon period:

One senator from Mr. Morales's own party, Román Loayza, said this week that whoever won would have three months to nationalize the energy industry and press forward on rewriting the Constitution, or face crippling protests. "This is not something we are saying just to the neoliberals, but also to our brother, Evo," he said. "For that reason, he has to be ready to respond to the people."
posted by: Randy Paul on 12.21.05 at 04:13 PM [permalink]

I think whom Bolivia elects is pretty much a yawn. In South America Brazil, Argentina, Chile, and arguably Peru seriously matter, Venezuela & Columbia matter less but still enough. Bolivia? Only in it's drug output - and whether that will prove to be a significant problem is yet to be seen.

Apart from that, the 'assets' to be 'nationalized' appear to belong to businesses outside the US. I think Morales is making a huge mistake picking on Bolivia's largest trading partner (Brazil) of course. But apart from precedent the US doesn't have a dog in this hunt.

"One shining exception to this (on the official level at least) was South Africa"

Yet. A decade ago the same was said about Zimbabwe and look at what has happened since....

posted by: Don on 12.21.05 at 04:13 PM [permalink]

Craigk8 does have a good insight about ethnic politics, but it should be pointed out that Alejandro Toledo's command of Quechua is weak at best, which is one reason why his "street cred" among indigenous Peruvians was so low. His (estranged) wife Eliane Karp, in contrast, is fluent in Quechua, even though she is from Belgium. The fact that an Indian president is no longer a novelty in Peru weakens any bandwagon effect that Humala might enjoy. But back to the subject of Bolivia, there is nothing in Morales' background to indicate that he has the capacity to govern effectively, so he will probably end up floundering like Lucio Gutierrez of Ecuador.

posted by: Andrew on 12.21.05 at 04:13 PM [permalink]

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