That symbol is former president Gonzalo Sánchez de Losada, who caught a plane to exile in Miami on October 17, following several weeks of bloody protests in La Paz.
Morales, head of the coca growers’ union and leader of the leftist Movimiento al Socialismo party, makes an apt point: The doctrinaire free-market, free-trade development model championed by the U.S., the IMF and the World Bank -- and enthusiastically endorsed by Sánchez de Losada -- is under attack as never before. And not just in Bolivia: Many other Latin American countries, most conspicuously Argentina, seem to be saying basta to the so-called Washington consensus (Institutional Investor, September 2003).
Now the fraught question for Bolivia and its neighbors is, What instead?
That remained very much up in the thin Andean air last month after Sánchez de Losada’s vice president -- popular historian and journalist Carlos Mesa -- replaced him and immediately pleaded for “a little space to work.”
At least 80 people died in the riots that rocked Bolivia, where 70 percent of the 8 million citizens live in poverty and growth has been sluggish for five years. Miners, coca growers and other disaffected groups angrily objected to the government’s decision to allow a private international consortium led by British Gas and Spanish oil company Repsol to export Bolivian natural gas to the U.S. and Mexico through a planned $5.2 billion pipeline.
To Sánchez de Losada, who privatized the country’s oil and gas industry during his first term, in the mid-1990s (when Bolivia’s growth rate was a brisk 4 percent a year), the benefits were clear: Natural-gas exports from the pipeline, which would stretch across Bolivia and Chile to a Chilean port on the Pacific Ocean, would add $300 million in taxes to this desperately poor country’s annual revenues.
But Morales and the other protesters fiercely opposed the project, on the grounds that a natural resource like gas should remain in Bolivian hands until all domestic needs are met. And the Chilean connection aroused Bolivians’ nationalistic fervor: Chile cut off Bolivia’s access to the Pacific in an 1879 war.
Many poor Bolivians are also fed up with what they see as another intrusive foreign connection: the U.S.-backed effort to eliminate coca production and stem the northward flow of cocaine. Morales, a coca grower himself, has capitalized politically on the distress of the cocaleros, who use coca leaves to quell hunger pangs and believe that their livelihood has been snatched away with no alternative crop to cultivate. Some 90 percent of Bolivia’s coca plantings have been eradicated -- 114,000 acres in all.
Opposition politicians have given the 50-year-old Mesa a 90-day grace period to form a government and organize a referendum on gas exports.
Meanwhile, Morales, a 43-year-old indigenous Indian who narrowly lost the presidency to Sánchez de Losada in June 2002, stands impatiently in the wings as a radical alternative to Mesa. “It’s important for the state to recover natural resources -- renewable and nonrenewable,” he tells II. That way La Paz can ensure that Bolivians have such basic necessities as cheap gas for cooking. Morales argues that natural gas should also be used to boost agricultural productivity -- once land reform enables more poor people to obtain farmland -- and to generate electricity for stimulating the industrialization of Bolivia’s commodity-dependent economy. Only later, under “better conditions,” should the gas be exported, he says.
What should investors in Latin America make of events in Bolivia? “There’s a streak of negativisim in most places, given the recession,” says Pedro Pablo Kuczynski, who was Peru’s Economy and Finance minister last year when street protests stymied plans to privatize power companies. The former Wall Streeter, who now administers the Miami-based Latin America Enterprise Fund, cautions against overgeneralizing about Latin America’s leftward tilt: “There’s a swing to the left in some of the countries -- in Argentina and, obviously, Bolivia -- but there’s also a swing to economic orthodoxy in socialist-looking countries, as there is in Brazil.”
The Bolivian situation has implications principally for Colombia and Peru, asserts Michael Shifter, vice president of Inter-American Dialogue, a Washington-based policy research group. The lesson as he sees it: “Democratic systems are very fragile, and if the social agenda is not addressed, there is tremendous risk of social unrest and instability.” Claudio Loser, a senior fellow at Inter-American Dialogue, notes that Mesa’s decision to hold a referendum is an increasingly common Latin American response to contentious economic issues. The risk, says Loser, is that sound economic policies may “lose because they don’t have popular appeal.”
On the other hand, Latin American politicians must do more to win citizens’ trust. “Democracy can’t be just voting every five years,” says Morales. “The best referendum,” he adds pointedly, “is the uprising of the people.”
