Bolivia's Current Crisis
Et tu Bolivia?
One thing can be said about Juan Evo Morales of Bolivia - he has never seen a left leaning nationalistic scheme he didn't like. One thing that can't be said of Evo Morales is that he has original left leaning nationalistic ideas.
Mr. Morales has been a follower of Socialist firebrand Hugo Chavez of Venezuela and the Castro brothers of Cuba for years. He has taken Bolivia down the path of state run autocratic rule little by little.
He has lead Bolivia as if he were liberating the country from European rule even though the current leadership and population are almost entirely mixed race. His populist slight of hand is meant to distract the public from the sad state of the economy. As Rahm Emanual was quoted saying in 2008, 'You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.'
His latest foray has been to follow the example of Cristina Kirchner of Argentina - whose take out of oil giant YPF last week was greeted with cheers from the street .By nationalizing Spanish power company Red Electrica's Bolivian interests, Mr. Morales see's a way to distract the people of Bolivia with the promise of more free giveaways. Some results of his controversial policies:
- Protested road building in sacred Indian lands within the Amazon Basin - to help coca growers
- Gasoline subsidy reductions leading to local riots
- Nationalization of gas industry in 2006 - met with general public approval
- Raised gas export prices to Brazil in 2006 - causing Brazil's Petrobras to seek alternative sources
- Political unrest in the eastern, oil rich area of Bolivia - potentially leading to civil war
What is becoming apparent is that the presidents policies will close the country off to foreign investment.This investment is what leads to the long term solution of alleviating suffering and lack of good jobs.
Mr. Morales started life being born into an Aymara Indian family of subsistence farmers. Life was hard for young Evo with Bolivia being ruled by a smaller group of Europeans since independence from Spain a generation ago. He came to view the plight of his family as somehow being the fault of these Europeans - radicalizing his societal views.
Later on Morales started growing coca, to increase the family income, which eventually found its way into the international cocaine trade. He then resented the United States for working with the Bolivian government to suppress the coca crop in the 1990's. His point of view led him to join a number of different socialist protest groups - the most colorful being the Cochabamba protests when that city privatized its water company.
Further showing his political leaning - he has even condemmed left of center American President Barack Obama after the United States became involved in the Libyan conflict - saying 'Mr. Obama's Nobel Peace Prize showed be revoked.'
As with the vast majority of socialist leaders - after awhile their policies are seen for what they really are - unpopular and enforceable only by force.This is interesting since Mr. Morales, being the self described champion of the oppressed, was witness to police brutality against peaceful protesters in La Paz in August of 2011.
Which leads us to the Red Electrica copycat move.
Red Electrica is a Spanish company involved in the energy sector primarily in the electric transmission business. Its Bolivian subsidiary is Transportadora de Electricidad (TDE) which controls 74% of Bolivian transmission. According to Red the company has invested close to US$81 million in upgrading TDE assets. Spanish Ambassador, Ramon Santos, said Bolivia was 'Sending a negative message that generates distrust.' Mr. Santos was being generous in his statement as the international business community will choose to invest in less risky countries.This will only hurt Bolivia longer term.As an example of how global we have all become even India is having difficulty attracting risk capital after its legislators decided to circumvent the Indian Supreme Court in relentlessly pursuing Vodafone over perceived tax avoidance.
Having been in neighboring Paraguay numerous times, while with KPMG, I can relay how difficult it is for these landlocked areas of South America to attract really attractive foreign investment. Generating all of your revenue internally is a recipe for slow growth and eventual popular unrest.I only hope that Bolivia can see what it takes to compete in a very competitive international arena.
Interesting Bolivia Facts
- Largest navigable lake - Titicaca
- Largest salt beds in the world at Uyumi
- Cerro Mutin is the world's largest iron ore mine (President Morales gave the mining contract to India's Jindalbecause of Jindal's promise to protect the Amazon - OK, a good move!)
- Bolivia has 20 native languages
- Bolivia ranks 11th in different plant species at 20,000
- Bolivia is the only source in the world of Bolivianita - a precious stone of yellow and purple from the naturally combined gems of citrine and amestrine
A Native Bolivian Indian Proverb
During the Spanish conquest of South America a beautiful Ayoreo princess named Anahí fell in love with a Spanish conqueror. This angered the members of her tribe so they plotted to kill the Spaniard. Anahí found out and warned him to leave for his safety. The members of her tribe, in an attempt to kill the Spaniard, accidentally killed Anahí instead. The two fused colors of Bolivianita represent Anahí's broken heart, divided between her love for her people and her love for her Spaniard, to whom she gave the gem as she lay dying.
Mr. Morales' popularity is down to 30%. I have hope that he and his people remember the wisdom of his ancestors and pull Bolivia back before she makes the mistake of killing off that which is most important to her.
Bibliography
www.worldpress.com, April 7, 2012.
www.boliviabella.com, April 4, 2012.
