Las Americas

Pipe Dreams a la Boliviana


Latin Americans with vivid visual tendencies and long memories claim that the Spanish Empire extracted enough precious metal from the Cerro Rico (or Sumaj Orcko—majestic mountain), outside Potosí, Bolivia, to build a bridge of silver from South America to Europe. Fantastic fortunes were made, produced by miners whose life expectancies were notoriously short. Topside sat the mansions and churches of the colonial Ken Lay-types, while down below enslaved Indians scraped away miserably at the ore.

Since the 1500s, Bolivia has traversed repeated cycles of resource pillage of this sort, during which the country has been unilaterally relieved of its natural endowments of silver, rubber, and tin. During the 19th century, after the best stuff had already been stolen, imaginative British bondholders in search of alternative energy sources made off with the country’s most promising deposits of bat shit. The final blow came when the government of Chile rudely helped itself to Bolivia’s Pacific coast. Each ransacking was accompanied by assurances that all ‘development’ activities were designed to benefit the population with exposure to—variously—hard work, discipline, entrepreneurialism, competition, and Christianity. Unhappily, the population was actually exposed to smallpox, slavery, genocide, misery, and destitution. For 500 years, this has not really changed much, although the locals have been more than patient.

Their endurance appeared to have run out unexpectedly in October 2003, after a consortium of carpetbaggers, corrupt politicos, and con men dreamed up a singularly ill-advised plan to enrich themselves, once again at the expense of Indians, peasants, labor unions, and everyone else in the way. This scheme involved the customarily grandiose pretensions of international capital: Suck Bolivia’s extensive natural gas reserves out of the earth, pipe them across hundreds of miles to the Chilean coast for liquification and export to the United States. It seemed like a good idea, except that your everyday Bolivian has been harboring a few smoldering resentments where both of these particular American neighbors are concerned. First, Chile remains extremely unpopular in Bolivia, ever since the theft of the Pacific Ocean in 1879. Secondly, the United States itself is high on the bat shit list in Bolivia because it funds the coca eradication program that has impoverished the thousands of small farmers (cocaleros) who raise the crop.

The growing movement of cocaleros is a key element in the October uprising. It is also an expression of the deepening disgust felt by an increasingly organized majority in Bolivia for the unholy alliance between President Gonzalo Sanchez de Losada, the International Monetary Fund, and the United States government. In January and February of this year, the cocaleros joined forces with the Confederation of Bolivian Workers (COB) to protest two converging policies perpetrated by the U.S., the IMF, and “Goniâ€: the coca eradication program and a regressive IMF-imposed salary tax. Together, the two programs were like an economic hammer-and-anvil operation directed at those few remaining farmers and workers lucky enough to have land or full-time work.

The coca eradication policy wipes out the livelihoods of small farmers, who have grown coca for centuries and chew it in order to cope with altitude sickness, hunger, and cold. The last few decades of lucrative coca export opportunities have been merely a blip on the historical screen of the cocaleros. Nevertheless, in an effort to establish a stable and inviting business environment for foreign capital, the forces of free trade and resource rip-off have systematically poisoned hundreds of thousands of Bolivian hectares, all the while blathering on vaguely about alternative crops for the dispossessed, such as pineapples or yucca.

But somehow, the pineapple/yucca cultivation plan has never really taken off out there in the hinterland: The markets are not established, transport is non-existent, and prices are low because—face it—we already have all the pineapples and yucca we need. When was the last time, for example, that your upside-down cake was short a pineapple? When was the last time you experienced a sharp spike in the price of tubers produced by a yucca shortage?

Never, that’s when.

As a result of the U.S.-backed plague of defoliants, the enmity of the cocaleros is hard to overestimate: They nearly elected Evo Morales, one of their own, in the 2002 elections. Although Morales had virtually no corporate funding and, in the beginning, little organization, he had a lot of backing and he attracted 21 percent of the vote nationally. The recently deposed President Goni, with backing from the United States and all the money in the world, got 22 percent.

After his precarious election, Goni’s hold on the Presidency of Bolivia became even more tenuous. During the demonstrations in La Paz in February, the rallying cry was “Goni, You Killer, The Lamppost Awaits You,†a quaint reference to Goni’s imminent hanging in retribution for the deaths of 53 people during the uprising. The February revolt erupted after Goni dutifully tried to apply an IMF-recommended tax hike of 12.5 percent on households earning over $250 a month, or $3,000 a year. The tax increase at this end of the income scale would amount to about $375 a year, well over a month’s salary for most of the working class. The IMF itself, when pushing the tax increase, recognized that the Bolivian economy was already suffering from poverty and underemployment because of the scale of the coca eradication program and the lack of any alternative source of food or income. The IMF Directors fitfully worried about this but, in their wisdom, determined that cuts to social programs for the poor and a hefty tax increase on the working class were the way to go. Here’s what they said (in typical IMF-ese) after consultations with Goni’s government: “These actions have included politically courageous decisions to defer low-priority spending and begin the process of broadening the tax base.â€

“Politically courageous†is a nice turn of phrase to use when describing what it takes to further bleed a country where two-thirds of the population live on less than two dollars a day. But then, Gonzalo Sanchez de Losada was not one to shrink from making those tough choices. By the time this last uprising ended, his government had killed more of its citizens in open combat than any of the previous putatively democratic administrations in Bolivia.

It should be pointed out, however, that Goni did not exactly cover himself in glory during the unfortunate February episode. In the midst of the fighting, he snuck out of the Presidential Palace in the back of an ambulance and took refuge in the U.S. Embassy, where he evidently felt more comfortable. Also, he lived to fight another day, which came along when he decided to proceed with the vastly unpopular pipeline to Chile. Unlike his experience with the IMF tax, which he did rescind, Goni had declined to back down on this one. Of course, Goni had a lot at stake here. He personally wanted and needed that pipeline through Chile. Like our own murderous Vice President, Goni is up the wazoo with mining and energy investments and a whole lot of gas. His personal fortune is estimated at 220 million and he is well-connected to the energy industry through his ex-Finance Minister and former campaign manager, Fernando Candia. Candia was the ex-Director of Transredes, the company formed with Enron and Shell by executive decree two days before Goni left the presidency in 1997. The unpublicized decrees creating Transredes were Goni’s version of the Clinton pardons: Nobody knew about them and when they found out, they didn’t like them—or him.

The company was to pump natural gas out through the Bolivia-Brazil pipeline, creating jobs and general prosperity. But, regrettably, the deal has not turned out to be nearly so beneficial for the Bolivian public as we had all hoped. Coincidentally, Goni’s then-economy minister was also on the Board at Transredes, together with Guillermo Aponte, who left his place on the Transredes Board to assume the position of Superintendent of Social Security and Pensions in Goni’s administration. The interlocking directorate that rules most of Latin America these days is particularly concentrated in Bolivia, and Transredes is a case in point. The company is a probably fraudulent creation of Enron and Yacimientos Petrolíferos Bolivianos (YPFB), the state oil and gas company. It is officially a “capitalized†company, which means that it is partially privatized, with the state allegedly retaining a 50-percent ownership stake. But the actual ownership structure of Transredes includes Enron with 25 percent, Shell with 25 percent, two Bolivian Pension Funds with 34 percent, and former workers of YPFB with 16 percent. Amazon Watch reports, however, that many of the former YPFB workers sold their shares in Transredes for very little to the private companies FondElec and Indosues, so that in fact, private corporations hold a controlling interest in the company. Under the terms of the capitalization, Enron was to make significant investments in Transredes, which credible allegations suggest that it did not do. To complicate matters, Latin Trade and the Bolivian Congress charge that Enron’s Transredes shares were not acquired through an open bidding process. Other bidders had only 13 days notice before the deadline, while Enron had five months of consultations with—that’s right—President Goni’s office. Two days after Enron was awarded the contract, the company had a detailed 20-page memorandum of understanding signed, sealed, and delivered. Fast work, no?

The companies positioned to benefit from the prospective pipeline to Chile are similarly sleazy. One of them, Repsol YPF of Spain, has an especially repellant history in Bolivia. Under Goni’s previous presidency, Repsol acquired the drilling rights to 1.3 million hectares in the ecologically fragile Indigenous Territory of the Isiboro Sécure National Park (TIPNIS). Repsol dutifully produced an environmental impact assessment (EIA), prepared by Arthur D. Little and expeditiously approved by Goni’s Ministry of Environment and Sustainable Development. The experts at Arthur D. Little who drafted the EIA were to TIPNIS as Jayson Blair was to The New York Times: They wrote the story without ever leaving the United States. Over the course of the next four years, Repsol neglected or manipulated consultations with affected communities, deforested, contaminated, and generally trashed every place it needed to drill or drive. In return for these privileges, the company gave to the TIPNIS organization various walkie talkies, sports equipment, and a personal computer.Ex-President Goni has had a cozy relationship with the three private interests promoting the Bolivia-Chile gas pipeline, including Repsol, Sempra Energy, and British Gas (BG). In the late ’90s, he was a Board member of the Institute of the Americas at the University of California-San Diego, where Sempra and Pacific Liquified Natural Gas, the consortium that includes BG and Repsol, are corporate members. The Institute is fairly up-front about its objectives: “Among many benefits, Members receive direct access to important Latin American policymakers, updates on political and economic trends in the region, and local and international networking opportunities.†The Institute also flogs its close ties to the multilateral development banks that fill in the financing gaps in the extravagant projects of the corporate sector:

The World Bank, the Inter-American Development Bank (IDB) and several economic agencies of the U.S. government have also provided financial support to Institute programs over the years… Today, this inter-American organization with members from countries throughout the hemisphere and a professional staff of 20, is in an ideal position to facilitate increased ties among corporations, as well as to build bridges between the corporate community, the government sector and the public.

In this particular case, the Institute has also facilitated building pipelines. And the deal that Pacific LNG was about to cut with Goni was a particularly profitable example of the Institute’s international networking possibilities. The President of BG, Edward Miller, remarked to the press a few months ago that the companies participating in the pipeline stood to make about $1.3 billion annually, while paying the Bolivian government about $70 million in taxes. How’s that for a benevolent development project? So as the dust settles in La Paz, it seems clear that, for the average Bolivian, this deal did not have a lot going for it. Assuming that the $70 million were not stolen by Goni and Co., a fairly questionable premise to start with, the Bolivian population of about 8.3 million people was about to sell off the country’s natural gas reserves for about eight dollars a head. This is probably more than they got from the Brits for the bat droppings, but it isn’t really a whole lot. For his part in the pipeline caper, President Gonzalo Sánchez de Losada got a one-way ticket out of Bolivia. He’s probably due in Washington momentarily—if he isn’t already here—where a sinecure for him can be set up at the World Bank or the IDB.

Now the wheels start to turn and the press starts to churn out the usual story to explain the unceremonious departure of a member of the international elite from a position of power: Those dumb Indians are just lashing out at whomever they can find to blame for their own backwardness. But the truth is that Goni was a deserving and exemplary target, both for his symbolism and for his actions. Whenever a white man in a suit comes along talking about development, he is really talking about theft. This seems to apply whether the subject is silver mines, oil wells, gas pipelines, “non-traditional†exports like pineapples and artichokes, or underwear assembly plants. These deals are always going to provide economic growth, jobs, and capital, but somehow, they never quite do. What they actually bring is unemployment, poverty, environmental devastation, sweatshops, and ultimately, dead people in the streets.

We’re hoping that this next president in Bolivia, Carlos Mesa, can do better. But judging from his recent picture in the Washington Post, draped in the presidential sash and surrounded by army men and those ubiquitous guys in the suits, it’s not looking good.

Based in Washington, D.C., Gabriela Bocagrande is awaiting the arrival of the former president of Bolivia.