Bolivia -- Revolt of the Rich

(1) Bolivia - Revolt Of The Rich

(2) South American Leaders Hope Diplomacy Can Save Bolivia

(1) Bolivia - Revolt Of The Rich

By Michael Miller

Newsweek Web Exclusive

September 13, 2008

http://www.newsweek.com/id/158825

Relations between Bolivia 's President, Evo Morales, and

the country's wealthy easterners were tense from the

start. Since Morales's election in 2005, the eastern

provinces, known as the "Media Luna," or half moon,

which have grown rich on natural gas, have fought

bitterly over a new constitution that would redistribute

some of that wealth to the western provinces. The

opposition has requently waged disruptive strikes.

Protests began to take a more violent turn after Morales

trounced the opposition in last month's recall election.

This week at least eight Bolivians were killed in

clashes. Opposition groups blew up part of a natural gas

pipeline and vandalized government offices, causing

millions of dollars worth of damage. They have also

succeeded in disrupting trade with Brazil and Argentina ,

which rely on Bolivia 's natural gas.

Relations between Bolivia and the United States have

quickly deteriorated as well. Bolivia expelled U.S.

ambassador Philip Goldberg for "conspiring against

democracy" and in response the Bush administration

sent the Bolivian ambassador in Washington packing. In

a show of support, Hugo Chavez, Venezuela 's president

and staunch Evo ally, ejected the American envoy from

Caracas. On Friday, Morales sent troops into the

eastern provinces to restore order. To find out where

it's all headed, Newsweek's Michael Miller talked with

economist and Bolivia expert Mark Weisbrot, co-director

of the Center for Economic and Policy Research in

Washington, D.C. Excerpts:

Newsweek: How serious is the fallout between the United

States and Bolivia ?

Weisbrot: I think it's serious. I think that this thing

was coming for a long time. There had been a number of

incidents. There was the incident with the Peace Corps

and the Fulbright scholar [asked to spy by the U.S.

Embassy]. And then there are the meetings between

the ambassador and the opposition. Obviously he's the

ambassador: he should meet with everybody. But the way

he did and the timing of it was considered unfriendly.

I think you have a bigger structural problem, which is

that you have USAID funding groups in Bolivia but they

won't disclose who they are. They are doing this now in

Venezuela too. These are polarized countries. So on that

basis both of these governments [ Bolivia and Venezuela ]

just assume that Washington is doing what it has always

done, which is to fund the people that they are sympathetic to.

How much influence do eastern Bolivia 's large estate

owners have? What kind of pressure do opposition groups

exert in Bolivia ?

Quite a bit. That's what this conflict is really about.

You have the most concentrated land ownership in almost

the entire world in Bolivia , with around two thirds of

the land owned by six tenths of one percent, not even one

percent of the landowners. Obviously Evo Morales ran on

a platform of land reform. He is not talking about

confiscating huge amounts of land, but there is going

to be some redistribution. There is the hydrocarbon

revenue, which goes disproportionately to the Media Luna

states with the opposition governors. So those are the

two big economic reasons for this conflict.

Which one, land or hydrocarbons, is really the central

issue?

That is a tough question. The hydrocarbons are

more immediate because [the government has] already

begun some redistribution there. Morales has not

touched the landowners. So I guess you could say that

[hydrocarbons] are the bigger issue.

I was in Bolivia a couple months ago and I met with the

Central Bank and the ministries. The government has $ 7

billion in reserves right now in the Central Bank, which

is an awful lot [considering] their whole GDP is only

$13.2 billion. Most of it is owned by the prefectures,

the provinces, so they have a lot of money. So it is

hard to explain why they would raise such a fuss over

the government wanting to take a small part of that and

use it for some pensions for people over 60, which also

goes to their own residents.

How does this tie into the recent recall election in

Bolivia? Wasn't that election meant to resolve this

impasse between the Morales government and the

opposition provinces?

It did show some things. First of all, Morales got 67

percent of the vote, which is as big as you get in

politics in the world without fixing the election.

And the other thing it showed is if you look

at the Media Luna provinces, while it's true that the

opposition won, the vote for Morales also went up

enormously as compared to what he got in 2005. So his

support, his mandate, really increased quite a bit

since the 2005 election. What you are seeing right now

is that the people who could not win anything at the

ballot box are trying to use other means. They are

cutting off the gas, which is very serious.

What are the financial consequences of opposition groups

disrupting Bolivia 's natural gas pipeline?

It's huge. It's more of a problem for Brazil than it is for

Bolivia: they get half their gas from Bolivia and more

than half in the industrial region of Sao Paolo. For

Bolivia it is quite a lot of money. It is a $100

million estimated just to fix [the gas pipeline] and $8

million per day of revenue lost as well. But it is even

worse than that because the opposition can really

sabotage the whole economy. Everything that the

government is doing in terms of the next five years as

far as extending gas supply to Brazil and Argentina ,

if Bolivia can't be a reliable gas supplier then those

countries are going to have to look elsewhere. So it is

a form of serious sabotage. The [Morales government] is

calling it "terrorism."

Will Morales's mandate enable him to act more forcefully

toward the breakaway provinces or is he going to have

to wait for the constitutional referendum in December?

I think he is going to have to do something. The

government has been very pacifist and I think they don't

get enough credit for that. Most governments in the

world would have sent in the military in force and a

lot of people would have been killed. He has been

extremely restrained. He has tried to avoid violence at

all costs and the opposition has been emboldened by

that. They just keep escalating. Now they are taking

it to a different stage and I don't know how much more

the government can just try to ignore it. They really

depend on these gas exports, as do Brazil and Argentina .

Brazil issued a statement the other day that said they

will not tolerate an interruption in the constitutional

order in Bolivia . Whether that means they will send

troops, I don't know.

Does this have a financial impact on the United States ?

Or is the decision to expel the Bolivian ambassador

simply a quid pro quo response? Is there real money at

stake for the United States ?

I don't think there is really anything at stake for the

United States. If [by antagonizing Morales] they push

Chavez too far, there is always the chance that he could

cut off oil. But it is unlikely.

What type of fallout will there from Morales' use of

troops in the eastern provinces?

It depends on what the [government forces do] and on

their capacity for crowd control and using non-lethal

weapons. Look at what happened prior to Morales: they

are still trying to extradite the former president

[Gonzalo Sanchez de Lozada] for all the people who were

killed in the demonstrations back then. Morales has been

on the other side of this and he knows that things can get out of

control. So he is trying to do everything to avoid that

but it's not easy when you have an opposition that is

not operating by the same rules.

(2) South American Leaders Hope Diplomacy Can Save Bolivia

By Monica Vargas

Reuters

September 15, 2008

http://uk.reuters.com/article/oilRpt/idUKN1445720620080915?sp=true

SANTIAGO, Sept 14 (Reuters) - South American presidents

are racing to prevent a deeper political crisis in

Bolivia, where President Evo Morales has accused right-

wing opponents of trying to topple him, but diplomacy

may not be enough to avert more deadly protests.

Regional leaders will gather in the Chilean capital

Santiago on Monday, hoping to repeat a diplomatic

success scored in March when they coaxed Andean nations

away from armed conflict that would have pitted

Colombia, a U.S. ally, against Venezuela and Ecuador .

At that time, like now, the United States , which has

seen its influence in Latin America wane because of

President George W. Bush's war on terrorism and the rise

of leftist leaders in the region, was not at the

negotiating table.

Other regional heavyweights, especially Brazil , are

stepping in to fill the void. And virtually all South

American leaders, be they left-wing or conservative,

have rallied around Morales, Bolivia 's first indigenous president.

The Bolivian government said on Sunday that Morales

would fly to Santiago for the meeting with the leaders

of Argentina , Brazil , Chile , Colombia , Ecuador , Uruguay and Venezuela .

"A civil war in Bolivia would be terrible not just for

Bolivia but for the region. It would would affect the

national security of many countries," said Ricardo

Israel, a professor of international relations in Chile .

"Expectations are too high. The only thing the leaders

can do is encourage both sides in Bolivia to negotiate,

and it's not clear they will agree to do that."

TESTING TIMES

Bolivia, a volatile country in the center of South

America, has suffered chaos in the past week during

clashes between supporters of Morales and right-wing

governors who want more autonomy. About 30 people have died.

The summit will be a test of the nascent South American

Union of Nations, or Unasur, a 12-member group created

in May. Its key members participated in a Group of Rio

summit in March that quickly ended the Andean crisis.

Both groups are seen as alternatives to the U.S.-

dominated Organization of American States , or OAS.

In an unusual move, right-wing governors opposed to

Morales' plans for deep socialist reforms demanded a

seat at the table in Santiago with regional heads of

state, though their plea could be denied.

The leaders may have their hands full just trying to

craft a diplomatic response that pleases everybody.

Brazil, which depends on natural gas imports from

Bolivia, is keenly worried about energy security, while

Venezuela's Hugo Chavez, a close ally of Morales, has

entered a loud diplomatic dispute with Washington .

Chavez expelled the U.S. ambassador on Thursday -- after

Morales threw out the American ambassador in La Paz and

accused him of fomenting protests against his leftist government.

Washington, in retaliation, sent home diplomats from the

two countries and imposed sanctions on Venezuelan

officials it accused of helping Colombian rebels smuggle drugs.

"The Unasur leaders are in somewhat of a trap. On the

one hand, they want to show their support to a

democratic, unified and stable Bolivia . On the other,

they need to distance themselves from Chavez's personal

feud with the U.S. ," said Patricio Navia, a political

scientist at New York University .

(Additional reporting by Ray Colitt in Santa Cruz, Bolivia; Writing by Terry Wade; Editing by Fiona Ortiz and David Wiessler)