Iranian cash builds bonds with Bolivia

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By Helen Coster
Monday, December 6, 2010

EL ALTO, BOLIVIA - Helen Limachi walked out of a gleaming new hospital in this wind-swept city satisfied with the care her 4-month-old son, Fabricio, had received for his ailing hip.

"The doctor took the time to explain the situation to us," she said. "He went over the X-ray."

The appointment and X-ray cost Limachi an affordable 40 bolivianos - roughly $6. Two days later, Limachi and her son returned to the hospital to see an orthopedist.

Good medical treatment is rare in Bolivia, a landlocked South American country where 60 percent of people live below the poverty line. But even more surprising about the year-old, $2.5 million hospital is its donor: the government of Iran, one of Bolivia's newest allies.

The relationship is part of Iran's effort to gain a foothold in the region by courting Bolivia, Venezuela and other left-leaning countries in Latin America with aid and business partnerships. The new ties help give both Iran and Bolivia greater international recognition as Iran seeks to challenge U.S. influence, experts say.

"The basic motivation is that Iran and a handful of governments in Latin America are looking for opportunities to counter and attack U.S. influence in the world," said Cynthia Arnson, director of the Latin American Program at the Woodrow Wilson International Center for Scholars in Washington. "As Latin American countries try to diversify their international partners, Iran offers itself up."

There is much speculation in Bolivia and in U.S. policy circles - but few hard facts - about the relationship between Bolivia and Iran. Iranian President Mahmoud Ahmadinejad visited Bolivian President Evo Morales for the first time in September 2007. Iran pledged $1.1 billion to help industrialize Bolivia, and the two leaders signed "memos of understanding" related to cooperation in agriculture, trade and energy.

The countries recently exchanged ambassadors, and Morales expressed interest in buying Iranian-built planes and helicopters when he visited Tehran in October. Iran has funded a milk factory and the hospital in El Alto.

But because the two countries have little chance of establishing meaningful trade - and unlike Iran and Venezuela, don't have oil in common - the relationship remains mostly political.

"This is not economic," said Jaime Daremblum, director of the Center for Latin American Studies at the Hudson Institute in Washington. "This is politics, imagery and the world noticing, 'We have lots of friends.' "

For centuries, foreign countries profited from Bolivia's vast natural resources while the country remained poor. But Morales is determined to develop Bolivia's resources - and relationships - on the country's own terms. In May 2006, he nationalized the oil and gas industries, and his administration is being choosy about how and with whom to develop its vast lithium reserves.

"For the first time we have the ability to decide who we can be friends with, who we can have relations with," said Gustavo Guzman, an adviser to the Morales administration and former ambassador to the United States. "We finally have the ability to make our own decisions."

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