Adventures in Bad Journalism

Over the weekend that hotbed of careful journalism, the Washington Times, managed to find a little space to discuss Bolivia in an opinion column by a former Reagan Administration official named Norman A. Bailey. The spin of the piece, like articles I’ve seen previously in papers such as the New York Times and New York Post, is essentially that Bolivians are either stupid or misled because they aren’t rushing to sell off the country’s vast natural gas reserves to foreign corporations. Here’s a taste:

“Bolivia is on the verge of nothing less than social suicide. The reason? Unprincipled politicians seek power by selling a self-defeating notion to Bolivians — many of them Indians and mixed-race cholos barely eking out a living on high, dry soil. The demagogues have convinced the dispossessed that selling Bolivia's huge natural gas reserves to foreigners somehow is contrary to the national interest. Better, they say, to leave the gas in the ground — and remain poor.”

And:

“With the entry of foreign firms from Europe, Brazil and the United States, proven and probable reserves burgeoned from 4 trillion cubic feet in 1996, to 36 trillion cubic feet today. That's a ninefold increase in eight years — with more in prospect if Bolivia doesn't throw away its opportunity. In short, gas production and exporting has been a financial bonanza for the Bolivian government, which rakes in an average of about 68 percent of gross petroleum revenues in royalties and other, complex taxes.”

Well, that would explain why Bolivia seems like such a wealthy country these days. I can’t count the number of once-poor Bolivians I see driving BMWs down the street.

Here’s the problem, Mr. Bailey has his facts just plain wrong.

To be sure, oil production has increased since the industry has been privatized. It is just that the new profits are going to foreign oil companies, not the Bolivian people. According to Bolivian budget data, revenue from oil and gas has essentially remained flat since privatization, and in some years has even been less. In 2001, for example, national revenue from privatized oil and gas was $40 million less than the take during the last year under public ownership.

Moreover, under the privatization reforms, a huge chunk of the taxes the government collects are now passed onto Bolivian consumers in the form of higher gas prices, bus fares, and energy costs.

Bolivians are neither stupid or misled. They understand quite well that they have been the victims of one bad international deal after another. Like people in poor-yet-mineral-wealthy countries all over the world, Bolivians aren’t opposed to selling their natural resources. They just want a fair share of the wealth that comes from under their feet.

As Mr. Bailey’s former boss, Ronald Reagan, once famously said, “Facts are stubborn things.” From privatization of oil and gas in Bolivia to privatization of Social Security in the US, it seems that some on the political right are so enamored with their ideology that the facts are really not all that important.