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Bolivian Envoy Declares Victory in Leftist Leader's Push for Poor
The Washington Diplomat / September 2008

By Larry Luxner

Mario Gustavo Guzmán Saldańa clearly remembers his first interview with Evo Morales in 2002. At the time, he was a columnist for Pulso — a left-leaning weekly newspaper in La Paz — and Morales was a rabble-rousing union leader intent on turning Bolivian politics upside-down.

Both men considered themselves anti-imperialists, and Guzmán immediately took a liking to the firebrand orator, whom he interviewed several more times over the next few years. Then, in December 2005, Morales stunned Latin America and the world when he was elected president with 53.9 percent of the vote — becoming Bolivia's first self-declared indigenous leader in the country's 183-year history.

"In June 2006, Evo called me to the presidential palace and asked me to be Bolivia's ambassador to the United States," recalled Guzmán. "'Compańero,' I told him. 'Estas loco? [Are you crazy?] I'm not qualified for this job.' He answered: 'And how do you think I got to be president of the republic?'"

It was an offer Guzmán couldn't refuse, and certainly not one he regrets two years after his arrival in Washington — especially now that Morales has the political mandate he needs to carry out the most sweeping, controversial political reforms in Bolivian history.

On Aug. 10, an estimated 63.5 percent of voters in this impoverished country of 9.2 million backed the Movimiento al Socialismo (MAS) party of Morales and Vice President Álvaro García Linera in a mid-term recall referendum whose results surprised even the president's most ardent supporters.

"I was convinced the yes vote would be around 60 percent, but we got closer to 70 percent," Guzmán says. Indeed, when all the numbers from outlying areas were counted, Morales garnered more than 67 percent of the vote. "The Bolivian people have clearly decided to support Evo Morales and his principle objective: to recover control of our natural resources, especially oil and gas. This now obligates the government and the opposition to find a solution to our problems based on dialogue."

The "yes" victory allows Morales to complete his five-year term in 2010 as scheduled, while a "no" would have immediately opened his position for re-election. For this to occur, he would have had to be rejected by a greater percentage of the electorate than initially voted him into office — so anything over 60 percent would have been considered a victory from the ruling government's point of view.

Yet the referendum also strengthened the opposition, with three of the four states supporting greater autonomy from the central government in La Paz rejecting Morales, and voters ratifying opposition governors in all four of those states.

"The polarization will continue," former Bolivian President Carlos Mesa told the Miami Herald the day after the referendum. "So will the radical policies by both sides. Neither side has enough power to make the changes it wants on its own."

Says Larry Birns of the Washington-based Council on Hemispheric Affairs (COHA): "Judging by the results, it seems as if the recall vote will not ease the divisive political tensions riveting the country, but instead may exacerbate them."

In a city known for stuffiness, the relaxed Guzmán, 51, hardly fits the stereotype of a typical ambassador. Like all good revolutionaries, he rarely wears a tie, and he keeps his shiny black hair tied back in a ponytail.

Guzmán is married to the former Adriana Amparo, with whom he has three daughters and a son. He studied economics and literature in La Paz, where he worked at the city's cultural center and operated a graphic design firm. Bolivia's unconventional man in Washington also spent 20 years in journalism and publishing —editing not only Pulso but two other newspapers, La Razón and La Prensa — before entering the diplomatic world "by an unexpected turn of fate," according to his own official resume.

"My central mission is to contribute towards transforming the unequal relations between Bolivia and the United States into one of mutual respect and dignity," he told The Washington Diplomat last month over steaming cups of mate de coca.

"For the first time in Bolivian history, the core of decisions is being made by indigenous campesinos. Until now, ours had always been a story of caudillos [strongmen] and political parties," he said. "We had 20 years of neoliberalism — from 1985 to 2005 — and the country was governed the same as always. What was the result? A country just as poor as it was 20 years earlier. That's why Morales was elected."

In fact, Bolivia has the unlucky distinction of being the poorest country in South America. In 2007, the United Nations Development Program ranked it 117th on its global Human Development Index, putting it right behind Kyrgyzstan and just ahead of Guatemala. Annual per-capita income is about $1,200, though many indigenous families — especially in the country's western, mountainous regions — get by on much less than that.

About 25 percent of Bolivian children under three years old are malnourished, while six out of every 10 Bolivians live below the poverty line — and four out of those six are among the indigenous inhabitants who comprise 62 percent of Bolivia's population. Yet this doesn't include Guzmán, a mestizo who speaks neither Quechua nor Aymara, the country's two leading indigenous languages. Guzmán is most at home in Spanish —the language in which he chose to be interviewed.

"The big landowners have always protested against our reforms," he explained. "Autonomy has become the rallying cry of the opposition. But we think the referendum, the first in our country's history, opens a dialogue for resolving our problems."

Guzmán claims he has "good relations" with the U.S. ambassador to Bolivia, Philip Goldberg, despite the State Department's decision to recall him for consultations in early June following violent anti-American protests in front of the U.S. Embassy in La Paz.

In justifying its decision to recall Goldberg, State Department spokesman Gonzalo Gallegos said "we are concerned by the recent statement of some Bolivian govenrment officials that cast doubt on Bolivia's commitment to fulfill its Vienna Convention obligations to protect diplomatic staff and facilities. Failure to fulfill these responsibilities would endanger both American citizens and the hundreds of Bolivians who work in the embassy."

Not very friendly words, to say the least. But Guzmán said there's a long history of mutual suspicion and distrust between the two countrijes.

"Bilateral relations have to be based on confidence, though President Morales has very good reasons not to confide in the United States," he told The Diplomat. "Only six years ago, the U.S. ambassador advised Bolivians not to vote for him. Only three years ago, Morales appeared on a State Department list of terrorists. And before becoming president, Morales was considered a political enemy because he opposed the struggle against narcotrafficking."

Guzmán confirmed that local authorities in the coca-growing region of Chapare have suspended their agreements with the U.S. Agency for International Development, though authorities in the equally important coca region of Yungas have not done so.

"For the past two and a half years, Bolivia has complied with its promises to the U.S. to eradicate coca. U.S. law demands respect for human rights, but after two and a half years, Chapare was a war zone," he said. "Today's it's at peace."

Yet the country — roughly the size of Texas and California combined — remains deeply divided because of long-standing cultural, economic and geographical differences.

"At least five of Bolivia's nine departments are now being governed by prefects critical of the Morales administration," according to the COHA report. "In fact, only one of the three prefects sympathetic to Morales — Mario Iporre from Potosí — managed to avoid defeat" in the Aug. 10 referendum.

"In one sense, Morales' wide margin of victory should give him the leverage to pursue his populist agenda, which includes the redistribution of fallow landholdings; the nationalization of the country's lucrative hydrocarbons sector, and the legal empowerment of Bolivia's indigenous majority," says the report.

"Each of these reforms is central to the new constitution, drafted in December 2007, the ratification of which has become Morales' Holy Grail. By law, Bolivia can have only one national referendum per annum, so the recall vote — which was first suggested by the opposition to delay a vote on the new constitution, and then embraced by Morales following the unsanctioned autonomy votes conducted by the [opposition-ruled] prefectures — can be seen as a failed tactic by the latter because, in the end, it empowered Morales."

On the other hand, the opposition was also bolstered by the vote.

As COHA noted, Rubén Costas, prefect of the wealthy department of Santa Cruz, received a greater percentage of "yes" votes than any other incumbent. His department boasts Bolivia's most developed capitalist economy, organized around large soybean plantations. Santa Cruz is also home to Bolivia's most developed urban center and influential business interests. For these reasons, Santa Cruz stands to lose more than any other if the president manages to push through his populist reforms.

Bolivia's bright spot, of course, is its enormous hydrocarbon reserves. According to government statistics, the country has 54 trillion cubic feet of natural gas, with lucrative contracts now in place to sell that gas to neighboring Brazil and Argentina.

"We disagree tremendously with the notion that Bolivia is rich because it has natural resources," says Eduardo Paz, president of the Business Chamber of Santa Cruz and a leading opposition figure. "We think the potential of Bolivia is in our people, and if we educated them then we would discover the real potential of our country."

Thanks to a renegotiation of the contracts, said Guzmán, Bolivia now receives 60-70 percent of the profits, which are distributes to the people, and foreign energy companies get the remaining 30-40 percent. Before Morales took office, it was the opposite.

"Today, incomes of the local governments and municipalities have quadrupled, in some cases quintupled, thanks to the renegotiation of contracts. This is indisputable," said the ambassador, claiming that between 2004 and 2007, Bolivia has boosted oil and gas revenues by $1.5 billion and signed nine exploration contracts with overseas companies.

"After 40 years, a company from India finally signed a $2.3 billion contract to exploit iron ore in Santa Cruz. No other government was able to achieve this," said Guzmán, though he admits that most of the recent jump in oil and gas revenues is due to rising commodity prices rather than actual new investment.

In fact, Paz claims there's been no investment at all in the oil sector since Morales became president.

"Oil companies say there's a lot of opportunities, and they have capital to invest, but they don't trust this government and I don't blame them," said Paz, speaking at a July 29 panel discussion on Bolivia sponsored by the Washington-based Hudson Institute.

"It's very tough to trust a government that gives you so many surprises. I don't see that changing, although we know that Argentina needs gas badly from Bolivia, Chile could use Bolivian gas, and Peru has an LNG project that we didn't build ourselves," said the businessman. "This government promised to modernize the gas sector, and we don't see that happening. We are losing opportunities."

For now, the U.S. business community is clearly unhappy with the recent turn of events in Bolivia.

"The situation is so uncertain you can't even quantify it," said Stephen Donehoo, managing director of McLarty Associates. "It's very difficult to put your capital at risk, considering the track record this current government has when it comes to the rule of law and sanctity of contracts."

Donehoo, speaking at the same conference as Paz, warned that Bolivia's standing in the Bush administration's Millennium Challenge Corp. is already at risk, "and if Bolivia cannot be certified in the drug program, that will put all other aid at risk too."

The three things average Bolivians dislike most about Morales, said Paz, are the bloated government bureaucracy, the president's "confrontational approach" and overwhelming Venezuelan influence in their daily lives.

"He does the same thing Hugo Chávez does in Venezuela; he tries to isolate a small group of people and put a large mass of people against them. That's how he builds power," said Paz. "Our president goes to different municipalities and hands out checks from the Venezuelan Embassy — and then talks about American imperialism."

Guzmán bristles at suggestions his hero is remaking himself in the image of Chávez, who many U.S. officials consider Latin America's single biggest threat to stability.

"The political process in Bolivia would have existed with or without Chávez. It has nothing to do with him," he pointed out. "Our president is not a military officer, and he's never participated in a coup. The difference between the Venezuelan and Bolivian processes is in the origin. Morales is the leader of a group of socialists."

Chávez isn't the only controversial head of state Morales has befriended.

Iranian President Mahmoud Ahmadinejad recently visited La Paz, pledging to invest $1 billion in Bolivia's oil and gas sector over the next five years. In a subsequent phone call to Morales, Ahmadinejad — who is building up Iran's nuclear arsenal while warning that it'll wipe Israel off the map if it intervenes — praised Bolivia for its "resistance against internal and foreign conspiracies" and invited the indigenous leader to visit Tehran later this year.

As far as Guzmán is concerned, this is strictly Bolivia's business — no one else's.

"We don't ask anyone to choose our friends, or our enemies. In the case of Iran, we understand Washington's reasonable concerns and we have explained to congressmen and to the White House that our interests with Iran are exclusively to develop the oil and gas industry," he says. "Bolivia is against the use of nuclear weapons, but we also have the right to develop, and we know that Iran can help us. The only thing that interests us is to be liberated from poverty."

Paz isn't buying that argument.

"It doesn't make very much sense when we see that Iran has the same problems as we do," he said. "They have oil but not enough investment to get that oil out. We have gas and we don't have enough investment. Even Venezuela isn't investing enough. I think the anti-American sentiment of these regimes is what makes them look to Iran."

Guzmán says he's irritated that opponents of Morales always talk about the president's friendship with U.S. adversaries like Ahmadinejad, Chávez and Fidel Castro — but little else. "We have extraordinary relations with Brazil, Argentina and Chile too," he said, "but the United States doesn't want to see this reality."

The ambassador declined to say if he thinks the situation will change following the November 2008 elections. Asked whether he prefers Sen. John McCain (R-AZ) or Sen. Barack Obama (D-IL) in the White House, Guzmán deflected the question. "At this point, it's not important who wins," he said. "Relations must improve."

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