Ciao!

Great post, Miguel. I have just been reading about the run-up to the 52 revolution, and some of the parallels (attacks on multinational oil companies, talks of nationalisation, indigenous rights) are strikingly similar. I think the only thing I would add is what effect being both of the social movements and yet at times having a very different position (eg MAS being very late on board during protests in May and June) will have on MAS. Will it radicalise MAS or will it lead to an irrevocable split? Perhaps that will be in your next installment?

Has there been any major candidate in the past that hasn't been populist? All three in December seemed to have a very similar message, although I think PODEMOS was the most extreme case of populism.

I had a friend who has been in ADN in years past, but he decided against getting involved in the campaign because the large amount of groups that brought their own "gente". I would PODEMOS really had no concrete plan, and they basically represented the anti-Evo side. They seemed to be an unrelated group of individuals, ex-party members and other opportunists that really were after state patronage.

I would say MAS was less obvious with that. Sure there were people who jumped on the bandwagon, so to speak, but I think all those invovled at least were on the same page and supported the movement of change.

Interesting post Miguel. A couple of thoughts on your predictions.

I'm not sure that Evo won't nationalize Boliva's gas/oil industry in a Chavez-esque manner. Although he is different from Chavez, both Evo and Chavez do appear to represent a move away from the US-leaning governments in favor of more locally-leaning governments.

This can also be seen in Argentina which recently paid off the last of its debt to the IMF and announced that it would no longer allow the IMF to influence its domestic economy. (Chavez helped in this by buying $1 billion+ of Argentina's debt, thereby allowing Argentina to end its relationship to the IMF earlier and cementing Chavez's role as an economic leader to SA-further weakening US influence)

So there is definitely a wave of more independent and non-American leaning leaders arising in SA.
-Chavez in Venezuela taking a highly independent stance, after nationalizing his countries energy resources.
-Evo in Bolivia, who I think will follow Chavez's lead and nationalize all or a portion of those resources. Also Evo will definitely change the rules of the US-sponsored drug war. Not clear how, but things will definitely change on that issue.
-Argentina has ended its relationship with the IMF
-Even Lula and Brazil are seeking more ties within SA and with Asia. Their energy resources have also expanded and Brazil plans on being nearly self-sufficient with its ethanol.

I would agree that these leaders are not necessarily socialist--it appears their real motivation is more nationalist in that they want to end the US's involvement in their affairs and to seek a measure of true economic independence using whatever natural resources they have, oil, gas, and possibly even coca. All of these leaders do appear to be moving towards closer ties with Asia and Europe--anyone so long as it’s not the US.

The US really needs to rethink its relationship with these countries. Right now, the US foreign policy with SA appears stuck in Cold War type arrangements. The Bush administration seems to have a "not with us, against us" mentality with regards to these countries, which I feel is an overly simplistic and completely incorrect view of the situation. Instead of viewing them as anti-American these leaders need to be seen as more sophisticated as the previous generation, who simply wanted stability and could be influenced on that level. These leaders appear to want more for their local constituencies (which no longer include the traditional former elites) and place less importance on keeping the US happy with their affairs.

Eduardo:

Yes, I agree that PODEMOS seemed a purely populist alliance, which is regretable. If only because my previous perception of Tuto was that he was more technocrat than politician, and a refreshing change from the kind of corruption & incompetence rampant during the Banzer presidency.

But most Bolivian parties, unfortunately, are more populist than "institutionalized" parties. By 2001, it was clear that only the MNR was an institutionalized party, w/ ADN & MIR coming close, but not quite. I think the MNR is still farily institutionalized, and suspect that this recent election might actually help them in that regard. MAS, however, is still a populist organization, though it could transend inot something of an institutionalized party during the Evo government, but the test will be its tenure in power & its behavior in the next election.

If Bolivia becames a two-party system, then parties will (like in the US) likely remain less institutionalized & more populist.

Patrick:

I'm not entirely sure that Evo *could* pursue the same kinds of policies as Chavez has, especially in light of his very public agreements to international leaders that he wouldn't nationalize hydrocarbons. But there are two important facts to keep in mind w/ this:

1) Bolivia's natural gas is mostly untapped, it's only been explored. So there's no infrastructure to get the gas out, refine it, and export it. If the country nationalizes the resourse, it won't have the investment capital to exploit the resource. It's a catch-22: Bolivia needs to set terms favorably enough to allow investors to operate, or else it won't get any benefit from the natural gas. This is a sharp contras to Venezuela, which is a wealthier country & has long-standing & existing infrastructure to exploit such a resource.

2) In the mid 1960s, the Bolivian government nationalized the oil industry. The result was a catastrophe. Since the country's landlocked, and since it had no standing oil refineries, the international oil companies boycotted the country's oil. No company would refine or transport Bolivian oil, essentially making the nationalized industry meaningless. In the end, the next government (which took over by coup) re-opened the industry to investment. This is also a contrast w/ Venezuela, which is not landlocked & has its own refining & transportation network.

Of course, things have changed in the past decades, but this is my perception. The real basic problem is capital to exploit the natural gas. Someone is going to have to pay for it, and since Bolivian doesn't have the money, that means foreign investment. A country like Bolivia that survives (literally) from foreign economic assistance can't afford to cut off both future investment & economic assistance.

Miguel I thought your analysis was well done and made even more complete with the ensuing dialogue with Patrick and Eduardo. Though I don’t think that I share the same breadth of knowledge on the subject as you three I have been living and working in Bolivia for the last 4 years trying to understand things from a late-comers point of view. I however would like to further the discussion regarding the necessary capital and technology for extraction of Bolivia’s natural gas, the question being this: What will be the impact, if any, of the so called intentions to create an “energy circle” with both Brasil and Venezuela offering capital and technological resources to Bolivia now that Morales is captain of the sinking ship? I would be interested in your perspectives on the plausibility of the creation of a so called energy circle, and the possibility of Brasil and Venezuela fronting the needed capital to Bolivia.

David:

I'm not too up on the economic ins/outs of your questions, but I'll take a shot at an answer of sorts. First, I do think that Evo is going likely to court expanded oil & gas dealings w/ Brazil (there already are pipelines to Brazil & Argentina) and perhaps also Venezuela. But Venezuela also exports natural gas (it's Bolivia's chief regional competitor in the market), so they're not likely to buy any natural gas from Bolivia. Instead, Venezuela has promised to ship gasoline to Bolivia to help keep the price low for consumers.

But there's no denying that Bolivia desperately needs investment capital. The national budget is heavily subsidized by foreign economic assistance (chiefly from the US, but also from Europe, Japan, and others). The government can't afford to even pay basic public salaries w/o foreign assistance, much less exploit a natural resource like natural gas in remote & barely accessible parts of the country. In a utopian world, Bolivia could own (and w/o corruption, mind you) its natural gas reserves. But this isn't a utopian world. Instead, the country needs foreign investors to help exploit the resource. And those investors will want to make a good profit from the venture.

Agreed, Evo would have some problems taking over the gas industry because of the capital issues. However, natural gas prices being what they are now (historical highs) countries like China and maybe even the US might be willing to come to a 50-50 split on this industry with either a long term eventual buyout by Bolivia in say 20 years, or a long favorable term contract for the gas with the foreign partner after they spend the money on infrastructure.

EIther way, there's probably going to be a lot of pipeline issues arising from this--could be an interesting problem for Evo. Especially since he claims to be a "man of the people" how are those people going to feel about him when/if he does claims their farmland for a pipeline project?

Patrick:

Many people don't realize that Bolivia didn't "privatize" its national industries in the 1990s, it "capitalized" them. What this meant was that the Bolivian government retained 50% ownership of those industries (though the foreign investers were given management control).

As for new natural gas investments: There's evidence that foreign companies are willing to renegotiate. The problem is that they don't want to risk having to renegotiate again, and again, and again in a climate of perpetual uncertainty. The Bolivian government has (in the last two years) shown itself incapable of enforcing the rule of law. And social movements have attacked natural gas installations, causing much property damage. I don't think the investors are heartless. But they're not going to invest millions of dollars into a venture only to then have their investment nationalized.

Evo's government will have to make it very clear to investors that he's willing to compromise, and that he'll reign in the more radical social movements.