Bolivia's Bold Experiment

Today, Bolivia is a powerful alternative example for other underdeveloped countries facing mass illiteracy, poverty and inequality in the way that revolutionary Cuba once was during the Cold War. But before Bolivia becomes the Cuba of the 21st century it will have to survive a series of so far unyielding challenges.

Evo Morales' emancipatory project for the poor and marginalized groups of Bolivia represents an independent model of economic development in a region traditionally dominated by U.S. economic interests. Since his election in 2005, Morales' brand of revolutionary social democracy and anti-capitalism has vexed American and European economic experts who favor neoliberal approaches to development---a model they have from time to time been prepared to defend through the barrel of a gun.

President Morales expelled the International Monetary Fund and nationalized significant industries upon his election in the face of Western opposition. But despite their fears, Morales and his party Movement Toward Socialism (MAS) have led Bolivia to what is expected to be the fastest economic growth rate in the Latin American region this year.

At home Evo Morales is the front-runner in a December election that will widely be a referendum on the economic policies of his first term. So far, public opinion polls indicate that Evo is regarded favorably in Bolivia, especially compared to this right-wing opponents. Even in Santa Cruz and Tarija, districts where the opposition is most vocal, President Morales gained about 57 and 56 percent respectively. If elected, Morales has promised to continue historic social spending on health care, housing, and education.

The first indigenous President of the America's has also promised to increase even more the role of the state in the Bolivian economy---a key source of antagonism among conservatives. The end result has been overwhelmingly positive. The billions of dollars in additional revenue from the now publicly-owned industries have allowed the government greater resources to spend on badly needed social programs. Public investment increased from 6.3 percent of GDP in 2005 to 10.5 percent for 2009. Higher earnings for exports and a fairer government imposed tax rate also created a budget surplus after years of large deficits.

Government revenues can only be expected to increase as President Morales invests in new lithium production facilities. Bolivia has 50 to 70 percent of the world's lithium reserves and foreign corporations are poised to rake in lucrative profits. But Morales is instead looking toward endogenous control of the reserves. Some are calling Bolivia, "the Saudi Arabia of Lithium" and the mineral resource if managed well could make South America's poorest country a global player in the technology industry.

The economic rebellion in Bolivia is a victory for yet another Latin American leader who launched an ambitious experiment in statist political economy 50 years ago. Cuba's former president, Fidel Castro is without question a primary source of inspiration for MAS' left-wing nationalism and he frequently celebrates President Morales in his widely read Reflections. Today, Bolivia is a powerful alternative example for other underdeveloped countries facing mass illiteracy, poverty and inequality in the way that revolutionary Cuba once was. But before Bolivia becomes the Cuba of the 21st century it will have to survive a series of so far unyielding challenges.

Bolivia still faces relative dependency on energy reserves for export, widespread corruption in regional government and entrenched political instability. In the 1990's privatization and austerity measures promoted by the IMF in Bolivia led to increased unemployment and break downs in social services. State capacity for industry regulation and service delivery have been historically weak and despite obvious improvements, the government still faces difficulties in reaching the most remote pockets of the country with their programs.

Unlike Cuba's one-party system, MAS is seeking radical transformation through the channels of liberal democracy. In this way political economic reforms have to be won by consensus with interest groups that are existentially opposed to the Morales' agenda. The European-descended elite of Bolivia who make up the opposition to Morales, historically controlled the government and remain the primary beneficiaries of the countries mineral wealth. The efforts by the President to redistribute political and economic power among indigenous groups have been met with vehement resistance.

The opposition-led senate for instance has opposed most of MAS' proposals to overcome internal obstacles to development including corruption. In 2008, opposition leaders led violent protestors in attacking MAS supporters resulting in public condemnation from outside Bolivia among Latin American allies. President Evo Morales' ambitious agenda for reform is more broadly complicated by the calculus of electoral politics inside Bolivia. MAS its self is essentially an alliance of social movements bound together less by political ideology than their support for Evo Morales. Even if Morales wins re-election in December, long-term objectives could be easily reversed if interests within MAS splinter in the years ahead.

Though a tiny country in South America, Bolivia's political economy of development hold significant implications for other democratic developing countries around the world. Unlike their Asian counter-parts who have pursued authoritarian state-directed efforts to attract foreign direct investment for economic growth, Bolivia is attempting to grow endogenously and democratically launching a dynamic social and economic empowerment strategy for the poor.

The road ahead for President Evo Morales and his supporters is sure to be paved with even greater difficulties than in previous years. If they can win, Evo Morales will have achieved a progressive vision of state-directed development that other underdeveloped countries have so far been unable to sustain in recent years. The implications of a successful experiment will ultimately reach well beyond their immediate borders and have a significant impact on global debates in other continents.