Evo Morales -- a friend of capital, much like Hugo Chavez

http://www.counterpunch.org/petras02042006.html

Weekend Edition
February 4 / 5, 2006

A Bizarre Beginning in Bolivia
Inside Evo Morales's Cabinet
By JAMES PETRAS

Major trade union federations, the biggest neighborhood social
movements (in the combative city of El Alto) and rural landless movements are
expressing consternation and hostility over several of newly elected
President Morales' cabinet appointments and their initial policy
priorities, which go counter to the campaign promises of candidate Morales.

One of the worst predictors of most governments' policies is their
campaign rhetoric. This is especially the case of presidential candidates
moving from the left toward the center. Much more reliable indicators of
the actual policies of a newly elected regime come in the form of the
Cabinet ministers appointed to key ministries.

President Morales has named sixteen Cabinet ministers, of which 7 have
been called into question by the mass movements which brought Morales
to the presidency. While overseas commentators and publicists praise the
presence of several "Indians" and four women in the Cabinet, the
popular movements in Bolivia are dismayed by the policies and past
trajectories of nearly half of the new ministers. Salvador Ric Riera, a
conservative Santa Cruz businessman and reputed multi-millionaire, accused by
the local trade union leaders of money laundering and other shady
activities, has been appointed Minister of Public Works and Services. In all
previous regimes, Public Works was one of the most notorious for its
corruption, especially in allocating public highway construction
contracts. Given the importance that Morales has given to fighting corruption,
most activists were appalled by the appointment of Riera, who was a
last-minute financial contributor to Morales' campaign. His appointment is
seen as a concession to a section of the Santa Cruz oligarchy.

The key Ministry of Mines was handed to Walter Villarroel who defected
from the rightwing UCS to jump on the Morales bandwagon. His
appointment was denounced by mining leader Cesar Lugo because of Villarroel's
previous stint in government in which he helped to dismantle the Bolivian
Mining Corporation (COMOBOL) and for privatizing one of the biggest
iron mines in the world. He has also been attacked for supporting previous
neo-liberal President Carlos Mesa and promoting private co-operatives
rather than strengthening state enterprises under worker control.

The Ministry of Defense was assigned to Walker San Miguel Rodriguez, a
lawyer and former director of Lloyd Bolivian Airlines (LBA), accused of
covering up the illegal privatization of the former state airlines.
Currently the Pilots Association has asked the state to intervene in the
firm to investigate crimes and irregularities. The new Minister of
Defense is a long-time member of the right-wing MNR and a former supporter
of ex-President Sanchez de Losada, the President who massacred scores of
protestors in 2003 before he fled into exile to the US. Hardly an
"incorruptible" and proper selection to head up the military!

The Teachers Confederation has rejected Morales' appointment of Felix
Patzi Paco as Minister of Education because he has no background in the
profession, has no knowledge of the field and is clearly unqualified to
confront the current crisis in education.

The Labor Confederation (COB) has strongly criticized the appointment
of Luis Alberto Arce to head the Finance Ministry. He has long been
connected with international financial institutions such as the IMF, World
Bank and Inter-American Development Bank. He is a long-term supporter
of their regressive structural adjustment programs. The Finance Ministry
is responsible for establishing the economic parameters for the rest of
the ministries, including investments, revenues and social
expenditures.

The Foreign Ministry will be run by a former City Councilor for El
Alto, David Choquehuanca. He has been a close collaborator of corrupt
neo-liberal ex-President Jaime Paz Zamora. He can defend his free market
policies in both Spanish and Aymara.

Evo Morales' appointment of Abel Mamani to the Ministry of Water was
strongly contested by the leaders of the Federation of Neighborhood
Councils (FEJUVE) in El Alto, the key organization that ignited the
insurrections that toppled two former neo-liberal presidents and gave Morales a
resounding 70 per cent majority in El Alto. Morales and Mamani acted
without consulting the popular assemblies of FEJUVE despite the
centrality of the water issue in El Alto. Moreover, Mamani, a former leader of
FEJUVE was criticized for mishandling funds and failing to pursue the
universal demand for nationalization of foreign-owned water distribution
rights in El Alto. The neighborhood groups were less impressed by
Mamani's facility in speaking Quechua than by his lack of militancy and his
abundant political opportunism.

The social movements praised Morales' appointments to Hydrocarbons
(Andre Soliz Rada) who promises to promote the nationalization of gas and
petroleum, Justice (Casmira Rodriguez Romerom) a leader in the Domestic
Workers Union, Labor (Alex Galvez Mamani) a former leader in the
Factory Workers Confederation. Regarding the rest of the Ministers, there is
neither serious opposition nor praise for the moment. However it should
be noted that Soliz Rada of Hydrocarbons was a former leader of the
center-right CONDEPA party which co-habitated with former neo-liberal
presidents, even as he polemicized against the illegal sell-off of state
petroleum resources. The head of Peasant and Agrarian Affairs is a Santa
Cruz intellectual with no ties to the major peasant movements in the
Andes or Cochabamba. The key economic posts are strongly tilted toward
technocrats and liberals while the 'social ministries' are in the hands
of leftists. While this gives the impression of diversity of
representation, in fact it is the economic ministry (Finance), which will
establish the economic parameters for budget allocations, which will profoundly
influence any social changes.

In his inaugural address to Congress Evo Morales was categorical in his
defense of big plantation owners and his opposition to any
redistribution of fertile and productive lands. "I want to tell you, distinguished
Congress people, my policy toward land policy. I want to tell you that
productive land, whether it is producing or lends itself to a social
economic use, will be respected, whether it is 1000 hectares, 2000
hectares, 3000 or 5000 hectares. But those lands which are used for
speculative purposes will revert to the state in order to redistribute the land
to the people without land" (January 22, 2006). Morales also condemned
slavery in the Eastern regions of Bolivia.

Morales' exclusion of all the biggest landholdings, plantations and
latifundios fulfills his pre-election promises to the wealthy Santa Cruz
agro-business oligarchs, but it is a repudiation of his promises of
agrarian reform to the landless and peasant movements. Government-promoted
land settlements in remote public lands with precarious soil, distant
from markets, transport and credit facilities will doom recipients to
failure, as has occurred in the past.

In his address to Congress Morales highlighted "austerity" in
government salaries for legislators and himself. However personal morality was
harnessed to austerity in the state budget--a position clearly
articulated by his newly appointed Finance Minister Luis Arce. As soon as Arce
took office, he convoked a meeting of the heads of the Central Bank, the
Tax and Revenue Office, the Planning and Development Ministries and
others to announce that Bolivia would follow four 'axes' of policy:
maintaining macro-economic stability, generating a new tax-paying
consciousness, encouraging consumers to buy Bolivian-made products and encourage
the use of Bolivian currency instead of the dollar.

Arce's defense of the IMF-backed macro-economic stability pact is a
guarantee that government-sponsored social programs will be severely
limited, that no major or minor structural changes (expropriations of land,
factories, banks and mines) will be undertaken. Arce's four priorities
exclude any redistributive programs and favor trivial measures, which
in absolute terms will have zero impact in lessening inequalities or
reducing poverty and--at best -- only minimally increasing social
services.

Encouraging consumers to "buy Bolivian" has been tried before and
failed because contraband provides a decent livelihood in the absence of
large-scale publicly funded job programs (which is unthinkable with Arce's
fiscal austerity strategy). Moreover without any substantial increase
in the $50 dollar a month minimum wage, consumers will prefer cheaper
contraband Chinese goods to local manufactures goods. Finally given the
enormous army of 'informal' street venders who depend on selling cheap
imports, anything short of public investment in alternative employment
will doom a "nationalist" consumer campaign. The new Aymara-speaking
Foreign Minister, David Choquehuanca, hasd affirmed that Bolivia is open
to discussing a free trade agreement with the US , something previous
neo-liberal regime were not able to advance. As he took over at the
Foreign Ministry, he declared "We do not reject entering the Free Trade Area
of the Americas".

He elaborated further "We are going to have relations with everyone, we
have to talk about free trade agreements, with various nations and
analyze the situation with the Andean Community, the Southern Cone Market
(MERCOSUR), blocs with which Bolivia has commercial accords." He went on
to cite Morales' overseas trip to several Latin American and European
countries and South Africa prior to his taking office. "When Evo
traveled abroad he said he learned how to do good business". Indeed Evo's trip
abroad and his conversations with the US Ambassador to Bolivia ( David
Greenlee) and US Assistant Secretary of State for Western Hemispheric
Affairs, (Thomas Shannon) , were essentially to assure Europe and the US
of his economic orthodoxy, to encourage more and bigger investments in
the mineral sector and to secure their certification of good conduct.

While Morales' key cabinet appointments may appear to overseas
observers as "contradictory" to his campaign rhetoric, and his enthusiastic
support among Indian communities, it is in reality compatible with the
less public side of his political wheeling and dealing with established
economic and political elites prior to and during his election campaign.

President Morales has opposed many of the demands of the mass social
movements for the past several years, in fact since he first ran for the
presidency in 2002. He did not support nor participate in the popular
insurrectionary movements which overthrew neo-liberal President Sanchez
de Losada in October 2003, and the popular uprising, which ousted
President Carlos Mesa in May-June 2005. He supported President Mesa's 2004
referendum in increasing the royalty payments on gas and petroleum,
which explicitly excluded nationalization. During the electoral campaign
Morales expressed support for "nationalization" in mass meetings, while
assuring foreign oil and gas companies that he would guarantee their
assets, investments and profits on the condition that they increased their
royalty payments. On his trip to Brazil, Argentina, Spain and France he
reaffirmed his commitment to protecting existing investments in
petroleum and gas, and went further asking them to increase and expand their
investments in mineral exploitation and processing. His appointment of
the liberal Walter Villarroel to the Mining Ministry, over the vehement
objections and threats of job action from the mining unions (which
brought him to power) is indicative of his determination to pursue an
orthodox foreign investment-based mineral exploitation model.

Carlos Villegas, Minister of Sustainable Development and Development
Planning, upon taking office stated that Repsol (the Spanish MNC) and
Total (French Gas Giant) "had signaled they were willing to re-negotiate
their contracts to give a greater share of profits to Bolivia"
(Financial Times 1/23/2006). "Nationalization" according to the Morales
administration is little more than an increase in tax revenue and nothing more.
Given Bolivia's commitment to "maintaining macro-economic stability"
that means essentially that more new tax revenues will continue to flow
into foreign and public debt payments, all incurred by previous corrupt
regimes and very little of which was ever invested in productive
activities.

Morales' overseas trip to Cuba and Venezuela and the promise of
socio-economic assistance served to provide him with 'leftist' legitimacy. His
travels to Spain, France, Holland, Belgium, South Africa and Brazil to
discuss political and economic agreements will lock Bolivia into its
conventional role as energy and mineral exporter. More significant than
his much-publicized travels abroad was his meeting in La Paz with US
Ambassador Greenlee at the Ambassador's residence prior to his travel to
Cuba and Venezuela. While no details of the conversation were released
it is understood by both sides that no significant conflicts surfaced.
Vice-President Garcia Linera announced the meeting was cordial and the
basis for future agreements.

One of the most lucrative mineral exploitation projects confronting the
Morales regime is the publicly owned iron and manganese mines of Mutun
in Santa Cruz, with 40 billions tons of iron deposits. The value of the
raw iron is estimated by Bolivian experts at $400 billion dollars at
current prices; converted to steel or iron construction rods, it is
valued at $30 trillion dollars, less the cost of production and investment.
Mutun is up for bidding, with several multi-nationals competing. The
bidding prior to Morales taking office was based on excavating and
exporting the raw iron ores with no intention of adding value through
conversion to steel. In order for the Morales regime to "industrialize" raw
materials to add value and increase national revenues, it would require
channeling natural gas toward fueling the steel refineries. That in turn
requires nationalizing gas production because the Brazilian
multi-national, Petrobras, would certainly not co-operate, as the returns on sale
within Bolivia would be far below its prices in Sao Paulo.

Morales' claim to want to "industrialize" raw material production comes
into direct conflict with his policy of guaranteeing foreign ownership
of hydrocarbon resources in exchange for higher tax rates. Morales uses
a double discourse: his opposition to "neo-liberalism" is contradicted
by his support for orthodox "stabilization of macro-economic policies";
his defense of budgetary austerity and his Finance Minister's refusal
to triple or even raise the minimum wage ("a raise is being studied to
see if it is compatible with stable macro-economic policies" according
to the Finance Minister) is in contradiction to his promise to reduce
poverty; his guarantees to the owners of vast plantations is in
contradiction to the demands of millions of landless and subsistence peasants
and his guarantees to the export-oriented multinationals' control of
hydrocarbons conflicts with national demands to harness energy to local
consumption and industrialization.

Sooner rather than later, polarized differences of interest between
Morales' foreign and local business allies and oligarchs and the masses
who struggled and sacrificed to elect him to power will lead to a new
round of confrontations and conflicts. Morales is riding two horses going
in opposite directions. The photogenic traditional Andean rituals, the
color and pageantry of the electoral inauguration will quickly fade in
the face of the continuing poverty, inequality and gross concentrations
of wealth. Over time a profound disenchantment will spread with a
President who spoke to the people but works for the rich, including the
foreign rich. For now the Bolivian Workers Confederation (Central Obrera
Boliviana) and the leaders of all the major mining, teachers and
neighborhood movements have sent a clear and forthright message to all their
affiliates to prepare for direct action if Morales reneges on three
central demands of the people: nationalization of gas and petroleum and
expulsion of the multi-national petroleum companies; the expropriation of
the large landed estates and the redistribution of 25 million acres of
land to the landless peasants; and an immediate raise of the national
minimum wage. The great majority of movement leaders and activists
(Indians and Mestizos) are not impressed by the Indian rituals and the
cultural theater organized by Morales entourage. They are prepared to
re-launch mass mobilizations when it become clear to the poor that Morales has
embraced the agenda of the bankers, trans-national corporations and
agro-business owners.

Bolivia is not Brazil nor Argentina nor Uruguay nor Chile where the
center-left regimes were in control of the trade unions and sectors of the
social movements. The most important trade unions are totally
independent of the state, Evo's party, the Movement to Socialist (or MAS) and
his cabinet. The transition from mass peasant leader to accommodating
statesman for the multi-national corporations will not be easy or a smooth
operation: more likely Evo will soon face the challenges and political
instability which sent his two predecessors into early retirement.

James Petras, a former Professor of Sociology at Binghamton University,
New York, owns a 50 year membership in the class struggle, is an
adviser to the landless and jobless in brazil and argentina and is co-author
of Globalization Unmasked (Zed). His new book with Henry Veltmeyer,
Social Movements and the State: Brazil, Ecuador, Bolivia and Argentina,
will be published in October 2005. He can be reached at:
jpetras [at] binghamton.edu


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