Chavez-style Economics Fail Miserably in Bolivia
Things continue to get worse for Bolivian president Evo Morales. Last December, his country erupted in massive street protests when Morales abolished fuel subsidies and thereby caused an abrupt spike in gasoline and diesel prices. Chastened by the violent backlash, he quickly reversed his decision and restored the subsidies. A few weeks ago, fresh anti-government protests began. Spearheaded by the most powerful Bolivian trade union (the Central Obrera Boliviana), the demonstrations were aimed at winning a 15 percent salary increase for teachers, miners, policemen, and other public-sector workers. Morales had proposed a 10 percent pay hike, but only for certain employees. The unions wanted more, and they launched a general strike to secure their demands. Labor activists set off dynamite and clashed with riot police, who used tear gas and water cannons to repel the unruly mobs. On Monday, the unions agreed to end their strike and accept a broad-based 12 percent pay increase. Meanwhile, the government appeared to backtrack from its declared plan to nationalize various mines owned by Pan American Silver and Glencore International, citing union opposition.
For the time being, Morales has quelled the unrest. But the recent strike — along with the fuel protests in December — showed that the former coca grower has lost the support of many poor and working-class Bolivians, who helped him secure reelection with 64 percent of the vote in December 2009. The unions were once bastions of pro-Morales sentiment — in fact, Morales himself was a top union leader before entering politics — but they are now among his fiercest critics. Morales took office with bold promises of reducing widespread poverty and deep inequality. Instead, his policies have spooked foreign investors, spurred capital flight, slowly destroyed the vitally important Bolivian energy sector, and increased social polarization. As of January, his approval rating stood at just 36 percent, according to the Ipsos Institute. A more recent poll found that if Morales ran for reelection today, he would receive only 22 percent of the vote.
Bolivia’s decline reflects the utter and complete failure of Chávez-style economics. Morales is a prominent disciple of the Venezuelan dictator, and he has closely followed Hugo’s playbook. He has weakened the rule of law, undermined democracy, and nationalized a significant portion of the economy while seeking to implement an ambitious land-redistribution agenda. Bolivia has the second-largest natural-gas reserves in South America. Yet Morales nationalized the industry in 2006, with predictably negative consequences. Last summer, the president of the Bolivian Chamber of Hydrocarbons told the Financial Times that his country’s natural-gas reserves were shrinking “because there have not been any significant investments in the past five years.”
Government by skin color doesn’t really work out – good stuff is where you find it and not where you expect to find it. Indigenous political movements will only find the Age of Copper and not a progressive state.
The problem in Bolivia is that the indigenous population in the mid to high lands is deeply xenophobic and that is what Morales has tapped into; that is not the same thing as tapping into innovation which is what is needed.
The east of Bolivia is prosperous because that is where the cocaine people spend and enjoy their money – it is almost a separate country. When I visited Santa Cruz in 1988 the difference from 5 years before was stunning. Free cable TV everywhere showing first run movies on large TVs was taken for granted, something virtually unknown in South America at the time. The number of car dealerships in such a small town was staggering – the place reeked of money.
In 60 years, the population has more than tripled and like the majority of Latin America, this is the true source of Bolivia’s problems.
do not fear ..obama is turning the USA into an image of Bolivia.
Evo was only elected after he paralyzed the country forcing the previously elected presidents (two of them ..hardly democracy) to flee using community organizing tactics like the thug obama.
I was working there (gas exploration) just before his grab at the presidency …there was a backlog of projects that vanished the next year and still have not returned.
How was this failure not manifestly predictable?
It was…to anybody with a brain.
Well you could very well take out all the “Bolivias” and replace them with the United States. We are on the same distructive path.
Last December, his country erupted in massive street protests when Morales abolished fuel subsidies and thereby caused an abrupt spike in gasoline and diesel prices.
That Evo attempted to end fuel subsidies shows a difference between himself and his mentor Thugo. Gasoline in Venezuela costs around 15 cents US per gallon.
It is ironic, or should I say fitting, that Evo has run into trouble with those who block roads or set off dynamite, as Evo made ample use of such tactics to rise from a humble cocalero to President. What goes around, comes around.
That Evo attempted to end fuel subsidies shows a difference between himself and his mentor Thugo. Gasoline in Venezuela costs around 15 cents US per gallon.
No, that just shows the difference between a nation that’s a petroleum producer, and one that isn’t.
Of course, that gas price only benefits Thugo’s cronies and apparatchiks, who are the only ones who can afford cars.
Well written and informative. Thanks.
On the plus side, he still has the most awesome hair south of the Rio Grande, and he could get at least third runner-up in a CHiPs look-alike contest. So he’s got that going for him.
Evo or the Donald in a hair to hair competition.
Who would take home the gold?
The noting of the Bolivian on cocaine trafficking charges is not surprising. As I get older, I begin to believe that the major drug dealers and the major drug interdiction operations (DEA et al) have a symbiotic relationship. The DEA needs the cartels to justify its existence. The cartels need the DEA to act as a barrier of entry to competition so they retain the lions share of the business.
Being an illegal activity keeps many who might otherwise compete out of the marketplace. That DEA is likely to nail newer operators without a lot of experience keeps upstart criminal operations gaining a foothold.
It seems that only enough is done to seem like something is being done but not so much as to put the “interdiction industry” out of business.
One would think that after several decades we would have been able to shut these people down if we were really serious about it.
It is like the US and the present and last few wars, we are not in it to win.
Enough sneaking around, just bomb them into oblivion.
Not surprisingly, corruption is rampant in his government. In February, a Morales intelligence adviser named René Sanabria, who had previously served as Bolivian drug czar, was arrested in Panama on drug-trafficking charges. Sanabria allegedly orchestrated a 317-pound cocaine shipment last November.
That darn Law of Unintended Consequences strrrikes again! Ain’t prohibition just grand?
Not really surprising that Chavez style economics is failing in Bolivia, since it is also failing in Venezuala. The only thing keeping Chavez going is oil money, but his economy is getting so bad that even the oil money wont be enough to keep it going.
Considering that Obama is not much different than Chavez, except that we dont have oil money, we should be very worried. The only thing keeping us still going is that the US has a much larger private economy to loot than Chavez did.
yet another example of socialist/marxist govt failing. but will any of the people listen ..heck no. like the cartoon ‘family circus’ marxists have a ‘NOT ME’mentality. every failure is marxism is due to something or someone else, a new enemy of the people which can only be stopped by surrendering more power to the govt. when it fails completly its becaue the marxism was not ‘real marxism’. you hear this alot from socialists about the failure of the soviet union. that it wasnt ‘real communism’. socialism is truly a mental illness
I came across this article about a recent Morales brainstorm in The National Post, a Canadian newspaper: http://www.nationalpost.com/todays-paper/Human+rights+proposed+birds+bees+trees/4598924/story.html
Morales wants to give human rights to birds, bees, and trees. He thinks this is such a good idea that he wants the UN to propose similar policies for the whole world.
Apparently, MOrales isn’t really clear on the meaning of the “human” in “human rights”. Then again, he is a Marxist so it is an understandable confusion….
When is Oliver Stone’s movie on how great Evo is, scheduled to come out?
I’m waiting….NOT!
Maybe you folks should read this again. Morales is losing popularity as he slides towards corporate deals and neoliberalism in the attempt to build an economy in a country that has had extractive industry as its primary support for centuries. The push back is from the left – wake up! – if Morales loses an election it will be to someone further left.
@Harry Reardon – the biosphere gave us life – the worldwide initiative to respect the foundation of life on Earth is more popular than you know.