Monday, January 28, 2008

Bolivia's Government Receives International Backing for Democratic Process

The Bolivian government gained regional support for the nation’s democratic changes during the Bolivarian Alternative for the People of Our America (ALBA) summit held in Caracas, Venezuela over the weekend.

Meeting for the 6th ALBA Summit, a declaration signed by the Presidents of Nicaragua, Venezuela, the Vice President of Cuba, and the Prime Minister of Dominica stated approval for the change that the people of Bolivia “are pursuing through a constitutional process”.

The statement also condemned actions that seek discrimination, exclusion, violence and racism and those actions that aim to harm Bolivia’s unity.

It was one of seven declarations signed by President Morales and the heads of state on Saturday at the close of the economic summit which was convened to launch a new regional development bank and inaugurate ALBA’s headquarters in Caracas.

The ALBA is a regional integration effort that is the brainchild of Venezuelan President Hugo Chavez. It was founded as a counterweight to the U.S.-led Free Trade Area of the Americas.

The regional body focuses on mutually beneficial trade based upon the idea of social, political, and economic integration between countries of Latin America and the Caribbean. The ALBA Bank will begin operating by year end and is expected to start with a constructive fund of $1 billion to $1.5 billion for development projects.

Venezuela and Cuba were the initial members, with Bolivia joining in April 2006 and Nicaragua in January 2007. Dominica became the fifth ALBA member, and the first English-speaking Caribbean member, during the summit this weekend.

The special statement signed in support of President Morales and his administration follows closely on the heels of a previous declaration signed by the South American governments of Brazil, Argentina, Venezuela, Uruguay, Ecuador, and Paraguay at a Bank of the South (Banco del Sur) summit in December 2007.

Similar to the ALBA initiative, the Bank of the South will serve to counteract the economic influence of the International Monetary Fund and Inter-American Development Bank - development funds dominated by the U.S. and European Union.

Although Brazil and Venezuela are the regional leaders, Bolivia’s economy is performing strongly under the leadership of President Morales. Nationalizing Bolivia’s hydrocarbon sector generated $2 billion in surplus revenue during 2007. The nation’s economy grew at about 4 percent last year and is expected to retain that growth throughout 2008, but poverty rates still remain high.

The rush of funds has generated other economic and political consequences. Regional governors within Bolivia are ready to secede from the national government in order to protect their larger shares of hydrocarbon revenue that resulted from the nationalization. Bolivia's inflation rate still remains high at almost 12 percent, as the Boliviano rises against the falling dollar.

Given the looming recession in the United States and ongoing global economic volatility that threaten the economic health of Latin America, these regional funding initiatives may be arising at a pivotal moment to support the economic and political changes taking place throughout the region.


Sunday, January 20, 2008

Money Matters May Jeopardize National Unity

LA PAZ (digitalwarriormedia) This past week the Bolivian government announced that it still intends to cut regional revenues by 30 percent in order to fund an elderly pension program, despite the ongoing negotiations between the central government in La Paz and the nine regional governors.

The announcement, made on Thursday, came as a surprise to the governors who held a second marathon meeting with President Morales at the beginning of last week.

On Tuesday, departmental governors failed to sign a national unity agreement at the conclusion of the meeting, but the spirit of political cooperation was still alive.

The two sides agreed to form a commission to find a solution to the issues of regional autonomy statutes and the distribution of funds from Bolivia’s oil and gas exports, but the "grand national accord" presented by Morales was rejected as the four governors from Santa Cruz, Beni, Pando and Tarija preferred to take a “wait and see” approach.

Despite lacking a formal unity pact, the meeting was a major step forward, as agreement was made to remove the capital issue from the deliberations. Lobbyists for Sucre's capital were refused entrance to the meeting by President Morales and eight state governors.

After the violence in Sucre that left 3 dead, hundreds wounded and halted the work of the Constituent Assembly, this gesture was a huge accomplishment for the central government and an indication that demands from the opposition to move the capital from La Paz to Sucre was no more than political posturing aimed at derailing the progress of rewriting Bolivia’s constitution.

But the mutual good feelings subsided after Thursday's announcement that the Dignity Pension will begin February 1, with the current funding structure in place. The opposition immediately accused Morales of double talk and breaking his previous promise to negotiate.

According to the government, payment of the Dignity Pension from the Direct Hydrocarbon Tax (IDH) revenues is just a matter of complying with a Bolivian law passed by Congress in November 2007.

“We must ensure payment of income in accordance of the law," said Finance Minister Luis Alberto Arce.

Minister Arce indicated that during the first round of negotiations held last week, the nine prefects,"all stated that they are in favor of the Dignity income."

The social program will benefit more than 676,000 elderly Bolivians and lift many out of poverty with an annual income of 2400 Bolivianos, or about $26 per month.

The cut of the oil revenues from the regions to fund aid for the elderly is one of the main obstacles in the dialogue initiated on January 7 between President Morales and the nine governors as they attempt to reach a national accord.

The prefects have offered a proposal in which the departments will provide $30.8 million of the $201 million needed to fund the program and the remainder would be administered from central government sources.

Regional representatives contend that a reduction in their budgets will be detrimental to regional development as funds are already designated for planned projects. Meanwhile the central government says payment of the Dignity Pension is unsustainable without the expected revenues from the HDI.

Any funding agreement reached with the prefects will require Congress to make changes to the current law. In the absence of such an agreement, the government will comply with the law and move forward with funding the program, said the finance minister.

Another negotiation meeting that was set for Friday has been postponed until January 23, at which time the government will submit a counterproposal to the prefects.

The regional departments of Beni, Pando, Santa Cruz and Tarija, which maintain some of the strongest opposition to the Morales administration, indicated that there was no need to continue negotiating over autonomy if the central government insisted upon cutting their oil and gas revenues.

"If we take away resources, why are we going to continue to talk about autonomy?" asked Carlos Dabdoub, Director of the Autonomous Prefecture of Santa Cruz.

Representatives from Tarija and Pando have indicated that they will wait until receiving the government’s counterproposal before continuing the dialogue.

"We are looking at alternatives and we are optimistic we will reach an agreement," stated Minister Arce.

The “wait and see” approach to Bolivian politics continues.

Photos: ABI and AFP


Sunday, January 13, 2008

Dialogue Brings a National Pact of Unity

LA PAZ (digitalwarriormedia) Throughout the previous week, an ongoing dialogue between the Bolivian government and regional prefects has at least temporarily preserved the unity of the country.

There were major developments towards bridging a political chasm that grew between the central government and opposition prefects. Both sides disagree over the new Constitution and the allocation of hydrocarbon revenues.

In the end, bipartisan agreement soothed the political turmoil which threatened to fracture Bolivia since the four regional governors of Santa Cruz, Tarija, Beni and Pando declared autonomy last month. Governors from Bolivia’s lowland regions declared autonomy on December 15.

The first step in resolving the impasse occurred on Monday during a meeting at the Governmental Palace in La Paz. Most of the 11-hour summit between President Morales and regional prefects was televised live on Televisión Boliviana. After the seventh hour, the media left the discussion as the regional governors requested a more "intimate" meeting.

Morales proposed the creation of several commissions to study the conflicting issues. "The people want to see us stay together,” he said. "Let's work together to resolve our differences.”

Pando’s governor, Leopoldo Fernandez, told Morales that he must revise the constitution to include more input from the opposition if he hopes to ensure democratic stability. He indicated that the President would not be able to govern if the document was approved by only a small majority of the people.

Tarija governor, Mario Cossio, noted that the country faced a “critical institutional moment.”

“We are all going to make an effort to forge a national pact of reconciliation and I hope to find a way to fix the problems that are putting the country at risk," he said.

The negotiations resulted in a unanimous agreement to set up committees that will forge a national unity pact and settle conflicts over the hydrocarbon revenue, demands for autonomy, and the constitution.

Subsequent meetings throughout the week continued the conciliatory momentum.

During meetings held on Wednesday and Thursday with the Ministry of Finance and Planning and departmental representatives, both sides agreed to guarantee the financing of the Dignity Pension.

The five regional governments of Santa Cruz, Beni, Pando, Cochabamba and Tarija have rejected the 30 percent hydrocarbon tax redistribution currently sought by the central government to finance the new social program for elderly Bolivians. Although an understanding was reached, exactly how the hydrocarbon revenues will be redeployed must be a determined at a later date.

The week concluded with President Morales holding meetings on Thursday and Friday to convey the demands of the regional prefects and meet with municipal authorities. Morales expressed a desire to find compatibility between the autonomy statutues of the dissenting regions and the new Constitution – a task the Constituent Assembly is expected to undertake. Silvia Lazarte, President of the Constituent Assembly, indicated that the revisions are possible.

While both sides consider the start of bipartisan talks as a sign of success, the opposition has leveled criticism against the government for continuing its campaign in support of the Constitution. Last week, Vice President Alvaro Garcia Linera and Foreign Minister David Choquehuanca, each made official trips to increase support.

Garcia Linera was in Santa Cruz on Tuesday. Minister Choquehuanca traveled to Berlin, London, Paris and Brussels where he met with international political and social organizations.

Another meeting between President Morales and the nine regional prefects has been scheduled for Monday, January 14. According to Minister Alfredo Rada, the dialogue will continue to deal with two key issues: the compatibility of the regional autonomy statutes and the redistribution of regional incomes from the Direct Tax on Hydrocarbons.

After a week of amiable discussions, this second meeting may serve as a better indication of whether substantial political progress is truly possible.

Photo: AFP


Monday, January 07, 2008

Morales and Departmental Prefects Will Hold Dialogue Meeting

LA PAZ (digitalwarriormedia) At 6:00 pm on Monday evening President Evo Morales and Bolivia’s nine departmental prefects will meet at the Governmental Palace in La Paz. The sit-down is a much anticipated first step towards dialogue after weeks of a political impasse between the central government and the five opposition-led departments.

Over the weekend, Morales met with his staff to prepare for the meeting that will also be attended by Vice President Alvaro Garcia Linera and a group of governmental ministers. There are hopes that Monday’s event will initiate solutions to address the crisis that has unfolded in the country since the adoption of the new Constitution in early December.

The new Magna Carta has been rejected by the prefects and civic leaders of Santa Cruz, Tarija, Cochabamba, Beni and Pando. These departments, except Cochabamba, responded by declaring departmental autonomy measures that will assume powers similar to the Executive and Legislative branches of government.

Besides the constitution, the Morales administration is under fire for the passage of the Dignity Pension by the Bolivian Congress on November 27.

The social program, which is expected to cost the government $215 million per year, will provide an annual income of about $1200 for Bolivians over the age of 60.* It requires a redistribution of oil and gas revenue, so that the departmental governments will receive less revenue through the Direct Hydrocarbons Tax (IDH).

In both instances scores of opposition representatives boycotted official meetings and then claimed foul. Opposition parties boycotted the Constituent Assembly debates in early December, and upon the document’s approval on December 9, criticized the Constituent Assembly for moving forward without the presence of debate by the opposition delegates.

In response to these measures, the opposition led by Santa Cruz, attempted to regain power from the central government by mobilizing for more independence. On December 15, opposition leaders in Santa Cruz declared autonomy from the central government and announced measures to create departmental ID cards as well as its own police force.

The autonomy declaration also announced that two-thirds of taxes from Santa Cruz’s oil and gas industry will remain in the department, rather than going to the central government. Tarija, Beni and Pando followed suit by announcing their own autonomy measures as well.

In just over two weeks 112,000 signatures were collected in the department of Santa Cruz to call a referendum that will approve and implement the autonomy statutes presented on December 15. According to El Deber, by the January 15 deadline, the number of signatures is expected to reach 400,000.

On Saturday, while speaking in Cochabamba, Morales called the autonomous statutes illegal and that actions of the four departments, destroy the unity of the country. He warned that the dialogue meeting will occur taking into account "unity, democracy and respect for the law.” He also indicated that parties from Spain, Europe and the United States were planning attempts to derail the change taking place in Bolivia and other parts of Latin America.

Criticism of the Morales administration has been widespread, especially in the Bolivian newspapers, which recently have printed editorials calling for the administration to allow the mediation or observation of the Catholic Church or the Organization of American States.

According to governmental spokesman Alex Contreras, the people should act as observers for the dialogue meeting, not some other entity.
"Despite the negative reports by some media with reference to dialogue, the government's objective is to initiate this process with an open agenda, without mediators or observers and without guarantors, because the best guarantor will be the Bolivian people," said Contreras.

Contreras asked that residents of El Alto and La Paz, receive all of the nine governors with generosity without showing “a single action against any prefect”.

The administration has assured that all security measures have been taken for the meeting that will be widely accessible to the media and open for the public to observe. He also guaranteed that racist elements will not be allowed to perpetrate activities that have occurred in other regions of the country.

It was a tumultuous year for Bolivia as political polarization drove wedges between several different sectors of Bolivian society. Only time will demonstrate the effectiveness of dialogue between the Morales administration and the opposition. Hopefully Monday’s meeting will prove to be a positive move towards unifying the country by addressing the widespread discontent between those who support the central government’s initiatives and those who want to maintain the status quo.

Photos: El Deber, Reuters

*CORRECTION: The original version of this post incorrectly identified the annual amount of the Dignity Pension at $1200. The correct amount is 2400 bolivianos per year, which is a slightly more than $300 annually.