Failing Bolivia

Bolivia, a blighted land, has become more so under Evo Morales’s tenure,
Chavez-style Economics Fail Miserably in Bolivia
Jaime Daremblum, Costa Rica’s ambassador to the United States from 1998 to 2004, writes that Bolivian president Evo Morales (pictured) slavishly follows Hugo’s playbook, with similarly disastrous results.
(h/t Silvio Canto)

He has weakened the rule of law, undermined democracy, and nationalized a significant portion of the economy while seeking to implement an ambitious land-redistribution agenda. Bolivia has the second-largest natural-gas reserves in South America. Yet Morales nationalized the industry in 2006, with predictably negative consequences. Last summer, the president of the Bolivian Chamber of Hydrocarbons told the Financial Times that his country’s natural-gas reserves were shrinking “because there have not been any significant investments in the past five years.”

Indeed, through nationalization schemes, price controls, and other anti-business measures, Morales has chased away both domestic and foreign investors. As Bolivian economist Waldo López said last year, “The government has a foreign-investment phobia, and its nationalization processes and the lack of clear rules are creating lack of confidence.” The World Bank’s 2011 “Doing Business” survey ranks Bolivia 149 out of 183 economies, behind even Sierra Leone and Syria. It is the poorest nation in South America, and among the very poorest in the entire Western Hemisphere.

Why should this matter to the USA?

The United States has more than a passing interest in Bolivia’s future. After all, the country is a major cocaine producer. Morales expelled the Drug Enforcement Administration from his country back in 2008, and a new U.S. government report says that Bolivia has “failed demonstrably” to combat drug trafficking and meet its international obligations. It has also strengthened relations with the Iranian theocracy. According to the Associated Press, a 2009 Israeli foreign ministry document accused Bolivia (and Venezuela) of providing Tehran with uranium.

As I have posted in the past, Iran is taking a much more active interest in our hemisphere. Add Bolivia to their roster.

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