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Bolivia and Brazil

To nobody’s great surprise, Bolivia’s President Evo Morales has won a third 5-year term by a landslide majority. It’s no surprise because Bolivia’s Gross Domestic Product (GDP) has tripled since he took office in 2006. The number of people living in poverty has fallen by a quarter, even the poorest now have the right to a pension, and illiteracy has fallen to zero. Of course he won.

What has happened in Bolivia seems as miraculous as what happened in Brazil, where another left-wing president, Luiz Inacio “Lula” da Silva, took office in 2003. The economy started growing at 5 percent a year, unemployment fell steeply, and some 40 million Brazilians, almost a quarter of the population, were lifted out of poverty. Lula’s former chief of staff and successor as president, Dilma Rousseff, is also likely to win another term in office.

Is there some secret they share? Many other South American economies have been growing fast too, but without the dramatic change in the distribution of income that has happened in Brazil and Bolivia. Even the late Hugo Chavez’s “Bolivarian revolution” in Venezuela, for all its anti-imperialist rhetoric and despite the country’s great oil wealth, has not delivered a comparable transformation in the lives of the poor.

Evo Morales has another claim to fame, too. He comes from the poorest of the poor: “Until I was 14, I had no idea there was such a thing as underwear. I slept in my clothes… (which) my mother only removed for two reasons: to look for lice or to patch an elbow or a knee,” he wrote in his recent autobiography. He spent only a short time in school, and he did not become fluent in Spanish until he was a young adult.

Morales grew up speaking Aymara, one of the languages spoken by Bolivia’s indigenous peoples. They are a two-thirds majority of the country’s population, but in almost 200 years of independence Morales is the first indigenous Bolivian to become president (all previous presidents were drawn from the 15 percent white minority). And his government passed a new constitution in 2009 that entrenches indigenous rights in politics and in law.

So should we hail the arrival of a new and better model for economic growth and social justice? Unfortunately, no. The only economic secret that Lula, Dilma and Evo all share is that if you want the economy to grow, you must not frighten the horses.

The international markets got ready for a meltdown when Lula, a self-taught former trade union leader with a penchant for radical rhetoric, became president of Brazil, but he turned out to be the very soul of fiscal responsibility. And although Morales nationalised a large part of the Bolivian economy – oil, gas, tin and zinc mining and key utilities – he negotiated deals that compensated foreign investors and kept the markets happy.

All the rest of it – things like Morales calling Barack Obama “an imperialist” at the UN General Assembly meeting in New York last month, and Rousseff cancelling a scheduled state visit to the United States last year after Edward Snowden revealed that the US National Security Agency had been spying on her emails – simply doesn’t worry serious investors so long as the numbers come out right and the financial and fiscal environment is predictable.

So Morales has not been punished by the markets for being a “socialist”, and neither has Rousseff. Both still have strong support at home, too. Unlike Morales, Rousseff didn’t get enough votes in the first round of the presidential election earlier this month to avoid a run-off on 26 October, but she will probably win again even though the Brazilian economy is now teetering on the brink of a recession.

Despite all the similarities, however, comparing Brazil and Bolivia is rather like comparing apples and oranges here. Brazil has a very large and diversified internal market (fourth largest car-maker in the world, for example), and has twenty times as many people as Bolivia.  The latter has an economy that is almost totally dependent on the export of commodities, mainly oil, gas and minerals.

Bolivia’s soaring GDP of the past decade, and the modest prosperity it has brought to what was South America’s poorest country, is mostly fairy gold. What goes up usually comes down again eventually, and what drove Bolivia’s GDP up was almost entirely rising commodity prices. When they come down again, so will the GDP, the government’s income, and its ability to support even the sketchiest outline of a welfare state.

In the meantime, Morales has spent the extra money wisely, and it will be very hard for any successor to abandon this kind of “social spending”. He has also made it normal for Bolivia’s indigenous majority to have a big say in policy decisions at the national level, and that too will be almost impossible to roll back. He has even built up big financial reserves to cope with falling commodity prices. But he has not really transformed the economy.
To shorten to 725 words, omit paragraphs 4 and 5. (“Evo…law”)

Bolivia: Race and Revolution

19 December 2005

Bolivia: Race and Revolution

By Gwynne Dyer

Bolivia has had more presidents by far than any other country in South America, mainly because so many of them were overthrown long before their terms ended. They were also all white, even though the majority of Bolivia’s population is “indigenous”, descended wholly or in part from the Indians whose ancestors already lived there as subjects of the Incan empire at the time of the Spanish conquest five centuries ago. So what are the odds that Evo Morales, Bolivia’s first indigenous president, will survive a full term of office?

Morales, who won an absolute majority of the votes in last Sunday’s presidential election, faces not only the usual hazards of life as the president of South America’s poorest country, but also the threat of American intervention to overthrow him. As a socialist whose declared goal is to “end the colonial state” and a leader of the coca farmers who promises to lift the ban on growing coca leaf, the crop from which cocaine is produced, he is deeply unpopular in Washington.

In the past, policies that are unpopular in the United States have proved to be bad for the president’s health in a number of Latin American countries. To those who argue that the Bush administration is too deeply mired in the war in Iraq to contemplate acting against Morales, the pessimists point out that the US found the time to organise the overthrow of the president in Chile in 1973 despite being neck-deep in the Vietnam war. The election of Morales, they fear, will finally focus Washington’s attention on how countries all over Latin America are rejecting US tutelage.

The main target of Washington’s wrath so far has been Venezuela, whose president, Hugo Chavez, has built an unassailable domestic base (he has won eleven elections and referendums in the past seven years) by spending a lot of the country’s oil revenues on the health and education of poor Venezuelans. He has built a close relationship with Cuba’s Fidel Castro, whose regime has obsessed US administrations since the beginning of the 1960s, and he is now providing Venezuelan oil at a discount to other Caribbean and Central American countries (and even to poor Americans).

It is Chavez’s incendiary language that gets the headlines — last month he called President George W. Bush a “madman, a killer and a mass murderer” — but his aim is serious: to free all of Latin America from the grip of neo-liberal economic policies, indeed from American influence in general. Last July’s launch of Telesur, a new television network whose aim is to provide an alternative to US-based news and analysis for all Latin Americans, is a case in point. It is based in Caracas and 70 percent financed by Venezuela, but it is also backed by the governments of Argentina, Uruguay, Cuba and Brazil.

The larger reality is that while the Bush administration has been obsessed by its grandiose plans for reshaping the Middle East, the real transformation has been happening in America’s own “back yard”. Left-wing governments have come to power in Brazil and Argentina, the two biggest countries of South America, and in a number of smaller countries as well.

Like Chavez in Venezuela, they combine a commitment to the poor and a rejection of the project for a US-dominated “Free Trade Area of the Americas” with a pragmatic respect for the rules of the free market: no nationalisations (except for oil and gas) and more or less balanced budgets. With this month’s presidential election victories by Michelle Bachelet in Chile and now by Evo Morales in Bolivia, virtually all of South America except Colombia and Peru is now part of this nascent left-wing bloc.

But the continent is seeing more than just a comeback in modern dress by the traditional left. The Indians and part-Indians who form a downtrodden majority in most of the Andean countries are staging their own comeback. They mostly talk in terms of winning elections and re-writing constitutions, but they basically share the view of Antauro Humala, leader of the Etnocaceristas in Peru: “There are four races, black, white, yellow and copper. We are the copper people and I want us to be recognised as a race.”

Hugo Chavez’s Indian and black ancestry is written all over his face, and explains much of his popularity with the majority of mixed-race Venezuelans who felt excluded by the dominant white minority in that oil-rich country. Evo Morales is even more clearly a descendant of the Incas who ruled the central and southern Andes before the white conquerors and settlers arrived, and he wants the two-thirds of Bolivians who share his heritage to hold the power in their own country at last.

It will get very fraught in Bolivia when Morales starts re-writing the constitution to include the excluded, as he has already sworn to do, but the ethnic solidarity among Bolivian Indians that has helped him into power will also make it very hard for Washington to overthrow him. So long as he avoids the civil war that some of the more extreme members of the white minority may now try to provoke, he will probably manage to serve a full term in office. What he does with that term may change Bolivia beyond recognition.


To shorten to 725 words, omit paragraphs 6 and 9. (“The larger…as well”; and “Hugo…last”)