[lbo-talk] IMF cuts off credit to Bolivia

Marvin Gandall marvgandall at videotron.ca
Wed May 24 08:29:45 PDT 2006


Yoshie wrote:


> On 5/24/06, Doug Henwood <dhenwood at panix.com> wrote:
>> Colin Brace wrote:
>>
>> >[with of course the obligatory digs at Evo from the left]
>> >
>> >http://www.wsws.org/articles/2006/may2006/boli-m24.shtml
>>
>> Digs? Or are they just pointing out some real problems (as if a
>> revolutionary Trotskyist government would have an easier time of it!)?
>
> WSWS's single-minded focus on Evo shows that it's going by its usual
> "revolutionary" fomulas, rather than a close look at Bolivia's
> reality. The most important figure in resource renationalization in
> particular and economic policy in general in Bolivia's government is
> Andres Soliz Rada , the hydrocarbon minister. He's the architect.
> Evo is the spokesman.
=========================== Here's how the Economist, fingers and toes crossed, weighs the constraints on the MAS government:

Bolivia Dreams and realities May 18th 2006 | LA PAZ AND SANTA CRUZ
>From The Economist print edition

The checks on Evo Morales's revolution

IN THE five months since Evo Morales won Bolivia's presidential election, he has made enough headlines for a five-year term. Since declaring "long live coca and down with the Yanquis" in his acceptance speech, he has nationalised the gas industry, signed a trade treaty with populist Venezuela and communist Cuba, and accused Bolivia's judges of "representing the colonial state". All this seems to place Mr Morales on the extreme wing of Latin America's expanding contingent of leftist presidents. The drift is worrying, but it is too early to conclude that his government will be as irresponsible as his rhetoric.

Mr Morales's indigenous blood and his absolute majority in the election give him unprecedented legitimacy. He wants to reshape Bolivia, but he faces limits. On July 2nd Bolivians will elect a 255-member constituent assembly, charged with drafting a new constitution. Mr Morales has his eye on winning as many assembly seats as possible for his Movement Towards Socialism (MAS). Only in the writing of the constitution will it become clear whether Mr Morales will strengthen or undermine democracy and the market economy.

The government's constitutional proposals are not encouraging. Héctor Arce, an adviser to Mr Morales, says that elected representatives have failed Bolivians. He wants a much greater role for plebiscites and referendums, reserved seats in Congress for indigenous representatives, and no term limits for the president. "A government should be in power for as long as the people want it to be," he says.

Mr Morales has been chipping away at the separation of powers. He cut public-sector salaries by half, an austerity measure that had the effect of encouraging mass resignations from the bureaucracy and the courts of officials not aligned with MAS. His most ferocious diatribes are directed at the courts and the media. Four of the 12 Supreme Court justices have resigned; the rest (along with the members of the Constitutional Tribunal) decried the president's "assault" on judicial autonomy. Rumours abound of officials harassing unsympathetic editors.

The main check on MAS's constitutional ambitions will come from Bolivia's nine departments, several of which want greater autonomy. Mr Morales supports transferring responsibilities to provinces that want them. But there will be a fight over finances. Santa Cruz, the richest and most autonomy-minded province, contributes 42% of the country's tax revenues but receives just 22% of public expenditure. It hopes to increase its share to 33%, but that would come at the expense of poorer provinces sympathetic to MAS.

Even pricklier is the subject of land. The government this week said it would distribute state land and unused private land to peasant farmers. Under Bolivian law, land that is not used productively for two years "reverts" to the state to be redistributed. No previous government has dared to implement the measure in Santa Cruz, the heart of Bolivian agribusiness but home also to many less-productive landowners, some with dubious title.

Much as Mr Morales would like to seize power from Bolivia's traditional elites, he may not have a free hand. More than one-third of the constituent assembly's seats are reserved for electoral runners-up, and a two-thirds vote is required to approve a constitution. MAS will thus need allies.

Something similar applies to energy nationalisation. The government has temporarily raised royalties from 50% to 82% at the two biggest gas fields. But it will have to settle for less if it is to get the outside investment it needs. Brazil's Petrobras, the biggest investor in Bolivia, has threatened to stop refining in the country. The government now talks of compensating Petrobras with gas. Mr Morales wants to be radical, but reality may yet stop him.



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