Bolivia’s elections are prompting the mainstream press to run a series of profile pieces, such as these: “In Bolivia, a Force for Change Endures,” New York Times; “Bolivia’s Morales favored to win re-election,” Reuters.
There has also been some hyperventilating led by the Heritage Foundation’s claim that “U.S. Should Reject Illegitimate Election Process in Bolivia.” Heritage goes so far as to advocate, “The Obama Administration should … refuse to recognize the new government Morales forms, and call for Bolivia’s expulsion from the Organization of American States (OAS).”
Leaving the election’s legitimacy to the ample contingent of observers, and noting that Heritage writers have managed to trump up Senate President Oscar Ortiz’s statement with uninformed exaggerations throughout the piece, let’s turn to Heritage’s alternate universe account of the first Morales term:
Not only have Morales’s economic policies weakened and further impoverished the already destitute poor of Bolivia, but his win in the December 6 election will empower him to further persecute what little remains of a democratic alternative.
Many of Morales supporters are indigenous Bolivians from the western highlands who have been mired in poverty for generations. Improving these indigenous people’s living conditions is certainly a laudable goal, but Morales’s methodology for realizing such improvement — statist policies and totalitarian control — has been disastrous.
As it turns out, Bolivia’s economic performance is the subject of a newly released report (announcement|pdf|flash) by the Center for Economic and Policy Research (home of Dean Baker, the economist most vocal about the housing crisis before it became headline news). In it we find:
Bolivia’s economic growth in the last four years has been higher than at any time in the last 30 years, averaging 4.9 percent annually since the current administration took office in 2006. Projected GDP growth for 2009 is the highest in the hemisphere. It is worth noting that Bolivia’s growth for 2009 follows its peak growth rate in 2008. As discussed in more detail below, Bolivia’s 2009 growth is all the more remarkable in view of the size and number of negative shocks to the economy. These included falling remittances, declining foreign investment, the United States’ revocation of trade preferences, declining export prices and markets for part of the year and other impacts of the global recession.
In short, Bolivia has ducked the Great Recession’s global impact, something achieved by only a handful of countries. How? Largely by its partial nationalizations of natural resource extraction industries, paying down external debt (including to the World Bank and IMF, with the help of debt cancellation), accumulating currency reserves, and spending them in a stimulus that is relatively larger than ours in the United States. Where has that money gone? Partly to public investment and infrastructure, and partly directly to the poor:
In the last three years the government has begun several programs targeted at the poorest Bolivians. These include payments to poor families to increase school enrollment; an expansion of public pensions to relive extreme poverty among the elderly; and most recently, payments for uninsured mothers to expand prenatal and post-natal care, to reduce infant and child mortality.
More official sources concur in the economic success, notably the International Monetary Fund: “The International Monetary Fund said in October that Bolivia is likely to post Latin America’s strongest economic growth this year at 2.8 percent” (source: Reuters; see also Bolivia’s Gross Domestic Product over time).
Five years ago, Bolivia’s national politics revolved around the future of its national gas resources. Today, none of the candidates is even suggesting a reversal of the partial nationalization that movements demanded and the Morales government has carried out.
Further background on the elections is available from: the Cochabamba-based Democracy Center (1|2|3); Upside Down World (1); Andean Information Network (1|2); InterPress Service (1); Bolivia Transition Project (“Pre-election analysis”).