March 14, 2006

There is a Lot Going On in Bolivia: Morales' Government and the Various Issues

MABB © ®

At almost two months into the Morales administration period, there is one issue taking priority: The Constituent Assembly. However, with the CA bill already passed, the process has kicked into gear and its moving slowly but surely towards June 2. Without a doubt there are many more hurdles to deal with, but the political will is notoriously positive. With the CA aside, for the moment, the government has started to pay attention to other issues of adminstrative nature.

The new phase in the CA process is the registration of eligible voters. The electoral court (CNE) has just opened the registration books. Be assured that this time the CNE will be very careful on this phase because, precisely this phase was the one that created severe criticism from the MAS last December. The critics had to do with the eligibility of voters. Because there were so many people who could not vote; who when at the ballot centers, they found out they were ineligible, the MAS criticized and even threatened to change leadership in the CNE. There were even accusations of fraud and political bias. That is the reason that the CNE has and will be very carefull now.

The requierements are as follows: People 18 years or older; those who changed address and those who did not vote last December. The documents required are, ID, a document called "Unique National Registration" (not sure what that is) or passport, and for the males, the military service document.

Currently there is a drive, aided by the government of Venezuela, to provide with documents of identification to the people in the country side. The peasants who don't have IDs and thus don't even bother to vote.

At the same time though, there are many other issues taking the attention of the government. A recent one was the official visit to Chile by Morales. President Morales paid a visit to this country in exchange of the visit Ricardo Lagos paid at Morales' inauguration. Morales attended Michelle Bachelet's inauguration where he had two main things to do: one was to make viable the rapprochement between Chile and Bolivia. The other was to meet with the US Secretary of State, Rice, to show his disposition to have some kind of relations with the Bush administration.

The two objectives were achieved by Morales first meeting with Bachelet and expressing his desire to establish a new kind of relationship between Chile and Bolivia. Morales mentioned that Bolivia wanted to sell energy to Chile and that his government stood ready to have an open agenda with Chile. The positive sign came from Chile when Bachelet agreed to work on relations with an open agenda and her desire to re-establish diplomatic relations with Bolivia. On his scheduled 30 minute meeting with Rice, Morales touched the issue of Coca and the need of continued support from the US in terms of open markets. According to reports, Rice was direct in saying that the position of the US on Coca is unchanged and since the access to markets is conditioned to this issue, there would be no modification to recent decisions taken by Bush's government. Wheter these decisions are good or bad is up to interpretation.

In recent days Tabare Vazquez, the president of Uruguay visited Bolivia. Him and Morales signed an agreement to sell Bolivian energy (natural gas) to Uruguay. This agreement can be beneficial for both countries if carried out. The only problem is that Uruguay and Bolivia don't have a commong border and any deal would have to include Paraguay or Argentina. At the same time, Alvaro Uribe, president of Colombia is visiting Bolivia (as I write this) to try to bring understanding to his government's international exchange policy. His government recently signed a TLC with the US government. This agreement could result in the closing of markets for Bolivian Soya products. The government of Bolivia was worried and had even put the future of the Andean Community in doubt. In previous commentaries Uribe said he had met the Andean community's expectations and MERCOSUR's. This issue is not yet resolved for the Bolivian government. If the TLC closes these markets, the relations between the Andean Community will be strained. Let's not forget that Chavez is in this community and he has no good relationship with Uribe.

On a final note on the international side, the Bolivian government is planning to close several embassies. A list of these embassies is not yet available but the criteria is to close embassies in countries where the level of bilateral relations is low.

On the domestic side, the Morales government wants to work on the improvement of the budget by implementing reforms to the collection of taxes. To my surprise the government wants to start taxing the incomes or the capital of citizens. This was one of the reasons why the government of Mesa was kicked out of government. It is an explosive issue but I am interested to see how the current government handles this. I would say if it works in any way with progressive taxes, it could stand a chance.

There are a lot of issues in Morales' plate. For the time being, the international issues are taking priority, at least from the press' point of view. One outcome is worth highlighting, and that is the possibility of rapprochement between Chile and Bolivia.

2 comments:

A.M. Mora y Leon said...

Miguel: How would a TLC between US and Colombia shut out Bolivian soya products? Would it be through the competitive advantage Colombia has, being able to ship in soya duty free? Or would it be more technical and bureaucratic a reason? If it's the former, why would Colombia provide the final shutout, givem that the US has lots of TLCs with other countries that probably also produce soya? Would be very interested in knowing more about this if you can help.

miguel (MABB) said...

Well I am guessing it would be a little bit of both. The contract b/w Colombia and the US gives preference to the soya products of Colombia. The preferencial agreement b/w Bolivia and the US is due to run out towards the end of this year. So as you can probably imagine, the US will be "preferring" to buy the cheaper products from Colombia. In that light, Colombia doesn't really have a "competitive advantage" in the theoretical sense but has just a price "advantage" on Bolivian products. They'll be priced out of the US market. That is why the Bolivian government is worried about the loss of these markets. And why is it so worried? The US is one of the largest markets for Bolivian products, textiles and soya are just two of the most important products. The loss of one of these markets has a big direct impact on the government's ability to govern. No jobs, means more blockades.

Also, I say both, because with the end of the preferential agreement b/w Bolivia and the US, the admin hurdle also rises. There will probably be more paperwork to file. That doesn't sound like much, but if you ask an exporter, he or she will start to talk about his or her transaction costs rising.

I am guessing, the reason Colombia is going for the TLC with the US is because it stands to benefit in more than just one way from it. It was probably not just an economic but a political decision. Aside from having preference for entering the (very well desired) American market, Uribe is also benefiting from US aid on defense. And of course, you cannot discount that in the current situation, in Colombia, it is seen politically well an alliance with the US. Just look at the recent legislative elections. Uribe won a decisive battle in the political arena. So his tough stance against violence and his alliance with the US is paying in more ways that we imagine.