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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.
(By Peter S. Goodman -- The Washington Post)
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"It's a structural crisis within capitalism, and not just in Bolivia," said Carlos Arze, an economist at the Center of Labor Development and Agrarian Studies, a research institution in La Paz. "United States hegemony over these economies is no longer working."
Previously, the IMF could force governments to adhere to its doctrines or risk losing access to credit. But Chávez, tapping Venezuela's oil wealth, has offered alternative financing, and he's not alone. China is distributing low-interest loans across Africa and Latin America. Private money is surging into developing countries.
"You have an extraordinary amount of liquidity in the world," said Albert Fishlow, an economist at Columbia University. "You have a much greater degree of freedom of individual countries to follow policies that would have previously been punished."
Officials at the IMF cast their diminished role in Latin America as good news, a sign that governments are healthy enough that they no longer require aid. Most countries in the region, Bolivia included, continue to subscribe to the fund's principles, they said.
"We find a much stronger commitment to balanced budgets and low inflation," said Anoop Singh, director of the IMF's western hemisphere department. "This is really a historic breakthrough."
But the nationalization of energy here and in Venezuela broke sharply with IMF counsel, redressing resentment toward foreign treasure-seekers dating to Spanish colonialism, when Bolivia's silver mines enriched a European empire.
Morales and his ministers exude pride in having shaken free of the dictates of Washington. Pablo Solon, Morales's special ambassador for trade, recalled how in 2003 IMF officials concerned about the size of Bolivia's budget deficit pressured the government to increase taxes, sparking riots that killed dozens of people.
"Those were the policies of the IMF," Solon said. "We're applying another recipe."
Bolivia's effort to improve its schools, long overseen by the World Bank, is one example of the policy shift. The World Bank's sector leader for Bolivia, Daniel Cotlear, said the country's average years of schooling nearly doubled between 1992 and 2001. But social advocates say the World Bank did not sufficiently consult with Bolivians on what was needed here.
"The World Bank came with a model and applied it indiscriminately," said Minister of Education Magdalena Cajias. "They ignored Bolivia's sense of its own identity."
Bolivia is now expanding a Cuban literacy program while promoting the use of indigenous languages in addition to Spanish. Last year, the government used energy royalties to distribute $31 million to parents as a reward for keeping children in school -- about $25 per child.
"It's had an impact," said Gumercindo Quenta, a teacher in the town of Huatajata on the shores of Lake Titicaca, an expanse of blue hemmed in by snow-capped peaks. Most children in his classroom trudge two miles from surrounding villages. Their families live in mud-brick homes, coaxing sweet potatoes from the land, subsisting on as little as $50 a month.
