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Bolivia as the new “bad boy” of the Americas?

By Daniel Duquenal

05.05.06 | Nothing further from the truth, what Bolivia is doing is the bidding of Chavez and Castro. But to understand this fully one needs to scratch a little bit deeper.

The first thing that should strike the observer is that the US really does not hurt, directly, from the Morales decreed nationalization of the gas industry. In fact, the two countries that are most affected are Brazil, Argentina and Spain, now under the rule of socialist administrations. How come?

Yes, you could argue that by rattling the oil markets Bolivia’s Morales forces a price increase that does affect the US, the empire, the enemy of all LatAm patriots. But it is enough for the Energy department to announce an unexpected surplus in the stocks of gasoline to push down and all but annul that price hike. Bolivia’s gas is not that important, certainly not in the league of Venezuelan oil. It has been a long time since US oil interests in Bolivia have been nationalized. Today main victim is state owned Petrobras and Lula is not amused as Brazil has perhaps 1.5 billion USD at stake in Bolivia, and I understand about half of the natural gas that serves the Sao Paulo region.

So, why did Morales decide to strike at Brazil, the leader of Mercosur, the group that Bolivia and Venezuela would like to enter as soon as possible? Did he think for a moment that Lula would have forgiven a temper tantrum of a fellow socialist president? There are two sets of reasons, internal and external ones.

In Bolivia it is far from certain that the coming constitutional assembly will be 95% pro Morales the way the Venezuelan one was in 1999, courtesy of a deficient electoral system. In fact, Morales is not even assured to get a majority in the next elections where regional aspirations will play a major role with a Bolivian opposition much better organized and spirited than the Venezuelan one was. In such context, there is no surprise that he is resorting to crass nationalism to rabble rouse the people around the “patriotic” president Morales.

The external reasons are more complex, and, in part, derive from the inherent weakness of Morales. And they revolve around the Chavez project. Just as Chavez was feeling a winner, with Bolivia aligned behind him, Peru about to fall and anytime soon Ecuador added to his trophy collection, clouds came up fast. At home, his administration is routinely ridiculed for its inefficiency just as Chavez does not need that distraction in his ambitious foreign plans. Outside, Colombia and Peru sign up for a FTA with the hated US of A (1). Chile under Bachelet seems to sail as usual, minding its own interests and adding yet more FTA to its commercial arsenal. Then Ollanta Humala stumbles and only gets what the pollsters were predicting, a rather meager 30% for someone chavistas were predicting winning on the first round balloting. The prospect of a Peru not falling in line has been enough to launch a series of events, probably planned for a while but which suddenly became urgent. This is why Chavez decided to leave the Andean Community, tried to force the hand of the Mercosur towards a more political block, and then sped up Morales in joining the Cuba Venezuela “trade” initiative. Probably in Havana a few days ago Castro and his gang decided that Bolivia needed to speed up its nationalization. It had become important to project an image of aggressiveness, of confidence, of victory to Chavez before people realize that maybe things were not going Chavez’s way. Even during a darker period, it is important to give the impression that Chavez is leading the continent.

But this is not going to be easy. In spite of a mediocre success in avoiding the OAS to involve itself in the Peru Venezuela squabble, and even in spite of today meeting a Port Iguaçu where one would be led to believe that Brazil and Argentina made their peace with Morales thanks to Chavez intervention, one cannot hide the fact that the ones benefiting from recent events are the anti Chavez forces that are starting to react across the continent. Oh! The reaction is not going to be strong yet. After all, nobody contests Bolivia its right to control its natural resources better (as long as adequate compensation comes, which remains to be seen and which might turn the Iguaçu smiles into bitter smirks). After all Chavez check book has still a few checks that all want to get and cash before something happens to him.

But look at what happened today: Uruguay socialist president Tabare Vasquez has been received by George Bush, the hated “imperator”. No, Vasquez is not reneging his socialist origins, Vasquez is thinking about the well being of his citizens, something that Chavez would be well advised to do. See, it turns out that in spite of several years in the Mercosur, the US is STILL the main customer for Uruguayan goods. Actually what Chile and the US buy to tiny Uruguay is roughly as much as what Argentina and Brazil buy. Uruguayans can do simple arithmetic and the Mercosur looks more and more like a pain in the neck, even more when piquetero acting environmentalist in Argentina pretend impose development policies of Uruguay by blocking the bridges that link Uruguay to Argentina in protest for a paper mill construction (2). Vasquez tried to play Chavez against Lula and Kirchner and these two scolded Chavez and ignored Vasquez legitimate pretensions (both Argentina and Brazil think that Uruguay should be one of their provinces). So this one went to see George Bush, to “strengthen economic ties” and to vent, where it matters, the problems of Mercosur. Just the way Maria Corina Machado did, incidentally. Will Venezuelan courts sue Tabare? Will Machado and Vasquez share a cell for visiting the Shrub? Meanwhile in all capitals of LatAm, some amused, some worried, look at the latest move of Tabare wo might outfox all of them as Uruguay has always done: when you are small, you survive on wits.

So, on one side we see Chavez trying to coax a coalition in his favor which is not birthing easily. He evens goes to talk to Sin Tierra groups of Brazil which is certainly something that Lula will not be delighted with. He intervenes grossly wherever he can. Yet, the more he intervenes the less long term changes are seen in his favor. Uribe will be reelected. Garcia now seems a shoo in Peru, and will be able to confirm the Peru FTA without losing political capital. Even better, that FTA might be a way to avoid Garcia to repeat the mistakes of his first term. Ecuador will probably follow its two immediate neighbors. Chile will be received by Washington in all regal splendor. Lula might finally sit down for real FTA business once he is reelected and will leave all the rest of LatAm hang high and dry (something that Vasquez is anticipating for sure). This will leave for Chavez Argentina and Bolivia and we all know that the first non Argentinean that will influence Argentina is not born yet…

Chavez would have achieved EXACTLY the same had he kept in Venezuela the hundreds of millions of dollars he has given away. Talk about lousy cost benefit calculations.

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1) Free Trade Agreements might be the secret weapon of the US against Chavez. This one does sell all the oil he wants to the US and folks are resenting that Chavez criticizes free trade agreements when US exports to Venezuela are booming and oil exports to the US are financing Chavez eccentricities and these governments own enemies at home. This inner contradiction is the best argument the US has gotten in quite a while to counter Chavez. The US Congress should swallow hard and approve these FTA as soon as possible. Their success in improving the economies of the signatories is the best antidote to the populist madness of Chavez. Hey, Dems and Gops, time to do something positive for LatAm before you get in much worse trouble as millions will soon seek the Northern roads.

2) Piqueteros are professional rioters issued from chronic Argentinean unemployment. Strom troopers of sorts created by peronista sectors and that now cannot be controlled.

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