How FDR Banning Sales of Airplanes To Bolivia Led To Landmark Supreme Court Decision And To Bolivian mythology

At issue

On April 1934 a joint resolution of Congress was passed giving President Roosevelt the power to forbid the sales of arms to Boliva or Paraguay in the Chaco War.

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That if the President finds that the prohibition of the sale of arms and munitions of war in the United States to those countries now engaged in armed conflict in the Chaco may contribute to the reestablishment of peace between those countries, and if after consultation with the governments of other American Republics and with their cooperation, as well as that of such other governments as he may deem necessary, he makes proclamation to that effect, it shall be unlawful to sell, except under such limitations and exceptions as the President prescribes, any arms or munitions of war in any place in the United States to the countries now engaged in that armed conflict, or to any person, company, or association acting in the interest of either country, until otherwise ordered by the President or by Congress.

Sec. 2. Whoever sells any arms or munitions of war in violation of section 1 shall, on conviction, be punished by a fine not exceeding $10,000 or by imprisonment not exceeding two years, or both. 

President Roosevelt then issued an executive order

Now, therefore, I, Franklin D. Roosevelt, President of the United States of America, acting under and by virtue of the authority conferred in me by the said joint resolution of Congress, do hereby declare and proclaim that I have found that the prohibition of the sale of arms and munitions of war in the United States to those countries now engaged in armed conflict in the Chaco may contribute to the reestablishment of peace between those countries, and that I have consulted with the governments of other American Republics and have been assured of the cooperation of such governments as I have deemed necessary as contemplated by the said joint resolution, and I do hereby admonish all citizens of the [p313] United States and every person to abstain from every violation of the provisions of the joint resolution above set forth, hereby made applicable to Bolivia and Paraguay, and I do hereby warn them that all violations of such provisions will be rigorously prosecuted.

And I do hereby enjoin upon all officers of the United States charged with the execution of the laws thereof the utmost diligence in preventing violations of the said joint resolution and this my proclamation issued thereunder, and in bringing to trial and punishment any offenders against the same.

And I do hereby delegate to the Secretary of State the power of prescribing exceptions and limitations to the application of the said joint resolution of May 28, 1934, as made effective by this my proclamation issued thereunder.

Curtis Wright Corporation, sold machine guns and airplanes to Bolivia, and was charged with a violation of the act.   It defended itself in Court arguing that Congress' resolution and President Roosevelts order were unconstitutional granting of power to the Executive and an overextension of power in commerce.

After the lower Court ruled against the government, the issue was brought before the U.S. Supreme Court.  In the landmark case, U.S. v. Curtis Wright  the Supreme Court ruled in its full decision that the President had supremacy in national security and foreign affairs  This case is required reading in Civil Procedure and Constitutional Law classes in U.S. Law Schools.    This doctrine of executive supremacy has also led to furious debates the past 80 years, and been used as a justification by FDR in WWII, LBJ in Vietnam, Bush's 1 and 2 in Iraq, etc.
 
  As this summary states

The Court, in an opinion written by Justice George Sutherland, ruled that the joint resolution was constitutional and that the charges against Curtiss-Wright would stand. The Court held that the Constitution's text constrains only the domestic activities of the federal government, but does not constrain the activities of the government abroad. The Court argued further that, like any other country, the United States has "external sovereignty" by which it may liberally assert or defend itself on the world stage as a free and independent nation. As Sutherland put it, "as a member of the family of nations, the right and power of the United States [in foreign affairs] are equal to the right and power of the other members of the international family. Otherwise, the United States is not completely sovereign." The federal government thus has unlimited power to conduct foreign affairs on the nation's behalf.

The Court also ruled that this unlimited power lies exclusively with the president. Quoting former Chief Justice John Marshall (in his role as a member of the House of Representatives, before his appointment to the Court), the Court maintained that "The President is the sole organ of the nation in its external relations, and its sole representative with foreign nations." The president's exclusive power to negotiate treaties and conduct warfare proves that the Constitution's drafters intended the document to give the executive significant powers to conduct foreign affairs. In sum, even though the Constitution is silent as to the president's power to impose embargos, such a power is implied within the executive's constitutional authority to manage foreign affairs. The government's charges against the Curtiss-Wright company would stand.  

Bolivia Wrights and Standard

Going back to Bolivia, the Chaco War,and in particular back to the original Resolution and Executive order, it has also had long term effects.


While Curtis-Wright fought F.D.R.'s executive order in order to continue its war-profiteering, other American companies were not so eager to challenge an assertive Roosevelt Administration. Standard Oil Company found itself in a situation where selling aviation fuel to Bolivia's Air Force (as in to fill-up said Curtis-Wright warplanes), could be construed as violatiing the arms and ammunition embargo. Rather than face potential administration sanction (money and potential jail time), the New Jersey company refused to sell aviation fuel to Bolivia's Military.


This failure to sell fuel has been used to justify the Bolivian governments decision to nationalize all Standard Oil  holdings after the War.  Diplomatic cables from that time show the many excuses the Bolivian government used to justify this decision.   And from the tone of the communications, it also appears that it was not a priority of the Roosevelt administration from Secretary of State Cordell Hull down to punish Bolivia for expropriating the assets of the company.  

However none of this has done anything to dissuade Bolivians from the national myth that Standard Oil was sabotaging Bolivia's war efforts and that Bolivia rightfully expropriated this companies holdings facing huge opposition from U.S. Imperialism..  For all its many misdeeds worldwide - as befitting a Rockefeller monopoly-  there is little real evidence of Standard Oil misbehaving in Bolivia in the latter part of the Chaco War years..  It must be remembered that any spoils in the Chaco were: merely "potential." in the 1920's and 30's.  Standard Oil in the 1930's was focused on an intense fight for the very lucrative Argentine oil fields and market.  

In the end, feuding over some Bolivian airplanes contributed to expanded Presidential powers in the United States and fueled (no pun intended) Bolivian resource nationalism.   

Evo's Witch Doctor Gets Busted!!!

The so-called Aymara "Priest" who presided over Evo Morales' Presidential Inauguration  in Bolivia was found red handed with many kilos of some sort of cocaine derivative at his house.  Allegedly he was wearing his ceremonial robes.  The sorcerer apparently was casting an ancient Chapare spell of purification over about 500 pounds of cocaine base, when the police rudely interrupted the Amauta..

Valentín Mejillones, 55 años, fue quien entregó el bastón de mando a Morales cuando éste juró a su segundo mandado en enero en un rito andino celebrado en el mayor templo arqueológico del país.
Ostenta el título de amauta que en la religiosidad andina es el máximo líder espiritual. El martes en la noche, la policía allanó su domicilio en una barriada de la ciudad de El Alto, vecina a La Paz y lo sorprendió elaborando cocaína.
Llevaba su poncho ceremonial el momento de la detención. Fue detenido junto a su hijo y a una pareja de colombianos que no fueron identificados por la policía, según el informe del director de la fuerza antidroga, coronel Félix Molina.

Read more: http://www.elnuevoherald.com/2010/07/29/774163/capturan-con-cocaina-a-sacerdote.html#ixzz0vBX1LXeu

Afghanistan Might Have Massive Lithium Reserves - Potential Mineral Riches

While Bolivia is known to have a significant part of the lithium reserves in the world, this might change drastically.  The Afghan government recently announced that American geologists found "huge lithium deposits amounts" in Afghanistan's Ghazni province.  These new discoveries are part of a survey that has found large deposits of key exportable minerals including zinc, gold, and copper in the country.  Large parts of it are in conflicted areas.     Apparently decades of conflict prevented this kind of wide-ranging survey, though many Afghan geologists have known of mineral riches and kept it quiet due to the political situation.

The New York Times reported the $1 trillion figure in Monday's edition and quoted senior American officials as saying untapped mineral deposits in Afghanistan are far beyond any previously known reserves and were enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself.
Americans discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, including iron, copper, cobalt, gold and critical industrial metals like lithium, according to the report. The Times quoted a Pentagon memo as saying Afghanistan could become the "Saudi Arabia of lithium," a key raw material in the manufacture of batteries for laptops and cell phones.

 Then there is this quote from the New York Times article specifically talking about the Lithium

Just this month, American geologists working with the Pentagon team have been conducting ground surveys on dry salt lakes in western Afghanistan where they believe there are large deposits of lithium. Pentagon officials said that their initial analysis at one location in Ghazni Province showed the potential for lithium deposits as large of those of Bolivia, which now has the world’s largest known lithium reserves.

The Lithium part should wake up not only Bolivia, but also Chile and Argentina, because a sizeable deposit of Lithium in Afghanistan, could mean rapid exploitation and export of an alternative to South American lithium.   The weight of the U.S. and the Afghan desire for revenue and development, can mean that even in a conflicted area, resources could be brought to bear in developing the industry.  

EDIT -

Bolivia's government has said its plans for lithium development are "not affected" by news of the Afghan lithium.   The Presidency's official spokesman said, "Afghanistan is a country practically at war" - actually an understatement.   With atypical restraint the official continued that he was not sure how easy it would be to "resolve" the conflict issue in Afghanistan, implying it is not a problem for Bolivia.  

"Bolivia and Argentinas Gas Crisis Shakes South American Region"

Bolivia and Argentina's Gas Crisis Shakes Region,  according to Ana Zarzuela energy analyst at Spain-based  Intelligence and Capital News Report.

Basically, the idea of Bolivia as the "Gas Hub" first under the neoliberal governments, then with a more "statist" focus, called for Bolivian gas to be piped out to neighboring countries through pipelines.

But under Evo Morales, Bolivia has become an unreliable supplier.  The state-owned oil and gas company, can barely supply existing obligations, and production levels are stuck.  Most experts agree that the industry needs investments and know-how  from private and foreign companies.    Owing mostly to the governments attacks on private industry and judicial insecurity, this looks unlikely to happen.
  
While Bolivia has become an unreliable supplier of energy needs, neighboring countries have found other alternatives, including buying Liquid Natural Gas abroad and importing it via sea.   

The latest blow to Bolivian aspirations has to be Venezuela's PDVSA setting up regasification facilities in Argentina, that in coming years will process natural gas coming from....Chavez' Venezuela.    By, by, Bolivian gas.

Esta situación pone a Bolivia, que exporta sólo a través de ductos, en una posición muy distinta de hace cinco años, cuando se proyectaba como el centro de distribución regional. Se lo acaba de describir a Morales su propia Cámara de Hidrocarburos (CBH): detectan “un fuerte contraste entre el crecimiento del GNL en barcos metaneros a los centros de demanda de Sudamérica y el estancamiento de exportación de gas natural boliviano en gasoductos”. De la gran red que Hugo Chávez y Morales prometían tejer en toda Sudamérica con Argentina como punta de lanza, hoy no queda ni la intención diplomática. Las zozobras de La Paz y Buenos Aires, el pragmatismo de Caracas y los recelos de Brasilia, Santiago y Montevideo han podido más. “La apuesta por un proceso de integración por gasoductos, que tuvo un crecimiento explosivo en la capacidad de transporte internacional incorporada entre 1998 y 2002, de los 19,1 MMmcd a 105,8 MMmcd -advierte la CBH- ha llegado al estancamiento”. “El incumplimiento de contratos por parte de Argentina y Bolivia, el estancamiento de la inversión y la poca confiabilidad mostrada parecen haber postergado el apetito de los importadores regionales, para nuevos proyectos de integración intrarregional” por gasoductos, apunta la CBH.

Why Naomi Klein is Really Stupid - Bolivia version

Among the most inane and just plain absurd deifications of Evo, is this gem by hard-left idiot extraordinaire Naomi Klein,  Klein's nonsensical worldview and silly ramblings were perfectly skewered by Jon Chait in a classic article. in The New Republic.   Now she goes to Cochabamba, for Bolivia's People Summit on Climate Change enlightening us on how Evo Morales can literally save the world, or something close to that.  No, I am not kidding, you can tell where this is going just from the title of her article: Bolivia's fight for survival can help save democracy too.

It was 11am and Evo Morales had turned a football stadium into a giant classroom, marshalling an array of props: paper plates, plastic cups, disposable raincoats, handcrafted gourds, wooden plates and multicoloured ponchos. All came into play to make his main point: to fight climate change "we need to recover the values of the indigenous people".

 
Naomi seems to think this pearl of deep thinking,  just sums up how great Evo is.  Evo's indigeneous values?  They owe more to the Cuzco Emperor's -whose scorched-earth tactics finally brought what then was known as Kollasuyu into the Inca' Empire-,  than with the worship of a benign Gaia-like Pachamana, imagined by New Agers and Environmentalists. 

Not content with that, she says that Bolivia's rhetoriticians can offer us real solutions to the crisis of "failed democracies" and "global warming". 

With the Cochabamba summit, Bolivia is trying to take what it has accomplished at the national level and globalise it, inviting the world to participate in drafting a joint climate agenda ahead of the next UN climate gathering in Cancun. In the words of Bolivia's ambassador to the United Nations, Pablo Solón: "The only thing that can save mankind from a tragedy is the exercise of global democracy."
If he is right, the Bolivian process might save not just our warming planet, but our failing democracies as well. Not a bad deal at all.
 

So how can Bolivia be an example for the World?   Is Klein thinking of Evo's version of State-Capitalism? His "neo-extractivism" comes with the usual environmental oversight and transparency common to the old Eastern block countries. Environmentally sound?  Evo's Cocalero allies are chopping down trees in national forests to grow coca, run-off from the increased coca processing plants is polluting even Lake Titicaca.   Democracy?  His version of democracy seems to have more to do with centralist dirigismo  and "smashing oligarchs" than it does with "grass roots" ground-up democracy.  

Forget the world, Bolivia's neighbors Peru, Chile, and Brazil  pointedly avoid most of the Evo-agenda.  They all seem to do rather well economically with their forms of social-democratic capitalism, while avoiding the messy authoritarianism and cult of personality around Morales.   For all Klein's rants against the Washington Consensus, countries that have followed the "Caracas Consensus" policies advocated by Chavez and Morales have done pretty bad, a fact that she would never concede.  Anyways.

Ironically, many affected indigineous people were shut out of the conference. Seems they might have issues with some of the State's development ideas. And Evo sure made Naomi prouder, by going on about gays, chickens, and bald people to everyone's amusement. Except for proud neo-Stalinist Naomi, who is too stupid to get it.

Evo Nationalizes Energy Companies - Part 2

As reported before, Evo Nationalized several electrical companies.  Now Britiain's The Economist weighs in-

Another Bolivian nationalisation - Power grab - Evo Morales’s allies grow restive

Since taking office in 2006 Mr Morales, Bolivia’s first elected president of indigenous descent, has taken over oil and gas, mining and telecoms businesses. Partly as a result, he is popular. When campaigning for a second term in an election last year, he promised that power companies would be next. The targeted firms thought they had avoided this fate by negotiating a deal in which the government would take a bare majority stake. No such luck.
But the May Day nationalisation seems to be bringing Mr Morales diminishing returns. To his bemusement, workers at one of the nationalised companies, a co-operative in Cochabamba, staged a protest sit-in. Although Bolivia’s gas revenues have risen sharply, that has as much to do with higher prices and contracts signed before Mr Morales took office as with rolling back privatisation, according to Carlos Alberto López, an energy official in a previous government. Most of the newly state-run firms have performed poorly.

South America - State Oil Companies While Colombia has record production, Bolivia and Venezuela are a Mess

Colombia's State Oil Company Ecopetrol is exporting record amounts of crude this year.

Bolivia's State Oil Company, YPFB after 4 years of Evo has turned Bolivia from being self-sufficient in most fuels and natural gas products, into a country that imports gasoline (even from Chile!) and liquefied petroleum gas (from Peru).   Gas production is static, despite the record prices and South American demand.    In 1999 there were 65 wells drilled in Bolivia, in 2009 there were 3 (three.)    Four years of government has meant six different CEO's for Bolivia's National Oil Company.  One of the exes is in jail, result of the worst scandal in YPFB company history last year.

Venezuela's PDVSA - once the flagship State Oil Company in the region, is producing a million less barrels of oil per day than it did in the 90's, it is a mismanaged mess, that is deeply in debt. 


Reason:  Colombia has a sensible hydrocarbons policy, in which the State plays an active role, while also allowing foreign participation and investment.   Bolivia and Venezuela do not - in many cases directly due to conscious policies in the last four years that reversed the modernization reforms of the 90's. 

Colombia, laws and regulations, modified in 2004, provide a comprehensive framework for the hydrocarbons sector.  Centuries of obsessiveness with the language finally pay off  in areas other than Magical Realist novels, as the carefully drafted legislation seems pretty clear and comprehensive.  Starting with the Constitution and the relevant legislation, the Country's laws set out clearly delimited areas of responsibility and accountability for all actors in the energy sector. The Ministry of Mines is responsible overall for the extractive industries, the Unit for Mining and Energy Planning (UPME) is responsible for research and planning future energy needs,  a unit of the Ministry of Mines, the ANH  administers the hydrocarbons sector - both private and state companies,  the regulatory agency  CREQ regulates the energy market of which natural gas is a part.  The National Oil Company, Ecopetrol, is the leading oil company in the country.

Ecopetrol unlike YPFB or PDVSA,  is not granted a monopoly on production, and is expected to be another competitor in the market..   To make sure it is competitive under this scheme, Colombian legislation ensures Ecopetrol has managerial autonomy, follow standard corporate rules and procedures, and pretty much operates as a modern international hydrocarbons company.    And to raise investment funds, it adopted a novel scheme.  it raised capital through stock offerings,  selling 20% of its shares in offerings in which Colombian citizens had first-right to buy, and there was a monetary and percentage cap as to how much any one individual could buy, to ensure national and "democratically" distributed ownership.   With this financing it has begun an ambitious cycle of investments that will boost Colombia;s coffers.

As part of its plan to increase investment and expand the industry, Colombian law allows private and foreign companies of all sizes to participate in the upstream and downstream part of the hydrocarbons business, either individually or as partner with Ecopetrol.   Colombia's current legal system, has laws that protect private investment.     As a result of this security foreign investment  in hyrdrocarbons has soared,  exceeding  3.5 Billion dollars a year for the past couple of years.

Drill Evo Drill

On the other hand, Bolivia's newly Nationalized Oil and Gas sector is arguably less transparent than it has been in the last 15 years.   Evo got rid of the somewhat competent independent regulatory agency that  "neoliberal" governments had set up, placing those responsibilities within the same ministerial bureaucracy.    Instead of openly soliciting bids for joint ventures or other projects, the government in past years has enacted decrees unilaterally picking partners and setting up ventures with foreign companies with little oversight.and questionable legality.  To make matter worse, the management of  the State Oil Company YPFB, starting right from the Morales governments inaguration has been politicized and de-professionalized, with corruption scandals of all sorts and incompetent decisionmaking and planning.  This sorry state of affairs has succeeded in stalled production.
 
While Venezuela at least on paper allows for foreign participation, Evo's Bolivia has policies described by one analyst as "tougher than Cuba's", limits all activities related to hydrocarbons exploration, production, and commercialization to YPFB, though it can sign limited contracts with outside companies.  But even these service contracts are in a sort of legal limbo due to the inconsistencies - and outright confusion- in the new Constitution.  As a practical matter,  the decrees, laws passed since 2005, and the new Constitution do not provide a comprehensive set of rules of the game, to put it simply.   It is hard for the players in the Bolivian hydrocarbons sector to know where they stand, and that is true even for the State!  Marcelo Quiroga Santa Cruz is probably spinning in his grave.    Small wonder that investment by foreign companies in Bolivia have dropped dramatically.    Forget harsh government rhetoric, having a Constitution that when it is not being stridently anti-capitalist  is confusing and vague when talking about  the extent of the States right to contract over resource rights, to private property rights and protection of investments,  does not seem like a good place to invest in.

Venezuela and Bolivia's have followed a failed statitst model,  For all the talk about Bolivia's "democracy from below" in the words of Evo apologist Jim Schultz, its so-called alternative to "neoliberalism" is bankrupt at its core.

The key here is that countries like Colombia that are doing well,  and are doing so outside of the stereotype of the neoliberal/washington consensus/imf bogeyman..   Ecopetrol is a nationally-owned State Company like Yacimientos or PDVSA.  But Colombia has built a framework that allows its State-owned company to thrive, while allowing foreign companies with their technology and know-how to actively participate in exploration and production of hyrdrocarbons.  This may not be the best system out there, but at least it ensures Colombias public coffers grow, and the industry longs well poised in the long-run.     Bolivia, sadly, seems to prefer to imitate the State Oil Company in Venezuela, instead of the one that works in Colombia.

Bolivia's "Tea Party" - 10 Years Since Cochabamba Water Wars

Its been 10 years since the Cochabamba "Water Wars".     Evo Morales' "unofficial" press agent  (thanks to George Soros ) Jim Schultz at the Democracy Center - has the usual self-congratulatory piece about this.   The Bolivian Water Revolt, Ten Years Later,  reminding us of this.

In this complicated story the movement that went from a social mobilization opposed to water rate hikes to a  movement marked by a political-ideological component, that of fighting neo-liberalism, calling for the unconditional expulsion of a multi-national consortium from Bolivia in the words of one Bolivian observer.

 Evo Morales' cocalero Union played a "large part" in that victory, which led Evo to shrewdly see the possibilities of linking the Unions fights against erradication with the disparate indigenous, anti-neoliberal and anti-globalization movements in the country. 


Ma-te Party


This Coordinadora movement became more about an ideological extreme position rather than one of negotiating for an end;  to use the hard-left term it was making "transitional demands" on the government, asking for the expulsion of the company rather than modification of the contract.   It was using language and rhetoric that  resonated with many of Bolivia's poorer citizens, playing on long-bottled frustrations and resentments against traditional politicians, the old oligarchy, and the ever-present fear of foreign control of resources.  What Dunkerely called "the Potosi Syndrome"  It was about passions, and yes, prejudices and fears,  held by many Cochabambinos including a xenophobia and distrust of outsiders.

  In many ways this is like the irrational part of the "Tea Party" movement in the U.S. that brings out the insecurities and the fears of some Americans.   Calling Obama a "socialist" and drawing imaginary lines in the sand against government action,  avoids entirely the practical problem of 25 million plus Americans who have no health care.   In  the case of the Coordinadora it was extreme anti-capitalistic, anti-american rhetoric, hysteria over stopping "multinationals"from "pillaging": the countries resources,  avoiding rational discussions of possible private/public solutions that could make sure people in Cochabamba got water in an efficient, modern, and reasonably priced manner.  

Victory?

One of the Water Wars leaders calls it the“first great victory against corporate globalization in Latin America." It is this defiunition of victory that is celebrated by Schultz and company, even while they have to admit that the "social" movements have failed to implement the objective that everyone agreed upon - which was to improve the supply of water to the residents of Cochabamba.  Tom Kruse, another scholar-activist wrote that  “while you can’t drink the rhetoric of antiglobalization, struggles like the water war are vital, and the only hope for rebuilding a progressive agenda."    That is little confort to the poor Cochabambinos still do not have an adequate supply of water, a fact that Schultz acknowledges.

1. The Cochabamba Water Revolt was and remains a powerful David and Goliath struggle in which some of the most humble people in the world took on the forces of the World Bank, Bechtel, and a former dictator, Hugo Banzer, and took back a resource essential to life – their water.


2. Nine years later the public company reborn from that revolt, SEMAPA, is marked by an ongoing history of mismanagement and corruption which, combined with Cochabamba's rapid population growth, has left much of the city without the basic water they need and deserve.


In other words, Cochabambinos won the war in the streets but lost the battle to have honest and competent water service. In my chapter on the Water Revolt I was frank about this paradox, and have continued to be in my recent talks in the U.S.

What Schultz doesn't mention is that he has continued to beat away at #1, the variation of the familiar narrative.  David could beat Goliath, in this battlefield, then this could apply to the entire evil of "globalization", the washington consensus, neo-liberalism, which was "imposed on Bolivia", etc., etc..     For the past 10 years Jim Schultz and The Democracy Center have used Cochabamba as a justification for reversing policies that actually worked, and as a blanket justification for Evo Morales' misguided and impractical "solutions" like nationalization.   

Even critics of the Coordinadora concede that the Aguas De Tunari  concession was a "very bad deal", though as Roberto Laserna said it was "negotiable" implying that solutions like a freeze on water rates could have been bargained for.   But rationally, one bad deal, should not condemn other private or public foreign capital deals in Bolivia.   Brazil's State Oil Company contract to invest billions in exploring and producing national gas - with World Bank finance for the pipeline, was an undisputed success, that was negotiated in an entirely different time and space than the Aguas De Tunari deal.   No matter for Schultz and company, anything having to do with the IMF, pre-Evo governments, is inherently bad.   Evo's failed nationalization  policies have been spun as victories for the Bolivian people by The Democracy Group, to borrow the title of the Groups book:  Dignity and Defiance, Bolivia's Challenge To Globalization.

Cocha-results  

What Cochabamba produced was a perfection of a political discourse and ideology, that would appeal to many poorer Bolivians, and which would provide a rallying point for the social movements that catapulted Evo Morales to power.    These themes guide the government, and more ominously have been enshrined in Bolivia's Constitution where they will constrain future governments.  Not only is the Constitution rigid in many aspects including economics, it is also confusing and inconsistent  product of the internal contradictions of the ideological smorgasborg that produced it:  Indigenous sovereignity over land, and government control over underground resources is one telling example of the many potential headaches.    

Then there is the matter of practical governance.   Bolivian government comes with an ideological straightjacket, that forces the government to act within very narrow paramaters,  especially in economic policy.    Evo's recent calls for foreign investors sound hollow and insincere, since most official statements and actions show a predisposition to nationalize everything foreign owned    But, according to what MAS stands for, it necesarilly must nationalize everything in order to hold up what its been preaching.  
Anti-Americanism - never as harsh before the Cocaleros as it was in other Latin American countries has led to a useless conflict with the U.S.  Obsolete Marxist (or pseudo-Marxist) views of economics  suffused with traditonal Bolivian and Indigenista strains of resource nationalism,  are a recipe for failure and when it comes down to it, anti-modern.   The ideological cocktail with its mix of indigenismo, anti-americanism, social mobilization, and victories over Bechtel and later Oil Companies, while disastrous to Bolvia and inefective as policy, is irrestible to foreign observers, obsessed with anti-globalization themes.   Great as an exportable tale for foreign consumption, bad for anything real.  

 Just how destructive, is visible in  the follow-up to the Water War, the Gas Wars: was over a contract that would have involved Billions of investment in Bolivian gas fields and infraestructure, including a port in Chile to export Liquid Natural Gas -  a deal cruelly dismissed by Schultz as "Cheap Gas for Chile".  A government fell, investments dropped, and as a result billions of foreign investment have gone to Peru (with less gas reserves),  and Chile, Brazil and Argentina invested billions in facilities to import Liquid Natural Gas owing in large part to the unreliability of Bolivia as a supplier..  But to Olivera, Schultz, and company it was a great victory for people power!!!   You don't want to bother with such things as facts.

Evo Nationalizes Energy Companies

May Day Media Spectacle  "POWER!!!"

 Evo Morales following his previous May day tradition, has nationalized energy companies - from foreign and national owners, securing 80 percent of the electrical production and distribution is in state hands.

Note- This is not strictly a "nationalization" of a "private" or "privatized" company, the energy companies in Bolivia were never "privatized" or sold outright to foreign/private capital to begin with. . Most of the companies involved were companies where the Bolivian State held part ownership in association with private capital which managed them. Some companies had foreign investors, but others were Bolivian-owned, in the case of Cochabamba's company the workers held a large share of the stock. '
In fact, what the State is doing is a "forced" buyout of the rest of the stock in these companies, and assuming management control.


What this means,

First of all, there is always disputes over compensation for the value of these companies, inevitable in any transaction.

Potential international litigation. There are French and English companies who still have the right to contest this under investment-protection treaties.


Foreign Investment - The spectacle of soldiers taking over power plants, right after Evo Morales sent his Finance Minister to the U.S. to look for foreign investors, this simply confirms the governments unreliability, and double-talk.

This usually doesn't work. Venezuela bought out foreign and private interests in the energy sector under Chavez. Result - mismanagement with a power grid close to collapse. Colombia on the other hand, broke up its state monopoly, created a regulatory framework to ensure adequate delivery and consumer protection, and allowed private sector participation. It now produces enough energy to offer electrical power to blackout ridden Venezuela.  Bolivia's next door neighbor, Peru, also did something similar and has managed to accomodate that country's increased demand for power, reached remote customers, while offer stable rates for customers, 

Paradoxically, the MAS government has dismounted the regulatory bodies - Superintendencias- placing responsibility for supervision and consumer protection with the same ministry that will theoretically also be responsible for the entire chain of production, transportation, and sale of power to consumers and businesses.

Evo's record of running anything besides political campaigns is disastrous. this could result in politicized appointments, incompetent managent, less transparency and consumer protection, reduced independent oversight, and even corruption.  The classic case is the do-nothing Oil Company, YPFB which has been rocked by scandals, since Evo took over, and has turned Bolivia from being self-sufficient in oil products to buying even gas from Peru..

Evo Morales and the Populist Paradox --

Bolivian Economist Roberto Laserna has deconstructed Morales policies, Evo Morales and the Populist Paradox (in Spanish here), exposing the reality that he has benefitted:
1. From Neoliberal economic policies that created the climate for investment and set in motion the industries that are now generating income for the country, and
2  Political policies from "Neoliberal" governments that opened the political space for Evo Morales rise, and created institutional mechanisms that allow the government to transfer resources to many communities. . That would be the municipal decentralization and local community budgeting laws passed by Sanchez de Lozada in the mid-90's.

Private investment in the mid-1990’s, moreover, increased output of natural gas. Soon gas was being exported – very profitably – to Brazil. Thus, when Morales came to power, Bolivia’s economy was in a position to take advantage of the global price boom for raw materials. As a result, revenues increased, despite his government’s nationalist and statist policies, which drove away investment and hindered access to new markets.

Since 2005, Bolivian exports have increased six-fold, along with fiscal revenue. This money is distributed automatically to local governments, according to the model established by Morales’s predecessors, carrying resources to the farthest reaches of the country. But it is not only local governments that have benefited; through cash transfers created during the so called neo-liberal years, families have gained as well, most importantly through a universal and non-contributive old-age pension benefit given to persons over 60, which reaches slightly more than 30% of households.

Brazil cuts Bolivia Gas Purchases, Invests in Peru

While Evo Morales is praised by his usual international apologists for his dominant re-election and inaguration, the consequences of his disastrous econommic policies and ideological stupidity continue to ruin Bolivia's long term prospects.

Brazil - Bolivia's largest gas customer - has announced it will cut back on purchases of Bolivian natural gas.

Meanwhile Brazilian president Lula was conspicuously absent from buddy Evo's inagural ceremony. Lula happened to be in Peru with his ministers and top Petrobras officials, negotiating an energy pact which includes Brazilian investment for exploration of Peruvian oil and gas fields, and to help develop its petro-chemical sector.

As Bolivian writer and analyst, Humberto Vacaflor, wryly observed also absent was Christina Kirchner who was negotiating with Toyota. Over what? Over Argentine lithium, and the Japanese automaker cut a deal with the Argentinians. Bolivia, has the largest lithium reserves in the world, but in large part thanks to Evo and his silly ideology it looks Bolivia is again seen as an erratic and unreliable source.

While Bolivias government continues its self-defeatist anti-capitalist policies, its neighbors, with less reserves of things like gas and lithium, are able to get the investments and markets needed to help its people. Morales talks about industrializing natural gas and lithium. Meanwhile, it is Peru that is getting the know-how and foreign investment for its petro-chemical sector, and Argentina that is getting Toyota's investment. Socialism rocks!!

Neo-Extractivismo

Ironicamente, el modelo "progresista" Suramericano, no es nada mas que una version nueva del "extractivismo" tradicional de las epocas coloniales y mercantilistas. Una economia semi-estatizada que depende de exportaciones de materias primas.

El neo extractivismo
Domingo, 07 Febrero 2010
2010-02-07 07:50:51 Hernán Zeballos H. La plataforma energética, promovida por CEDLA, en debate los días 27 y 28 de enero, congregó a un conjunto de especialistas, para tratar el tema “Crisis...

HidrocarburosBolivia.com

Bolivia y su política en materia de hidrocarburos

Bolivia y su política en materia de hidrocarburos
Lunes, 14 Diciembre 2009
2009-12-14 07:59:55 Por Emilio J. Cárdenas Ex embajador de la República Argentina ante las Naciones Unidas - Evo Morales, como era previsible, acaba de ser re-electo como Presidente de Bolivia....

HidrocarburosBolivia.com

En 2006 Bolivia tenía autoabastecimiento de naftas e importaba un 30% de su diesel. Hoy la última cifra es del orden del 50% del consumo doméstico. Además, el año que viene se perderá la autosuficiencia que Bolivia lograra en 1954. No será nada fácil recuperarla. Se estima que tomará unos cinco años de hacer bien las cosas y unos 8.000 millones de dólares de una inversión que será difícil de obtener desde que pocos, muy pocos, confían en Bolivia. En rigor, ni los maltratados brasileños. Bolivia no ha reinvertido en el sector en el último quinquenio y las consecuencias estarán –muy pronto– a la vista de todos. En el futuro inmediato, Bolivia deberá importar el 20% de sus naftas y el 20% de su gas licuado. Porque lo cierto es que es poco, muy poco, lo que ha hecho el Estado en el sector. Entre el 2002 y el 2006 se perforaron 96 pozos. En los 4 últimos años, solamente 18. De horror como fracaso de gestión. Inocultable, por demás.

Top Gear goes to Bolivia!

Top Gear goes to Bolivia! BBC's Top Gear, IMHO the planets best car show goes to Bolivia - As in previous episodes, the trio of Jeremy Clarkson, James May, and Richard Hammond are given a set of tasks. First off they buy cars - sight unseen - on the internet, off local websites. They then hit the Altiplano, salt flats, and the La Paz-Coroico road (aka road of death) most definitvely looks to be fun...

Bolivia: Coca Es Mostly Cocaina.....Cocaine Production Up In Bolivia & Peru Down in Colombia

According to Reuters

LIMA (Reuters) - Cocaine production is growing fastest in Bolivia while Peru is on its way to matching output from Colombia, the top global producer of the drug, U.N. officials said on Friday.

Coca plant cultivation in Bolivia, which expelled U.S. anti-drug agents last year after accusing them of meddling in domestic affairs, grew 6 percent in 2008, according to the U.N. Office on Drugs and Crime's annual study of Andean nations.

Estimated cocaine production rose 9 percent to 113 metric tons in the impoverished South American nation.

This is what happens when you leave the fox in charge of the henhouse. The reality that Evo-pologists avoid or ignore is that Morales's main base of support is composed of people who grow coca that is almost exclusively used to make cocaine. They want to be able to avoid annoyances like the DEA so they can grow coca freely so they can sell it or make their own coca paste. So now it is easier to do such things as bribe cops/military people without the "gringos" there, and there is less incentive to do anything about it.

EDIT

Meanwhile, the UN also found that production also increased in Peru, part which can be attributed to neo-Sendero Luminoso types. Meanwhile growing of coca and production of cocaine actually fell in Colombia. Part of this might have to do with successes against the FARC, who both directly control some of the production and export as well as critical smuggling routes. And also moving against top Paramilitary leaders, who often acted with semi-sanction from officials because they fought the FARC. Critical in the Colombian conflict(s) and efforts against traffickers is territory. The more space in control or disputed by non-governmental armed bands, the more space that could be used to grow and produce cocaine. In a larger sense the conflicts with the guerillas also acted as a buffer against government actions against all parties dealing cocaine. Taking those players out of the equation allowed both direct erradication - as well as for traditional law enforcement to work against drug dealer.

Lula Smacks Down Evo

At an event inagurating a natural gas processing plant, Lula had this to say about Evo Morales and Bolivia as a natural gas supplier

I am very happy. If Petrobras continues on this path, there will be a day when I will call Evo Morales "Dear Evo, now we wil leave you in peace to sell gas to whoever you want to, Brazil doesn't need any more. we are self-sufficient" Its logical that strategically Brazil will continue buying, because for our own growth we have no interest in a poor neighbor. We need to grow......in our relation..its important that people understand, that when we fight less, we produce more..."

“Hoy estoy acá feliz de la vida. Si Petrobras continúa en el recorrido en el que está, va a llegar un día en que voy a poder decir a Evo Morales: ‘Evo querido, ahora nosotros te dejamos en libertad para vender el gas a quien quieras. Brasil no precisa más. Somos autosuficientes. Es lógico que estratégicamente Brasil va a continuar comprando, porque para nuestro crecimiento no nos interesa tener un vecino pobre. Tenemos que crecer. Pero para que tengas una dimensión de la relación entre nuestros países, voy a decir, y es importante que la gente comprenda, que cuanto menos peleamos, más producimos’”.

Not The First Time
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Last February Lula in a very significant speech in front of the Argentine Congress....also had this to say in reference to Bolivia's request for a voluntary reduction in gas volumes in order to comply with Argentina's requests...

We don't have gas, those who do don't exploit it as they should.

El presidente Lula da Silva, que concurrió a la cita con unos días de anticipación, describió perfectamente la situación con la siguiente frase en su intervención ante el Congreso argentino: ´No tenemos el gas... Algunos que lo tienen no lo explotan como deberían´.

Et Tu Lula?


So what gives? Isn't Lula Evo's ideologically-attuned buddy? In public Lula is all smiles with Evo, praising him to high heaven. But Lula's policy is Brazil's long-term strategic interest in achieving self-sufficiency in hydrocarbons. And through Petrobras they are laying down billions in investments - at home and abroad. Specifically it is investing in natural gas exploration and production to achieve self-sufficiency. Lula's government has just passed a new natural gas legislation, strengthening the regulatory framework and ending Petrobras monopoly to permit competition both in downstream and upstream.

Bolivia was once considered a long-term supplier of natural gas and strategic partner of Brazil. At the government of Brazil's heavy prodding, Petrobras invested heavily in developing Bolivia's gas reserves and laying the pipeline to Sao Paulo. Bolivia now supplies 50 percent of Brazil's natural gas. But Evo's government after three years in power is unreliable, and unpredictable as El Deber says. Even after the rift caused by Evo's very public humiliation .of Brazil and Petrobras during the "nationalization" media theater, Evo has had 3 years to make it right. But through ideological intrasigence, incompetence, and simple idiocity the Morales government has mismanaged its hydrocarbons industry neither able to produce as a "nationalized" industry and uncertain and risky for foreign investment.

Lula's seemingly out of character comments might carry a bit of payback for the May 2006 "nationalization". Or it simply may be frustration at 3 years of trying to work Evo Morales behind the scenes to back off a bit and accept the fact that Bolivia's hydrocarbons industry needs technical know-how and investment from abroad. Evo only seems to have ears for Hugo Chavez, and Lula may have simply given up. And he can afford to. At the rate Petrobras is going it will also be in a position to export gas and oil in quantities rivaling those of Venezuela. Chavez should also be worried.

Bolivia, Colombia: FARC Laptop: Evo, Ortega to Meet Marulanda at Summit

The laptops which allegedly were captured from the FARC camp are an interesting read. Colombian publication Semana has some n Interesting highlights. In general, it is a lot of back and forth correspondence among top levels of the FARC hierarchy, as would be expected from a member of the directorate charged with foreign affairs.
There is also quite a bit of chatter - almost obsessive - on their business dealings. They try to figure out how best to use money from Chavez - the $300 million the press talks about. In my opinion it could be Chavez granting them a contract to commercialize the $300 million worth of oil, from which they would get a huge commission, and could launder it through front corporations. Only in Colombia would Marxist-leninists have this kind of business savvy. The Uranium, sounds like a proposal one of their "contacts" made. When you have this kind of cash, people will try to sell you anything
.
Then you get to the heart of the matter of the matter. There is a lot of internal strategizing and debate between FARC commanders about how to effectively use their bargaining position with the hostages, to get international recognition as combatants, the "despeje" or "cleared zone" to further peace negotiations. And throughout its clear that they see Chavez as a key partner, even flattering his vanity. But definitively someone who can help them in undermining Uribe internationally, by upstaging him in these hostage dealings - and consequently strengthening the FARC's position internally.

"PATRIA O MUERTE" EVO
Evo, Ortega and Correa are described as being close to Chavez: the FARC commander emailing Marulanda/Tirofijo describes them as "patria o muerte" with Chavez "fatherland or death" literally.
Marulanda, the ancient and enigmatic leader of the FARC, who has been in the bush most of his adult life, will apparently have a meeting with Chavez. The Venezuelan will be accompanied by Evo, Daniel Ortega and Correa, in what is described as a "summit of commanders".
Here is a quote from that communication.

Octubre, 4 de 2007
Camarada Manuel. Cordial saludo. Del diálogo con Chacín, lo siguiente:

1- Se proseguirá el esfuerzo por hacer realidad la cumbre de comandantes en el Yarí. De lograrse, Chávez iría acompañado por los presidentes Ortega, Evo y Correa, que son “patria o muerte” con Chávez. De todas maneras habrá una reunión privada Chávez-Marulanda. "

No doubt many discussions of Boliviarian projects, complaints about the empire and comparing notes on coca production.

-As an aside, I was struck by the ideological common ground between Evo, Garcia-Linera, the MAS leadership and the FARC. Their worldview, an extremely paranoid and rigid view of the empire, and its domestic "oligarchic" partners. The delusions they somehow have a "valid revolutionary alternative" - nothing more than the same old Marxist-Leninist cliches, with some twists.

Another letter, describes the topics that will be brought up by these characters. The negotiations with the Colombian government, and a "common geo-political strategy".

3- Ya estoy enterando a Ricardo y a Marcos de todos los pormenores. Los dos camaradas serán recibidos públicamente por Chávez antes de su reunión del 12 con Uribe en la frontera de la Guajira. Esperamos nuevas directrices del camarada Manuel. Por ahora les he explicado que su misión es reiterar a nombre del Secretariado lan exigencia de despeje de Pradera y Florida. Agradecer a Chávez su invaluable labor de intermediación. Que la cumbre Chávez-Marulanda en el Yarí con el acompañamiento de los presidentes Ortega, Morales y Correa, será decisiva en la búsqueda de fórmulas para el acuerdo y para la estrategia geopolítica común. Plantear que estamos analizando sus propuestas de fecha para la reunión secreta con el Secretariado. Convocar a los gobiernos del mundo, personalidades y organizaciones políticas y sociales a rodear la intermediación del Presidente Chávez.

The FARC clearly sees Evo and Ortega as part of this "Boliviarian" anti-US block, that wants to weaken Colombia's government, decrease US influence, and build up Chavez. The FARC want legitimacy as combatants, the clearing of a "demilitarized zone" within Colombia while negotiations for their release and an eventual peace plan take place. They want to discredit and hurt Uribe as much as possible in the meantime. Externally, that means giving Chavez - and partners Evo, Ortega, Correa - leverage by showing they can be effective intermediaries with the FARC by releasing hostages. Evo and Correa can also contact influential countries on behalf of these "efforts", without carrying the Chavez stigma (in theory).

In some ways this is nothing more than the FARC giving a percentage of its future earnings to partners like Chavez - and Evo to a lesser degree. Those earnings, are of course, the ransom for the hundreds they kidnapped and hold hostage for years. This is an ugly situation.
Judge for yourself, the 36 page PDF made available by Colombia.

Bolivia: New Constitution, Change For Change's Sake,

So MAS "passed" its "new constitution", steamrolling it through the assembly.
Which brings me to this piece by Jim Schultz of the Democracy Center, a general pro-Evo, pro-MAS group. Seemingly as a rebuke to the Prefect of Cochabamba and many urban residents who have opposed the government, Schultz describes the large pro-MAS pro-MAS constitutional assembly.

Jim quotes some of Bolivia’s poorest citizens, marching through Cochabamba, showing their “agreement with the new constitution”, “recover and industrialize natural resources.” As he warns us to not “underestimate” the “passion” of Bolivia’s rural poor, which is expressed in their demanding “changes vital to their children’s future.”

What makes this whole affair tragic, is that these poor folks are putting their hopes and aspirations into the hands of radicals, whose program (both through the constitution and writings) is utterly and completely destined for failure.

There is no middle ground here. In this era to reduce poverty you need: laws and regulations to impartially and fairly mediate the rights of all actors in society, foreign investment to spur the growth necessary; a vibrant private sector to serve as the engine of the economy to create jobs; an openness towards the world economy; and a “small but muscular” state to provide for the basic human needs, including education, health, basic sanitary needs, and to take care for those who cant help themselves, all done in a decentralized and efficient manner.

MAS’ constitution wants to permanently enshrine in the constitution, an obsolete centralist vision of the State. A state-owned, and planned economy, with some small concessions made for the private sector. This is the same corporatist vision which might have seemed right (and new) in 1952, but in many ways reinforced the old traditional clientilism among the middle class and crony capitalistism Ultimately, it led to a situation where Bolivia went into debt and hyper-inflation fueled in a significant part to pay for state-owned enterprises.

THIS IS NOT CHANGE!!! How is returning to this progressive? How on earth can anyone think this will lead to something better? This is revolutionary sloganeering acting as reality. Wishful thinking of the most perverted form.

All it will do is destroy the chances of those who have joined –or aspire to join- the 21st century, dragging the country down to even more mediocrity. And the poor, the poor will be the ones who will always pay the most.

Bolivia: Founding Fatalism, MAS' Bloody Constitution

This article in El Deber is a first-hand, rather gripping, blow-by-blow account of how the the officialist group, in Constituent Assembly managed to steamroll through the initial text of the Constitution while opponents fought police. Evo's allies did this by convening in a military school custodied by the police, the army - and crucially - by pro-MAS mobs brought into the city. As I had posted earlier, these officialist groups explicitly threatened the opposition in the assembly, claimed they were going to block the entire city, and to hammer the points home home, allied groups killed two dogs symbolizing the "opposition".

What happened was effectively a lock-out of the opposition, those entering would have to face the angry mob, something that happened later in the Congress in La Paz.

But in Sucre, upon hearing the news of the convening of the "assembly" the students - rose up against the police and set off to confront the assembly. They were joined by a good number of Sucre's citizens in what in effect turned into a battle of two mobs. Even the hardened veterans of Bolivia's street violence - the MAS cocaleros and El Alto activists & the cops who used to beat them up - could not contain the students and residents.
And when the word came down that a protestor was killed, the MAS assembly leader - herself a veteran of many a disturbance, suddenly threw it into overdrive, calling for a quick vote to formalize approval of all the articles. On the outside, even local MAS supporters had joined in, and were close to breaching the gates of the military school. But, it was too late, the assembly had voted, and its members fled.

And that is just another tragic and bizarre chapter in Bolivia's crazed political life. A constitution, which in theory should be the starting point of the Nation's legitimacy, passed by an officialist convention, while opposing mobs and the cops fought it out just outside.

EDIT Here is a first hand account from a Bolivian blogger in Sucre. Here is a good compilation of videos from the events from another person. The writings of a Sucre Blogger.

Chavez Threatens Bolivian Opposition

Looking for proof Chavez has his claws into Bolivia, and that Evo Morales seems almost a puppet of the Venezuelan strongman? Yesterday Chavez directly threatened the Bolivian opposition on his weekly show, broadcast from Cuba of all places. Saying that Venezuelans "will not sit still" if Evo is overthrown or killed by the Bolivian "oligarchy", and that it would be a "Vietnam of machine guns" they would face. He also helpfully indicated that "compromise" with "oligarchs" was impossible.

While the lemmings who are quick to chime in about all sorts of abuses of soveirgnity by the US, World Bank, and IMF, they ignore the Chavista petro-kleptocracy's heavy handed diplomacy. And heavy handed it is. Petro-dollars and bad advice are spread around to ideological allies. And the Boliviarian Supremo then takes a paternal interest in seeing his schemes go through. Take the case of Bolivia's Constituent Assembly - which Chavez brought up in his tirade. The MAS "proposal" is almost a cliff notes version of Chavez own "revisions" to Venezuelas Constitution. That Evo Morales has to contend with an effective opposition, which knows what lies in store if the document is approved, must drive Chavez nuts.

Morales selectively appeals to Bolivian's strong nationalism only when convenient. It is clear he will put his ideological preferences over sovereignity, as when he shamefully celebrated Che and the Cuban communist invaders of 1967 over the protests of his own Army. A U.S. Ambassador making comments about Bolivian politics is a sin, but allowing Evo's ideological mentor and paymaster to bully his opponents is perfectly ok within this context. One word for that: hypocrisy.