"Bolivia's Evo Morales Shifts the Hemispheric Balance of Power"

In the first of the wave of year-long presidential elections in Latin America to mark a significant shift in the Western Hemispheric balance of power between the United States and Brazil, Bolivians voted into power Evo Morales who is pledged to end Bolivia's dependence on the United States and to join the forces of regional autonomy and integration.

Recent elections in Honduras and Chile confirmed the extant balance of power. Honduras is impoverished, lacks strategic resources and is dependent on aid from Washington; voters there had a choice between two traditional parties that were both committed to pro-U.S. policies. [See: "Intelligence Brief: Elections in Honduras"]

With a successful trading relationship with the United States based on a neoliberal economic paradigm, yet eager to obtain energy supplies in the region, Chile maintained its posture of straddling the North-South gulf by giving a large plurality to Socialist Michelle Bachelet who promised a dual-track policy of continuing the country's good relations with Washington -- anchored in a bilateral trade agreement -- and pursuing regional integration through its associate membership in the Brazil-dominated Mercosur trading bloc. [See: "Intelligence Brief: Chile"]

In contrast to the Honduran and Chilean elections, Bolivia's presented a stark and genuine choice between the two contending power centers. The two leading candidates -- Morales and Jorge Quiroga -- stood at the opposite ends of the North-South divide, with Morales committed to taking Bolivia into Brazil's camp and Quiroga affirming a pro-U.S. position. Morales' victory registered a severe setback for Washington in the region.

With the largest natural gas reserves in South America (estimated at approximately 53.3 trillion cubic feet) after Venezuela, Bolivia is of central strategic interest to both the United States and Brazil, and the former is now in retreat. Morales' success is also likely to embolden similar movements in the other Andean states -- Ecuador and Peru -- leaving Washington with the prospect that Colombia will remain its only reliable ally on the continent. Washington's loss is Brasilia's gain.

The Significance of Morales' Victory

Presenting himself as Washington's "worst nightmare," Morales stands on the far left of the current tendencies in South America to seek alternatives to Washington's neoliberal economic policies. An admirer of Cuba's Fidel Castro and Venezuela's Hugo Chavez, Morales based his campaign on promises to wrest control of the gas reserves and the hydrocarbons industry from the multinational energy corporations that had invested in Bolivia during its pro-U.S. administrations of the past 20 years.

Morales also pledged to decriminalize the cultivation of the coca leaf -- the source of cocaine -- for its traditional uses as a mild stimulant and medicinal tea, and to fight the cocaine trade, promising to end cooperation with Washington's programs to eliminate the crop. Morales wrapped up his proposals in an ideology that attacked the neoliberal market model and offered in its place a vision of cooperative socialism and regional integration similar to Chavez's "Bolivarian Revolution." [See: "Venezuela's Hugo Chavez Makes His Bid for a Bolivarian Revolution"]

Pre-election polls showed Morales with 34 percent of the vote to Quiroga's 29 percent, with the other six candidates below 10 percent. Had those figures reflected the results, Morales would have had to face a run-off in Bolivia's congress, necessitating deal making that would have diminished his power. As it turned out, he scored a surprising total of 54.3 percent of the vote, avoiding the run-off and gaining enhanced legitimacy, which was solidified by the 85 percent turnout of registered voters. Since the end of Bolivia's period of military dictatorships in 1982, the country's presidents had rarely received more than a 25 percent share at the polls and never a majority, much less such a convincing one.

Morales' rise from an impoverished childhood, through his leadership of Bolivia's coca growers, to his leadership of a broad social movement -- composed of indigenous communities, labor unions, coca growers and the urban poor -- reflects the progressive alienation of the sectors of Bolivia's population that were disadvantaged by neoliberal policies. In 2003, the International Monetary Fund, which promotes the neoliberal agenda, reported a fall in Bolivia's per capita income and a rise in unemployment, leaving 63 percent of the population below the poverty line and more than 50 percent living on less than one dollar a day.

With a left-nationalist political tradition that made Bolivia the first South American country to nationalize its energy industry in the 1930s and surfaced in a 1952 revolution spurred by organized miners, the failure of neoliberalism generated a new wave of social movements centered on reversing the privatization of public utilities, restoring state control over hydrocarbons, rolling back coca eradication programs, instituting land redistribution and enhancing the rights of the majority indigenous population. Morales, an indigenous Aymara, gathered the disparate movements into the Movement Toward Socialism (M.A.S.), which became the largest bloc in congress, and failed narrowly in the 2002 elections to become Bolivia's first indigenous president.

The winner of the 2002 contest, Gonzalo Sanchez de Lozada, pursued hard-line neoliberal policies, including a plan to pipe Bolivian gas to Chile, where it would be liquefied and shipped to the United States. That proposal ignited the "gas wars" of 2003, in which the rising social movements resorted to direct action, including a profusion of road blockades, to oppose Sanchez de Lozada's policies. The gas wars merged with the "coca wars," "water wars" (against privatization of waterworks), and union and student demands for social spending into a political force that led to Sanchez de Lozada's resignation. The new president, Carlos Mesa, was ousted in 2005 under similar pressures after his efforts at reconciliation failed to heal the division between Bolivia's highlands -- populated by impoverished and indigenous peoples -- and its lowlands, where the energy resources are located and the population is more European and mestizo, and relatively wealthier.

Morales' unexpected vote tally indicated that he had drawn support from groups outside his base, particularly the small business sector that had been economically hurt by the blockades and had calculated that it would be more advantageous to have Morales on the inside than in the opposition. He also attracted support from urban professionals and government workers who had become disaffected in response to the economic situation and corruption.

Although Morales has legitimacy, the announced loyalty of the military and the temporary acquiescence of the opposition, the path to reaching his goals is not clear. His highest card is the fear of the opposition that, if he is thwarted, he could unleash his energized base and move to authoritarian rule that could involve expropriation of land and resources, which -- at the moment -- he has promised not to do.

The opposition's highest card is the threat to take the lowland provinces into secession if the economic interests of that region are severely damaged. Morales also faces the need for capital investment to develop the gas industry and Bolivia's dependence on aid and trade preferences from Washington, the latter of which have been instrumental in developing the country's textile and furniture industries.

The complex set of pressures on Morales resolves into a force field in which he must balance between the demands of his base that he fulfill his promises, and civil strife and the possible loss of Washington's benefits and of foreign investment if he goes too far in trying to fulfill those promises.

Analysts point out that Morales could be cushioned by aid from Venezuela and has ready markets for its gas in Brazil, Argentina and Chile. It is a telling sign that among the multinational energy companies in Bolivia, such as Total, Exxon, British Gas and Repsol, only Brazil's national company Petrobras has not put litigation on the table if Morales goes too far in his efforts to renegotiate hydrocarbons agreements.

Meanwhile, Washington is faced with the uncomfortable choice of punishing Morales by withdrawing aid and trade preferences if he carries through on his coca policies, which could drive him firmly into the arms of Chavez, or to attempt to compromise with him and see the effective termination of its Andean war on drugs.

Conclusion

Caught between an insistent and mobilized base, and a determined opposition which is only held back by the threat of that base and which might move toward secession if that threat materializes, Morales will have to be adroit to survive. The tangled conflicts will come to a head in August 2006 when Morales has promised to convene a constituent assembly to rewrite Bolivia's constitution. Both his base and the opposition are counting on the assembly to enshrine their divergent aims; for the former, indigenous rights and state control of energy, and for the latter, regional autonomy and a greater share of hydrocarbons revenues. Until then, both sides will be girding for battle.

Morales will be supported externally by Brazil -- the biggest importer of Bolivia's gas -- and Venezuela. The United States will probably try to stay on the sidelines, fearful that any measures to curb Morales will backfire into greater support for him, as they did in 2002 when Washington threatened to withdraw aid if Morales was elected, a threat that was not repeated this time around.

The foreign hydrocarbons companies will probably acquiesce in more favorable contract terms for Bolivia, as they have in Venezuela, but they are likely to litigate if they are pushed against the wall and might diminish their rate of investments, as they have been doing since the gas wars (investment in the gas industry went from US$608 million in 1998 to US$200 million in 2004).

Although Bolivia's political future is currently too clouded to make any well grounded prediction about it, signs point in favor of Morales' survival. The current left-nationalist movement is the most comprehensive and mobilized in the country's history and the indigenous awakening is unlikely to be reversed, putting the old European and mestizo political class on the defensive. Although Washington favors the policies of the lowlanders, it would not welcome the probable civil war that would attend efforts at secession. In addition, Morales is operating in a friendly neighborhood, with the support of the region's major power center, Brazil, and its oil-rich partner, Venezuela.

Morales treads on shaky terrain, but -- if he is able to restrain his base -- has an advantage over his rivals.