Tuesday, December 20, 2005

Bolivia's stunning electoral result

/ chavez / contagious /
In what is still more good news from Latin America the socialist Evo Morales, self-styled US nightmare in the region, a cocalero, the first native indian president of the country and a chavezite, has, it seems, received the 51% of the vote that enables him to claim the presidency without any political bargains. This is great news any way you look at it.

This guy is about to rock some boats (although there are fears in the movement that supported him that he won't go far enough):

  • He's about to nationalize Bolivia's gas reserves:

    Morales wants to nationalize Bolivia's huge gas reserves, the continent's second largest after Venezuela, currently in the hands of multinational companies. 'We will renegotiate all contracts - they are illegal, since congress has never ratified them,' he says. 'The state will recover the property of its natural resources, but we are open to foreign investment in exchange for a share of the business.'

    He's not in a hurry and won't do this hastily, but it is quite certain that (after the past few years' "gas wars") he can't back off this promise. He seems to have certain ideas that involve neighboring Venezuela. Venezuela might step in if the US makes good on its threat to cut (90 million dollars of) aid to the country. Chavez BTW is already giving the big oil companies hell. The population of Bolivia has been radicalized by both the gas issue and the water issue, having defeated World Bank mandated water privatization that had exploded the price of water. More on the Bolivian water wars here.

  • The thing that will certainly piss off the US is the fact that Morales is about to legalize coca cultivation, a traditional crop for Indians and primary ingredient of cocaine, "with the aim of industrialising productions so it can be made into food and medicinal products". A site called Evo Morales, which might or might not be connected with Evo personally or might, more probably, just be a fan site, states the following (which I reproduce in its entirety):

    We, Aymaras and Quechuas, original nations of the Andes, have survived the onslaught of the white man until today thanks to our coca leaf. From the moment the white man came to our land he has tried to control our leaf for his own enrichment. He has abused it here and now he is abusing it everywhere else. Since it has escaped his control he is intent on destroying it.

    He has labeled our sacred plant a drug, to be prohibited and eliminated under universally binding drugs conventions. With these conventions the United Nations have offended and betrayed the Aymara and Quechua Nations.
    Under the cover of these conventions and after impoverishing our people with their neoliberal policies, the United States government, foremost enemy of the Indians, has used its dollars to bribe the officials of Bolivia, corrupt its institutions and pit white Bolivians against us. Recently the United States Embassy in La Paz has funded a mercenary force with orders to eliminate the coca plant and the Indians defending it.

    Coca is not a drug!
    This lie has to be called. The moment has come for us to stop the menace of anihilation of the coca plant and our communal ways of living.
    The coca plant has sustained us through all adversities until today and we will strive, with all our might and with her help, to thwart the white man's wicked plans.
    Like other plants coca is a medicine, a holy plant. Thanks to coca we have withstood the untold sufferings brought upon us by the white man's unholy war on drugs.

    Therefore, the United Nations should respect our coca leaf and take it off their prohibitive lists.
    Therefore, the United States should get all their drug war personel and equipment out of Bolivia. They have abused their stay. Let them go home to fight their own countries drug war.
    Therefore, the white men should stop their war on drugs and accept that we live peacefully with the coca plant. They should consider reports from Harvard University, their most cherished academic institution, about the beneficial uses of our plant.

    But this will not come about without our active intervention. We have to rise to the occasion.
    The moment has come for the original nations to take power in our own hands.
    The moment has come for us to redeem the coca plant.
    We have learned to treat the plant with respect and she has generously rewarded us
    From now on we will no longer tolerate any foreign powers harming our plant. We will be her sovereign guardians.
    Those nations that accept this will be our friends. We will help them treat its abuse.
    Those that will continue to repress our plant will be our enemies and the predictions of sickness and misery proferred by our yaquiris, as recorded by legend, will certainly befall them.

    As long as the American invader fights us, we, the original nations, won't forget our war cry, born from the pain of our people:

    Causachun coca! Wañuchun yanquis!
    Long live coca! Yankee go home!

  • In related developments in neighboring Venezuela, the Chavez government just earmarked a breathtaking 41% of total expenditure of the country's 2006 budget for social programs. Which according to the BBC are already showing spectacular results.


    S G said...

    funny you should call the election of a cocaine grower "good news".

    And about the nationalization of the gas mining company, you should know something: Gas or oil, is not just money coming of its own will out of the earth. It needs to be extracted. And the best (read: cheapest, fastest, most efficient) technologies for this are in the brains of a few big mutinationals.

    Nationalizing gas, will send them all away and make them trust Bolivia less next time they try to get their help. Which they will do once the state proves once again how it can mess up the easisets tasks (you know the joke: The state could produce a sand deficit in the Sahara desert).

    It is true that sometimes contracts are not awarded to the big gas companies through the cleanest and best ways. But nationaliying is not the answer. Designing a clean auction, is...

    talos said...

    S_G: People were growing the coca plant in the Andes since time immemorial. That the west took this and created a drug and an addiction isn't their problem. Evo promises to fight narcotrafficers, but protect the small coca growers. Which is good.

    As far as extracting gas is concerned, I hear (and linked) that those pesky Venezuelans are about to lend a hand. Nevertheless the quite state-owned Chinese oil companies, don't seem to be at any disadvantage.

    As for trusting Bolivia less... I think you will find that wherever there'a a (big) profit to be made "trust" can quite easily re-establish itself. See for example how docile the oil companies are around Chavez (or the Iranians for that matter).

    Anonymous said...

    "Fight narcotraficers, but protect the small coca growers".

    This should be interesting.

    Coca is almost harmless when used in a culturally appropriate way. The Indians have been chewing coca leaves since forever, without taking much damage from it.

    Unfortunately, it's going to be damned difficult to keep the coca leaves in the hands of Indians. Coca farmers can make a lot of money selling to middlemen who'll sell to drug traffickers.

    In theory, it should be possible to design a system that keeps the coca leaves in a conduit from small farmer to indigenous coca-chewer, with minimal leakage. In practice, this would probably require the creation of a tolerably competent and honest administrating bureaucracy. And when I think of government in Bolivia, "competent" and "honest" are not the first words that leap to mind.

    Coca growing is already legal in some areas of Bolivia, BTW, for local consumption in the traditional manner. Mostly way the hell up in the mountains, where transport costs make even smuggling difficult and expensive, in small isolated communities that are relatively easy to monitor. (They actually self-monitor. Which works pretty well... as long as you're in a small isolated community, where everyone knows everyone else.)

    If Morales keeps it like that, it should be OK. If he tries to expand the program for ideological reasons, I see trouble ahead.

    And speaking of trouble ahead, there are some major differences between Venezuela's oil and Bolivia's gas industry. Venezuela's is far larger and much better developed. Chavez could more easily tell the oil companies to go to hell, because he already had rigs, pipelines and refineries in place. This is not the case in Bolivia, where huge amounts of investment are needed.

    Another difference: the Bolivian opposition seems to be stronger. Worryingly, it also has a strong regional aspect -- much more so then in Venezuela. Bolivia is divided along a highland-lowland, east-west axis. The western highlands are mostly Indian and poor; they eastern lowlands are much whiter and (by Bolivian standards) richer. Morales' support comes from the highlands. The lowlands have made murmurs about secession before. Watch for those murmurs to grow much louder now.

    N.B., Morales is Bolivia's fifth president in the last five years.

    Doug M.

    kkk said...

    talos said:
    S_G: People were growing the coca plant in the Andes since time immemorial. That the west took this and created a drug and an addiction isn't their problem. Evo promises to fight narcotrafficers, but protect the small coca growers. Which is good.

    Good point talos. In fact the demand is created to a great extent by thrusting neocon (so-called neoliberal) stockbrokers and financial types, as well as haf the Tory party in the UK, whose drug of choice it is :D !!!

    The speedy, incoherent but nevertheless arrogant buzz from coke is essential for them to maintain their "understanding" of economics in any sort of comprehensible fashion. Cocaine is therefore essential to the maintance of the international financial status quo. (Well I suppose meth crystal _might_ be a substitute)

    So spare us the hystrionics about the the election of a "cocaine grower" (cocaine grower, indeed) s_g, if neocons are scared that the supply might dry up they should just accept market rules, and the associated price hike that will come with these new developments. Cocaine is too cheap as it is IMHO.

    Remeber Reagan's "War to promote Cocaine Use"? Oops, I mean "War on Drugs". Olly North? Or didn't they teach you that at economics class.



    This is a most interesting development. I just wish that that old bugger Fidel would.... erm, retire, I really don't like him seen as part of something like a new triumvirate. Chavez and Morales seem like "new energy" to me, I dislike their association with Castro.

    But then I've never hidden my feelings about authoritarian Commie bastards :D

    Good post, I'll be following this...

    Renegade Eye said...

    Morales's value is to the extent, the mass movement pushes him. He has always been a parlimentarian.

    He had secret communications with the US, reassuring them.

    I believe he deserves critical support.

    talos said...

    Re: Coca:

    ""Zero coca would mean zero cocaleros," said Evo today. In a long fight, with many deaths, injuries and jailings, the cocaleros often blockaded the central highway between La Paz and Santa Cruz, choking the economy. At last, in October 2004, former president Carlos Mesa signed a pact allowing each farming family in Chapare to cultivate coca on one ´cato´ (approximately 0.4 acres) of land.

    Contrary to reports, Evo says he is happy with the ´cato´ for now and, as president, he would mount a international campaign for the right to legally export many coca-containing products, such as health cures, shampoos and biscuits. The national cocalero federation unequivocally opposes cocaine trafficking. "

    Re: gas&oil:

    "...The winner of Bolivia's presidential elections has repeated his vow to nationalize oil and gas and said he will void at least some contracts held by foreign companies "looting" the poor Andean nation's natural resources.

    Indian coca farmer Evo Morales said he will not confiscate refineries or infrastructure owned by multinational corporations. Instead, his government would renegotiate contracts so that the companies are partners, but not owners, in developing Bolivia's resources, he said..."


    "Bolivia's Evo Morales, who won presidential elections on Sunday, signaled on Tuesday that his new government will give preference to state-owned foreign companies in future energy partnerships.

    Morales, who will take office in January, said at a news conference that foreign state-owned oil companies that have rights to natural gas wells here will be able to recover their investment when they lose those rights under new contracts.

    "We are going to strengthen relations with state oil companies ... We are going to guarantee that partners have all the right to recover their investment," Morales said.

    Brazilian state-owned oil company Petrobras... is the biggest natural gas producer in Bolivia.""

    S G said...

    comeon, is there anyone who believes the cocaine from the small farmers will never reach the western markets in the familiar form of a white powder?

    sure I think cocaine is a problem of supply AND demand. And to say the truth I believe it should be legal. But until then most of the cocaine proceeds go to guerillas or criminals. I dont think this is acceptable. And surely a coca grower is not the person i would trust to bring some order to this mess that is Bolivia.

    "People were growing the coca plant in the Andes since time immemorial. "

    people used to have slaves since ancient times too... I hardly see a point in your argument.

    about gas & oil:

    "Instead, his government would renegotiate contracts so that the companies are partners, but not owners, in developing Bolivia's resources, he said..."

    this kind of behaviour, making and breaking contracts all the time, brings insecurity and makes companies invest less and ask more money for their troubles. Is there anyone who thinks Bolivia does not need investment?

    talos said...

    S_G: Well legalized coca cultivation will not reach the hands of criminals (much less guerillas). I think it stands to reason that a legal crop is much more easily regulated than an illegal crop. If someone BTW were to find a way to make some really addictive drug from olive oil, do you think that olive cultivation should be criminalized?

    Countries which have gas and oil resources AFAIK don't have to look too far to find investors. Especially when the current investors are robbing them blind. Petrobras and PDVSA will do nicely I'm sure - and look for Chavez to make some grand gesture regarding profit margins...

    Anonymous said...

    Well legalized coca cultivation will not reach the hands of criminals

    Odds of coca production in Bolivia being "well" legalized?

    Again, the current _cato_ system is very small scale, and (if I understand correctly) is restricted to two rural provinces in the mountainous west. It seems to be OK so far. Doesn't mean scaling it up is a good idea.

    Natural gas: again, I think we're talking past each other. High hydrocarbon prices give more leverage to the producers: sure. But not endlessly so. And -- again -- Bolivia is in a much weaker position than Venezuela.

    One, Bolivia's gas deposits are small compared to Venezuela's gas + oil.

    Two, natural gas prices haven't risen by nearly as much as oil prices.

    Three, Bolivia needs spectacular amounts of investment. Venezuela already has the infrastructure; Bolivia doesn't. Bolivia doesn't even have a pipeline connecting to the Pacific yet.

    Four, Bolivia has very limited capacity to do anything with the gas but export it. Venezuela has refineries and a petrochemical industry; it can turn the oil into everything from aviation fuel to fertilizer to PVC piping, and export it. This gives Venezuela a whole palette of options that Bolivia just does not have.

    And, of course, Bolivia is much less stable than Venezuela. Always has been, still is.

    [shrug] Who knows? Maybe Morales will do wonderful things for Bolivia. But he's got a much harder road ahead than Chavez ever did.

    Doug M.

    S G said...

    "Countries which have gas and oil resources AFAIK don't have to look too far to find investors. Especially when the current investors are robbing them blind."

    Excuse me saying so, but you still don't get it. It is not enough to get one investor. The more you get, the better. Because more potential investors will compete more fiercely for the contract, thus giving higher profits to the Bolivians. This lack of competition, because of perverse incentives against foreign investors is exactly what is plagueing Latin America. And people there still think it is too much liberalism that makes them poor. No way, it is too little liberalism, too little openness.

    kkk said...

    s_g said:
    >> funny you should call the election of a cocaine grower "good news".
    >> And to say the truth I believe it should be legal.

    Funny that you should believe cocaine must be legalised, s_g, but view "cocaine growers" as bad news.

    And further, even though it has been explained to you that there is no such thing as a "cocaine grower", the concept still seems to elude you.
    You still speak of "cocaine" from small farmers. Small farmers do not produce cocaine s_g, they produce coca leaf, which they sell on the market (I assume you know what a market is). Cocaine is produced, in the first instance in jungle labs mainly by representatives of international right-wing govrnments :D. OK??

    s_g also replied to talos' comment: "People were growing the coca plant in the Andes since time immemorial. " with:
    >> people used to have slaves since ancient times too... I hardly see a point in your argument.

    s_g, clearly your forte iseems to be in "economic" matters, and nothing to do with the real world. Coca leaf is an indispensable stimulant to people living at altitudes of >10000 ft, and as such is a valuable and ultra useful commodity. That's why it has been important since time immemorial. It has nothing to do with slavery, I fail to see what point you are trying to make, other than the usual hystrionics. Does this help you see the point, now? (No?? Have you any experience of breathing at >10000 ft?)

    So, when Reagan, or Dubya or Mitsotakis or the Tory party or the whole of the LSE decide that their noses are itchy, and that they, too, would like some of that High Andean stimulation, and in a conentrated form to boot, (despite living at <10000 ft), it is perhaps not quie right to mess up the lives of Andean peasants by accusing THEM of "drugs" trafficking.

    This sort of pathetic logic, duplicity and out-and-out hypocrisy. (of the type: Yes, I'd like to see cocaine legalised, provided it's controlled 100% by international pharmaceutical companies, and that the peasants are totally ripped off) is in large part responsible for so much of the ignorance around the subject, and extends to a lot of other areas, too, for instance the notion that some kind of social, co-operative custody of their resources, by the Bolivians themselves, would somehow be A BAD THING, if there weren't a wole lot of Western parasites, oops, I mean economic experts, taking the lion's share of the cake.

    I'm afraid that any simpler explanation would require a picture-book.

    kkk said...

    Merry Xmas, Happy New Year, and all the Best, talos, and general Histologion fans...