Isolationism or Exploitation: Morales Struggles with Natural Resources
by Emily Specker
Bolivia is blessed with an ample supply of natural resources. The size of its natural gas reserve is second to only a single South American country: Venezuela. Unfortunately, Bolivia is also no stranger to corruption and exploitation. Domestic resentment of foreign manipulation has been slowly building for centuries. Bolivia’s current president, Evo Morales, gained popularity with his nationalization policies; according to demonstrators however, Morales has not gone far enough to enact them.
Morales generated support early in his presidency by taking assertive action, for example, in regard to the country’s natural resources. On May 1st of 2006 he announced that Bolivia’s military was securing the oil and gas fields. His stance appealed to the 94% of Bolivians, who voted in favor of the recovery of state ownership of oil and gas in 2004. Morales’ logic matched that of the general population. He acknowledged the unsettling contradiction that Bolivia was simultaneously home to a plethora of natural resources and South America’s poorest population.
Morales’ Movement for Socialism acted under the idea that recovering natural resources would generate more work for the unemployed public. This would, in turn, reverse the damage caused by the broken promises of foreign companies. Such investors, when taking over Bolivia’s oil and gas industry, had falsely presented their goals by displaying an interest in modernizing domestic infrastructure and technical capacity. However, Morales’ proposal for the nationalization of oil and gas firms is not a risk-free solution, nor will it reverse the damage that has cumulated over five centuries of exploitation.
Economists have explored the potential risks involved. The primary concern is that the government of Bolivia may be leaning too strongly towards a policy of isolation. While protection of interests is a pertinent issue, the international repercussions of isolation could be devastating. The situation at hand places Bolivia on a growing list of countries from the South American region that are shifting away from the free-market ideology. Though nationalization could benefit Bolivia in the short run by increasing the supply of jobs, the long-term effects must also be considered.
The people of Bolivia appear to hold the opposite view. Rather than being concerned with the enduring consequences Morales’ policies may incur, demonstrators are favoring an even more radical approach. Morales, stuck somewhere in the middle, is operating by means of negotiations. In this manner he hopes to recover a certain amount of control over the industry. However, his policy does not allow for a complete takeover. Morales hopes to substantially increase government revenues by increasing the power of his government, which would then allow his administration to establish domestic and export prices.
Morales’ ability to carry out his more gentle approach may be considerably hindered. Protestors in the southeast city of Camiri in Bolivia have created a blockade. The road they are blocking links the country to Argentina and Paraguay, and forms the fuel delivery route to the provincial capital of Santa Cruz. The demonstration is a direct response to the foreign deals that are currently being renegotiated by Morales.
Bolivia is currently in a state of confusion over economic policy. The country is wedged between ideologies that could significantly influence the future welfare of Bolivia. Morales seems to have arrived at a rational solution. Rather than succumb to foreign exploitation or push into a potentially harmful isolationist policy, he has found a middle ground. However, as the people of Bolivia have made clear, they too have a say in the future of their beloved country.
http://news.bbc.co.uk/2/hi/americas/6310777.stm
http://www.dollarsandsense.org/archives/2006/1106luomagordon.html
