The Washington Diplomat / December 2003
By Larry Luxner
Until a few months ago, mountainous Bolivia was pretty much a forgotten land tucked away in the Andes — its eight million people considered among the poorest in South America.
Then, in mid-October, the country's worst violence in 30 years erupted, when thousands of indigenous protesters blocked the streets and highways of the capital city, La Paz, demanding the resignation of President Gonzalo Sánchez de Lozada. The president eventually did resign, but not before riot police had killed over 80 demonstrators.
Bolivia suddenly made headlines in U.S. newspapers, and the country's ambassador in Washington, Jaime Aparicio, was thrust into the spotlight for the first time in his career.
In a recent interview, Aparicio said the immediate reason for the protests was the former president's plan to export natural gas via Chile to the United States and Mexico.
Bolivia's new leader, former TV journalist and vice-president Carlos Mesa, has promised to hold a referendum on the controversial gas pipeline project. But that, he said, only scratches the surface of Bolivia's seemingly intractable social and economic conundrum.
"What happened was a cumulative process," Aparicio told The Washington Diplomat. "In 1952, we had a social revolution that brought deep changes to the country. Since then, there's been a deterioration of the social fabric, and in the last five years, we've had an economic recession — not only in Bolivia, but throughout the region.
"We were affected first by the crisis in Asia, then Argentina, and then in Brazil. After five years of recession in a country that's already poor, with all the inequalities we have, added to that a drug eradication program without effective alternative development, and the result is great frustration."
Aparicio, 48, became ambassador to the United States 10 months ago, after having served as Bolivia's envoy to France and Venezuela. A lawyer and career diplomat who has spent 22 years in his nation's foreign service, he speaks Spanish, English and French, and has a basic knowledge of Quechua, one of Bolivia's three indigenous languages (the others are Aymara and Guaraní).
"Bolivia is a very poor country, and the great majority of people don't benefit from the political system," he said, noting that 60% of the population considers itself indigenous.
"The biggest inequality comes from the lack of opportunities," explained Aparicio. "And we still have problems with our judicial system. That's one of the tragedies of Bolivia. People perceive that the political parties are totally corrupt. That's not the case, but it's true that people don't trust the government. We can't even collect taxes."
Bolivia covers an area the size of Texas and California combined, but it is landlocked — the result of a devastating war with Chile 130 years ago that cost Bolivia its Pacific coast.
Despite vast natural resources such as gold, silver, tin, zinc and natural gas, Bolivia's annual per-capita income is the lowest in South America, and has actually dropped from $1,000 a decade ago to between $700 and $800 today.
Aparicio concedes that this is the result of failed policies enacted by a succession of well-meaning governments including that of Sánchez de Lozada, a 71-year-old millionaire who has taken up residence in Washington after being forced to flee the country in October.
"Bolivia has done everything in the last eight years in terms of reforms," he said. "It was one of the first countries to have popular participation in decentralizaton. When we became a democracy 20 years ago, we had one of the highest inflation rates in the world, over 27,000%. We were able to go to single-digit inflation in a few months. But these reforms and sacrifices didn't translate into better living conditions."
A big part of the problem is that Bolivia's history is largely one of Spanish conquistadores and their white descendants exploiting the indigenous majority. For centuries, San Luís Potosí — one of the world's largest silver mines — enriched Spain but impoverished the locals, and today Potosí is a ghost town.
"The mentality of the Bolivian people is this tragedy of all this national wealth leaving the country — first the silver, then the tin, the tungsten and the rubber. All these booms did nothing for the people," said Aparicio. "They sense there's no future, and when you have frustration and so many years of deterioration, obviously that's the best scenario for radicalism to grow."
In Bolivia, radicalism takes the form of Evo Morales, a former coca grower whose populist rhetoric has made him one of Latin America's most famous politicians. Morales has been embraced by Venezuela's Hugo Chávez, Brazil's Inacio Lula da Silva, Cuba's Fidel Castro and even Libya's Moammar Qaddafi.
Last year, he nearly defeated Sánchez de Lozada for the presidency. Morales is admired by indigenous people throughout the continent but despised by Bolivia's business class for his ranting against the United States, capitalism, globalization and the proposed Free Trade Area of the Americas.
Morales has been leading the fight against Bolivia's plan to export natural gas to Mexico and the U.S. West Coast via a pipeline that would go through Chile. The project requires several billion dollars worth of foreign investment, but could eventually turn Bolivia — whose gas reserves are second only to Venezuela in all of South America — into a relatively prosperous country.
"Our biggest problem is information. People have to be informed," said Aparacio, accusing Morales and his followers of spreading a disinformation campaign for political reasons.
"We must find sustainability through gas exports, but radical groups don't want to export gas. They say foreign companies will come here and take Bolivia's gas, and that the poor will have nothing, not even gas in their homes. But it's not true. Bolivia has 58 trillion cubic feet of gas reserves, enough to last more than 800 years."
Lingering bitterness against neighboring Chile also has a lot to do with objections to the gas project. The only practical route for the proposed pipeline is through the Chile, which like Bolivia was a military dictatorship for many years but is now the most prosperous nation in Latin America, thanks to its diversified, export-based economy and investment-friendly policies.
"Our problem with Chile is not rational, it's emotional," said Aparicio. "It's the collective psychology of being a landlocked country. Like many countries, we lost territory and became landlocked. No government can change that. But there's been very deep resentment against Chile for many years. People feel they've lost their contact with the world, and they think it's Chile's fault."
The resentment is so deep, in fact, that Bolivia and Chile haven't had diplomatic relations for the past 30 years. Some Bolivians are demanding that Chile return Bolivia's Pacific coastline — a demand that was publicly backed in late November by Venezuela's Chávez.
But Aparacio says he doesn't resent the Chileans; in fact, he admires them.
"Chile has strong institutions that have credibility, and that's a great lesson for us," he said. "I think we should have more creative ways of solving this problem. Look at how Europe achieved integration. We cannot continue these concepts of the 18th century in the 21st century."
Aparicio pointed out that not everything in Bolivia has been a failure. In the early 1990s, Bolivia pioneered the concept of "capitalization" rather than privatization of state-owned companies. One of the most successful such capitalizations was that of Entel, the state phone monopoly.
"It was a very inefficient system before. You had to pay $2,000 for a line, so nobody had phones. Now you see people everywhere with cellphones," said the ambassador. "When the oil company was state-owned, all the income was transferred to the government, and there was no money for R&D. Today, thanks to $2 billion of foreign investment, Bolivia has gone from 3 trillion cubic feet of gas reserves to 58 trillion."
Aparacio says 87% of Bolivia's foreign exchange now comes from energy and mining, but that those sectors employ less than 10% of the population. The answer, he says, must come from the establishment of thousands of small and medium-sized enterprises.
"We need immediate short-term programs for creating jobs, and that will come only through production and exports," said Aparicio, outlining 10 specific areas in which Bolivia can be competitive. These include textiles, leather goods, wood, furniture, jewelry, organic coffee and quinoa, a cereal used as a staple food by millions of indigenous people.
"Organic coffee is doing very well now," he said. "For example, some stores like Trader Joe are already distributing Bolivian organic coffee, but this is not directly linked to coca substitution. These are more community-based organizations that are trying to develop jobs."
In Bolivia, campesino anger against the United States is fueled by various U.S.-backed programs over the years to eradicate the country's coca crop. Except for 12,000 hectares in the department of Yungas (for local use only), the cultivation of coca leaves — the main ingredient in cocaine — is illegal. Most of Bolivia's coca leaves come from the department of Chapare, where 90% of the crop was destroyed under the administration of Sánchez de Lozada.
The United States promotes "alternative development" schemes under which coca farmers are encouraged to move into other crops. But Aparacio said he has mixed feelings about this policy.
"You can substitute coca with other products, but it's not enough. A lot of these people started growing pineapples and other products for export to Argentina and Brazil. But with the devaluations in those countries, exports dropped by 70% overnight. Nobody had a plan to give these people jobs."
Regarding the future, said Aparicio, "Bolivia has a very clear possibility of developing itself in the medium term. In five years, we could be receiving $400-500 million a year in gas income. This money could be put into a trust fund, following some models like Norway and Alaska, in order to achieve our goal of reducing poverty by at least 50%," he said.
Aparicio has spent much of his time lobbying in favor of the Free Trade Area of the Americas as well as Washington's Andean Trade Preference Act, under which Bolivia has seen its exports to the United States grow by 16% last year, mainly in jewelry, textiles and furniture.
He also spends a great deal of time meeting with local Bolivians.
The Washington, D.C., metro area is home to an estimated 100,000 Bolivians, making it the second-largest community of Bolivians in the world outside Bolivia (the largest is Buenos Aires, home to around a million Bolivians). The immigrants in this area come mainly from the city of Cochabamba, and work for the most part in the restaurant and construction industries. While some are here for good, many others would like to return to Bolivia when and if conditions there improve.
"We need a consensus-building process of what we want as a country," he said. "What's going to bring peace and calm is that we achieve consensus. From my point of view, economic growth that funds social investment like basic health and sanitation is the only way we can close this gap. We must achieve 4% annual GDP growth in order to achieve these goals."
In the meantime, Mesa has officially declared that he'll remain in power until Aug. 6, 2007, as allowed under the constitution.
"The president has a great opportunity now, because most of the people in his cabinet are independent. They don't have political pressures," said Aparicio, noting that "there's going to be an investigation into the use of force" to establish responsibility for killings during the October protests.
"At this point, we are receiving immense support from the United States. The eradication program is going to continue, and we're going to increase social investment," he said. "Everybody wants to see democracy prevail. Bolivia is a fragile country, and if we don't find immediate solutions, we will have more violence and radicalism."