Spotlight on Bolivia

Bolivia, one of South America’s poorest countries, doesn’t take centre stage very often. But the spectre of another round in the hemispheric battle between Venezuela’s leftist leader Hugo Chavez, his mentor, Cuba’s Fidel Castro, and the Bush Administration, hangs over this nation of nine million people.

On December 18, Bolivians will go to the polls to elect a new president. The election, originally scheduled for December 4, was been postponed as the country's politicians squabbled about a contentious redistribution of congressional seats. But interim President Eduardo Rodriguez knocked heads together to ensure there's a vote before Christmas. The political elite in this country know that if elections aren't held soon it will be back to the streets for thousands of disgruntled Bolivians.

The leading candidate in this election is a coca farmer, Evo Morales, whose platform includes nationalisation of Bolivia’s rich reserves of oil and gas, and decriminalising coca-growing, the source of cocaine. Morales is the pin up boy of the populist anti-American left that is led by President Chavez and Cuba’s Fidel Castro. He attacks the “neo liberal” economics that organisations such as the IMF and the World Bank have imposed on many South American countries, including his own.

The Bush Administration thinks that the Cubans and the Venezuelans are the puppeteers behind Morales. On August 16, Secretary of Defence Donald Rumsfeld said, "Any time you see issues involving stability in a country, it is something that one wishes would be resolved in a democratic, peaceful way," but, "[t]here certainly is evidence that both Cuba and Venezuela have been involved in the situation in Bolivia in unhelpful ways".

And when Morales ran in the 2002 presidential election campaign, the US Ambassador to Bolivia Manuel Rocha warned Bolivian voters that if Morales were successful, the Bush Administration would cut off aid to the struggling country.

Such a ham-fisted approach to Bolivia by the US is hardly the way to ensure that relations between the two countries are harmonious. The US is viewed as “imperialistic” in South America because of such rhetoric and tactics, according to Julia Swig of the New York based Council of Foreign Relations. “Unfortunately, what's happened is that America says democracy and Latin America hears imperialism,” Sweig told the Miami Herald on September 25.

The appeal of Evo Morales for many Bolivians is that he is, like them, an outsider in his own country. Morales is an indigenous Bolivian - not a member of the small but immensely powerful European elite that still controls so much of the power structure of this country. Morales has stood up to the Americans who are spending billions of dollars trying to eradicate coca crops, because, they argue, it is the source of so much of the cocaine that finds its way into the US. And Morales does not come from the wealthy Santa Cruz area - a part of the country that has grown rich and politically powerful on government largesse and oil fields.

Morales is a “golden hope” for activists and NGOs who are opponents of international institutions like the World Bank and the IMF. In Bolivia’s case the IMF and the World Bank are blamed for forcing the country’s politicians to allow private sector ownership and development of its substantial oil and gas assets. Morales and his Movement towards Socialism (MAS) played a key role in forcing the resignation of two presidents - Gonzalo Sanchez de Lozada and Carlos Mesa - in the past three years. The issue that forced both men out of the Presidential Palace in La Paz was how to develop oil and gas field.

Bolivia’s natural gas reserves are, without doubt, an enormous source of potential wealth for the country. There is estimated to be around 54 trillion cubic feet of gas that has been discovered so far, and companies drilling in the country regularly make large new discoveries. Likewise oil. Since 1997, proven oil reserves have increased from 116 million barrels to over 500 million barrels today.

The growing importance and potential of the oil and gas sectors has been largely due to the influx of foreign capital since these sectors were privatised in the early 1990s. But the move to re-nationalise these assets is driven by a belief that while foreign companies such as the failed Houston energy giant Enron, France’s Total and South American player, Petrobras, have made good money from their Bolivian assets, Bolivia’s overall wealth has not increased accordingly. GDP per capita dropped from US$3,000 in 1999 to US$2,600 in 2004.

For Evo Morales the answer is simple - do what Venezuela’s Chavez is able to do. Chavez regularly raids his country’s state-owned oil company Petroleos de Venezuela to fund social and economic programs for the 60 per cent of Venezuelans who currently live on around US$2 a day. It helps that Venezuela is the fifth largest oil exporter in the world and that we live in times of booming oil prices.

Morales is convinced that if he could re-nationalise Bolivia’s oil and gas assets it would provide an “economic solution” for his country, where around 65 per cent of the population lives below the poverty line. “The state should be in charge of the exploration, the industrialisation and the commercialisation of hydrocarbons. This could be an economic solution,” Morales said in a December 2003 interview.