Bolivia news March 22, 2006

Let me catch you up on some of our local news that probably didn’t make your local news:

This morning (Wednesday, March 22) I heard a large explosion at 7AM – I thought that maybe the Lost-the-Sea-to-Chile Day celebrations had kicked off a day early (the anniversary is the 23rd of March), but just in case I turned on the morning TV news report where I saw they were reporting on two huge bomb explosions last night in small local hotels around the bus station – the first explosion at 9:30PM last night which completely destroyed that hotel, and the second at 2AM this morning that only partially destroyed that hotel but broke out the windows of all the buildings on the block. The images on the TV and in the morning newspaper looked like Beirut in the 80’s. The different news reports on different channels have different stories – either an Arab man and a Uruguayan woman were arrested for the bombings, or it was a North American man and a Uruguayan woman. Why someone would bomb these poor little hotels is beyond me. On my way to work this morning I looked to see what had exploded in our neighborhood, but both the Hotel Calacoto and the Casa Grande were intact.

In the electric industry news, yesterday Evo approved the new “Dignity Tariffs” for electrical retail rates. These tariffs were first proposed by Carlos Mesa and offer nearly wholesale rates for everyone with a consumption of less than 75kWh/month, which means that nearly everyone in Bolivia except myself will be paying considerably less for their electricity. I’ve already run the financial analysis on our projects in Potosi at these rates and have determined that the utilities won’t be able to pay for more than 10% of their O&M costs, never mind anything for administration costs or even send out bills. I don’t know if the government is planning on subsidizing the utility’s operations out of the national treasury or what. Will the last person to leave the country please turn out the lights?

Also yesterday, Evo kicked off a new literacy campaign, utilizing Cuban instructors and instructional materials. I can see the materials now: “Look Dick, see Spot run. See Spot run from the evil capitalist. See how democracy has repressed Jane. See the evil democratic government exploit the workers through capitalism. See how Dick and Jane will be much happier once the socialist dictator has re-nationalized all of the industries privatized in the 90’s.” According to Evito, only Cuba and Venezuela have 100% literate populations, as opposed to the United States where they have some huge, unspecified percentage of illiterates. Now, I don’t argue that the US has its fair share of illiterate people, but I’d be willing to bet dollars to donuts that our percentage is a good deal lower than either Cuba or Venezuela. Speaking of Venezuela, the attached photo is of the Venezuelan dictator, Hugo Chavez, with his wanna-be, Evo Morales. You'll note that Evito is sporting his infamous sweater that he wore to meet all of the heads of state on his pre-inaugural "Rainbow Tour" earlier this year.

Also this week, the government decreed a doubling of the minimum wage. According to the local captains of industry they will now be shutting down production and laying people off. And, according to my Bolivian friends who make more than the minimum wage, this increase also means that everyone’s income taxes will be significantly reduced because the tax rate is tied to the minimum wage, thereby reducing the income to the national treasury.

A little earlier this month, on the local political front here in Bolivia, the divide between the east and west got deeper and deeper. Evo and company wanted to convoke a constitutional convention but the folks from down east in Santa Cruz, Tarija, and Beni didn’t want the socialists to write the next constitution, so they wouldn’t support the convention. Without the eastern block, known locally as the crescent moon, Evo couldn’t rouse enough votes in congress to call the convention, so then he threatened to convoke street protests (as the president?) Meanwhile, the eastern block wanted a referendum on departmental (departments in Bolivia are like States) autonomy, but Evo said that those issues needed to be corrected in the constitution itself. So then, the eastern section of the country threatened to secede from the union if they didn’t get their way. And then, all of a sudden, one Monday morning congress announced that they’d come to an agreement on everything – they’re going to hold the referendum AND hold a constitutional convention next August 6th – just like that. Everyone agreed and everyone got their way. I’m so surprised that I almost don’t know what to think.

But then Bolivia lost their huge income from selling soy beans to Colombia because Colombia just signed the TLC (Free Trade Agreement) with the USA, so they’ll now be buying their soy beans from the USA for a much better price than Bolivia was offering. Bolivia, under this new government, so far has refused to even discuss never mind sign the TLC with the US government. In fact, since the US refused to issue visas to some of the newly elected MAS politicians because of their ties to terrorism, the Bolivian government officials refused to attend a reception that the US Ambassador held when some dignitary from the US was in town (I don’t know which – I was in Florida at the time.) So then the US was the only country not represented when the combined diplomatic corps held a reception in honor of Evo’s new presidency. So, the further we go along this year, the further apart the US and Bolivia become. And since the US has been Bolivia’s biggest financial supporter, over $150,000,000 last year, it’s going to hurt eventually. I’ll tell you, after watching Bolivian evening news for four years now, it’s always a shock to see the bad guys waving to the masses out the window of the presidential offices – for the past four years these guys were on the streets inciting riots and now for the past three months they’re on the inside. And speaking of having the bad guys in the presidential offices, this month I avoided a meeting with the new murdering terrorist vice-president – I begged off a meeting that Fernando arranged telling him that I thought that the presence of a gringo at the meeting would not help our company's future in Bolivia – after careful consideration he agreed.

And then, as if to underscore the widening divide between the US and Bolivia, Evito picked a fight with the US military. Apparently there was an anti-terrorist unit within the Bolivian military that was secretly formed after 9-11-2001 in which the US provided weapons, munitions, uniforms, training, etc, in exchange for getting to hand pick the leaders of the special unit – and was kept a secret until earlier this month when it was exposed by Evo himself. I assume that this type of deal is probably in place in most of our allied countries. Anyway, the US pulled the plug on this $500,000/year in funding when Evo changed the commander of the unit for one of his guys – one of his rabid anti-American guys. What’s more, according to my friend the military attaché, all of the new generals under this government are at least professing an anti-American stance – even the guys who were our friends under the former government – just to keep their jobs. What I’ve seen in the various ministries with which we deal is that all of Evo’s boys are anti-American. Anyway, the high-tech arms provided to the anti-terrorist unit were only loaned to Bolivia by the US, who has asked for their return, to which Evo has responded that he’s not giving them back and if the US tries to come and get them then Big Brother Hugo Chavez will protect us, since the Venezuelan army is constantly training to repel just such an American invasion.

On the bright side of the news, Bolivia’s new Chancellor continues to make us all laugh. His latest antics include:

1. A statement that the average life expectancy in Bolivia is 200 years. Boy, I’m never leaving Bolivia again.
2. A statement that coca is more healthy than milk and a recommendation that the school breakfasts make the switch. Unfortunately the Minister of Education declined the suggestion.
3. A rule that the qualification for being a diplomat from Bolivia is that the diplomat speaks Aymara. That should really help out the ambassadors from Bolivia to places like Germany, France, and the United States.