Tuesday, June 23, 2009

Bolivia - Washington Consensus vs. Caracas Consensus -

Bolivia we are told was a battleground for the Washington Consensus, a poster-child for the "failure of neo-liberalism," of "popular resistance to the International Monetary Fund." This was illustrated by such episodes as the Water Wars in Cochabamba and the Gas War that brought down Sanchez De Lozada, and ultimately the surprise rise to power of Evo Morales. In this narrative it is mainly about resources, resistance to economic measures imposed from abroad that allowed multinationals to come in and extract natural resources to the detriment of Bolivia's poor.

Reality of course is much more complicated. The rise to Evo and the failure of the traditional political class, also owes a lot to the ethnic and regional cleavages in Bolivian society, and the long history of instability and self-destruction in Bolivian politics. Among other (numerous) factors you can also throw in the historical exclusion of a large part of the population, regional economic crisis, US drug policy,etc, etc.

But bring it back to economics, because that is what we were told this was about. If the evil IMF, the neo-liberals, and the multinationals were so bad, what was the alternative?
However many dumb things the IMF suggested (or forced) the country to do, the truth is the budget did become balanced, and the foreign debt was lowered. This was forecast by the Bolivian Government and the IMF when they reached a Stand-by deal in 2002. Privatizations of airlines, railroads, telcom companies wiped out hundreds of millions of dollars in obligations the Bolivian government carried. And due to the opening up of the oil and gas sector per the Washington Consensus/IMF/Neo-lib recommendations resulted in nearly 4 billion dollars in investment. Up to the 1990's Bolivia produced little natural gas, afterwards it held the 2nd gas reserves in the continent, filling 50 + percent of Sao Paulo's needs. Simply put, the gas industry exists because of foreign investment.

And Evo Morales' policies? Under the tutelage of loudmouth Hugo Chavez - who acts as a cheerleader and enabler of Morales worst instincts. Destroying transparency in government. The childish nationalizations, that resulted in massive mismanagement, corruption, and even over-payments to transnationals. Bolivia going from being the "gas hub" of South America, to the "black hole" of energy policy in the Continent as one analyst put it. So destructive and unreliable has Morales government become that Bolivia's gas clients like Argentina and Brazil have ponied up billions of dollars for re-gasification facilities, preffering to pay more to bring in gas from Trinidad and Tobago and eventually Africa. Cuba now has a more favorable environment for foreign oil and gas company than Bolivia, and Peru is drawing in billions in investments with much less gas.

While this has gone on, the same voices that constantly whined about the IMF, about the World Bank, about Goni, about Bechtel, are awfully silent. Nothing about Morales' amazingly inept and failed policies. The narrative shifts, it is now about the excluded indigenous majority trying to "change" the country under assault from the "light-skinned" elites in the east. Noting resistance to the "indigenous" Constitution - while failing to note how it crudely imposes a statist-centralized government-run economy, and pretty much bans foreign investment. Basic stupidity that goes far beyond, trying to force a bankrupt government to balance its budget. Whatever damage the "Washington Consensus" did, the Caracas Consensus is a real loser.


skywalker said...

"Inept Morales"
Despite battling secessionists in the east, a US Aid program which financed and encouraged them and a conservative church hierarchy, the supposedly innept Morales has held the country together, been re-elected with an increased majority had a referrendum passed overhwelmingly despite opposition for the latifundia and the bishops and witnessed a massive growth in GDP.
There has been no coup or cessionist attempts in the United States yet what have their great leaders achieve?
- Besides war and a great depression?

Boli-Nica said...

no one doubts Evo's strong political skills and instincts. He has acquired vast power and electoral success. All done with the resources of the state, a very effective propaganda machine, organized officialist mobs at his beckon, the backing of the army, and financed with tens of millions of dollars in Venezuelan suitcase money. The pittance spent by AID on development or even the fortunes of landowners and oppposition politicians are no match.

I am talking about his policies in economics, namely the statist-centralist agenda regarding not only natural resources but export in general.

they have been ideologically outdated and unrealistic in conception, in execution have been technically and administratively disastrous

GDP has risen because sectoral policies by prior governments basically left in place a gas-exporting industry with the regions largest gasoduct, increased textile exports to the us, and an efficient agriculture-exporting industry.

When energy and commodity prices soared, the country benefitted enormously. As it would have w/out Evo. Even with his increasing royalties, economists have estimated that at most added 18 percent to total gas/oil revenues which benefitted more from sky=high prices. And, that number does not take into account the hundreds of millions in dollars of unnecesary spending on things like worthless stock from nationalized multihationals, importing diesel/gasoline, and investments that the state must make now that it blocked out foreing investmnent.

Anonymous said...

Evo is popular and was elected because he's indigenous, not because he's capable. He was elected because the majority of Bolivia's population is indigenous and whether or not he was capable or running a country was irrelevant to them. They see Evo as their Messiah and the only thing that mattered was his race to get him elected. The population that elected him has an extremely low education level and has no idea what it takes to run a country. Had the vote been based on capacities, he would not have won.

Anonymous said...

Skywalker, Evo has not held the country together. It is more divided now than it has ever been in its 183-year republican history. What planet do you live on!

Anonymous said...

...the supposedly innept Morales has held the country together, been re-elected with an increased majority had a referrendum passed overhwelmingly despite opposition...

Evo was re-elected because of widespread election fraud, nothing more and nothing less.

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