The Blog is on Vacation

Dear Readers:

The Blog from Bolivia is taking a break until August 1. Depending on your propensity toward conspiracy theories I am either:

1) Off raising funds from left-wing European and US NGOs so that I can lead a secret band of 1970s vintage Berkeley radicals to surreptitiously back Evo Morales in the coming Presidential election and therefore spark a global uprising against private ownership of everything from socks to baseballs.

or:

2) I am on vacation with my family.

Take your pick, comment to your heart’s desire, and I’ll be back August 1.

Jim

A Valuable Look Back at Bolivian History

I just found a gem of an article about Bolivia on The Nation's Web site. It is a piece titled "Democracy in the Andes" written by William Rosenberg published by The Nation in August 1952. I think it is the best writing on Bolivia that I have seen in The Nation (including my own writing).
As the saying goes, history does not repeat itself but, sometimes, it echoes. The parallels between 1952 and today are haunting, but the differences are notable as well.

Violent clashes between the government and social and labor movements left many dead. The issue at the heart of the uprisings was the demand for nationalizing the country's largest industry, tin mining and export. The government falls and Victor Paz Estenssoro, a former national Finance Minister living in exile in returns to take over the presidency. Bolivia's '52 revolution, with parts both good and bad, takes control of the nation.

What does the historical perspective of this article have to say to us now?

Then as now, the nation was in turmoil over the demands of its people that its wealth under the ground (tin then, gas now) be under public control and developed in the interests of the nation as a whole rather than a select few. Then as now, the claim on the other side was that the resource had to remain in private hands in order to be exploited efficiently. Then as now, the Bolivian people weren't buying the argument. Then as now, Bolivians looked to what nature left in the land as its economic path toward development.

The levels of violence are clearly different now. In 1952 thousands died in clashes with the government. Fifty-three people died in the October 2003 uprising that ousted Gonzalo Sanchez de Lozada, a tragedy still, but one on a vastly different scale. In 1946, when public uprisings ended the rule of President Gualberto Villarroel, installed earlier by a military coup, The President was executed by hanging in Plaza Murillo. The last time I saw Goni he was sitting comfortably in first class on a flight from Miami to Washington.

Bolivia's vast mineral wealth has always been both its gift and its curse and the dance between that wealth and the country's fits and starts at democracy has always been at the center of Bolivian politics.

Read the article. It offers a valuable perspective.

Cochabamba Water Company Head Fired

On Tuesday night the board of directors of Cochabamba's public water company (SEMAPA) fired the company's directors. Here's today's article in Los Tiempos. Cochabamba's mayor, who heads the water company board, says that the company's director, Gonzalo Ugalde, was mismanaging the company and hinted at financial "irregularities" as well.

A few years ago the water staff at the InterAmerican Development Bank (IDB) asked me to meet with them in Washington and posed a question. "Fine, let's assume that water privatization is not going to happen in a lot of places like Cochabamba. What could we do to strengthen the efficiency of public water companies?" My answer was the same then as it would be now – build the capacity of the public boards of directors of these companies to really watch over operations and to understand the economic choices at hand in issues such as setting water rates.

That is what the SEMAPA water board is trying to do, under pressure from the community. I spoke yesterday with one of the board's publicly elected members, Franz Taquichiri. He was elected last year by my neighborhood to represent us on the board and he has dug in and learned the issues and how to ask the right questions. Maybe he doesn’t have the same training in economics as a Bechtel water manager would, but he has something more important – a clear mission to make sure that the company serves local water users and not foreign investors.

Does this mean that we should expect everything to be rosy at SEMAPA? Not hardly. The Democracy Center is in the process right now of undertaking a major study of Cochabamba's water service five years after the "Water Revolt" that tossed out Bechtel. We're looking at how many new hookups there are, the cost of water, the quality of it – the nitty gritty details that aren’t as romantic as protests in the street. What we find we'll report, unvarnished.

But this is the stuff of democracy, citizens digging in and getting into the details of the institutions that are supposed to be serving the public. The citizens of Cochabamba who are demanding more vigilance over their water company are doing more than just that. They are building democracy the hard way, piece by piece.

Showdown Looms Over Aguas de Illimani

Business News Americas, which I always find a good source of economic reporting, has a new article out noting that the end of this month brings two key deadlines in the fight in El Alto/La Paz to take back control of the local water company. The Bolivian government is set to announce plans about how it wants to organize a new public water company and the lead corporate owner of the current company, Suez of France, is legally obligated to renew $15 million in bonds by the end of July if it wants to keep operating the concession.

To refresh readers memories, a public uprising in El Alto in December and January led to a decree by then-President Carlos Mesa to cancel the private contract with the company owned by Suez, the World Bank and others. Among other complaints that led to the rebellion, the private company had boosted the cost of a water and sewage hook-up to $450, an astronomical amount in a country where the minimum wage is $60 per month. Tens of thousands of other water users were red-lined out of service altogether. Here's our original reporting.

It still seems a done deal at this point that Suez and its co-investors will have to leave and that the water system will be returned to public hands, as it was in Cochabamba five years ago. However, there are some huge issues looming about exactly how the corporate owners go out the door.

1) How much does Bolivia owe Suez and other investors?

I spoke not long ago with the leaders of Fejuves, the neighborhood organization in El Alto that led the anti-privatization effort. The community groups agreed that Bolivia would need to compensate the company for genuine investments but a big fight is brewing over how to calculate that investment. That begins with how to audit the company's books.

Suez says that the Bolivian government already approved an audit of the corporation's books from 1997-2001, says that any further look at those years should be off the table, and wants a "paper-only" audit of the four years since. However, 1997-2001 is when Suez and the others supposedly made the bulk of their investment. Community leaders are demanding a full audit of all the years that the corporation has run the water system and want that audit to look not only at the paper trail but to actually go out in the community and count hookups and other infrastructure. The bottom line is that community groups want to be sure that Suez actually did invest what it says it did.

2) Who owns investments financed with foreign aid?

Aguas de Illimani, like many Bolivian water companies, public and private, has received loans and aid for water development. If a foreign government gave the company aid to expand water service to the poor, can Suez really count that as an investment for which it ought to be compensated?

3) Compensation paid with stock in the new public company?

The cost for Bolivia to essentially buy back Aguas del Illimani is still to be determined, but it will certainly be in the millions of dollars. Bolivia has two basic choices of how to finance that. One is to have the public water company borrow those funds and carry it as debt. Carrying debt means pressure for higher water prices and less funds for water development. The other main option on the table is to compensate the company with stock in the new public company. How much stock that would be and how much control would go with it is also undetermined.

Fejuve leaders and others who are working with them have done a good job of getting their hands dirty in the economic details. No one said that taking back the community's water company would be simple.

Two Important Stories to Track Down

As the new week begins, I have been sent brief news clips on two very important Bolivian stories, both of which speak to the issue of how the U.S. may be responding behind the scenes to Bolivian social unrest. I have only seen the clips. I haven’t had time to track down all the original source documents that may exist.

By putting these out I am not saying that both are certain but, rather, that both deserve greater investigation. I also think the readers of this Blog are in a good position to help nail down the facts. You are interested and knowledgeable about Bolivia. You cut across a wide ideological spectrum. And this Blog creates a space where readers can compare what they know and swap analyses of what it means.

Here are the two stories. Let’s go to work and see what we know.

Is the U.S. Building a Military Base on Bolivia’s Doorstep?

The Information Clearinghouse published what it reports to be a July 11 article in El Deber (I am not suggesting that this isn’t 100% truthful, I just haven’t had time to check it myself) about the U.S. constructing a 16,000 troop military base in Paraguay, 200 kilometers from the Bolivian border. Is this true? What is the US saying about its intentions, if it is admitting the base at all? If it is true, what does this mean for Bolivia?

Here’s the article.


Is the US Helping Equip a Bolivian anti-Riot Force of 3700?

The Narco News posted a report by Stephen Peacock on Saturday, that the US government has put out a request for bids to riot-gear manufacturers to equip 3,700 Bolivia anti-riot forces with upper body padding and shin guards and the government with a new emergency operations center in La Paz. The report includes links to the US government’s request for bids for both projects:

Riot Gear
Emergency Operations Center

This story seems very well documented and The Democracy Center has reported in the past of the US providing the Bolivian government with tear gas and an anti-riot water tank. What does it mean that the US is preparing the Bolivian government this way?

Here’s the article.

The US has a long and well-established history of involving itself in Bolivian affairs. Whatever people may think of that, getting the facts straight is the first thing we need to do.

The Evo Debate

Maybe it is what happens when Bolivian politics gets looked at through the prism of a US political culture driven by personality. Pick up almost any current analysis of Bolivian politics written abroad and it would seem like the political world here revolves around one person, MAS party leader Evo Morales.

Analysts on the left cast him as a charismatic leader who represents rising indigenous power and new wave Latin American socialism all in one. Critics on the right love to demonize him as a Hugo Chavez stooge who is pushing Bolivian democracy to the brink.

But here’s what you see when you start to get close up and especially if you talk to the other actors in Bolivia’s social movements who are trying to figure out how to deal with him. What Evo Morales really is….is a politician.

Morales first rose to prominence as head of the Chapare-based coca growers unions and then rode a wave of Bolivian anger over imported economic policies to become the close second place finisher in the 2002 Presidential elections. He also got a big political boost when the US Ambassador at the time publicly threatened Bolivia with a cutoff of aid if they voted Evo to power. Morales joked that the Ambassador was his campaign manager.

Who is Evo Morales in Bolivian politics today?

First, despite a lot of foreign claims otherwise, he was not the initiator of the recent national blockades and protests demanding that Bolivia recover its gas and oil reserves. The credit there (regardless of what you think of the protests) goes to the neighborhood organizations in El Alto and the Aymara pueblos in the altiplano. Morales scrambled to get in on the action, at the head of a hastily organized march from Cochabamba and when he arrived in El Alto he was not warmly received. Morales had, long before, abandoned street tactics for Congressional negotiation on the gas issue and had abandoned the calls for “nationalization” in favor of focusing on the demand for a 50% tax on the multinationals. I heard the words “Evo” and “sell-out” used in the same sentence a lot more than once.

Second, I think that Evo has about as much chance of becoming President of Bolivia after next December’s elections as I have of being Bush’s pick for the US Supreme Court. There are three main candidates running. They include former President Tuto Quiroga (who has decided to move back to Bolivia for a while from the US, to run for the top job), Burger King owner Samuel Doria Medina, who finally gets to run on his own after playing second fiddle for a decade to Jaime Paz Zamora in the MIR party (which Medina has now abandoned), and Morales. Former Cochabamba Mayor Manfred Reyes Villa may also run, but he seems almost irrelevant.

To win you need either 51% of the popular vote, which Evo will never get, or you have to put together a coalition deal that gets you to 51% of the Congress to elect you. My prediction is that Tuto will finish first and within 24 hours Medina will find himself in a chair across a desk from the US Ambassador being told how important it is to form a coalition with Quiroga, echoes of the game that put together Goni’s majority in 2002.

Third, the most heated debate over Evo Morales can be found not on Bolivia’s political right but its left. On one side the argument goes: Evo botched whatever leadership opportunity he had on the gas issue the last two years, he isn’t trustworthy, and he is going nowhere politically, having alienated the middle class on the one side (by being seen as too radical) and a chunk of his natural base on the other (by being viewed as a sellout). On the other side the argument goes: Evo is the best chance there is for a consolidated campaign from the left. Instead of complaining that he isn’t politically pure (that holy grail that social movements in any country look for and never find in Presidential candidates), movement leaders should exchange political support for specific promises from MAS and Evo on both policy and the way he would govern. The debate here on the left is whether there should be another candidate besides Evo.

All this reminds me so much of places like South Africa and Brazil (I have spent significant time working in both places) where progressive movements finally won power after many years of waiting. Get close to progressives in South Africa and they’ll tell you that the ANC didn’t need to be shoved into neoliberal economics by the World Bank and the IMF. The party did it themselves. So now you have water privatization and water cutoffs in Johannesburg, all courtesy of the ANC. Get close to progressives in Brazil and they will tell you that Lula seems almost like a Washington Consensus cheerleader.

What is the point?

All this trashing from the right of “Evo the Barbarian” and lauding from the left of “Evo the Indigenous Hero” is really just lazy analysis. It is stuck in August of 2002 and for those who may not have noticed, it isn’t 2002 anymore, not in Bolivia at least. In the odd world of Bolivian politics, so deeply polarized by ideology and sectoral and regional interests, Evo seems more and more like a politician trying to engage in a political balancing act (trying to expand his base in the middle and keep his base on the left) and not doing especially well at either.

Bolivian politics isn’t about personality these days. If it were, then Carlos Mesa would still be President. It is about two issues that are splitting apart the nation – how to develop the country’s gas and oil and how to bring the nation’s poor and indigenous majority out of the political margins. No national election is going to change that and none of the candidates running look to be any better than Mesa was at leading the country toward some resolution.

My guess is that a year from now we’ll look back on election 2005 as an unplanned and unsought national political detour and we’ll be back again to the kinds of conflicts we saw here in June, but this time with a President (Quiroga) who has demonstrated already his easy hand at responding to protest with the bullet.

Thinking of our Friends in London

The Democracy Center has a good number of close friends and colleagues in London. I was just there with many of them a few weeks ago. Today we send our best thoughts out to them and the others who live in that vibrant city. It is not only those within bomb range who suffer today's events but a whole city of millions that has had normalcy changed in a heartbeat into fear and trauma.

We are working on an article related to the G-8 summit and the weekend's Live-8 concerts, but that will wait until the start of next week.