[Marxism] Bolivia and Brazil

[Louis Proyect <lnp3@xxxxxxxxx>]

Calculated Contradictions
Evo Morales's two constituencies: Bolivia... and Brazil
By Mac Margolis
Newsweek International

Jan. 16, 2006 issue - When a mop-haired socialist coca farmer won the 
Bolivian presidency last month, a chill swept through Washington. After 
all, Evo Morales is not only the champion of the cocaleros, whose harvests 
supply the global cocaine trade, but bosom amigo to both Fidel Castro and 
Hugo Chavez, the United States' top two headaches in the hemisphere. Now, 
with yet another Latin American nation apparently set to take a hard left, 
the wonks and moguls were bracing for the fallout?not inside the 
Washington, D.C., Beltway, but in Brazil.

No country has more at stake in the "new Bolivia" than its giant neighbor. 
With its volatile politics and blighted economy, Bolivia might seem like 
forbidden territory. Not to the Brazilians. They know that this Andean 
nation sits atop 1.6 trillion cubic meters of natural gas, enough to fuel 
South America for decades. When the Bolivian economy opened up in the 
mid-'90s, state-owned Brazilian oil giant Petrobras built an epic pipeline 
to pump natural gas from the Bolivian jungle to So Paulo and plowed an 
additional $1.5 billion into oil and gas prospecting, refining and 
distribution. Bolivia now supplies half of Brazil's natural gas. 
Brazilians, in turn, buy a third of Bolivian exports, pay a fifth of La 
Paz's taxes and process about 40 percent of its soybeans.

Now that mutual bounty could be in jeopardy. Morales built his campaign on 
promises to nationalize natural resources and "decolonize" the economy, 
code words for rolling back the rules of gringo-sponsored capitalism. "In 
the case of Bolivia," says Jean-Paul Prates, an independent Brazilian 
oil-industry analyst, "we are the gringos."

Officially, relations between the Brazilian government and Bolivia's heir 
apparent, who takes office Jan. 22, couldn't be cozier. Even when he held a 
thin lead in the polls, Morales made a point of seeking the blessings of 
Brazilian President Luiz Inacio Lula da Silva, whom he admiringly calls "my 
big brother." Lula, in turn, issued an effusive note hailing Morales's 
electoral victory and quickly dispatched a special envoy to La Paz to 
reinforce Brasilia's good will.

But not even Lula can divine what a Morales government will do. On the 
campaign trail, garlanded in flowers and coca leaves, the fiery cocalero 
repeatedly denounced foreign companies for "looting" the country. Recently 
he reiterated his promise to make multinational companies renegotiate their 
contracts, a prospect that will surely inflict losses on the oil industry, 
Petrobras included. (Total foreign investment in Bolivia plunged to just 
$62 million in the first half of 2005, down from a peak of $600 million in 
1998.) Yet he recently drew applause in an unlikely gathering of business 
and civic leaders in Santa Cruz de la Sierra, a wealthy province where 
Morales is seen with skepticism. "I do not want to expropriate or 
confiscate any assets," Morales said. "I want to learn from the businessmen."

Part of the ambiguity might be calculated. Morales was swept to power by 
one of Latin America's most volatile constituencies, a loose coalition of 
urban nationalists, coca growers and impoverished Indians who toppled two 
constitutional governments in as many years. But he knows that insurgents 
alone will not put Bolivia's stunned economy back on its feet. That means 
playing the risky game of both ends against the middle. "Morales has to 
deliver results, which means offering investors reasonable terms," says 
Michael Shifter, a senior analyst at the Inter-American Dialogue, an 
independent Washington think tank. "Yet if he abandons his [radical] 
discourse, his voter base will feel betrayed and go to the streets, and 
maybe force him out, too."

Still, many analysts believe that good sense will prevail, if for no other 
reason than that Morales has little choice. Unlike Chavez, who is swimming 
in oil, Morales still has most of his energy windfall buried underground. 
To get at it, "Bolivia needs foreign capital far more than the world needs 
Bolivia's gas," says Ricardo Amorim, Latin American analyst for WestLB 
Bank. That may not be the message that Bolivia's restive majority is eager 
to hear. But it is one that its new leader can ill afford to ignore.
© 2006 Newsweek, Inc.

© 2006 MSNBC.com

URL: http://www.msnbc.msn.com/id/10756777/site/newsweek/

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