Bush Squares Off with Bolivia and Venezuela


arlier this year George W. Bush had some
harsh words for the governments of Bolivia and Venzeuela. “Let
me just put it bluntly—I’m concerned about the erosion
of democracy in the countries you mentioned,” Bush said in
response to a question put to him about Venezuela and Bolivia. “I
am going to continue to remind our hemisphere that respect for property
rights and human rights is essential for all countries,” he

While Bush’s hostility towards Hugo Chavez of Venezuela is
well known, his critical comments about Bolivia came as somewhat
of a surprise, given that Evo Morales had served only four months
as the country’s first Indian president and had done nothing
to thwart the democratic process. As the Bolivian foreign minister,
David Choquehuanca, noted: “We are creating a participatory
democracy and the world knows it. I don’t understand how the
United States can say democracy is eroding.” 

A change is taking place in South America as Morales and Chavez
move to exert greater control of their energy resources and challenge
U.S. plans for a hemispheric “free trade” zone. As the
president of the Bolivian Senate, Santos Ramirez, noted: “Bolivia
and Latin America are no longer the servile democracies that tolerate…poverty
and the surrendering of sovereignty.” 

Early in May Morales announced that Bolivia would nationalize its
energy resources, particularly its natural gas exports. While no
foreign corporations were expropriated outright, Morales made it
clear that “the looting of our natural resources by foreign
enterprises is over.” 

At the same time Morales moved to reshape the country’s commercial
relations, particularly with Venezuela. In May Hugo Chavez flew
to Bolivia, declaring, “We are going to concretize the People’s
Trade Treaty,” an accord that was signed between Venezuela,
Bolivia, and Cuba. It is openly pitched as an alternative to the
U.S.-backed Free Trade Area (FTAA) of the Americas, a trade zone
that facilitates the expansion of multinational corporations. 

Bolivia and Venezuela have signed 8 different accords dealing with
200 different projects concerning energy, mining, education, sports,
and cultural exchanges. Most importantly, Venezuela has agreed to
invest over $1 billion to help industrialize Bolivia’s natural
gas production, including construction of a petrochemical complex. 

Venezuela is also providing diesel fuel, which Bolivia does not
produce, in exchange for the sale of soybeans. This comes at an
opportune moment for Bolivia as most of its soy exports have gone
to Colombia which just signed a free trade agreement with the United

The U.S.-Colombian accord means that cheap, subsidized U.S. grains
will flood Colombia, driving out Bolivian soybeans. 

Bolivia Morales took Chavez to visit Chipare, the semi-tropical
region where Morales rose to prominence as the leader of the coca
growers’ confederation. There they announced their intention
to build a factory to process coca leaves for herbal teas, medicinal
products, and cosmetics. This is certain to arouse the ire of the
United States, which for years has pursued a policy of forced eradication
of coca in Chipare, leading to the virtual militarization of the

The burgeoning economic alliance between Venezuela and Bolivia also
helps offset the difficulties that have arisen with Brazil and Argentina
over Morales’s determination to exert greater control over
natural gas exports. Both neighboring countries have significant
investments in Bolivia’s gas fields and both are importing
gas for domestic use at prices well below the world market. At a
recent international gathering of Latin American and European leaders
in Vienna, Austria, Morales and President Lula da Silva of Brazil
exchanged harsh words over efforts to draft a new accord over natural
gas. While the two leaders formally made up before they left Austria,
there is little doubt that Chavez’s support provides Bolivia
with leverage in its negotiations with its two more powerful neighbors. 

Venezuela is also signing a financial accord aimed at bolstering
Bolivia’s banking and monetary system. This is intended to
strengthen Morales’s hand vis-vis the United States and international
financial institutions. The Bolivian government at the end of March
announced that it would not solicit any new loans from the International
Monetary Fund. 

Chavez’s visit to Bolivia coincided with the opening of the
Exchange Fair, a project of the People’s Trade Treaty. Enterprises
from Cuba, Bolivia and Venezuela participated with the goal of expanding
commerce and sharing technical expertise. At the fair the vice-president
of Bolivia, Alvaro Garcia Linera, criticized the U.S. neo-liberal
trade regime, asserting: “It is not necessary for small producers
and entrepreneurs to subordinate themselves to financial capital….
There are other forms of interdependence, other forms of globalization,
other ways to generate regional exchanges of products, ideas, and
necessities.” Garcia Linera concluded, “Bolivia needs
the world and it will produce for the world.” 

Agrarian Reform 


he government of Evo Morales began tackling
the explosive issue of agrarian reform less than three weeks after
nationalizing Bolivia’s natural gas and petroleum resources.
In a country with glaring land inequities, Vice-President Garcia
Linera proclaimed that large tracts of agricultural land would be
redistributed to “peasants and indigenous communities.”
While “productive lands” will be exempted from expropriation,
Garcia Linera stated that this would not be the case for large underutilized
holdings, “the latifundias that are gangster-like systems of
extortion based on commercial, mercantile and political coercion.” 

Outlining a series of sweeping proposals for changes in the country’s
agrarian reform laws, the Morales government is taking on elite
economic interests located in the eastern region of the country.
This is where most of the large landed estates are located, many
of them acquired through political corruption and land speculation
over the last three decades. According to Miguel Urioste, the director
of the Land Foundation, an independent research center in La Paz,
“Bolivia has a dual land system, the minifundias and subsistence
agricultural plots in the west, and the capitalist enterprises tied
to the latifundias in the east.” The prosperous estates produce
soy beans, cattle, and other agricultural export commodities that
have enriched a bourgeoisie based in Santa Cruz, Bolivia’s
third largest city. 

The devastating poverty that afflicts South America’s poorest
country is bound up with this dysfunctional land system. Out of
Bolivia’s 9 million inhabitants, 3.5 million people live in
the countryside with about 80 percent subsisting at the poverty
level. Garcia Linera noted in his address on agrarian reform that
40 percent of the country’s peasants and inhabitants of the
indigenous agricultural communities live in conditions of extreme
poverty, earning less than $600 a year. Indian women suffer the
most at the bottom of this chain of exploitation. The vice president
stated that, “Women will have special treatment” in the
impending land redistribution program. 

of the landed bourgeoisie in Santa Cruz have already proclaimed
their staunch opposition to the proposed changes in the agrarian
reform laws, even though the government has offered to discuss the
legislation with them. 

Even before Garcia Linera publicly stated the government’s
position on agrarian reform, virtually all the business and entrepreneurial
associations in Santa Cruz, under the leadership of Branko Marinkovic
of the Federation of Private Businesses, issued a proclamation expressing
their “deep concern with the measures of agrarian reform that
are coming from the administration of Evo Morales.” 

While many peasant and indigenous organizations are roundly applauding
the changes in the agrarian reform law, a few leaders express reservations.
Felipe Quispe, the  former head of the Union Confederation
of Rural Workers of Bolivia, who has often challenged Morales from
the left, said, “The government is committing an error because
it is offering to discuss the agrarian reform plan with the large
landowners who have historically exploited the peasants.” 

Militant indigenous movements are already staking out their intent
to take over large estates. The Coordinator of Ethnic Peoples of
Santa Cruz announced its determination to seize 14,000 hectares
owned by Branko Marinkovic. “This land will automatically be
taken because it is ours,” declared a representative of the
ethnic groups. An official of the business coalition shot back,
“This is an abusive assault and we are going to defend our
private property with determination.” 

The dye is cast with the historic initiatives taken in May. Evo
Morales now faces two potent adversaries—foreign energy corporations
and the Bolivian bourgeoisie in Santa Cruz. 


Burbach is director of the Center for the Study of the Americas based
in Berkeley, California. He is co-author, with Jim Tarbell, of

Overstretch: George W. Bush and the Hubris of Empire