Peter S. Goodman writes: "After two decades of reliance on the economic prescriptions of the United States, the World Bank and the International Monetary Fund, Bolivia has turned left, embracing Venezuelan and Cuban aid, nationalizing industries and championing what its leaders call a pragmatic version of socialism."
This is to the horror of conservatives in our country, who believe that any help to the poor from the government is a crime that ought to be abolished from the earth as quickly as possible.
For years, the International Monetary Fund, based in Washington, D.C., lent billions to impoverished, so-called "developing" nations. But that lent money came with the price that these nations obey IMF, and largely conservative, strategies for dealing with their problems.
"The World Bank came with a model and applied it indiscriminately," said Bolivian Minister of Education Magdalena Cajias. "They ignored Bolivia's sense of its own identity."
But there are forces at work in the world that are threatening to change all of that. The prosperity of Venezuela, with its oil revenues, and China, with its broad resources, is creating a new socialist trend in many Latin American countries.
Goodman reports: "Lending by the IMF to Latin America and the Caribbean plunged from $49 billion in 2003 to $759 million last year, according to the fund."
On the one hand, that's a good thing, because the "developing" nations weren't really developing, and they weren't able to get out of debt. They were eternally beholden, in this way, to the rich financiers. And for the last decade, it has been clear that many would never pay back their loans. This prompted debt forgiveness, with more strings attached.
Anoop Singh, director of the IMF's western hemisphere department, sees these recent developments as a sign of success. IMF strategies have, to a large extent, taken hold in Latin America: "We find a much stronger commitment to balanced budgets and low inflation. This is really a historic breakthrough."
The systems put in place, though, were always designed to let the rich get richer, at the expense of the poor. The recent reversal is a determination to help the poor rise up.
"What drives things now is social conscience," said Florencio Choque, a government engineer. "This is rule by the poor."
Now, granted, simply taking money from the rich in order to redistribute it to the poor, could be construed as theft on a mass scale. But when the system has become corrupt, and the people of a society suffer, we don't look at Robin Hood as a thief. We look at Robin Hood as a hero.
The real question now is how to redistribute the funds that are available, especially from China and Venezuela. Much of it is going into health care and education, which I know conservatives will especially cringe at. (It's horrible to fund these things, I know. Conservatives begin to scream "socialist takeover!" at the first sign of money that might help those in need.)
"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."
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.
This may not seem like much, but for parents who live on $50 per month, it makes all the difference in the world. So now, rather than keeping their kids home to work, parents are more willing to send the kids to school.
Goodman also reports about health care coming to Bolivia via Cuba's world-famous medical system: "Jacinto Calle raises cattle outside Caracollo, a smudge of a town where dogs root through trash. In his 63 years, Calle had never seen a doctor. But when an infection spread across his leg recently, he rode his bicycle three miles to a hospital built last year with gas royalties. The doctors were Cuban, a gift from President Fidel Castro. His leg is healing."
At the end of the movie "Sicko," by the way, Michael Moore takes a group of suffering Americans, including emergency workers who helped at the 9/11 disaster in rescue efforts, and became ill as a result, to Cuba for treatment because they couldn't be helped in the U.S. The government, at the time of the film's release, was considering pressing charges against Moore for getting these people help there. If you haven't seen it, see the film "Sicko."
Whereas we in the United States are impoverished--remember all our "tight budgets," as I write about in my previous blog--Bolivia must be doing great. Goodman writes that "Bolivian ministers acknowledged that money from energy royalties extracted from the foreign energy companies outstrips the country's capacity to spend it. About $500 million sits at the central bank, reserved for local governments that have yet to formulate projects."
"There's not yet really a system to absorb this money," Planning Minister Gabriel Loza said.
President Evo Morales tours the countryside, and offers money to help the people, but in many cases, they don't yet know how to propose plans that can be approved. And to Bolivia's credit, they're not just giving the money away willy-nilly.
He scolds them: "Before, you couldn't find any money," he said. "Now, there's money, but you don't come prepared."
Of course, the opposition remains in South America. Goodman quotes Carlos Bohrt, vice president of Bolivia's Senate and a member of the opposition: "These populist policies -- we've already lived through them in Latin America. They don't create long-term sustainable growth. It's just handouts. This funding could just disappear without any impact."
And Goodman also writes that "Detractors say Morales is handing the poor instant gratification at the expense of long-term prospects. Energy nationalization discourages foreign firms from sinking capital into Bolivia, jeopardizing efforts to attract investment to expand production, economists say."
Programs that are "just handouts" don't work. It's true. But programs that foster the growth of the rich at the expense of the poor don't work either. So, as usual, it is a question of balance. I, for one, applaud the efforts of Morales to improve the living conditions of the poor in Bolivia.
And while it's true that nationalization discourages investment by get-rich-quick corporations around the world, Bolivia apparently sees other investors they can turn to, and this has changed the whole dynamic.
I don't know if this will work or not, but I applaud their efforts to do what we won't do in the United States: to help the poor and not insist on a Randian type of "pull yourself up by your own bootstraps" approach.
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