Monday, December 29, 2014

Mile high transit over Bolivia

Bolivia Revolutionizes Urban Mass Transit: From the Streets to the Sky

How a spectacular urban cable car system and a new municipal bus program are revolutionizing mass transit in La Paz and El Alto, with the help of some political competition.

Emily Achtenberg 12/26/2014
(Emily Achtenberg)(Emily Achtenberg)

Those searching for revolution in Bolivia may find it in unexpected places. On the streets and in the sky above La Paz, the nation’s capital, and the neighboring indigenous city of El Alto, a genuine transformation of the urban public transportation system is taking shape, against the backdrop of a political competition that is working to the benefit of local residents.
On December 4, President Evo Morales inaugurated the third line of Mi Teleférico (My Cable Car), the spectacular new cable car system launched last May between La Paz and El Alto. With its Red, Yellow, and Green Lines (the colors of the Bolivian flag), 11 stations, and 427 gondola cabins spanning more than 6 miles at 13,500 feet, it is the longest and highest urban cable car system in the world.
Around 100,000 passengers each day—more than 1 out of every 5 commuters between the two cities—are now riding the teleférico to work or school, to buy or sell goods in the local market, or to enjoy family leisure or tourist activities in one location or the other. Compared to the grueling, unpredictable journey in a packed taxi, minivan, or microbus that is the customary mode of local transit, the popular teleférico offers a quick hop in the sky between sleek, modern terminals, with spectacular vistas along the way and free internet at the stations. While the fare of 3 bolivianos (43c) costs more than a minivan ride, passengers who are elderly, disabled, or students pay only half, and the commute takes less than 20 minutes instead of the usual hour.
Morales points to the teleférico as a showpiece of Bolivia’s modernization, made possible by the past nine years of economic prosperity and political stability under his MAS (Movement Towards Socialism) government. It is also being touted as a symbol of integration, breaking down social, economic, and geographic barriers by connecting distant neighborhoods of indigenous migrants to the city’s commercial center, while opening up opportunities for tourism and investment flows to El Alto. As a political project, the teleférico epitomizes the campaign themes of progress, development, technological advancement, and national unity that propelled Morales and the MAS to an overwhelming victory last October.
While the cable system was constructed by the Austrian firm Doppelmayr—one of a handful of companies in the world with the necessary technical expertise—it is also very much a domestic initiative. The $235 million project cost has been financed entirely by Bolivia, with funds amassed largely from hydrocarbons revenues (taxes and royalties) accruing to the government. The construction workforce is largely Bolivian, and Bolivian engineers and technicians are being trained to operate the system.
The teleférico’s capital cost is expected to be amortized in 25 years—earlier than originally anticipated—through a combination of passenger revenues (75%) and commercial income (25%) generated from retail space and billboard rentals at the stations. (Fortunately, no commercial advertising is permitted on the cable cars, which are decorated instead with messages about important Bolivian laws, and, occasionally, with civic symbols such as soccer balls.) While experts remain skeptical, since virtually no public transit system in the world operates in the black, Morales has predicted that profits from the teleférico will soon be used to subsidize the government’s cash transfer programs.
Morales has pledged another $450 million to construct 5 more teleférico lines starting next year, more than doubling the range of the system. Unlike cable cars built in cities like Caracas and Medellin, which reach only a few isolated hilltop neighborhoods, the La Paz/ El Alto teleférico is uniquely envisaged as the core of an urban mass transit system—a “subway in the sky,” as The New York Times has dubbed it. Austrian president Heinz Fisher will travel to Bolivia to sign the new contract on January 22, the day Morales is sworn in for his third presidential term.
Equally popular in La Paz is the new municipal bus system, PumaKatari, (named for the cougar and serpent that symbolize strength and cleverness in Andean culture). Designed to serve the city’s remote and neglected hillside neighborhoods, the system is especially welcomed by poorer residents who live farthest from the center, and are often denied service or charged extra by taxi and minivan drivers. In some cases, angry residents have mobilized to demand the expulsion of minivan lines that provide poor service to their neighborhoods. The municipal buses, with fares of 28c during the day and 43c at night, may cost a little more than prevailing modes of transportation, but offer the same half-price discounts as the teleférico and the convenience and reliability of fixed stops, schedules, and routes.
PumaKatari is the brainchild of Luis Revilla, the popular La Paz mayor elected in 2010 on the left-center MSM (Movement Without Fear) ticket. Revilla supports the teleférico, but insists that it must be part of, and coordinated with, an integrated mass transit system for the La Paz metropolitan region that is efficient, safe, convenient, and meets residents’ needs.
The first phase of PumaKatari was launched in February 2014—just before the teleférico—with 3 routes and 61 buses manufactured by King Long Motors of China. Four new routes and 73 buses have been commissioned for early 2015, with another 4 routes and 60 buses to follow later in the year. The total $30 million capital cost, along with an initial $4 million operating subsidy, is being financed by the municipality, which in turn receives most of its funds from national sources (principally hydrocarbons revenues).
With Bolivia’s departmental and municipal elections scheduled for next March, transportation politics have become a major battleground in the hotly-contested La Paz mayoralty race. Revilla, forced to form a new party when the MSM was decertified after its poor showing in the national elections, collected more than 50,000 signatures in a week to secure standing for the new (Sovereignty and Liberty) ticket. has since acquired many adherents, especially among MAS dissidents such as former defense minister Cecilia Chacón and TIPNIS leader (and ex-presidential candidate) Fernando Vargas. The party is now organizing a slate of candidates to run for positions throughout the La Paz department, including ex-MAS education minister Félix Patzi for governor.
With Revilla now being mentioned as a potential future rival to Morales, the mayoral campaign and its related transportation issues have become even more competitive and contentious. At the recent official ceremony inaugurating the teleférico’s new Green Line, Revilla was snubbed in favor of La Paz city councilor Guillermo Mendoza, who is also the new MAS candidate for mayor. (Initially, the head of the state cable car company, César Dockweiler, was widely rumored to be in line to run for MAS.)
Tensions have also arisen over the selection of an interim mayor to replace Revilla, who is legally required to resign by the end of the year in order to run again in March. Revilla has expressed concern that the confirmed designee, a MAS-allied city councilor who recently voted against expanding the PumaKatari bus project (for reasons of cost), could work to undermine his transportation initiatives over the next several months.
Still, there are growing signs of inter-jurisdictional cooperation and coordination around transportation planning in the region. Teleférico stations are being coordinated with PumaKatari bus stops, and the first integrated transfer location was established with the new Green Line in December. The municipalities of La Paz and El Alto have signed an agreement to cooperate in implementing a regional mass transit system, and now meet regularly with representatives of the state cable car company as well as the Ministry of Public Works. El Alto’s counterpart to PumaKatari, the new municipal bus Sariri, is scheduled to start operations early next year, with two routes feeding directly into the teleférico.
The Morales government has also taken critical steps to contain opposition by the powerful MAS-allied transportista (taxi- and minivan-drivers) unions which have threatened to derail both the teleférico and municipal bus initiatives. Morales has guaranteed a $100 million loan from China to enable the La Paz and El Alto unions to purchase 2,000 modern vehicles from King Long Motors (the same company that manufactures the PumaKatari buses). The upgraded fleet will run on natural gas, eliminating the cost of federal gasoline subsidies. Additionally, the government will buy up the old minivans for scrap, and the unions will use the proceeds as a downpayment on China’s loan.
So far, Bolivia’s competitive urban transportation politics seem to be working to everyone’s advantage, and especially to the benefit of La Paz and El Alto residents. Having the resources from hydrocarbons revenues for major national and local projects certainly helps. Meanwhile, showcasing its shiny new cable cars and buses, La Paz has just been named one of the “seven most amazing cities in the world.”

Emily Achtenberg is an urban planner and the author of NACLA’s blog Rebel Currents, covering Latin American social movements and progressive governments (

Saturday, October 18, 2014

Glenn Greenwald article on Bolivian election

Featured photo - What ‘Democracy’ Really Means in U.S. and New York Times Jargon: Latin America Edition
Dean Mouhtaropoulos
One of the most accidentally revealing media accounts highlighting the real meaning of “democracy” in U.S. discourse is a still-remarkable 2002 New York Times Editorial on the U.S.-backed military coup in Venezuela, which temporarily removed that country’s democratically elected (and very popular) president, Hugo Chávez. Rather than describe that coup as what it was by definition - a direct attack on democracy by a foreign power and domestic military which disliked the popularly elected president – the Times, in the most Orwellian fashion imaginable, literally celebrated the coup as a victory for democracy:
With yesterday’s resignation of President Hugo Chávez, Venezuelan democracy is no longer threatened by a would-be dictator. Mr. Chávez, a ruinous demagogue, stepped down after the military intervened and handed power to a respected business leader, Pedro Carmona. 
Thankfully, said the NYT, democracy in Venezuela was no longer in danger . . . because the democratically-elected leader was forcibly removed by the military and replaced by an unelected, pro-U.S. “business leader.” The Champions of Democracy at the NYT then demanded a ruler more to their liking: “Venezuela urgently needs a leader with a strong democratic mandate to clean up the mess, encourage entrepreneurial freedom and slim down and professionalize the bureaucracy.”
More amazingly still, the Times editors told their readers that Chávez’s “removal was a purely Venezuelan affair,” even though it was quickly and predictably revealed that neocon officials in the Bush administration played a central role. Eleven years later, upon Chávez’s death, the Times editors admitted that “the Bush administration badly damaged Washington’s reputation throughout Latin America when it unwisely blessed a failed 2002 military coup attempt against Mr. Chávez” [the paper forgot to mention that it, too, blessed (and misled its readers about) that coup]. The editors then also acknowledged the rather significant facts that Chávez’s “redistributionist policies brought better living conditions to millions of poor Venezuelans” and “there is no denying his popularity among Venezuela’s impoverished majority.”
If you think The New York Times editorial page has learned any lessons from that debacle, you’d be mistaken. Today they published an editorial expressing grave concern about the state of democracy in Latin America generally and Bolivia specifically. The proximate cause of this concern? The overwhelming election victory of Bolivian President Evo Morales (pictured above), who, as The Guardian put it, “is widely popular at home for a pragmatic economic stewardship that spread Bolivia’s natural gas and mineral wealth among the masses.”
The Times editors nonetheless see Morales’ election to a third term not as a vindication of democracy but as a threat to it, linking his election victory to the way in which “the strength of democratic values in the region has been undermined in past years by coups and electoral irregularities.” Even as they admit that “it is easy to see why many Bolivians would want to see Mr. Morales, the country’s first president with indigenous roots, remain at the helm” – because “during his tenure, the economy of the country, one of the least developed in the hemisphere, grew at a healthy rate, the level of inequality shrank and the number of people living in poverty dropped significantly” - they nonetheless chide Bolivia’s neighbors for endorsing his ongoing rule: “it is troubling that the stronger democracies in Latin America seem happy to condone it.”
The Editors depict their concern as grounded in the lengthy tenure of Morales as well as the democratically elected leaders of Ecuador and Venezuela: “perhaps the most disquieting trend is that protégés of Mr. Chávez seem inclined to emulate his reluctance to cede power.” But the real reason the NYT so vehemently dislikes these elected leaders and ironically views them as threats to “democracy” becomes crystal clear toward the end of the editorial (emphasis added):
This regional dynamic has been dismal for Washington’s influence in the region. In Venezuela, Bolivia and Ecuador, the new generation of caudillos [sic] have staked out anti-American policies and limited the scope of engagement on developmentmilitary cooperation and drug enforcement efforts. This has damaged the prospects for trade and security cooperation.
You can’t get much more blatant than that. The democratically elected leaders of these sovereign countries fail to submit to U.S. dictates, impede American imperialism, and subvert U.S. industry’s neoliberal designs on the region’s resources. Therefore, despite how popular they are with their own citizens and how much they’ve improved the lives of millions of their nations’ long-oppressed and impoverished minorities, they are depicted as grave threats to “democracy.”
It is, of course, true that democratically elected leaders are capable of authoritarian measures. It is, for instance, democratically elected U.S. leaders who imprison people without charges for years, build secret domestic spying systems, and even assert the power to assassinate their own citizens without due process. Elections are no guarantee against tyranny. There are legitimate criticisms to be made of each of these leaders with regard to domestic measures and civic freedoms, as there is for virtually every government on the planet.
But the very idea that the U.S. government and its media allies are motivated by those flaws is nothing short of laughable. Many of the U.S. government’s closest allies are the world’s worst regimes, beginning with the uniquely oppressive Saudi kingdom (which just yesterday sentenced a popular Shiite dissident to death) and the brutal military coup regime in Egypt, which, as my colleague Murtaza Hussain reports today, gets more popular in Washington as it becomes even more oppressive. And, of course, the U.S. supports Israel in every way imaginable even as its Secretary of State expressly recognizes the “apartheid” nature of its policy path.
Just as the NYT did with the Venezuelan coup regime of 2002, the U.S. government hails the Egyptian coup regime as saviors of democracy. That’s because “democracy” in U.S. discourse means: “serving U.S. interests” and “obeying U.S. dictates,” regardless how how the leaders gain and maintain power. Conversely, “tyranny” means “opposing the U.S. agenda” and “refusing U.S. commands,” no matter how fair and free the elections are that empower the government. The most tyrannical regimes are celebrated as long as they remain subservient, while the most popular and democratic governments are condemned as despots to the extent that they exercise independence.
To see how true that is, just imagine the orgies of denunciation that would rain down if a U.S. adversary (say, Iran, or Venezuela) rather than a key U.S. ally like Saudi Arabia had just sentenced a popular dissident to death. Instead, the NYT just weeks ago uncritically quotes an Emirates ambassador lauding Saudi Arabia as one of the region’s “moderate” allies because of its service to the U.S. bombing campaign in Syria. Meanwhile, the very popular, democratically elected leader of Bolivia is a grave menace to democratic values – because he’s “dismal for Washington’s influence in the region.”
Photo: Dean Mouhtaropoulos/Getty Images

Thursday, October 16, 2014

Evo Morales wins third term: Ellie Mae O'Hagen article in the Guardian

Ellie Mae O'Hagan
Evo Morales campaigns for the presidency
Evo Morales in the runup for the vote at the inauguration of a thermo-electric plant in Yacuiba in September 2014. Photograph: Aizar Raldes/AFP/Getty
The socialist Evo Morales, who yesterday was re-elected to serve a third term as president of Bolivia, has long been cast as a figure of fun by the media in the global north. Much like the now deceased Hugo Chávez, Morales is often depicted as a buffoonish populist whose flamboyant denouncements of the United States belie his incompetence. And so, reports of his landslide win inevitably focused on his announcement that it was “a victory for anti-imperialism”, as though anti-US sentiment is the only thing Morales has given to Bolivia in his eight years in government.
More likely, Morales’s enduring popularity is a result of his extraordinary socio-economic reforms, which – according to the New York Times – have transformed Bolivia from an “economic basket case” into a country that receives praise from such unlikely contenders as the World Bank and the IMF – an irony considering the country’s success is the result of the socialist administration casting off the recommendations of the IMF in the first place.
According to a report by the Centre for Economic and Policy Research (CEPR) in Washington, “Bolivia has grown much faster over the last eight years than in any period over the past three and a half decades.” The benefits of such growth have been felt by the Bolivian people: under Morales, poverty has declined by 25% and extreme poverty has declined by 43%; social spending has increased by more than 45%; the real minimum wage has increased by 87.7%; and, perhaps unsurprisingly, the Economic Commission on Latin America and the Caribbean has praised Bolivia for being “one of the few countries that has reduced inequality”. In this respect, the re-election of Morales is really very simple: people like to be economically secure – so if you reduce poverty, they’ll probably vote for you.
It’s true that Morales has made enemies in the White House, but this is probably less to do with rhetoric than the fact that he consistently calls for the international legalisation of the coca leaf, which is chewed as part of Bolivian culture but can also be refined into cocaine (via a truly disgusting chemical process). Before Morales was first elected, the Telegraph reported: “Decriminalisation would probably increase supply of the leaf, which is processed into cocaine, providing drug traffickers with more of the profitable illicit substance.” In fact the opposite has happened – in the past two years, coca cultivation has been falling in Bolivia. This inconvenient fact is a source of great consternation to the US government, which has poured billions of dollars into its totally ineffective and highly militaristic war on drugs in Latin America. Morales has – accurately in my view – previously implied that the war on drugs is used by the US as an excuse to meddle in the region’s politics.
Having said this, it would be dishonest to argue that Morales’s tenure has been perfect. Earlier this year the Bolivian government drew criticism from human rights groups for reducing the legal working age to 10. But what most news outlets neglected to mention is that the government was responding to a campaign from the children’s trade union, Unatsbo, which sees the change in legislation as a first step to protecting Bolivia’s 850,000 working children from the exploitation that comes with clandestine employment. Although Bolivia has made massive strides in reducing poverty, more than a million of its citizens still live on 75p a day – a legacy of the excruciating poverty of Bolivia before Morales took office.
Nevertheless, Morales must make reducing the number of child workers a priority during his third term. Not doing so will be a serious failure of his progressive project. In terms of social reforms, Morales should heed recent calls from the public advocate of Bolivia, Rolando Villena, to legalise same-sex civil unions and pave the way for equal marriage. He should also follow the lead of Uruguay’s president, José Mujica, and completely liberalise abortion, which would be a good first step to tackling the country’s high rates of maternal mortality. And Morales must also address the criticism of indigenous leaders who accuse him of failing to honour his commitments to protect indigenous people and the environment.
But however Morales uses his third term, it’s clear that what he’s done already has been remarkable. He has defied the conventional wisdom that says leftwing policies damage economic growth, that working-class people can’t run successful economies, and that politics can’t be transformative – and he’s done all of this in the face of enormous political pressure from the IMF, the international business community and the US government. In the success of Morales, important political lessons can be found – and perhaps we could all do with learning them.

Saturday, October 11, 2014

New York Times article by Martin Sivak on the 12 Octobr election

This article appeared in the Opinion pages of the New York Times on 10 October, 2014, two days before the Bolivian national elections. While this site does not agree with all the author's views, his piece is well written and informative and much better than the usual anti-Morales diatribe written in the US press.


    BUENOS AIRES — On Sunday, Bolivians are widely expected to re-elect their president, Evo Morales, for an unprecedented third term. He is still overwhelmingly popular, including among the indigenous people from whom he has sprung. Their conditions of life have improved dramatically since he first took office in 2006, and so has the general economy. But that extraordinary popularity could ultimately prove a weakness for Bolivia, since he has so far shown no inclination to groom a successor and a strong political party to assure that his transformation of Bolivia does not fade when he inevitably leaves office.
    For certain, Bolivia has shown the world an assertive, if sometimes startling, national image of late. Thanks to loans from China, the Internet reaches rural schools via a satellite that bears the name of Tupac Katari, the leader of an important indigenous uprising against Spanish colonial rule. Like Mr. Morales, Bolivia’s current foreign minister, David Choquehuanca, belongs to the Aymara, one of the 36 ethnic groups recognized by Bolivia. Following a visit to London, he proposed to change the hands of the clock at the Plurinational Legislative Assembly, the Bolivian equivalent of Congress, so that they move counterclockwise — symbol of Bolivia’s recent spirit of change and independence in the Southern Hemisphere. Another example: the government maintains a vehemently anti-American discourse even as it promises Bolivian students scholarships to study at Harvard and Stanford.
    What seems clear is that Bolivia is defying longstanding caricatures of itself as an icon of political instability. Economic stability has followed the political achievement, and opinion polls have given the president a 40 percent advantage over his closest rival. If he wins, it will give him a third term — a possibility based on a constitutional change that he initiated but that his detractors say he is misusing.
    Even so, his popularity endures. Under his Movement Toward Socialism, poverty dropped to 45 percent in 2011. In 2005, it had been 64 percent. Mr. Morales is also the first indigenous president of Bolivia, where 48 percent of the population declared themselves indigenous in the last census, and his government has proven itself adept at reconciling ancestral knowledge with economic modernization.
    All of this has left Bolivia in the grip of the leftist or populist trend in South American politics that was rising at the turn of the 21st century, even though that trend has slowed in Venezuela, Brazil, Uruguay and Argentina. In the United States, business and foreign policy figures have long portrayed Mr. Morales as an authoritarian strongman who connects emotionally to the masses and was bankrolled by Hugo Chávez, the populist leader and ally of Cuba who governed Venezuela from 1999 until his death last year.
    But the notion of a mentor/student relationship underestimates Mr. Morales and overestimates Mr. Chávez. With Mr. Chávez gone, there is little Venezuelan aid to speak of today. But Bolivia is expected to finish the year with the highest growth rate in South America — above 5 percent. During his time in office, per capita income has grown from $1,000 to $2,550 and unemployment levels have remained below double digits. Between 2006 and 2014, $8 billion of oil income was disbursed to social programs for young people, the elderly and young mothers. Mr. Morales’s most emphatic opponents accuse him of being authoritarian, uneducated and intransigent, but don’t challenge his personal integrity.
    In Bolivia, presidents govern from the Palacio Quemado (the Burnt Palace), a name earned in 1875 when it was set on fire with torches. It hints at Bolivia’s well-earned identity as a flammable country: of 83 governments, 36 lasted a year or less and 37 were anti-democratic.
    If he is re-elected and serves out his term, Mr. Morales will have achieved the longest staying power of any president: 14 years. During his first term, the resource-rich east seemed on the verge of secession, but he managed to dismantle the regional opposition. Since then, domestic political opposition has been erratic. For this election, most of the other contenders are simply framing themselves as better administrators of the existing system.
    Nationalizations, most importantly of the hydrocarbon industry, have been the pillars supporting this agenda. Another point in the government’s favor was the country’s new constitution, which improved representation in a country long characterized by crippling social exclusion. Not long ago, in La Paz, I asked a street soup vendor’s 11- year-old son what he wanted to be when he grew up. “President,” he said. “President like Evo.” That the son of a mujer de pollera, an urban indigenous woman, can see himself as president illustrates the seismic change in Bolivia.
    Relations with the United States are touchy at best, principally over coca production. President Obama has again declared that Bolivia “failed demonstrably” in its counternarcotics efforts, which meant the United States would continue to withhold aid. But the United Nations Office on Drugs and Crime has praised the Bolivian government’s efforts to tackle coca production, so the American move may only have isolated the United States in the region. The plant’s leaves, chewed for extra energy at Andean altitudes, are deep in Bolivian tradition, and Mr. Morales himself once led the coca growers union. So framing relations within the context of the fight against drugs is a perspective that has severe limitations in Bolivia.
    If Mr. Morales wins the election, he must now look forward, and use his third term to create the necessary conditions for a plausible successor. That the political process is so strongly identified with him has only contributed to the lack of potential successors. No important leaders have emerged; President Morales’s ruling party has not grown stronger; and up to now, he has not considered stepping down. On the contrary, he has increasingly concentrated his power and made decisions on his own.
    The problem of this strong personal identification with the presidency will only grow more acute if his legislators press to modify the constitution in order to guarantee Mr. Morales’s unlimited re-election (all he needs is two-thirds of the vote on Sunday). Any eternalization will ultimately be a blow to the economic boom and the social progress achieved. The new Bolivia should not allow a president’s cold to escalate into a raging disease.
    Martín Sivak, an Argentine journalist, is the author of “Evo Morales: The Extraordinary Rise of the First Indigenous President of Bolivia.” This essay was translated by Kristina Cordero from the Spanish.

    Monday, September 29, 2014

    Bolivian public transport: cable cars offer unique city views

    Here is an article published in the New York Times, by Alissa Walker on 19 August, 2014.

    Watch How Bolivia Built The World's Longest Urban Cable Car System

    Watch How Bolivia Built the World's Longest Urban Cable Car System
    In most parts of the world, cable cars are relegated to ski areas or amusement parks. But in South America, cities use the gondolas to navigate undulating terrain as public transportation. Later htis year, two more lines will open in Bolivia’s La Paz-El Alto network, making it the longest urban cable car system in the world.

    This new “subway in the sky” (which looks pretty much like a bunch of ski lifts) is able to lift residents up and over the urban gridlock, allowing them to move between the two city centres faster and more efficiently. As part of a story this weekend, the New York Times made a beautiful video celebrating this rather elegant transit system, which residents call the “red line.”

    The potential for this new method of transportation to transform cities like La Paz is huge, where the city is built on veritable alpine cliffs 3600m above sea level. Cable cars provide a light touch on city infrastructure, and can connect steep neighbourhoods where trains are too impractical or expensive. It’s also cleaner and safer than the other alternative — the addition of more crowded minibuses, which will only lead to more streets choked with traffic and pollution.
    But the biggest takeaway for riders is that they now feel their city is moving forward, and modernising in a way that will help it keep pace in the global economy (it’s no coincidence these new lines are being finished in time for an election year). Besides their new perspective-changing commute, the cable cars have given the city a signature method of transportation — which brings residents a sense of pride


    Thursday, May 1, 2014

    anti-Soviet ops heating up for the cold war

    Things are heating up in the Crimea - now that it is part of Russia, the New York Times is writing about how bad it is since a Ukranian was not able to get good service at the consulate. As if after the US   'annexing' Iraq and Afghanistan the natives were able to get any service at all anywhere...
    So Professor Cohen at NYU is now telling us we are in the middle of a cold war.
    Cold wars seem to go all over the globe...they include media wars and trade wars, with a umber of Soviets now blacklisted from the US and US citizens barred from doing business with them.
    And in all Soviet friendly countries, there are agents making 'cold war' is as cold-blooded as any warm war, or hot war. Not cool!
    In Bolivia there are already agents working to destabilize Morales and make sure he does not get into office a third time. In other Soviet friendly countries expect much the same - pay good attention for instance to Cabinda, the mineral rich province of Angola.
    One agent to look out for is John Holbert, traveling on a Surinam passport, really a DIA agent -
    his real name we will leak later, so stay tuned.
    At 666 Fifth Avenue - note the address, the good folks at Carlyle had a meeting about Russia and Bolivia etc., supposed to be secret but I guess Carlos got a hold of some of the info...
    And Carlos likes to leak things so, like I said, stay tuned.


    Friday, February 21, 2014

    New York Times reporting on Bolivia's vibrant economy

    This is a very positive article in the New York Times, which is usually negative to neutral on Bolivia; it reinforces what was being said on this blog for years about the Bolivian economy, especially after meeting Luis Alberto Arce Catacora, Minister of Economics and Public Finance when he came to talk at Columbia University in April, 2010 [see post for 24 April, 2010 on this blog].
    We welcome this are  this kind of accurate reporting from the NYT. William Neuman wrote this article, with assistance from Monica Machicao; Neuman, along with Simon Romero, are the two most senior NYT reporters to cover Latin America and I have always liked Neuman's tone and style. His piece appeared on the internet on 16 February, and in print on pp. A4/A8 the next day:

    LA PAZ, Bolivia — Argentina’s currency has plunged, setting off global worries about developing economies. Brazil is struggling to shake concerns over years of sluggish growth. Venezuela, which sits atop the world’s largest oil reserves, has one of the world’s highest inflation rates. Farther afield, countries like Turkey and South Africa have watched their currencies suffer as investors search for safer returns elsewhere.
    And then there is Bolivia.
    Tucked away in the shadow of its more populous and more prosperous neighbors, tiny, impoverished Bolivia, once a perennial economic basket case, has suddenly become a different kind of exception — this time in a good way.
    Its economy grew an estimated 6.5 percent last year, among the strongest rates in the region. Inflation has been kept in check. The budget is balanced, and once-crippling government debt has been slashed. And the country has a rainy-day fund of foreign reserves so large — for the size of its economy — that it could be the envy of nearly every other country in the world.
    “Bolivia has been in a way an outlier,” said Ana Corbacho, the International Monetary Fund’s chief of mission here, adding that falling commodity prices and other factors have downgraded economic expectations throughout the region. “The general trend is we have been revising down our growth forecast, except for Bolivia we have been revising upward.”
    Bolivia has taken an unlikely path to becoming the darling of international financial institutions like the monetary fund, not least because the high praise today is coming from some of the same institutions that the country’s socialist president, Evo Morales, loves to berate.
    Mr. Morales often speaks harshly of capitalism and some of its most ardent defenders, like big corporations, the United States, the monetary fund and the World Bank. He nationalized the oil and gas sector after taking office in 2006, and he has expropriated more than 20 private companies in a variety of industries.

    A large market in El Alto, a working-class city in Bolivia. From colorful mansions to a proliferation of bakeries, there are signs that many have extra cash to spend. Meridith Kohut for The New York Times

    Yet while Mr. Morales calls himself a revolutionary, others have begun using a very different word to describe him: “prudent.”
    Both the monetary fund and the World Bank, in recent reports, praised what they called Mr. Morales’s “prudent” macroeconomic policies. Fitch Ratings, a major credit rating agency, cited his “prudent fiscal management.”
    While Mr. Morales remains firmly in Latin America’s leftist camp, on many economic matters he fits within a broader trend away from ideological rigidity in the region.
    In Peru, President Ollanta Humala went from ardent leftist to centrist. In Colombia, President Juan Manuel Santos, a former defense minister, now plays the role of peacemaker, negotiating with the country’s largest guerrilla group. In El Salvador, presidential candidates from left and right moved toward the center to woo voters. In Uruguay, President José Mujica, a leftist and a former Marxist guerrilla, has carried out business-friendly economic policies.
    “There’s definitely an underappreciated element of pragmatism” in the region, said Maxwell A. Cameron, a professor of political science at the University of British Columbia.
    Not long ago, Bolivia was a focal point of political and economic instability, and while it remains South America’s poorest country, much has changed.
    Economic growth last year was the strongest in at least three decades, according to the monetary fund, and it continued a string of several years of healthy growth. The portion of the population living in extreme poverty fell to 24 percent in 2011, down from 38 percent in 2005, the year before Mr. Morales took office.

    Though there is still much misery, the economic transformation is widely visible, in thriving urban markets or in the new tractors tilling land where farm animals pulled plows not long ago. In El Alto, a working-class city perched above the capital, the newly wealthy flaunt their success in the form of brightly colored mansions. Another recent addition: the proliferation of bakeries selling elaborate cakes, a sign that even those of more modest means have extra cash to spend.
    One of the most surprising developments is the way that Bolivia has amassed foreign currency, salting away a rainy-day fund of about $14 billion, equal to more than half of its gross domestic product, or 17 months of imports, that can help it get through economic hard times.
    According to the monetary fund, Bolivia has the highest ratio in the world of international reserves to the size of its economy, having recently surpassed China in that regard.
    “We are showing the entire world that you can have socialist policies with macroeconomic equilibrium,” said Economy and Finance Minister Luis Arce. “Everything we are going to do is directed at benefiting the poor. But you have to do it applying economic science.”
    The country is doing well thanks to relatively high prices for natural gas — its most important export — during Mr. Morales’s presidency. That enabled Mr. Morales to order in November that all government and many private sector workers get double the customary year-end bonus of a full month’s salary.
    It was a populist move that critics linked to the coming election season — Mr. Morales will run for a new term in October. But it is consistent with a broader effort to redistribute wealth and direct some of the country’s natural gas income directly into people’s pockets.
    “I wouldn’t necessarily say these are mainstream economic policies,” Ms. Corbacho said. “What we have assessed as very positive are the outcomes they have achieved when it comes to growth, social indicators” and other criteria.
    Bolivia’s turnaround is noteworthy because for many years the country was a proving ground for the kind of orthodox, free market policies long promoted by the monetary fund and other international institutions. Grappling with a host of economic problems, including hyperinflation that reached 24,000 percent in 1985, the government cut spending, eliminated fuel subsidies, partially privatized government-owned companies and fired many workers.
    Critics say that while those policies tamed inflation, they also did long-term damage, exacerbating the unequal distribution of wealth, pushing newly out-of-work miners and farmers into coca farming that increased cocaine production, and ultimately contributing to the social unrest that helped usher in Mr. Morales as president.
    “The Morales administration has basically cast off the recommendations of the I.M.F. and other huge international lending organizations, and for the first time, during his tenure, you see those macroeconomic indicators improve significantly, which finally gains the approval of organizations like the I.M.F.,” said Kathryn Ledebur, director of the Andean Information Network, a research group based in Bolivia.
    Mr. Morales has benefited by being president during a time of high commodity prices, which have driven economic growth here and in many countries throughout the region. In a highly contentious move, he nationalized the energy sector by taking a greater stake in the companies that extract the nation’s gas and demanding a bigger share of the revenues. That has greatly increased government income, giving him the money to pay for social programs like cash payments to young mothers, improved pensions and infrastructure projects.
    But while the nationalization rattled foreign investors, Mr. Morales now gets generally good marks for the way he has handled the windfall.
    “You could mismanage this opportunity, and the reality is they have not,” said Faris Hadad-Zervos, the resident representative of the World Bank in La Paz, who cited the large foreign reserves stock and substantial increases in government spending on infrastructure.
    Not that there are no areas of concern. Both the monetary fund and the World Bank say much more should be done to encourage private investment. Bolivia has less than half the rate of private investment of most other countries in South America.

    There are also worries about what will happen if natural gas prices fall significantly, and whether Bolivia is simply in the midst of the typical boom-and-bust cycle that often bedevils poor countries.
    Bolivia’s gas exports go entirely to Brazil and Argentina on long-term contracts, meaning that sustained economic problems in those countries could eventually spell problems for Bolivia. But a greater concern is over a low level of investment in gas exploration, which could endanger Bolivia’s ability to maintain production levels in the future.
    “This is not sustainable in the long term,” said Jose L. Valera, a lawyer based in Houston who has represented energy companies doing business in Bolivia. “The model is not designed to generate substantial profits for an oil industry that is going to then be incentivized to reinvest in Bolivia.”
    Bolivia’s relations with the monetary fund and the World Bank, both based in Washington, are a sharp contrast to those of some of its leftist allies. Venezuela, Ecuador and Argentina refuse to take part in annual economic reviews by the monetary fund.
    Mr. Morales’s public statements have also often been highly critical. He once said the World Bank tried to blackmail him into changing his economic policies. And in a speech in December 2012, he called for the dismantling of “the international financial system and its satellites, the I.M.F. and the World Bank.”
    But his attitude toward the bank seemed to have changed in July at an event to announce a World Bank project to support quinoa farmers.
    “The World Bank does not blackmail, or impose conditions, not anymore,” Mr. Morales said, according to a publication on the bank’s website. To celebrate, he played a friendly soccer game with the bank’s president, Jim Yong Kim.