The New York Times on Evo and Hugo

Today’s New York Times has a good article, by Caracas-based reporter Simon Romero, checking in on the ongoing story of Venezuela’s close relationship with Bolivia and the Morales government. The article focuses on a comparison between US aid and US influence versus that of the government of Venezuelan President Hugo Chavez.

I am not an expert on the military connections between the two governments, or the specifics of Venezuela’s role in Bolivia’s gas nationalization efforts – two issues covered in the article. There are, however, two other points that I think are worth a closer look.

First, the article notes Venezuela’s much-publicized investment in Bolivian facilities to support the “industrialization” of coca. Chavez has also pledged to import Bolivian coca tea and other similar products. The Times describes this as a major issue for Washington. I think that US concern about industrialization of coca is misplaced.

If the Bush administration’s concern is about Bolivian coca being exported for cocaine production then the issue is the size of the coca crop and its ultimate uses. If the Bolivian government can actually succeed in sucking up a good portion of that crop for the production of herbal coca tea (a product served to guests in the US Embassy in La Paz to help with altitude illness) then that ought to serve US purposes, not violate them.

On this issue the Bush policy seems more driven by ideology than practicality, a practice that has not served the administration too well in other parts of the world, Iraq to name one. This issue of whether Bolivia can globally export its coca tea is likely to heat up in the next year as efforts increase to get the UN to remove the green coca leaf from the world list of banned substances – alongside cocaine and heroin.

The second issue worth a closer look is the one I spoke to Romero about when he was preparing the article (I am quoted at the very end), the role that the Chavez government has played in helping its Latin American neighbors seal their divorces from the International Monetary Fund. Venezuelan loans directly enabled the Argentine government to end its dependence on IMF lending. Bolivia let its last IMF agreement expire a year ago without seeking a new one. That was largely enabled by the Fund’s cancellation of Bolivia’s debt (alongside many other countries as well), but the backstop of Venezuelan aid may have added to the Morales administration’s confidence in telling the IMF goodbye.

A Bolivian opposition lawmaker is quoted saying that, “We’ve become a client state of Venezuela, in what is a new form of imperialism.” If one measures the relative “conditionalities” associated with Venezuelan aid vs. IMF loans, it’s not even a close call.

It is unclear what direct negative effects Venezuelan aid has had on Bolivia so far. The IMF’s list is long. It played a key role in pushing for the privatizations of gas and oil, and other industries, in the 1990s, an economic experiment that robbed the national treasury of billions in lost revenue and ultimately sparked a series of bloody national rebellions. More recently, as the Democracy Center has documented in great detail, the IMF directly pressured the Bolivian government into the 2003 disaster of Febrero Negro that left 34 people dead.

As legitimately controversial as Venezuelan aid to Bolivia may be, so far Chavez hasn’t had anything like the impact on Bolivia that the economists from Washington had. Bolivia is, quite clearly, far more independent of foreign pressures today than it has been for the last two decades.

The lead from the Times piece is below, along with a link to the full article.

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Venezuela Rivals U.S. in Aid to Bolivia

By Simon Romero

LA PAZ, Bolivia — To understand Venezuela’s growing influence here, consider that more than two dozen ambassadors are in this capital city, including those of Bolivia’s leading trading partners like Brazil, the United States and Argentina. Yet none enjoy the direct conduit that the Venezuelan ambassador, Julio Montes, has established with President Evo Morales.

Mr. Montes often accompanies Mr. Morales on domestic and international trips on executive jets provided by Venezuela’s national oil company, say officials who have seen them traveling together. On many days Mr. Montes, who arrived in La Paz a year ago, can be found at the presidential palace huddled in meetings with Mr. Morales or the president’s top aides.

Since Mr. Morales became president little more than a year ago, Venezuela has quickly come to rival the United States as Bolivia’s main patron. It has provided assistance for the army, cattle ranches, soybean cultivation, microfinance projects, urban sanitation companies and the oil industry.

Read the full Times article here.