Source: El Universal
Two years of riots, roadblocks, and instability have culminated in today’s impossibly important presidential election in Bolivia.
Bolivia matters because as Bolivia goes politically, so goes South America. The country is often compared to Tibet but politically, it could also (imperfectly) be compared to Iowa, Ohio, or Peoria, Illinois. What direction this wind blows may influence events all over the continent.
There’s more to that, though. Far-left Evo Morales is the current frontrunner. If he gets 50% plus 1 vote, he becomes president outright and if he gets less than that, the election moves into the Senate. Anything can happen.
Morales is an acolyte of Hugo Chavez and Fidel Castro. Recent news reports from Bloomberg say he intends to chase out all foreign investment and hand it over to Venezuela’s highly politicized state oil company, PDVSA. (So much for national self-determination!)
Bolivia is an important exporter of natural gas to Argentina, Brazil and, indirectly, to Chile. If Hugo Chavez controls those growing countries’ natural gas supply, it could mean that Chavez, Castro and Morales control those countries’ affairs well beyond their own political or economic heft.
But there are shades of difference in impact: Brazil is the biggest buyer of the energy, but also has the most diversified economy, meaning that it is the least vulnerable to an energy cutoff in case of a disagreement. That said, Brazil’s energy investments via Petrobras currently amount to 80% of Bolivia’s economy, and there are leftists in Bolivia who specifically want Petrobras out. A Morales victory may mean they get their wish. Oddly enough, Brazil has been acting quite weakly in the face of this challenge to its interests and recently, President Lula of Brazil made pro-Morales statements, suggesting that he intends to appease the axis of Castro-Chavez-Morales further. Maybe because he is terrified. Maybe because he has ideologicial space to do it. But it doesn’t sound like a long term plan.
Argentina and Chile are more vulnerable to an energy cutoff, and Argentina in particular because it is unlikely to ever get any credit, given its atrocious treatment of private bondholders still fresh in the minds of world financial markets. Right now, commodity prices are high, so no big deal, cash on the barrelhead suits Argentina just fine. But if world soybean prices fall, it could be a different story. Argentina (and Brazil) are ultraefficient agricultural producers and soybeans are among their top cash earners. Argentina as a result has made a direct deal to ship natural gas 4000 miles to Argentina in a long pipeline that will bypass Bolivia.
Chile is vulnerable too, because it must buy Bolivian natural gas from Argentina due to the lingering impact of the 1871-3 Pacific War, which cut off Bolivia’s access to the sea. Bolivians are still bitter about it and won’t sell natural gas to Chile (with its vast mineral industry which requires natural gas) as a result. A sea access is important to Bolivia because natural gas must have a land pipeline to transport, and must have a port to export. There is no other way to do it. If Argentina ever runs short, Chile will suffer. Chile, as a nation, though, is no fool, and has aggressively pursued new deals with Indonesia, Peru, and Trinidad to prepare for that inevitable instability from its own region. So like Brazil, it has some plans in case of a Morales emergency.
Maybe this will temper Morales about his choices, given that all three countries are doing something to prevent Morales from calling the shots, but all is null if Hugo Chavez is running the show. Will Morales let Chavez run the Bolivian energy show? That is the question.
For Bolivia itself, a Morales presidency would be a disaster. He has no ideas for economic growth other than expropriation and chasing out foreign investment and is far too close to Chavez and Castro. I don’t think he can be a pragmatist, given his choice of patrons – they certainly aren’t!
Morales completely misses the economic failures of both regimes, neither of which has any long term future, because socialism does not work and people in the end always desire freedom. Socialism is nice when commodity prices are high and there’s lots of pork-barrel money to fling around to favored cronies, but when commodity prices fall, socialism turns to rationing and repression in no time. The socialist model being pursued by Chavez, Castro, and Morales could bode very ill for regional integration or continental prosperity in a raw-materials-prices downturn, which is all an anti-globalist country can produce. China is happy to eat all of their lunches.
But what could it mean for democracy? Bolivia has a free press and under Morales, that that could come to an end. Bolivia’s also scored much higher than the past in economic freedom – I’ll find that chart, and that trend could end. Energy companies already have cut investment and on new exploration, they have moved out fast. Bolivia also has people marching in the streets demanding free trade with the U.S.
Bolivia’s made some strides in its eastern regions for development, coming to resemble another Brazil or Argentina in terms of living a normal life and having normal choices and normal prosperity, due to producing something of value by world standards. It hasn’t helped everyone but it has created a real middle class however small. This region has industrious immigrants and attracts a great deal of internal immigration due to the creation of actual jobs. In the west, where huge government spending is the rule already, the vast government crowds out the private sector. Many in those areas will vote for Morales in the desperate hope for more government handouts because other opportunities are unimaginable.
Morales has already threatened coercion, in the form of roadblocks, if he doesn’t win the election. He has about 30% or 35% support, and many Bolivians intend to vote for him just to give him his shot at the office and to let him see how hard it is to govern. Some even say they hope for Morales’ own people to get tired of him and throw him out and see how he likes it. But voters may be taking a bigger risk than they realize if Morales intends to become a dictator.
But Morales also has very high negatives from those who are supporting other candidates. There is some speculation that the people of Santa Cruz, fearful of seeing their energy-rich province being made into the damaged low-production socialist operation that Hugo Chavez has made of Venezuela’s oil fields, along with his firing of talented people and replacing them with political cronies, will secede. And Brazil and Argentina have been talking to them about it, possibly understanding the danger Morales poses to the entire region.
Anything can happen now. One thing is for sure: If Morales tries to turn Bolivia into a socialist wasteland, instability and strife will follow.
But even without Morales, all is not lovely. Morales has only been possible due to the messes made by other administrations and I’m not talking about President Gonzalo Sanchez de Lozada who definitely did do something to help Bolivia. But others, who brought socialism instead of freedom. Besides this, there is the complicated issue of the drug war and its missteps.
The greatest ace Morales has is that Bolivia’s growth overall remains low, much lower than it should be, something like 1.2% a year, unacceptable in a developing country where double-digit growth is needed. Does poverty end a need for democracy? Socialists in the Castro camp would argue so, but I am not so sure about Bolivians. As the world itself marches in the streets for democracy, in the most remote and poor places, there is nothing about Bolivians that would suggest freedom, democracy and prosperity are the inheritance of everyone except them.
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Will Bolivians elect Morales? Bolivia’s bloggers have done a magnificent job shedding different parts of light on the issue. Eduardo Avila has written that Bolivia’s poor have never had a president from among them, so Morales amounts to a great step forward for them. This is ironic, because his ideas derive from 19th-century failed German philosopher Karl Marx, along with some indigenous concepts that don’t hold up well in the era of globalization. Miguel Buitrago and Miguel Centellas have described the election dynamic in Bolivia, with one of them noting that Bolivians often shift their voting choices at the last minute. Many Bolivian voters were undecided even when the last polls were conducted.
Most of the bloggers are doing live-blogging or something close to it, so here are some good choices to have a look at as the polls go on and the results come in:
Eduardo Avila at Barrio Flores has a truly riveting account of his experience on the campaign trail of one of the candidates, and it might be Morales, given his past bloggings. He, however, declines to endorse anyone. Even if it is Morales, Eduardo has the voice of a sane person, so it’s great reading. He forecasts that Morales may win very big, not necessarily the 50% plus 1 majority it will take to send the vote into the legislature but a record high for the popular vote. The whole thing is a must-read here.
Miguel Buitrago at MABB has some statistics and projections as the election goes on here.
Alvaro Ruiz Navajas at Off Topic has a very interesting item about how kleptocracy contributes to dictatorships and how budding dictators often go into politics as a quick way to get rich – it’s full of food for thought here.
Miguel Centellas at Ciao! has the last polls on the Bolivian elections and some important details about how even a majority of the votes for Morales won’t necessarily mean he becomes president due to the breakdown of Senate seats – it’s a must-read here.
Matthew Shugart at Fruits and Votes has a good discussion of the structural political picture behind the election here.
Boz at Bloggings By Boz doesn’t have anything yet but is watching, so keep an eye on him too, here.
My own furious ravings about Castro and Morales are over at Babalu here.
In the media:
El Universal has a great tape of events here.
La Razon has more coverage here.