[Marxism] FT blog on Morales
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Thu May 3 12:07:58 MDT 2012
Is Bolivian president Evo Morales the poster boy for Latin America’s extreme left? Or for orthodox macroeconomic management?
Morales, a charismatic former coca union leader who swept to power in 2006 on promises to rebalance centuries of inequality, can do fiery rhetoric as well as his leftist allies Rafael Correa of Ecuador and Hugo Chavez of Venezuela. But just as Morales swapped his bobbly batwing jumpers for tailored suits with an indigenous fabric trim, has he taken a more conservative line when it comes to Bolivia’s bottom line?
Many economists would say yes.
Bolivia’s economy grew at 5.1 per cent in 2011, and after six years of fiscal surplus had built up $12.1bn in international reserves. And for the first time in 1920, it is preparing a bond issue of up to $500m to help Morales further his industrialisation agenda, particularly in building a lithium processing plant, food processing and hydroelectricity.
This last is more important than ever considering the parlous state of electricity provision in Bolivia. This and the May Day expropriation of Red Electrica of Spain’s assets means the government will now be carrying the can for energy rationing and steep consumer prices.
In an interview with the FT, Michael Shifter, president of the Washington based inter-American Dialogue, called Morales “the poster child for multilateral financial institutions”.
“Certainly here in Washington Bolivia is seen very favourably in terms of its economic management and showing discipline,” Shifter said, adding that Morales, unlike Cristina Kirchner in Argentina, knows he can’t afford to completely turn off foreign investment.
“I think Morales is going to be careful to try to at least accompany this measure with at least sending the message privately that foreign investment in the country is still welcome. Because without foreign investment the country is going to have a hard time growing and if the country doesn’t grow he is going to have difficulties.”
Morales’ May Day antics are certainly bad news for Red Electrica, and for Spain, but no one could say they were shocked. Just as social protests such as the one that has paralysed Newmont’s $4.8bn Conga gold and copper project are accepted as a leading risk of doing business in Peru, and corruption a major consideration in Argentina, nationalisation has been a factor in Bolivia since 2006.
And while Morales may have quietly restored diplomatic relations with the United States and prudently managed the economy, he will continue to demonise American interests in speeches from the presidential palace, and seize the occasional foreign asset – even if lately those assets are smaller and in less strategic sectors. Morales is courting international investors, but it’s a backroom courtship that wouldn’t do his image much good on the home front.
Inflammatory rhetoric and nationalisations are still very much vote-winners in one of Latin America’s poorest nations, where Morales’ political base, the indigenous majority, have for generations got the fuzzy end of the lollipop.
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