Washington Week in Review

On Monday morning early I flew from La Paz to Washington and have been in a series of all day meetings all week, hence no action on the Blog. There is a huge interest in Bolivia here, as evidenced from the big turnouts for the two panel discussions I was part of here this week. The first was sponsored by the Council on Foreign Relations and the second by the Washington Office on Latin America.

Here are some developments and observations about the big question of how the new Bolivian government will get along with the powers that be here in Washington.

Bolivia's New Ambassador Designate

Last weekend I sat down for a coffee with Sacha Lorenti, a long-time friend (Sacha wrote the Spanish foreword to our IMF book), who was named a few days later by Evo Morales to be Bolivia's new ambassador to the US. The appointment still requires approval by both the Bolivian Senate and the US State Department, but neither should be a problem and Sacha should be taking up residence here in a few weeks.

Sacha is a super pick for this job. A lawyer, Sacha has served for the past several years as President of Bolivia's National Human Rights Assembly. He is well-respected on all sides in Bolivia, having served as a mediator in some of the most serious conflicts between the social movements and past Bolivian governments (including during Febrero Negro). He was also appointed by then-President Rodriguez a few months ago to serve on a national panel of "notables" to work out plans for a national constituent assembly.

He is in the process of studying up on the key issues that Bolivia and the US will need to negotiate and laying the groundwork for a successful representation of Bolivia here. I have had high-level conversations this week with both the Bolivia and US sides of this emerging relationship and it is clear that both governments would like to develop a good, not combative, working relationship. That is good news for everyone and Sacha's appointment contributes to that a good deal.

What to Watch For in the Months Ahead

From my meetings and conversations here in Washington and La Paz this week, here are the key issues to watch for as Bolivia and the Bush administration figure out how to deal with one another.

Is Evo Chavez? That is the first question that the powers that be are asking here. Will Evo Morales turn out to be a Bolivian version of the Venezuelan leader that is in such conflict (for good reason) with the Bush administration? I think that the answer is clearly no, and soon enough Washington will figure that out. As MAS leaders have said to me clearly, it isn’t in their strategic interest to just pick a fight with the US for sport, rhetorical or otherwise. To be clear, there will be tough issues to work out and the new Bolivian government will do that firmly but in good spirit.

Coca: The first policy issue that will get thrust into the center of the emerging Bolivia/US relationship will be coca. First, it really is the centerpiece of US policy in Bolivia. Second, it is the first issue where the Bush administration and US Congress will have to make an actual decision, with votes coming up in the Congress on foreign aid that is tied to the coca issue. Hopefully the US will take note that the Chapare region in Bolivia (the center of so much violent conflict over US policy) has been largely quiet for almost two years, the result of a slight relaxation of that war in which poor coca-growing families have been allowed to grow small family plots. To be clear, some of that coca goes for traditional uses and some for the illegal drug trade. The portions for each are in dispute and the US has a great tendency to exaggerate the latter. In reality, Bolivia ceased to be a major coca leaf source for the drug market a long time ago. Today it means more to the US as a supposed (and very debatable) symbol of the success of the "War on Drugs".

Debt Relief: Bolivia, thanks to the joint actions of US-backed governments and US-dominated international financial institutions, is a heavily indebted country. Today Bolivia borrows about a quarter of its annual national budget from foreign sources, more if you take into account borrowing for special projects. That translates into a lot of accumulated debt. The IMF recently made a decision to cancel a good deal of Bolivian debt and other programs to do so are in the works. Watch what happens with these now that Bolivia has a MAS-led government. First up, the Inter-American Development Bank.

A Reminder on my US Appearances

For those interested, I still have two more public talks before I return home to Cochabamba in a week. Here they are. If you are nearby, please join us:

NEW YORK: February 1st – 5:30 pm
Marymount College, 211 East 71st St. (between 2nd and 3rd Avenues)
The Regina Peruggi Room

ST. PAUL MINN: February 4th – 9am
Unity Unitarian Church, 732 Holly Avenue

Evo Mania

I am sitting in an Internet cafe just beside Plaza San Francisco – in a capital city gripped by ¨Evo Mania¨. Evo being Evo Morales, who two hours ago was sworn in as Bolivia´s president.

It is ironic. Back in the days of ¨Oh my God, the sky will fall if Evo becomes president,¨ the fearful proclaimed that Bolivia would become isolated, a nation shunned. Tell that to a city so full of heads of state and luminaries that people like the literary giant Eduardo Galleano and former Mexico prsidential candidate Cuauhtémoc Cárdenas get barely noticed. I met a reporter for breakfast at the Raddison this morning and the staff proudly reported five heads of state in residence. More than 400 foreign media are here. Hotel rooms are virtually impossible to find. If Bolivia´s GNP were measured just by these two days it might compete with China, for all the economic activity generated by the inauguration.

Yesterday Morales passed through another inauguration, standing atop the 1000 year old ruins at Tiahuanaco. In a ceremony that hasn’t taken place since the consquest half a millenia ago, Bolivia´s first indiginous president was granted powers by the indian communities of the altiplano. Indiginous leaders from throughout the Americas and elsewhere were on hand to participate – from Guatemala to the USA. An indiginous leader from the US handed Morales an eagle feather, noting that the eagle would fly with the condor.

Reporters, many sunburned from yesterday´s harsh altiplano sun in Tiahuanaco, asked me all the usual questions. Won´t MAS screw up at governing? What government have they ever run?

(A parade of rainbow-colored, checkered wipala flags – symbol of the indiginous communities – has just gone bounding by on the street outside, to the tune of flutes.)

The U.S. government has planted some of these questions I learn, at a private off-the record chat the ambassador held at his house the other night with visiting US journalists.

In a congress chamber filled to the brim with the heads of Argentina, Chile, Peru, Brazil, Venezuela, Slovenia, and many other nations, Morales broke the media-generated suspense over what he would wear to such a formal occasion by showing up in a black tunic ringed with indiginous weaving. I had thought about sending Morales a George Bush 2000 inaugural tie that a Republican acquaintance of mine gave me a couple of years back (inexplicably thinking that I might actually use it) but I decided to keep it, knowing that it has come in handy as an emergency halloween costume.

I watched Morales take his oath on TV, in a take-away pizza place a half mile from the Congress. Behind me sat two women, weeping tears and saying over and over ¨que impresionante!¨ As he put on the green, red, and yellow sash of his country, Morales broke down in tears of his own. A split screen image, showing both Morales and the crowd gathered outside here in the plaza, revealed that he was not the only Bolivian marking with tears the moment of history all were living.

Morales began by asking the dignataries, the Congress, and the nation to mark a moment of silence for the martyrs—from Inca kings who died at the hands of the Spanish to Che Guevarra and the humble who have lost their lives in five years of social struggle here.

¨Five hundred years of indiginous resistance have not been in vain,¨ he said. He then luanched into a presidential address – on everything from the US war on drugs to corruption in the building of highways – that was so long that at one point he stopped to ask a Senator in the chamber to wake up from his nap (I am betting it was Omar Fernandez from Cochabamba, who ALWAYS falls asleep when we are in meetings together). The channel I was watching featured CNN-style captions summararizing key points and it was, well, just so Bolivian, when the caption changed to, ¨Morales tells Senator to wake up.¨ The whole ceremony had the air of a young democracy and inexperienced president trying to awkardly find their footing.

Even Morales, at one point acknowledged that his speech was lasting a very long time. ¨Brothers and sisters, I apologize for going on so long. Maybe I caught something from Castro or Chavez (the chamber breaks into laughter and the camera turns to Chavez who appeared to be rustled from a little nap of his own). I just want to express myself about the reality of Bolivia.¨

On my way to the rally here that awaits Morales´ arrival, the streets were nearly deserted . The one person who seemed oblivious to the whole thing was an older indian woman sitting in a narrow alley way, footsteps from princes and presidents, asking for small change.

The question that remains is, once the hoopla is over and the dignitaries are gone, will it make any difference in her life? To be sure, that is what Morales is promising and I believe that he and MAS are sincere in that. But governing and delivering the goods will be a good deal harder than they think.

But for today, La Paz and Bolivia is a spectacle of optimism and history being made. Back to the flutes and the wipalas!


Note to my readers. I am off first thing in the morning to the US where I will speak at the Council on Foreign Relations and other forums. Here are the public ones. Come if you can!

WASHINGTON: January 25th – 3:15 pm
The Mott House, 122 Maryland Avenue, N.E.

NEW YORK: February 1st – 5:30 pm
Marymount College, 211 East 71st St. (between 2nd and 3rd Avenues)
The Regina Peruggi Room

ST. PAUL MINN: February 4th – 9am
Unity Unitarian Church, 732 Holly Avenue

Bechtel Enterprises: A World of Imagination

If there is one thing that Bechtel might have learned in its long and losing battle to sue Bolivia over the Cochabamba Water Revolt, it ought to be this – public relations based on falsehoods doesn’t do you any favors. And yet, today, as Bechtel drops into Bolivia once more, to drop its case, the Bechtel PR machine is back to its old tricks of spinning pure baloney.

Here are a couple of choice examples:

1) Lie About the Rate Increases Bechtel Imposed

This has always been Bechtel’s first line of defense and apparently remains so. Four years ago, shortly after Bechtel filed its World Bank case, it peddled the fairy tale that “For the poorest people in Cochabamba rates went up little, barely 10 percent [Gail Apps, spokeswoman for Riley Bechtel].” In fact, the data Bechtel left behind in the water company computers when it fled showed that, for the poorest, the corporation raised rates by 47%.

This morning they gave this specific spin a slight update, “Bechtel disputes that fees rose that high and said the Bolivian government agreed to an average increase of 35 percent to pay off old debts and to expand service [San Francisco Chronicle].” Again, the data in the computers tells a different story. The average increase that Bechtel won in their secret negotiations with Bolivian regulators was 51%, a big portion of which was to service the 16% per year guaranteed profit they also demanded and won.

Here is a painfully thorough analysis of Bechtel’s price hikes, including scanned before-and-after water bills.

2) We would have dropped the whole thing if they’d said it wasn’t our fault.

This is a new one, and really, it is a stunner. This morning, Bechtel explained that the only reason they kept everyone running up (literally) millions in lawyer bills for four years is that Bolivian officials wouldn’t issue a simple statement saying that the whole fiasco really wasn’t Bechtel’s fault. Here’s what Bechtel said this morning to the San Francisco Chronicle (the hometown newspaper we share):

"We had offered some time ago not to continue arbitration if we received a clear, unambiguous statement that Aguas del Tunari acted entirely without fault, during time of concession and released of any liabilities," said Jonathan Marshall, media relations manager for Bechtel. "Given how poor Bolivia is, Bechtel's intent was not to squeeze money out of the country. We simply couldn't accept blame for what happened."

Readers, really, just stop a moment and think about this. We are supposed to believe the following:

First, Bechtel would have dropped the whole thing years ago if the government of Bolivia has just said an easy sentence-worth of words. Second, not Tuto Quiroga, not Gonzalo Sanchez de Lozada, not Carlos Mesa – all presidents who were eager to please foreign corporations – none would issue such a simple declaration. If you belive that I have some lovely land in in Quillacollo...

Squeezing the poor is exactly what Bechtel set out to do in Cochabamba. An updated analysis shows that if Bechtel had stayed at its demanded tariffs, the people here would have spent $17 million more on water these past six years.

Some Free Advice to Bechtel’s PR Department

Truly, I would think that the public relations people at Bechtel would be, well, just a lot more competent. The years of spin only succeeded in creating what Associated Press called today, “a cause celebre for activists around the world and a public relations headache for Bechtel...” That’s not the kind of thing I would like my boss reading over their on Beale Street. All the spinning only made things worse for Bechtel.

So, here is a little free public relations advice for the good people over by my beloved San Francisco Bay. You want to cut your public relations losses and actually score some points on us? Say this:

First, the leadership of Bechtel is genuinely regretful of the suffering and even a death that happened in Cochabamba. Those results were never our intention in Bolivia. We are a business. We provide people with water and we do it with an obligation to make a profit for our shareholders. We are a business, not a charitable foundation.

Looking at it as objectively as we can, there are a number of things that should have been done differently, both by Bechtel and the Bolivian government. The contract process itself – from start to finish – ought to have been opened to public scrutiny. No deal will work if it doesn’t have acceptance from the community and that begins with genuine transparency. What happened in Bolivia was far, far from that and it is one of the reasons for the public reaction that came after.

Additionally, it is also true that the economics of water privatization just don’t work well in a very poor country like Bolivia. The poor can’t afford the full market price for water. There are too few middle class and wealthy to cross-subsidize the poor. The national government is already borrowing to pay its bills, so there aren’t really viable subsidies there either. Getting the poor access to water is going to take more than just the market. It is going to require aide as well, and a good deal of it. Infrastructure development is expensive.

There are many, many important lessons to be learned from what happened six years ago in Cochabamba, for others and us. We wish the people of Bolivia well.

News Conference on Bechtel Settlement Thursday

There are a number of foreign reporters in Cochabamba this week. For those who are here, there will be a news conference for the Bolivian press Thursday morning, regarding the Bechtel settlement, involving water revolt leaders, The Democracy Center and others. All journalists are welcome:

Thursday, January 19 at 10:00 am
Federacion de Fabriles (3rd floor)
Plaza Principal (corner of Bolivar and España)
Cochabamba

Bechtel to Drop World Bank Trade Case Over Water Revolt

It is official. On Thursday, representatives of the Bechtel Corporation and its co-investor, Abengoa of Spain, will be in Santa Cruz to sign an agreement ending their four year effort to sue Bolivia over the Cochabamba water revolt. Bechtel and Abengoa have been seeking $50 million in damages and lost profits before a secretive trade court (International Center for the Settlement of Investment Disputes) operated by the World Bank, the same institution that coerced Bolivia to privatize its water to begin with.

Bechtel and Abengoa will sign an agreement dropping the case for a token payment of 2 bolivianos, about 30 cents. For a couple of weeks I have been communicating back and forth between Bechtel, the Bolivian government, and water activists here in Cochabamba, trying to force disclosure of the agreement details. As of last night, we have the last of those in hand.

This is a huge victory for activists worldwide who have fought this case on five continents. It is a huge precedent for the growing Web of legal cases in which the world’s most powerful corporations seek to tie the hands of people and governments to shape their own economic futures. We know of no other case in the world where a major corporation like Bechtel has dropped its action in response to global citizen pressure.

To reporters just tuning into Bolivia, this is a story well worth your attention. Here’s a link to the background. You can get more information by contacting us by email. The Democracy Center will have much more to say about this on Thursday. Keep watching.

…Or, Could It Be Evo Morales in Drag?

I had to share this one folks. The Navhind Times (of India) has this headline and lead on its Web site today:

Bolivia Elects First Woman President

AP Santiago Jan 16: A Socialist, doctor and former political prisoner was elected yesterday as Bolivia’s first female President, defeating a conservative multimillionaire opponent in a race that reflected Latin America’s increasingly Leftward tilt.

Now, there are a couple of possibilities here. One is that Evo Morales has a surprise announcement in store for us next week, far beyond what any of us have expected (Really, as a news story, wouldn't that beat nationalizing the nation's gas ands oil?). Another is that the writer sort of mixed up Bolivia and Chile (which did elect its first woman president yesterday). That's fair. I am guessing that a good number of Bolivians get India and Pakistan confused.

Personally, I am betting on it being a mix-up by the reporter. But, if not, maybe the pressure on Evo to change his wardrobe for the inauguration will give us the odd site of Mr. Morales in a broad Paceña pollera and bowler hat.
Now that would make front page everywhere.

And the Rains Came

It is really extraordinary to watch a whole valley change color, and to do so almost overnight.

Cochabamba in the last months of the year is a landscape in dusty brown. The grass in the Andean foothills that ring the city is dead, the color of an over-milked cup of coffee. The dirt under your feet bounces up in clouds with each footstep. The riverbeds that reach down from the mountains are dry alleys of strewn rocks [as long time readers will recall, Cochabamba has rocks in abundance]. Water, the kind that falls from the sky, is a faint memory of many months before.

Then sometime just as the New Year begins, that all changes. The rains come.

First the rains just flirt. As Cochabambinos will tell you, those high clouds that appear in December and fly through town in a fury of afternoon wind aren't going to drop anything. They are just nature showing a bit of teeth. "Yes, we have water," they are saying, "but you aren’t getting any of it, not today."

That goes on a few weeks. Then the rain comes. It comes in torrents.

Sometimes the rain comes at night while you are sleeping. You never actually see it but it leaves its wet footprint in muddy puddles and wet clothes left unsuspecting on the line. There are few things as grand as a walk in my beloved hills on a cool and cloudy morning after a night of drenching.

Later it starts to come in the afternoon. You leave the house on a blistering hot summer morning and by tea and empanada break in the afternoon you are thinking about that umbrella that really wouldn't have taken up all that much room in your backpack. Of course, only gringos, with a few exceptions, carry umbrellas. Bolivians act like the falling downpour isn't really there.

Rain without drainage. "Hello new lake that wasn't there this morning." Rain in the marketplace. Rain that hovers for the day and falls like a calm shower. Rain.

And in those first few days something miraculous happens. A giant paintbrush invisibly sweeps across the hillsides and they turn, almost overnight, from tired brown to exuberant green. A visitor who arrived here this time of year, for her first time, told me, "Cochabamba looks like Hawaii." At first I thought she just had altitude sickness from her change of planes in La Paz. But looking at the low clouds hovering like cotton on the hills, and the lushness that had sprouted everywhere, I realized that she wasn't far off.

Empty fields suddenly sprout some sort of strange green plants that reach to eye level in two weeks. Grass sprouts out of the rocks that pave the streets on my hillside. The blackberry bush is popping out sweet fruit again for Mariana and I to pick and smash into our morning oatmeal.

And Cochabamba turned from brown to green. And the corn found what it was looking for. And the laundry that needs to hang on the line as to wait. And the rains came.

How it Looks to Bolivia's New Vice President

On Sunday, Bolivia's Vice-President elect, Alvaro Garcia Linera, was in our offices for a meeting with Bolivian social movement leaders. Just a few months ago he was here with many of the same people, debating the pros and cons of joining the MAS ticket. He pledged then that if he ran and won he would be back to talk again. Sunday was his first step in keeping that promise.

Movement leaders and the new V.P. had a wide-ranging conversation about gas and oil, land issues, education and health reform, and other topics that will be on the new government's agenda. Garcia Linera also offered a detailed and interesting analysis of how he sees the state of Bolivian politics and the plans of the MAS government. Here are some highlights:

The Shift of Political Power in Bolivia is Still in Motion

"We still don't know the significance of December 18th," he said. "What are its possibilities? What are its limits?" In the run up to the election Garcia Linera talked about Bolivia being at the point of "a historic standoff", in which the emerging powers in the country – indigenous communities, social movements, etc. – has achieved power equal to the established powers in the Bolivian elite, transnational corporations, and others who wield so much clout here. The election, Garcia Linera argues, gave the emerging movements one more instrument of power, the presidency, but that political power in Bolivia remains seriously fragmented, despite the election results.

The legislative branch, the judiciary, the business community, the military, the police, social movements, and others, he observed, are also key bases of political power, none of them under MAS control. He noted that the struggle for shifting the balance of power in Bolivia still continues.

Gas and Oil: Playing Skillful Chess

The incoming Vice-President reiterated MAS' campaign commitment to recover national control of Bolivia's gas and oil, privatized into the hands of foreign corporations over the past decade and a half. "What you should know is that in Evo and in me and in many of our Congress people you have people who are dedicated to the people of Bolivia, not to the oil companies, not to the United States or to Cuba."

He then added, "But now we have a responsibility to look at the whole picture. We have to look at all the effects of the actions we take, on funding, on compensation…" He described the path ahead on nationalization to be like a chessboard, in which the government needs to make every move based on the careful anticipation of every implication that can result. He also noted that the battle to get control over the sales side of Bolivia's gas and oil industry will be just as important as regaining control of the reserves in the ground.
His message was clear. This isn't about MAS watering down its position but, rather, acting in a clear and strategic way. Watch for MAS to deal with different oil companies very differently.

Constituent Assembly: Full Power

Commenting on the other big issue dominating Bolivia's political landscape, the V.P.-to-be also reiterated the MAS campaign pledge to quickly convene a constituent assembly to rewrite the country's constitution. He pledged that the assembly would be "sovereign" meaning that it would have full political powers. In Bolivia this means being able to take up the gas issue and any other that the assembly sees fit. He said that MAS would initiative a three-way dialogue to set up the plans for the historic process, involving social movements, the government, and the nation's business leaders.

My Article in Today’s Sacramento Bee

For those interested, here is the link to my article in the Forum section of Today’s Sacramento Bee newspaper. Below is the headline and lead.

A New Path for Bolivia

Newly elected President Evo Morales promises to break with 20 years of U.S.-imposed conservative economics

Late last year, Bolivians made history, for their own country and for all of Latin America, when they elected, by a wide margin, an Aymara Indian as their next president. The victory of Evo Morales signals many things here, but first and foremost it marks a broad popular rejection of two decades of conservative economic policies imposed on Bolivia from Washington.

Evo in Spain: The New York Times Invents a Chill

One of my favorite movies is Woody Allen’s Annie Hall. In it there is a funny scene in which Woody Allen and Diane Keaton are shown in a split screen, each talking to their New York shrinks. Each shrink asks, “How often do you have sex?” Allen replies, Hardly ever, maybe every two weeks. Keaton replies, Constantly, every two weeks.

Today’s news coverage of Evo Morales trip to Spain is equally schizophrenic. In the case of the New York Times, suspiciously so.

Today’s Cochabamba daily, Los Tiempos, has a big picture on the front page of Morales and Spain’s King Juan Carlos beaming at one another. On page three it has a similar photo of Morales sharing a beaming greeting with Prime Minister José Luis Rodríguez Zapatero. It also reports the announcement by the Spanish government that it will forgive Bolivia of $120 million in debt, to support new literacy efforts in the country.

Similarly the BBC led its coverage with the debt announcement, Spain to Write Off Bolivian Debt, and noted Morales’ meetings with the king, the prime minister and Spanish corporate leaders.

All this makes the New York Times’ coverage, from reporter Renwick McLean, all the more odd.

The Times headlines its article, Bolivian Receives a Chilly Reception in Spain. It then begins, “After receptions in Cuba and Venezuela this week and last that included marching bands, red carpets and praise for his stand against American "imperialism," Evo Morales, the president-elect of Bolivia, encountered a chillier welcome in Spain on Wednesday as he began a three-nation tour of Europe.”

The article makes no mention of Spain’s debt relief announcement and no mention of his Morales’ visit with the King. It also reports that Prime Minister José Luis Rodríguez Zapatero “refused to appear with Morales at a news conference” and that the main opposition leader in the Parliament declined to even visit with him.

Spanish officials explained the latter two points as a matter of protocol, given that Evo is still not formally the head of state. But the Times paints all this as a deliberate political snub.

The paper speculates, with no government sources, “But Mr. Zapatero also appeared determined on Wednesday to keep his distance from Mr. Morales, perhaps wary of the criticism that Spanish policies have drawn from the United States and some European officials for advocating more active engagement with Cuba and Venezuela, Mr. Morales's two chief allies.”

If all you read about the visit was the Times coverage you might really believe that Bolivia’s president-elect did get a chilly reception in Madrid. You would also have a very misleading picture. And maybe that is the Times intent.

Perhaps I don’t fully understand the subtleties of international diplomatic symbolism. But if I invite someone to my house, introduce them to all the important people in my family and then tell them, “Hey, that $120 million you owe me, don’t worry about it,” well I think that is one pretty darn warm reception.

You want chilly reception?

Sorry Evo, the King is really busy that day, I think he is playing golf.

Sorry Mr. Morales, the Prime Minister is all booked up, national shoe week you know. And about that $120 million you owe us…

That’s how you do chilly.

The Times coverage on this seems so off the mark that it, well, seems deliberate. Let us not forget the powerful role that the Times played in helping promote the Bush administration’s failed intelligence of about weapons of mass destruction in Iraq. The nation’s daily newspaper became a key element in the Bush propaganda machine, only to have to deliver a heavy mea culpa later.

All this leads to one question. What is behind this new episode of New York Times spin, this time against Morales?

Hear The Democracy Center on Public Radio in the US Tuesday Night

For readers interested, I will be a participant this evening on a public radio program in the US called “Open Source”. The topic for tonight (the producers’ selection, not mine) is “Latin America’s New Socialism” and will look at what the election of Evo Morales means in terms of the larger trends in Latin America. Also on the program will be Jeffrey Sachs, a former advisor to the IMF and World Bank and the credited architect of Bolivia’s shock-economic treatment in the 1980s, and Miguel Centellas, an academic in the US who writes about Bolivia.

The program will be live at 7pm east coast time US. Here is a link to the home page for the program. Here is a link to a page where you can see when the show airs locally in several different cities (and can also be heard via the Net).