1/30/2006

BOLIVIA: Morales may lack room for manoeuvre

“OXFORD ANALITICA” (EE.UU.)


Tuesday, January 24 2006

EVENT: Evo Morales was sworn in as president on January 22 and yesterday named his cabinet.

SIGNIFICANCE: Buoyed up by the size of his election victory, and a majority in Congress, Morales is in a much stronger political position than his predecessors. However, his government is inexperienced and lacks an organised political party to provide it with social backing.

ANALYSIS: Evo Morales won the December 18 presidential elections with just under 54% of the vote . No other presidential candidate in Bolivia's recent history has won a plurality of votes. Morales's party, the Movimiento Al Socialismo (MAS), also won 84 out of a total of 140 seats in the Chamber of Deputies. Although it failed to win an absolute majority, it has clinched the presidency of the Senate through agreements with minority parties.

Since the election, Morales has sought to take advantage of the international profile he has gained . Eleven heads of state were present at his inauguration on January 22, an unusually high number. The most conspicuous absentees were Mexico's Vicente Fox and Uruguay's Tabare Vasquez. Cuba's Fidel Castro decided not to go, presumably on account of the altitude in La Paz. Assistant Secretary of State for Western Hemisphere Affairs Thomas Shannon represented the United States. Since Morales's victory, Washington has sought to downplay its previously vitriolic denunciations of Morales, formerly a coca farmers' leader.

Handicaps. In spite of the size of its electoral victory and the legitimacy it confers, Morales will encounter some immediate difficulties in turning from opposition to government leader:

o He lacks experience of political management. He has never been involved in government. He has a reputation for impetuousness and inconsistency.
o He lacks an experienced team to back him up. Most of those who enjoy his confidence have little experience in office, and will have to learn fast. He yesterday appointed a diverse yet largely little known cabinet, mostly of political appointees. Outside one or two institutions (such as the Central Bank), there is little that resembles a professional civil service. Improvisation and mistakes are quite likely.
o Beyond a few clear objectives, the new government does not have a detailed blueprint about what it intends to do and how.
o The MAS is not a political party in the conventional sense. It is more an alliance of social movements, which have played a prominent part in the waves of protest that have swept the country in recent years. Therefore, it lacks internal discipline or ideological coherence.

Pending issues. Three issues will dominate the government's agenda this year:

o Constituent assembly. Elections to a constituent assembly are due to take place on July 2, with the assembly beginning deliberations on August 6. The MAS long has supported the need to elect such an assembly to make the political system more open and inclusive. A key issue within the constituent assembly will be the degree of autonomy to be conceded to departmental governments, especially in Santa Cruz.
o 'Nationalisation' of gas. The new government will need to work out an accommodation with foreign investors in the oil and gas industry. The penultimate government of Carlos Mesa (2003-05) passed a hydrocarbons law last year, which many on the Left feel does not go far enough in protecting Bolivian sovereignty in this area. The Morales government will come under political pressure to strengthen legislation. New Energy Minister Andres Solis, a former congressman and journalist, is known for his nationalist stance on state control of natural resources. However, policy will depend largely on more junior figures in the ministry. Investors continue to threaten to take Bolivia to international arbitration for unilaterally abrogating contracts signed in the 1990s. A compromise formula will have to be found in what could be a tense showdown with foreign investors.
o Coca. In spite of Washington's cautious welcome of the new government, the issue of coca eradication is set to continue bedevilling bilateral relations. Morales has pledged to change the law that bans coca cultivation. Acreages are likely to continue rising as a result. The annual US 'certification' round could provoke a crisis in relations. The US administration states annually which countries it considers to be 'cooperating' in the war on drugs. Decertification runs the risk of a cut-off in US economic assistance and, more seriously, the possibility of Washington taking steps to cut multilateral aid. Bolivia is highly dependent on such aid.
Opposition. The size of the government's majority means it is more insulated from domestic opposition than if it had narrowly won elections. Nevertheless, depending on how the government responds to policy challenges, opposition is likely from both Left and Right:

o Left. On the Left, there are a number of groups that have made clear their opposition to Morales in the past. They are probably strongest in El Alto, where the regional labour confederation (COR) and neighbourhood associations (Fejuve) maintain a radical political discourse, especially on the gas issue. They want full-scale nationalisation of the gas industry, a policy Morales has resisted. Morales's old rival, Felipe Quispe, may also seek to make a comeback in opposition to the Morales government. Quispe won just over 2% of the vote in the elections, an extremely disappointing result.
o Right. On the Right, the main opposition is likely to come from the business elite in Santa Cruz. This is concerned about the effects of a showdown on the gas issue. There are also sectors in Santa Cruz that will resent being ruled by an indigenous president in La Paz. Before embarking on his foreign travels in early January, Morales visited civic groups in Santa Cruz, promising to listen to their demands. The fact that the MAS won one-third of votes in Santa Cruz, where it never has had a strong following before, strengthens his position there. Morales plausibly can claim that elite groups do not speak for the department as a whole. Nonetheless, his cabinet includes only two ministers from Santa Cruz.

Therefore, Morales will have to manage a careful balance between these forces. This will not be easy. His campaigning style has raised expectations, and he has presented himself as representing a 'new beginning' in Bolivian politics. His ability to manage the economy -- which currently is quite strong -- has yet to be proved, but there will be strong pressures to repay political debts. However, Bolivia's experience of chronic macroeconomic instability in the 1980s is sufficiently recent to act as a sobering influence.

International context. Internationally, Morales takes office at a favourable moment:

o The governments of Brazil and Argentina are anxious to have a stable government in La Paz with which to negotiate future energy supplies.
o Venezuela is keen to assist. It may be the source of valuable help in developing the gas sector.
o The new government in Chile may be disposed to negotiate terms to give Bolivia some sort of land corridor to the Pacific. The presence of President Ricardo Lagos at Morales's inauguration may be a pointer.
o The United States seems concerned to downplay its previously hostile stance towards Morales, aware that he may exercise considerable influence elsewhere in the region.
o European governments are willing to support democracy in Bolivia, though they remain cautious on the coca issue.

CONCLUSION: Morales will enjoy a honeymoon period over the next few months, in which preparations for a constituent assembly will dominate the political scene. However, his opponents will be seeking to take advantage of any major mistakes he commits. His room for manoeuvre probably is not as large as it seems.

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