Bush Squares Off with Bolivia and Venezuela over Hemispheric Model

by Roger Burbach
George W. Bush has come out with harsh words for the governments of Bolivia and Venzeuela. “Let me just put it bluntly - I'm concerned about the erosion of democracy in the countries you mentioned,” Bush said in response to a question put to him about Venezuela and Bolivia. “I am going to continue to remind our hemisphere that respect for property rights and human rights is essential for all countries,” he added.

While Bush’s hostility towards Hugo Chavez of Venezuela is well known, his critical comments about Bolivia came as somewhat of a surprise, given that Evo Morales has served only four months as the country’s first Indian president and has done nothing to thwart the democratic process. As Bolivian foreign minister David Choquehuanca noted: “We are creating a participatory democracy and the world knows it. I don’t understand how the United States can say democracy is eroding...”

Bush’s true agenda is reflected in his call for “respect for property rights.” A change is taking place in South America as Morales and Chavez move to exert greater control of their energy resources and challenge US plans for a hemispheric free trade zone. As the president of the Bolivian Senate, Santos Ramirez, noted: "Bolivia and Latin America are no longer the servile democracies that tolerate...poverty and the surrendering of sovereignty."

Early in May Morales announced that Bolivia would nationalize its energy resources, particularly its natural gas exports. While no foreign corporations were expropriated out right, Morales made it clear that “the looting of our natural resources by foreign enterprises is over.”

At the same time Morales is moving to reshape the country’s commercial relations, particularly with Venezuela. This week Hugo Chavez flew to Bolivia, declaring “we are going to concretize the People’s Trade Treaty,” an accord that was recently signed between Venezuela, Bolivia and Cuba. It is openly pitched as an alternative to the US-backed Free Trade Area of the Americas, a trade zone based on neo-liberal principles that facilitates the expansion of multinational corporations.

Bolivia and Venezuela have signed eight different accords dealing with 200 different projects concerning energy, mining, education, sports and cultural exchanges. Most importantly Venezuela has agreed to invest over $1 billion to help industrialize Bolivia’s natural gas production, including the construction of a petrochemical complex.

Venezuela is also providing diesel fuel, which Bolivia does not produce, in exchange for the sale of soybeans. This comes at an opportune moment for Bolivia as most of its soy exports have gone to Colombia which just signed a free trade agreement with the United States. The US-Colombian accord means that cheap, subsidized US grains will flood Colombia, driving out Bolivian soybeans.

In Bolivia Morales took Chavez on a visit to Chipare, the semi-tropical region where he rose to prominence as the leader of the coca growers’ confederation. There they announced their intention to build a factory to process coca leafs for herbal teas, medicinal products, and cosmetics. This is certain to arouse the ire of the United States which for years has pursued a policy of forced eradication of coca in Chipare, leading to the virtual militarization of the region.

The burgeoning economic alliance between Venezuela and Bolivia also helps offset the difficulties that have arisen with Brazil and Argentina over Morales’ determination to exert greater control over natural gas exports. Both neighboring countries have significant investments in Bolivia’s gas fields, and both are importing gas for domestic use at prices well below the world market. At a recent international gathering of Latin American and European leaders in Vienna, Austria, Morales and President Luis Inacio Lula da Silva of Brazil exchanged harsh words over efforts to draft a new accord over natural gas. While the two leaders formally made up before they left Austria, there is little doubt that Chavez’ support provides Bolivia with leverage in its negotiations with its two more powerful neighbors.

Venezuela is also signing a financial accord aimed at bolstering Bolivia’s banking and monetary system. This is intended to strengthen Morales’ hand vis-á-vis the United States and international financial institutions. The Bolivian government at the end of March announced that it would not solicit any new loans from the International Monetary Fund. The fund has aroused a great deal of antipathy in recent decades as it restricted social spending and forced the privatization of state enterprises, particularly in the tin mining industry.

The visit of Chavez to Bolivia coincides with the opening of the Exchange Fair, a project of the People’s Trade Treaty between Bolivia, Venezuela and Cuba. Enterprises from all three countries participated with the goal of expanding commerce and sharing technical expertise. At the fair the vice-president of Bolivia, Alvaro Garcia Linera, criticized the US neo-liberal trade regime, asserting: “It is not necessary for small producers and entrepreneurs to subordinate themselves to financial capital…There are other forms of interdependence, other forms of globalization, other ways to generate regional exchanges of products, ideas, and necessities.” Garcia Linera concluded, “Bolivia needs the world, and it will produce for the world.”

Roger Burbach is director of the Center for the Study of the Americas, based in Berkeley, California. He is the co-author, with Jim Tarbell, of Imperial Overstretch: George W Bush and the Hubris of Empire, published by Zed Books. He has written extensively on Latin America and is currently working on a book on the social movements and the new left in Latin America.