How Bolivia’s Morales Weathered Latin America’s Backlash Against the Left
April 22, 2019 - www.worldpoliticsreview.com

Andrew Thompson

Not much remains of the “pink tide” of leftist governments that swept across Latin America in the 2000s, riding the long commodities boom. After the boom came the bust, and with it widespread voter dissatisfaction. Where free elections have been held, most of the region has subsequently swung to the right.

There are, of course, some exceptions, most notoriously in Venezuela. President Nicolas Maduro, who came to office in 2013 as the handpicked successor of the leader who launched the wave, Hugo Chavez, continues to preside over one of the worst economic and humanitarian disasters in recent Latin American history. He’s still claiming to be some kind of revolutionary.

But another leftist leader who was swept into office by the “pink tide” is faring much better. Farther south, in Bolivia, President Evo Morales, has survived the regional backlash. Morales is an ideological brother-in-arms to Maduro. There is a temptation to see the two men and their political trajectories as similar, and there are certainly points of comparison. But the differences are more revealing.

The biggest one by far is economic. In Venezuela, it has taken 19 years of self-described “Bolivarian socialism,” six of them under Maduro, to largely destroy the country’s economy. Its GDP has dropped by as much as half, hyperinflation is uncontrolled, and up to 4 million Venezuelans have fled the country. In Bolivia, by contrast, after 13 years of rule by Morales and his Movement for Socialism, or MAS, the economy seems to be thriving. Annual growth has averaged just under 5 percent during his time in office. According to the International Monetary Fund, growth this year will be 4 percent, the highest rate in South America, and well ahead of what is being achieved by some prominent center-right and right-wing governments, for example in Argentina and Brazil. Bolivian inflation and its exchange rate remain remarkably stable.

In some ways, Bolivia and Venezuela are heading in entirely opposite directions. Once wealthy and middle-class, Venezuela is crashing headlong into poverty, while Bolivians are quietly getting modestly wealthy. For the first time in the country’s history, the middle class has become the largest socioeconomic group. From 2006, when Morales took office, to 2017, the proportion of the population living in poverty dropped from 59.9 percent to 36.4 percent, according to the INE, the National Statistics Institute. Those suffering from extreme poverty fell from 38.2 percent to 15.2 percent. Per capita income tripled to $3,130—still very modest by regional and international standards, but entailing a world of difference for Bolivians.

There is an economic policy story behind these numbers. Both Venezuela and Bolivia are commodity exporters: oil in the case of Venezuela; natural gas, zinc and gold in the case of Bolivia. Both enjoyed a decade-long export boom. Both countries nationalized key industries. But the similarities end there.

Venezuela’s nationalized industries were basically looted and run by incompetent cronies of Maduro and Chavez. The country used its windfall oil profits unwisely, splurging on an array of politicized subsidies and handouts that favored its supporters. What was left disappeared into industrial-scale corruption schemes.

Bolivia was smarter in how it managed the bonanza from gas, zinc and gold. Cash transfers to the poor were more controlled and more sustainable. And rather than patronage handouts, Morales’ government invested in major infrastructure projects in order to diversify the economy—for example, by promoting the mining of lithium, the highly sought-after and lucrative mineral used in all kinds of modern batteries. Although there have been allegations of corruption in Bolivia, including some involving the notorious Brazilian construction giant Odebrecht, the scams seem to have been on a smaller scale. And perhaps most of all, despite spending on some expensive prestige projects like a new government headquarters in La Paz, Bolivia under Morales maintained a budget surplus up until 2013, and in subsequent years has sought to control the size of the deficit. This is a world away from Venezuela printing ever-more money in order to cover uncontrolled deficits, which in turn has fed relentless hyperinflation.

Morales could still lose support as a result
of deep social changes that he helped
initiate.

This isn’t to suggest that there are no economic problems looming on Bolivia’s horizon. The end of the commodities boom has taken a toll. The country now has double deficits—a fiscal deficit of around 7 percent of GDP, and a current account deficit of around 5 percent of GDP. Foreign currency reserves are half what they were in the boom years, which peaked in 2014, and debt has increased, although it is still manageable. Absent sustained export growth, Bolivia could face a future currency crisis. But that can be said of many post-commodities boom countries in Latin America.

The political implications of how Bolivia’s economy has not just survived but thrived, while other leftist governments fizzled, are startling. They suggest that, at the end of the day, ideology may be much less important that basic managerial competence. Back in 2006, Jorge Castañeda outlined a taxonomy of Latin America’s “left-wing resurgence,” categorizing it not as one but two Latin American lefts. “One is modern, open-minded, reformist, and internationalist, and it springs, paradoxically, from the hard-core left of the past,” he wrote in Foreign Affairs. “The other, born of the great tradition of Latin American populism, is nationalist, strident, and close-minded.”

There was also a parallel distinction between leftist leaders who were genuinely committed to democracy and term limits, and those addicted to holding on to power at all costs. Venezuela remains a clear case of Castañeda’s second category: a deeply entrenched, populist and increasingly authoritarian regime. Morales may look more like the first category, given his positive economic record, but his story is not yet finished.

Bolivia’s first indigenous president is standing for re-election once more in presidential elections this October, facing a divided opposition but potentially his most serious challenger yet: former President Carlos Mesa, who was in office from 2003 to 2005. But Morales can only run again because of his own populist and even authoritarian impulses. He didn’t take no for an answer when 51 percent of voters rejected a change to the constitution, by a referendum held in February 2018, that would have allowed him to seek a fourth consecutive term. Morales instead orchestrated a ruling by the pliant Supreme Electoral Tribunal that has allowed him to do just that, on the dubious grounds that his political rights would otherwise be violated. His move mirrored Juan Orlando Hernandez, the autocratic right-wing ruler of Honduras, who arranged his own unconstitutional re-election on similar grounds last year.

What kind of leftist leader will Morales ultimately be? The answer may lie with Bolivia’s new middle class. Those who emerged from poverty thanks to the economic policies of Morales and his party might remain loyal to him. Yet that is not what happened in neighboring Brazil. The middle class there grew rapidly as poverty fell during the rule of the left-wing Workers’ Party, from 2003 to 2016. But the new middle class disliked poor public services and widespread corruption and crime. It came out on the streets and ultimately voted the government out.

Morales could face the same phenomenon, ultimately losing support as a result of deep social changes that he helped initiate. And there could yet be a strong backlash among voters to his brand of populism. It says something that he has already opened a museum to himself. It may turn out that Morales misjudged the right time to leave office. If so, he would hardly be alone among Latin American presidents, from the left to the right, who have been seduced by the temptation to hold on to power, seeking re-election after re-election.

Andrew Thompson is a journalist and political risk analyst who covers Latin America. He was previously a foreign correspondent in Mexico, Argentina and Brazil, and head of the BBC’s Latin American Service. He is also an associate fellow at London-based Canning House.