Populism For a Price

New policies promoted by Bolivian President Evo Morales emphasize clinics and education. About two-thirds of the nation's 9 million people are poor.
New policies promoted by Bolivian President Evo Morales emphasize clinics and education. About two-thirds of the nation's 9 million people are poor. (By Peter S. Goodman -- The Washington Post)
By Peter S. Goodman
Washington Post Staff Writer
Friday, August 3, 2007

ORURO, Bolivia

Allama-wool hat swathing his head, Santos Paredes took the floor with photos in hand -- images of a half-built medical clinic in his village on the high plains of the Andes. Paredes, the mayor, entreated Bolivia's president, Evo Morales, for money to finish the job.

"I ask for your blessing," Paredes said, laying the pictures across a red-velvet tablecloth as the president leaned in for a look. Morales was here to distribute aid supplied by his ideological kinsman, Venezuelan President Hugo Chávez.

"I don't know if I'll give you the money," Morales teased before flashing a grin. Paredes took home a handwritten check for $27,437.

After two decades of reliance on the economic prescriptions of the United States, the World Bank and the International Monetary Fund, Bolivia has turned left, embracing Venezuelan and Cuban aid, nationalizing industries and championing what its leaders call a pragmatic version of socialism.

Bolivia's break from Washington is part of a regional trend underwritten by Chávez, who has lavished aid on allies to roll back the influence of the United States and Washington-based institutions that have long shaped Latin America's development.

In the past two years, Bolivia, Nicaragua, Argentina and Ecuador have used Venezuelan aid to pay off their debts to the IMF or allow credit agreements to lapse, while adopting unorthodox development strategies that would have been barred so long as they depended on the fund for credit.

Lending by the IMF to Latin America and the Caribbean plunged from $49 billion in 2003 to $759 million last year, according to the fund.

The new course, with its emphasis on health clinics and classrooms for poor communities, draws cheers in many parts of this country of 9 million, where about two-thirds of the population is poor. But economists and political opponents say they doubt it will lift large numbers from poverty.

"These populist policies -- we've already lived through them in Latin America," said Carlos Bohrt, vice president of Bolivia's Senate and a member of the opposition. "They don't create long-term sustainable growth. It's just handouts. This funding could just disappear without any impact."

Since taking office last year, Morales, a former coca grower and the first indigenous tribesman to lead Bolivia, has nationalized Bolivia's oil and gas industry, reversing a privatization orchestrated by the IMF. He forced foreign energy firms to accept drastically diminished profits, increasing the government's royalties by more than $1 billion a year and earmarking the money for schools and hospitals. To gain a free hand, he has ended a credit agreement with the IMF and pulled out of a World Bank body that referees disputes with foreign firms.

"What drives things now is social conscience," said Florencio Choque, a government engineer. "This is rule by the poor."

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