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The Bolivian Aid Barrier
Businesses Not the Only Ones Hurt in Unfriendly Environment

By Marcela Sanchez
Special to washingtonpost.com
Friday, October 13, 2006 12:00 AM

WASHINGTON -- For James Cooper, head of a small nonprofit promoting judicial reform throughout Latin America, working in Bolivia today is very much like practicing an "extreme sport: You have no idea what's going to happen. ... You go from moments of extreme happiness to total desolation."

That's life in the philanthropic fast lane -- under the auspices of President Evo Morales' new Bolivia. The former leader of the country's coca growers last year became the Andean nation's first indigenous president, putting an end to a history of white minority rule that he blames for his country's deep-seated poverty. So far, he has nationalized natural gas resources, launched ambitious land reform projects and promised to reexamine coca eradication programs.

This agenda has created an unfriendly environment that threatens foreign investment and challenges international relations. And it has also altered the terrain for philanthropic organizations that play an essential role in a country where nearly half of all public investment funds depend on foreign aid and private generosity.

Cooper's Proyecto ACCESO promotes the rule of law in Bolivia through unusual means. He has designed a clothing line with human rights messages and trained shoe shiners in La Paz to help impart civic education among their customers. Last month, he co-sponsored a national conference for law enforcement officials on the use of drug treatment courts and flew U.S. judge Laura Safer Espinoza to La Paz to share experiences from her Bronx courtroom.

Starting these and other projects has grown more complicated during Morales' administration. Simply meeting with government officials is an exercise in frustration. "The senior people are being replaced all the time and the junior people are too afraid to make a decision," he said. "The only expectation I have is to have no expectations."

What's going on in Bolivia is not simply a problem of personnel shuffling, but the reflection of a radical change among those who hold power. In this transformation, the U.S.-based Soros Foundation sees opportunity. Together with the Norwegian government, it is currently exploring ways to help Bolivian officials develop the know-how to run the industries recently nationalized.

This kind of assistance is similar to what the foundation did in former Soviet bloc countries to help them embrace democracy. At the Organization of American States earlier this month, George Soros said his foundation's niche is helping governments deliver on their promises in countries where "a group previously excluded comes to power with good intentions but without capacity."

Soros and Cooper may be the exception rather than the rule. In general, philanthropic activity, like money, abhors instability. As Soros put it in his OAS speech, "philanthropists don't like to be involved in things that may be politically controversial."

Corporate giving is particularly vulnerable in an unfriendly environment such as Bolivia's. But a study done last year showed that the chilling effect of uncertainty also affects homegrown giving, both at the national and local levels. Jeffrey Davidow, former U.S. ambassador and now president of the Institute of the Americas at the University of California, San Diego, has found in Mexico that "the willingness of local business to donate ... has a relationship to the question of the confidence in their own future in that country."

To the degree that political changes or anti-business attitudes lessen the confidence of business owners, they spend more time figuring out short-term advantages for themselves, including getting the money out of the country, Davidow said. In Bolivia, where national wealth is largely concentrated in the eastern part of the country, there has even been talk of secession from the poorer mountainous regions of the west.

There is also the fear that populist policies undermine initiatives designed to create self-sufficiency. Nancy Birdsall, president of the Washington-based Center for Global Development, warns that populism can rapidly disintegrate into "patronage systems that end up hurting the poor" by pushing aside legitimate community-driven local initiatives favored by international donors.

Bolivia has yet to come to that point. In fact, Morales is spending far more than he planned on nationalizing the gas and oil industry -- leaving less for social programs. In August, the Bolivian government announced that the nationalization process would be "temporarily suspended" due to lack of funds.

Morales' popularity has been falling as discontent rises and the threat of violence hovers over the country. In that environment, the work of nonprofits is only likely to become more perilous, and helping Bolivia's poor will be far more difficult.

Marcela Sanchez's e-mail address is desdewash@washpost.com.

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