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Commentary

No Left Turn


     
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Washington—IN 1781, an Aymara Indian, Tupac Katari, led an uprising against Spanish rule in Bolivia and lay siege to La Paz. He was captured and killed by having his limbs tied to four horses that pulled in opposite directions. Before dying, he prophesied, "I will come back as millions." To judge by the overwhelming victory of Evo Morales, an Aymara demagogue, in Bolivia's elections on Dec. 18, he kept his promise.

Mr. Morales's election has been interpreted as confirmation that South America is moving left. Mr. Morales does not hide his admiration for Fidel Castro and Hugo Chávez, and his proposals include the nationalization of the oil industry, the redistribution of some privately owned estates and the decriminalization of coca plantations in the Chapare region. He opposes the Free Trade Area of the Americas and blasts "neoliberalism."

It would be a mistake, however, to think that Mr. Morales will become another Hugo Chávez even if that is his wish. The new Bolivian president will not have the resources that Venezuela commands and his popular base is shakier. Moreover, Brazil has an important presence in Bolivia and will be in a position to exercise a moderating influence.

Unlike Venezuela, where skyrocketing oil prices brought Mr. Chávez a windfall that allowed him to build a strong social network based on patronage, Bolivia has little revenue. The only reason its fiscal account is not showing a $1 billion deficit is foreign aid, mainly from the United States. Because Mr. Morales's followers toppled the two previous presidents and forced the authorities to impose heavy royalties on multinational companies exploiting natural gas, foreign investment has dried up: only $84 million worth of investment came into the country this year.

And the possibility of suddenly turning Bolivia's natural gas reserves (potentially a whopping 52 trillion cubic feet) into an exporting bonanza has been precluded by the cancellation of a project that sought to export natural gas to Mexico and California through Chilean ports. (Bolivia and Chile have been at odds since the late 19th century, when Bolivia lost its access to the sea to Chile in the War of the Pacific.)

Bolivia's indigenous population, which wants results quickly, may also hold Mr. Morales in check. His party, Movement Toward Socialism, is a loose amalgam of competing social groups. If Mr. Morales tries to concentrate power, he will need a sturdy, permanent base of support that is by no means guaranteed. Furthermore, the residents of many provinces, especially in the east, are agitating for local autonomy and have warned that they will resist attempts to centralize even more power in La Paz.

Bolivia has had left-wing governments before that were toppled by the same people who made them possible. President Carlos Mesa, who replaced Gonzalo Sánchez de Lozada in 2003 after violent demonstrations, had the support of the population when he reneged on natural gas contracts with foreign investors and led a virulent campaign against Chile. Yet the masses still turned against him, forcing his resignation in June.

Finally, Brazil's pragmatic president, Luiz Inácio Lula da Silva, could also constrain Mr. Morales's ambitions. Brazil is now effectively Bolivia's only foreign investor, and its role is likely to grow even more crucial, because Mr. Morales promises to nationalize the subsoil and keep the high royalties on oil and natural gas exploitation that have kept out investors from other countries. Bolivia therefore will need Petrobras, the Brazilian energy giant, to expand its investments. Mr. da Silva has not been able to rein in Mr. Chávez, but he will have leverage over the more vulnerable Mr. Morales.

Of course, whether Mr. Morales will draw closer to Mr. Chávez will in part depend on American policy toward Bolivia. And that, in turn, will depend on whether Mr. Morales decriminalizes coca growing. If he does so, the United States should not overreact, because nothing much will change. Even with the restrictions that are in place now, there are already as many plantations in Chapare as the demand for coca—and Bolivia's capacity to make cocaine from it—warrant. In any case, cocaine production and distribution will still be banned in Bolivia, Mr. Morales says. If Washington were to respond to coca decriminalization by hindering Bolivia's exports of clothing and jewelry to the United States, tens of thousands of families in El Alto, one of Mr. Morales's indigenous power bases, would lose their source of income, and anti-American sentiment would pull Mr. Morales leftward.

Thomas Shannon, assistant secretary of state for Western Hemisphere affairs, recently told me that the United States aims to eliminate its remaining protectionist measures (which hamper some South American economies by restricting United States imports of their goods). Few Latin Americans have heard about this endeavor. If the goal is to promote development and foster good relations across the hemisphere, eliminating protectionist policies will be far more effective than making coca plantations the paramount issue in Bolivia-United States relations. Fractious politics and ethnic tensions already make for a delicate situation in the Andes. Let's not make it worse.


Alvaro Vargas Llosa is Senior Fellow of The Center on Global Prosperity at The Independent Institute. He is a native of Peru and received his B.S.C. in international history from the London School of Economics. His Independent Institute books include Global Crossings: Immigration, Civilization, and America, Lessons From the Poor: Triumph of the Entrepreneurial Spirit, The Che Guevara Myth and the Future of Liberty, and Liberty for Latin America.


  New from Alvaro Vargas Llosa!
GLOBAL CROSSINGS: Immigration, Civilization, and America
The erosion of national boundaries—and even the idea of the nation state—is already underway as people become ever more inter-connected across borders. A jungle of myth, falsehood and misrepresentation dominates the debate over immigration. The reality is that the economic contributions of immigration far outweigh the costs.






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