Bolivia's Nightmare (excerpts):
Evo Morales and his party, MAS, have led a successful crusade against foreign investment in Bolivia the last couple of years. Foreign investment has dropped to one tenth of what it was in 2003. By forcing the cancellation of foreign contracts and the introduction of confiscatory new taxes, Morales has prevented Bolivia from developing natural gas reserves amounting to 52 trillion cubic feet.
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One only needs to look at Morales' own life story to realize his own deprivation, like that of so many other Aymara Indians, was the result of nationalism, populism, and socialism, and not, as he maintains, of globalization.Why did he become a coca grower in the 1980s? He was born in Isallavi, in the tin-mining region of Oruro, at a time when tin mines lay in ruins. The reason for their decline was the 1952 revolution, which "nationalized" them and created a bureaucratic mining entity known by its acronym COMIBOL. The revolution raised miners' salaries by 50 percent but failed to keep up investments, so production collapsed. Eventually, thousands of families, among them the Morales family, had to move elsewhere.
Now Evo Morales wants to do to the natural gas fields of Tarija what the 1952 revolution did to the tin mines of Oruro and other parts of Bolivia.
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In 1953, the revolutionary government had undertaken land reform, expropriating those estates it deemed unproductive and handing them to some peasant associations. Restrictions on property rights were so abundant and legal frameworks so dodgy that a few years later Bolivia had to import food because its unproductive minifundia were useless. Unlike Taiwan's agrarian reform, which created a property-owning mass of peasants, Bolivia's revolution undercapitalized the land. So when Evo Morales arrived in Yungas, he realized agriculture was in no better shape than mining.Now Morales is proposing to do to his country's farms precisely what was done to the land in 1953.
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Morales accuses U.S. capitalism of impoverishing Bolivia. But the U.S. should actually be faulted for funding populism and socialism! Between the start of the 1952 revolution and Morales' internal migration in the 1980s, nine tenths of the money Bolivia received from abroad were grants and soft credits from the U.S. By 1957, the United States was subsidizing 30 percent of the government's budget. With this encouragement, more nationalizations took place in the late 60s under general Ovando and in the early 70s under general Juan José Torres. Needless to say, the protectionist policies in vogue throughout the region, including import substitution, were dominant under most Bolivian governments.
Depressing.
Posted by Walter at December 27, 2005 11:04 AM