Inter-American Security Watch has an excellent translation of Revista Veja’s report on present-day Bolivia, The Cocaine Republic
Bolivia’s President Evo Morales is proud to encourage the cultivation of coca, the raw material for more than half of the cocaine and crack consumed in Brazil, arguing that its leaves are used to produce tea and traditional medicines. However, the United Nations (UN) estimates that only one-third of the coca planted in the country is necessary to meet this demand. The rest is used for drug trafficking and, consequently, contributes to corrupting the lives of nearly one million Brazilians and their families. Recently, evidence has emerged that the Bolivian government’s complicity with drug trafficking goes beyond a simple defense of the cocaleros, or coca growers. VEJA magazine had access to the reports produced by an intelligence unit of the Bolivian police which reveal, among other facts, a direct connection between Morales’ confidante, Minister of the Presidency Juan Ramón Quintana, and a Brazilian drug trafficker currently serving a sentence in Catanduvas, a maximum-security prison in Paraná.
A must-read for those wanting to know what is going on in South America. Read the whole thing.
The international left has explained Mr. Morales’s early popularity in racial terms, painting him and his white upper-class Marxist Vice President Alvaro Garcia Linera as noble liberators of an indigenous nation. This ignores the fact that a majority of Bolivians are culturally mestizo, meaning that regardless of their bloodlines they no longer live like their ancestors did 500 years ago and they speak Spanish. What the socialists also miss is that indigenous Bolivians are no more interested in being tyrannized by someone who looks like them than by someone who doesn’t.
Things ought to be going well for Mr. Morales. Bolivia is a resource supplier, and commodity prices on the whole are booming. Yet the economy has performed only so-so. Gross domestic product averaged an anemic 2.9% annual growth from 2005 through 2010. Last year it expanded at an estimated 5% but still missed the 6% target that economists say developing countries must maintain over a decade to make an impact on poverty rates.
One reason is the dearth of private investment. Total investment is running around 16% of GDP when something closer to 25% is needed to generate strong, long-term growth. Worse, most of that investment comes from the public sector and is increasingly financed by the central bank. Private investment has been running at only 6% to 7% of GDP, suggesting that investors are worried about country risk.
His gas industry venture isn’t working out well either. After the 2006 gas nationalization, he backtracked on a long-term contract to supply Brazil through a Petrobras pipeline and tried to raise the price. Petrobras responded by increasing its capacity to handle imported liquefied natural gas and began to invest heavily to exploit domestic Brazilian resources. It is no longer reliant on Bolivian gas.
Meanwhile, Mr. Morales’s real problem, Bolivian hatred of his authoritarianism, is spinning out of control. The trouble started with a December 2010 effort to raise gasoline prices by 70%. The uprising—known as the gasolinazo—was so violent that he was forced to back down. The incident badly damaged his image.
Next he announced plans to put a Brazilian-financed highway through an Indian reserve in the Bolivian Amazon known by its Spanish initials as the Tipnis. Inhabitants asked for a rerouting to spare their ancestral lands. When Mr. Morales refused, hundreds of Indians took off on a 500-kilometer protest march to La Paz. Along the way they encountered a pro-Morales roadblock and were tear-gassed by police. When the government rounded up some 300 marchers and tried to fly them out of the area, local townspeople set fires on the airport runway in solidarity with the captives.
Mr. Morales has suspended construction on the highway but is still insisting that the road be built because the coca growers—his most important constituency—need it to expand their businesses.
And, yes, Spanish corporations ought to take the hint that investing in countries led by Marxists is not wise.
Since 2000, cultivation of coca leaves—cocaine’s raw material—plunged 65% in Colombia, to 141,000 acres in 2010, according to United Nations figures. In the same period, cultivation surged more than 40% in Peru, to 151,000 acres, and more than doubled in Bolivia, to 77,000 acres.
More important, Bolivia and Peru are now making street-ready cocaine, whereas they once mostly supplied raw ingredients for processing in Colombia. In 2010, Peru may have passed Colombia as the world’s biggest producer, according to the U.S. Drug Enforcement Administration. Between 2009 and 2010, Peru’s potential to produce cocaine grew 44%, to 325 metric tons. In 2010, Colombia’s potential production was 270 metric tons.
Meanwhile, Venezuela and Ecuador are rising as smuggling hubs.
Those of you who think this cocaine is only produced for consumption outside Latin America, do take note that Brazilian police say 80% of that country’s cocaine supply comes from Bolivia.
Noteworthy was a comment by Lebanon’s drug enforcement chief, Colonel Adel Mashmoushi, who stated that one path used by Hezbollah’s drug trafficking friends into Lebanon was “aboard a weekly Iranian-operated flight from Venezuela to Damascus and then over the border [from Syria].” The air bridge between Caracas and Tehran has long been a significant security concern.
Is it a coincidence that Bolivia has the largest Iranian embassy in the hemisphere, and that Ahmadinejad has visited the region five times – last week stopping in Ecuador and Venezuela?
iran, whose embassy in Bolivia is the largest in our hemisphere, sent Defense Minister Ahmad Vahidi to Bolivia at the Bolivian Defense Ministry’s invitation.
While in Bolivia, Vahidi attended a ceremony with President Evo Morales,
The article does not touch on the question of what the nature of Vahidi’s visit to the BDM would be. However, apparently Argentinian officials must have protested, because Bolivia’s foreign minister wrote a letter of apology to the Argentinian foreign minister, and Vahidi was sent out of the country. The apology claimed that
The invitation . . . had been issued by the Bolivian defence ministry which did not know the background to the case and had not co-ordinated with other departments.
Vahidi is wanted for being behind the AMIA bombing.
In a global triangulation that would excite any conspiracy buff, the globalization of terrorism now links Colombian FARC with Hezbollah, Iran with Russia, elected governments with violent insurgencies, uranium with AK-103s, and cocaine with oil. At the center of it all, is Latin America—especially the countries under the influence of Venezuelan President Hugo Chávez.
There are enough connections to make your hair stand on end: the FARC, Venezuela, Russia, Iran, Hezbollah, Ecuador, Bolivia, Nicaragua,
So, on one side Venezuela is funding and arming the FARC; on the other it is purchasing nuclear reactors and weapons from the Russians; on yet another, it is sending money to Iran and helping it find and enrich uranium. And then there is Hezbollah, Iran’s Lebanon-based asset.
Reports that Venezuela has provided Hezbollah operatives with Venezuelan national identity cards are so rife, they were raised in the July 27, 2010, Senate hearing for the recently nominated U.S. ambassador to Venezuela, Larry Palmer. When Palmer answered that he believed the reports, Chávez refused to accept him as ambassador in Venezuela. Meanwhile, Iran Air, the self-proclaimed “airline of the Islamic Republic of Iran,” operates a Tehran-Caracas flight commonly referred to as “Aeroterror” by intelligence officials for allegedly facilitating the access of terrorist suspects to South America. The Venezuelan government shields passenger lists from Interpol on that flight.
Iran, meanwhile, has developed significant relationships elsewhere in Latin America – most prominently with Chávez’s allies and fellow Bolivarian Revolutionaries: Bolivian President Evo Morales, Ecuadorean President Rafael Correa and Nicaraguan President Daniel Ortega.
And let’s not forget the Tri-Border Area,
Argentine officials believe Hezbollah is still active in the TBA. They attribute the detonation of a car bomb outside Israel’s embassy in Buenos Aires on 17 March 1992 to Hezbollah extremists. Officials also maintain that with Iran’s assistance, Hezbollah carried out a car-bomb attack on the main building of the Jewish Community Center (AMIA) in Buenos Aires on 18 July 1994 in protest of the Israeli-Jordanian peace agreement that year.
Most of this report will not come as a surprise to long-term readers of Fausta’s blog, but you must read it all.
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.
Chavez has lobbied in recent weeks against what he calls the evils of capitalism, including alcoholism, breast implants and violent television programs.
Since taking office in 1999, he’s preached against supposed capitalist-fueled vices ranging from alcohol to cholesterol, vowed to curb whisky imports and ordered beer trucks off the street.
Responding to the pressure — and opportunity — the cartels have spread out quickly. Five of Central America’s seven countries are now on the United States’ list of 20 “major illicit drug transit or major illicit drug producing countries.” Three of those, Costa Rica, Nicaragua and Honduras, were added just last year.
And, Julie Lopez, can you tell us first, is this a sincere divorce, or a divorce of convenience for the president and the first lady?
Ms. JULIE LOPEZ (Freelance Journalist): Well, both the president and the first lady have said that the reason why they are divorcing is to prevent their case going to the constitutional court because a divorce would make her qualify as a candidate.
An October 2009 cable, signed by Mr. Pascual, reported that Mexican Undersecretary for Governance Geronimo Gutierrez Fernandez lamented that the early phase of the Merida Initiative ($400 million for the drug war approved by Congress in June 2008) did not contain “enough strategic thought.” There was too much focus “on equipment, which they now know is slow to arrive and even slower to be of direct utility,” and not enough focus on institution building.
The cable continues: “[Mr. Gutierrez Fernandez] went on to say, however, that he now realizes there is not even time for the institution building to take hold in the remaining years of the Calderón administration. ‘We have 18 months,’ he said, ‘and if we do not produce a tangible success that is recognizable to the Mexican people, it will be difficult to sustain the confrontation into the next administration.’” And: “He expressed a real concern with ‘losing’ certain regions.”
Mr. Pascual reported that soon after 15 Juárez high school and university students, with no links to the cartels, were massacred in January 2010, Mr. Calderón “created an unprecedented level of engagement by every level of government to address the violence in Juarez.” He also wrote that the U.S. was “well-placed to support efforts to implement new and creative strategies.” The 2010 drug-war death toll in Juarez reached more than 3,000.
In November 2009, Mr. Pascual wrote that Mexico’s security strategy “lacks an effective intelligence apparatus to produce high quality information and targeted operations,” and also that there was resistance to information sharing because some units viewed “local military commands as often penetrated by organized crime.” In another cable Mr. Pascual charged that the Mexican army sat on intelligence that the U.S. gave it in the hunt for drug kingpin Arturo Beltran Leyva, who was later killed by the Mexican navy.
The relationship is part of Iran’s effort to gain a foothold in the region by courting Bolivia, Venezuela and other left-leaning countries in Latin America with aid and business partnerships. The new ties help give both Iran and Bolivia greater international recognition as Iran seeks to challenge U.S. influence, experts say.
“The basic motivation is that Iran and a handful of governments in Latin America are looking for opportunities to counter and attack U.S. influence in the world,” said Cynthia Arnson, director of the Latin American Program at the Woodrow Wilson International Center for Scholars in Washington. “As Latin American countries try to diversify their international partners, Iran offers itself up.”
There is much speculation in Bolivia and in U.S. policy circles – but few hard facts – about the relationship between Bolivia and Iran. Iranian President Mahmoud Ahmadinejad visited Bolivian President Evo Morales for the first time in September 2007. Iran pledged $1.1 billion to help industrialize Bolivia, and the two leaders signed “memos of understanding” related to cooperation in agriculture, trade and energy.
The countries recently exchanged ambassadors, and Morales expressed interest in buying Iranian-built planes and helicopters when he visited Tehran in October. Iran has funded a milk factory and the hospital in El Alto.
But because the two countries have little chance of establishing meaningful trade – and unlike Iran and Venezuela, don’t have oil in common – the relationship remains mostly political.
What remains to be ascertained is exactly what is behind all this largesse. Lithium?
“How is Cristina Fernandez de Kirchner managing her nerves and anxiety?” asked a cable dated Dec. 31, 2009, and signed “CLINTON” in all capital letters.
The cable, sent at 2:55 p.m. on New Year’s Eve, and originating in the department’s Bureau of Intelligence and Research, asked a series of other probing questions as part of what it said was an attempt by her office to understand “leadership dynamics” between Kirchner and her husband, former President Nestor Kirchner.
“How does stress affect her behavior toward advisors and/or her decision making?” the cable continued. “What steps does Cristina Fernandez de Kirchner or her advisers/handlers, take in helping her deal with stress? Is she taking any medications?”
Hillary wanted info on Nestor Kirchner’s temper, and what the hey were the Kirchners doing with the economy. Of course, that assumes that the Kirchners (Cristina and Nestor) had a clue as to what they were doing,
“Long known for his temper, has Nestor Kirchner demonstrated a greater tendency to shift between emotional extremes? What are most common triggers to Nestor Kirchner’s anger?” the cable asked.
The cable described Nestor Kirchner’s governing style as “heavy-handed,” and asked U.S. diplomats in Buenos Aires to determine whether Cristina Kirchner viewed “circumstances in black and white or in nuanced terms?” Does she have a “strategic, big picture outlook” or does she “prefer to take a tactical view?” it asked.
Other leaked cables offered insight into U.S. interest into a foreign minister’s past links with leftist Montoneros guerrillas, and suggested that Argentina had offered to intercede with Bolivian President Evo Morales, who expelled the U.S. ambassador to La Paz in September 2008.
Another confidential cable detailed Argentine umbrage at Assistant Secretary of State Arturo Valenzuela’s remarks in late 2009 suggesting that U.S. businesses had concerns over “rule of law and management of the economy in Argentina.”
“Once again, the Kirchner government has shown itself to be extremely thin-skinned and intolerant of perceived criticism,” the cable said.
The Argentine anger at Valenzuela contrasted with the good relations it held with his predecessor, Thomas Shannon, an Oxford-educated U.S. diplomat with a smooth manner. According to the Madrid daily El Pais, a not-yet-public cable dated Sept. 2, 2008, reveals how Shannon convinced Kirchner that Washington did not have anything against Morales, Bolivia’s first indigenous leader, and did not seek to break apart his country.
Good for Shannon. Evo, who recently kneed a guy in the gonads during a friendly soccer game, is a lunatic in power.