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Bolivia's Nightmare
Tech Central Station ^ | 29 November 2005 | Alvaro Vargas Llosa

Posted on 12/01/2005 3:01:22 PM PST by Stultis

The forces of Latin American populism are arrayed behind Evo Morales, the former coca grower who toppled two Presidents of Bolivia through violent street action and promises a nationalist revolution if he wins the elections on December 18th. Although he is ahead in the polls, a parliamentary vote will decide who the next President is if no candidate gets more than 50 percent of the ballots. But even if Morales does not, the next President, possibly center-right candidate Jorge Quiroga, will be at the mercy of Morales' movement.

Unfortunately, Morales is not a character in a Romantic novel by Chateubriand, the 19th-century French author who assuaged Europe's bad conscience by idolizing indigenous Latin America. This is a real-life tragedy that will have lasting consequences for Bolivia.


Evo Morales and his party, MAS, have led a successful crusade against foreign investment in Bolivia the last couple of years. Foreign investment has dropped to one tenth of what it was in 2003. By forcing the cancellation of foreign contracts and the introduction of confiscatory new taxes, Morales has prevented Bolivia from developing natural gas reserves amounting to 52 trillion cubic feet.


Morales represents a particularly toxic mix of nationalism and populism that has re-emerged in South America in the last few years. His movement has potential "spill-over" effects in the countries that border Bolivia, including Peru, where Ollanta Humala, another nationalist populist, is rising fast in the polls.


One only needs to look at Morales' own life story to realize his own deprivation, like that of so many other Aymara Indians, was the result of nationalism, populism, and socialism, and not, as he maintains, of globalization.


Why did he become a coca grower in the 1980s? He was born in Isallavi, in the tin-mining region of Oruro, at a time when tin mines lay in ruins. The reason for their decline was the 1952 revolution, which "nationalized" them and created a bureaucratic mining entity known by its acronym COMIBOL. The revolution raised miners' salaries by 50 percent but failed to keep up investments, so production collapsed. Eventually, thousands of families, among them the Morales family, had to move elsewhere.


Now Evo Morales wants to do to the natural gas fields of Tarija what the 1952 revolution did to the tin mines of Oruro and other parts of Bolivia.


Where did Evo Morales go to escape the consequences of those policies as a young man? He went to the Yungas, near La Paz, to try agriculture. What did he find? In 1953, the revolutionary government had undertaken land reform, expropriating those estates it deemed unproductive and handing them to some peasant associations. Restrictions on property rights were so abundant and legal frameworks so dodgy that a few years later Bolivia had to import food because its unproductive minifundia were useless. Unlike Taiwan's agrarian reform, which created a property-owning mass of peasants, Bolivia's revolution undercapitalized the land. So when Evo Morales arrived in Yungas, he realized agriculture was in no better shape than mining.


Now Morales is proposing to do to his country's farms precisely what was done to the land in 1953. He wants to expropriate "those that are unproductive" and hand them over to peasant cooperatives under the same restrictions that made economies of scale impossible five decades ago.


Where did young Evo go after Yungas? To the rainforests of Chapare, which offered the only opportunity available to him. That opportunity was coca -- coca not exactly geared towards the production of shampoo, toothpaste, and medicines. In Chapare, the new coca grower rose through the ranks of unionism, until he emerged in 2000 as a voice against foreign capital and the insufficient free-market reforms of the 1990s, which he blamed for social ills that were the result of five decades of nationalism and socialism's ill-fated attempt to correct the oligarchic legacy of the colonial era.


Morales accuses U.S. capitalism of impoverishing Bolivia. But the U.S. should actually be faulted for funding populism and socialism! Between the start of the 1952 revolution and Morales' internal migration in the 1980s, nine tenths of the money Bolivia received from abroad were grants and soft credits from the U.S.. By 1957, the United States was subsidizing 30 percent of the government's budget. With this encouragement, more nationalizations took place in the late 60s under general Ovando and in the early 70s under general Juan José Torres. Needless to say, the protectionist policies in vogue throughout the region, including import substitution, were dominant under most Bolivian governments.


It is hardly surprising that in those circumstances thousands of families should have turned to coca. Then, caught up in the anti-drug effort, they saw their livelihood almost disappear at the end of the 1990s when coca leaf was reduced from close to 100,000 acres to 7,000 acres through eradication efforts (another 24,000 acres are legally grown elsewhere). Morales emerged as a national hero.


In the last few years, Morales, not the most radical among the radicals, has held his country by the throat, squeezing it every time it gulped for air, as when it tried to export gas to the U.S. through Chilean ports. Inevitably, the reaction to this populist leader in the more modern parts of the country has fueled the separatist cause of south-eastern regions like Santa Cruz. The result is a powder keg of a country that Bolivia has become.


Good luck on December 18th!


Alvaro Vargas LLosa is Senior Fellow and Director of the Center on Global Prosperity at the Independent Institute and the author of Liberty for Latin America.

TOPICS: Business/Economy; Culture/Society; Editorial; Extended News; Foreign Affairs; News/Current Events
KEYWORDS: bolivia; cocaine; evomorales; socialism; southamerica

1 posted on 12/01/2005 3:01:23 PM PST by Stultis
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To: Stultis


2 posted on 12/01/2005 3:21:10 PM PST by Travis McGee
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To: Stultis; Travis McGee

Excellent article.

Chavez in Venezuela, Morales in Bolivia, Humala in Peru all represent aggressive, angry ignorance. They reject as unworkable something they have never known, which is the free market system. With the partial exception of modern Chile, Latin America has never experienced the free market system, and they have never implemented the kind of legal transparency that free markets require. They have all suffered from the kind of economic stagnation that flows naturally from a politicized economy, legal uncertainty and corruption. In Latin America, traditionally, law bends before power, whether it be power exerted from above or from below.

These would-be reformers offer only more of the same except worse. In a few years, or a generation if things go really bad, they will be overthrown by some other would-be reformer.

Chavez blames "neo-liberalism" which is his term for free markets. Morales wants a coca based economy, and Humala wants to go back to the Incas. These are not the brightest bulbs in the box. But they are willing to fight, and since the middle class people they go up against just want to be left alone, their power is magnified by their opponents' confusion and unwillingness to use power.

What dooms any effort to oppose them either peaceably or by force is that their opponents, at heart, agree with them. Chavez won by a landslide in his first elections because the opposition parties could not articulate why he was wrong, because they agreed with him. Even "conservatives" in Latin America believe in centralized, politicized economies.

Bolivians who oppose Morales are in the same situation. They recognize him as being a dangerous man, but they can only oppose him on that basis, they can't explain why he is wrong. If they can't refute him, if they can't explain to voters why he would be a disaster, they are left with only two choices; fight him, or stand by and watch him win the next presidential election.

3 posted on 12/01/2005 4:16:52 PM PST by marron
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To: backhoe

Sadly, the direction things seem to be headed, you may have a "pity about South America" index soon.

4 posted on 12/01/2005 4:23:39 PM PST by Stultis (I don't worry about the war turning into "Vietnam" in Iraq; I worry about it doing so in Congress.)
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To: Ooh-Ah
Deal to end crisis in Nicaragua ("creeping coup" frozen for now) ^
  Posted by Stultis
On News/Activism ^ 10/11/2005 8:12:42 PM CDT · 8 replies · 209+ views

BBC ^ | 11 October 2005
Deal to end crisis in Nicaragua Nicaragua's President, Enrique Bolanos, has announced an agreement with the opposition-controlled Congress to end a deepening political crisis. A power struggle had threatened the government and US aid to the country. The pact was reached between Mr Bolanos and the left-wing Sandinista leader, Daniel Ortega. They agreed to delay constitutional reforms which weaken the president's powers until next year, when Mr Bolanos leaves office. The move comes after the Organisation of American States warned that Nicaragua's democracy was under threat. Last week, the US deputy secretary of state, Robert Zoellick, threatened to cut off...

Ortega, Again--The Left’s dear comandante comes back in Nicaragua. ^
  Posted by Ooh-Ah
On News/Activism ^ 07/13/2005 8:08:44 PM CDT · 4 replies · 289+ views

National Review ^ | July 13, 2005 | Otto J. Reich
EDITOR'S NOTE: This piece appears in the July 18th, 2005, issue of National Review. Twenty years ago this summer, Washington’s hottest debate centered on the Contras’ war against the Sandinistas in Nicaragua — and how to keep the nations of Central America from falling into the hands of Marxist terrorists or right-wing death squads. It was the equivalent of today’s Iraq debate. The eventual victory of freedom in Nicaragua came at a cost of tens of thousands of lives — and it is now in jeopardy. The hard Left in Latin America has learned its lessons: It is no longer...

5 posted on 12/01/2005 4:27:45 PM PST by Stultis (I don't worry about the war turning into "Vietnam" in Iraq; I worry about it doing so in Congress.)
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To: Stultis
Sadly, the direction things seem to be headed, you may have a "pity about South America" index soon.

Yes, I've been following events there... a rather desultory conglomeration of links:

-The Fire Down South...( Latin America--)--

6 posted on 12/01/2005 4:43:14 PM PST by backhoe (The Silence of the Tom's ( Tired Old Media... ))
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To: Stultis

excellent article, thanks for posting it. it is first rate.

7 posted on 12/01/2005 4:46:52 PM PST by Kitten Festival (The thug of Caracas has got to go.)
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To: marron

Stir in the insane racial component, and you have the makings of Pol Pot or Mau Mau type violence.

8 posted on 12/01/2005 5:03:40 PM PST by Travis McGee
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To: Travis McGee
Stir in the insane racial component, and you have the makings of Pol Pot or Mau Mau type violence.

You are right.

We always focused on the "more-Maoist-than-thou" aspect of Sendero Luminoso, but there was a racial component which magnified the natural anti-west, anti-life tendency normal to any marxist insurgency, and made it one of the most murderous cults we have ever seen. At the very least, the ethnic component made its membership difficult to penetrate, but I think it also made it easier for them to carry out the cold-blooded executions that they were famous for.

Just a thought.

Humala is fishing in some of the same waters, and so is Morales. They are not "Sendero", but in their stupidity they could unleash that kind of civil war.

9 posted on 12/01/2005 5:33:55 PM PST by marron
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To: Stultis

A new window will open

10 posted on 12/01/2005 7:19:26 PM PST by Cacique (quos Deus vult perdere, prius dementat ( Islamia Delenda Est ))
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To: marron

I would not want to be living in the highlands, that's for sure.

11 posted on 12/01/2005 9:58:32 PM PST by Travis McGee
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To: Stultis
Thanks for the ping. These articles also tie in to what Llosa is saying:

Why Latin Nations Are Poor

Barrio Study Links Land Ownership To a Better Life
12 posted on 12/01/2005 10:01:11 PM PST by Ooh-Ah
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