To this Journal's Readers

I just wanted to take some time off for a brief note to sincerely thank the readers of this blog for the support given to this website. This journal is still young (this will be merely the 15th post) but already counts with a small readership of regulars. Special thanks to the folks at Global Voices, Blogs de Bolivia and fellow bloggers that have linked to the site and accepted my comments (poluntic, barrioflores, the democracy center) those references can only help this website grow.

To all these people I wish the best in the New Year!

Interview with the VP

Many observers have seen vice president-elect Álvaro García Linera as the bridge Evo sought to build with the middle class, the intelligentsia and other moderated circles. However, little was ever told about García Linera other than that he was a guerrillero of the EGTK [1] or an academic of leftist views.

This interview with the daily La Prensa, published a little before he was officially announced to run as Evo’s VP, fills in some of the gaps about Linera’s actual perspectives on socialism, how to conduct the government and deal with leftist groups. These answers become even more relevant today, now that MAS has reached power.

My translation follows:

La Prensa (LP): You have been accused of armed uprising and some candidates say you are a terrorist. How do you plan to address this situation?
Álvaro García Linera (AGL): The candidates who are using that [claim], I see that they do it out of fear of debating. Any candidate who surfaces that out of memory gives me a reference point about his intellectual capacity. Because of that absence of ideas, proposals, projects, introspection and reason….that stigma, denigration and mud slinging surfaces. That a candidate uses that as an argument reflects a terrible poverty of ideas.

LP: Has García Linera been one of the ideologues of the EGTK?
AGL: I have been one of the men who have reflected about the EGTK, and that I have admitted in my [sworn] declarations. I have been a man compromised with the EGTK, and my crime, I publicly admit, has been to think, written and reflected. Thirteen years without a sentence, I hope prove the contrary, and justice cannot give a single step to prove the contrary.

LP: What is MAS’ position? Es it a radical left [party]?
AGL: The position is centre-left, and I have been characterizing it that way for the last two and a half years. Why do I say MAS is centre-left? Because we couldn’t qualify the project of changes MAS wants to take forward as communist or communitarian, it doesn’t have that dimension. An [example of the] radical left is COB [2] or maybe Quispe [3].

LP: Doesn’t MAS want a socialist government?
AGL: No, no way, because –on top of it- it’s not viable. It’s not viable because socialism can only be built on the base of a strong, organized proletarian presence. The socialist utopia is the extreme maturation of capitalism. In Bolivia there’s no capitalism. In Bolivia 70 percent of the urban workers work in the family economy, you don’t build socialism on the base of a family economy; you build it on the bases of industry, which there’s none of in Bolivia. You don’t build socialism on the basis of the 95 percent of rural population living on a traditional communitarian economy.

LP: What kind of system, then, does MAS want to build?
AGL: A type of Andean Capitalism.

LP: What is an Andean Capitalism?
AGL: It’s a capitalist regime where family, indigenous and peasant potentials are balanced and are articulated around a national development project and productive modernization. If you want to build the future, what is the model for Bolivia? A strong State and that is capitalism; the State is not socialism, it’s a strong State in hydrocarbons, foreign investment, local private investment, the family economy and small businesses and communitarian economy. It’s not even a mixed system.

LP: Why didn’t García Linera gain the support of Jaime Solares, of the COB or Felipe Quispe of MIP?
AGL: I proposed to myself to talk with all organizations, included those I had personal differences with. Because of respect to its historical trajectory we went to the COB, despite the behaviors of its directors in recent times. It’s clear that today’s COB is not the COB of the 80’s. The COB is just one more, a small, weak movement. In the other hand, I consider Felipe Quispe to be much more important and not having forged an alliance with Quispe is something that hurts me more, because he represents an indigenous force in the Aymara altiplano.

LP: But, Why haven’t you being able to forge that alliance?
AGL: We first approached COB because of this, because it wasn’t a decisive social movement, important yes, because of its historic relevance which we tried to pull, but it wasn’t accomplished. Why? I would say because of their leadership and the distribution of congressional seats.

LP: Did COB wanted a share of power?
AGL: Everybody wants shares of power.

LP: Did Jaime Solares want to lead the alliance with Evo Morales?
AGL: Solares wanted the COB to have a greater protagonism, to be the organization that summoned [everyone], and I believe that at this stage there’s no single social movement who can attribute itself that power, because there’s no national movements in Bolivia. All social movements are now regional of local. And wanting to assume that attitude of “I’m the one who did something and because of that I have national relevance” doesn’t work anymore; we are not dealing with the COB of the 70’s. Here there’s a sort of melancholy, of a force that doesn’t exist anymore.

LP: Does this mean that you didn’t accept that COB be the one who summoned [the social movements, voters]?
AGL: I tried to reflect that that was impossible, that the possibility of an articulator COB was no longer feasible. That COB is just one more of the movements, and those words involved power quotas, leadership quotas, and definitions of whom would be president, vice president and congress representatives.

LP: And with MIP?
AGL: The same, the same.

LP: So power quotas influenced the process…
AGL: No, not power quotas, because power quotas sound ugly. But electoral power structure; I mean distribution of congressional seats. The important topic was who went first, Felipe or Evo Morales? President Felipe and Evo Morales second? Evo Morales did not accept that because he has more of a national leadership; Felipe has a more regional leadership.

LP: Are the social sectors who have managed to place around MAS sufficient?
AGL: Not everyone, not all [social sectors] went. But it’s not because we had to place actors around MAS, but because the idea I proposed myself was to form a project of united social movements.

LP: But, is the project actually marching?
AGL: I believe there have been plenty of advances. I can point out some sectors, national and departmental. FEJUVE in El Alto, we still need the signature, which depends a little bit of the debate, but FEJUVE has already made its position made.

LP: Is there an issue of distribution of congressional seats and leadership, there as well?
AGL: It has to do with electoral power, but we have advanced a lot.

Notes:

[1] EGTK or Ejército Guerrillero Tupac Katari is one of the few Bolivian sub-national groups to be classified as a terrorist organization by the U.S. Government. Its last documented attacks ended in the mid nineties.
[2] COB or Central Obrera Boliviana is the main worker’s (originally miner’s) union of Bolivia, however its power and influence has decreased steadily for the last decades, as it has turned more and more radical. It’s currently presided by trostsky-ite Jaime Solares.
[3] Felipe Quispe, the leader of MIP or Movimiento Indígena Pachacuti, and indigenist/separatist party, Quispe was also a leader of EGTK.

Source: Buitrago, Jaime E. García Linera desnuda los intereses de la COB y el MIP. La Prensa, Agosto 30 2005.

Photo:

Cited in this post [external links]: Álvaro García Linera (MAS biography), COB, MIP, EGTK

UPDATE: BBC interview with Evo Morales and another one with Alvaro García Linera. A new freakishly titled blog about Morales and another note from Dan the missionary man talking about Linera .... And I can’t resist the temptation of noting that prank call… the second I found out about it (by reading a post in indymedia, go figure) my memory flashbacked to a TV character of my childhood, and his trademark phrase: “Se aprovechan de mi nobleza!” For a second, I stood in awe.

Tag: Bolivia,MAS,socialism,capitalism

Today's News Catch: December 21, 2005

MAS Hits the Brakes on the Mutún Bidding

"El MAS posterga el Mutún; decretan paro en la frontera" Nuevo Dia, 21 de diciembre 2005.

A process that begun months before election dates where even selected, and has for decades being in awaited by both cruceños and bolivianosm, has being halted by MAS pressures. MAS wants this “little” project to be executed during their government, and as such have decided to delay the opening of envelopes (2nd step in the bidding process) for 60 days. Let’s just hope none of the international companies involved withdraw their proposals.

See story, see prior post about this topic.

Bolivia's "Big Oil's" First Public Comments

“Bolivia's Morales to revise Repsol YPF contracts, denies expropriation of assets” Interactive Investor.

A lot of hype has been rising about Repsol’s stock performance in the Madrid markets, about the fears of expropriation and future of contracts. I’ll try to keep you posted on official press releases flowing out of this company; this is the first note in that respect.

See Story

“Bolivia's victor worries BG”, Telegraph (UK) By Malcolm Moore (Filed: 21/12/2005)

“BG Group, the oil and gas explorer, yesterday threatened that future investment in Bolivia, where it is one of the largest foreign operators, may be cancelled because of the country's new president…. During his campaign, President Morales questioned the legality of 70 oil and gas contracts. He is expected to revoke the ownership of gas by foreign companies once it has been pumped above ground and to tinker with the length of some deals. He did not intend to confiscate or expropriate drilling rights.”

See Story

Sovereign Debt (Fitch) Ratings Remain Unchanged

“Fitch: Bolivia's Ratings Unchanged After Elections” Fitch Ratings (Press Release) 21/12/2005

Some excerpts of this press release, I’m particularly concerned about sovereign debt issues, given that negative ratings will affect interest rates/margins on future issues of debt. Higlights are mine:

“Fitch Ratings today commented on the Republic of Bolivia's general elections held on Dec. 18, 2005. Fitch rates Bolivia's foreign and local currency issuer default ratings 'B-' with a Negative Outlook…While Fitch is concerned about the politician's campaign rhetoric, which challenged the liberal economic policies followed by recent governments and the regional policies of the U.S. that advocate the eradication of coca cultivation, the Morales victory should give his government a greater degree of legitimacy than that enjoyed by recent predecessors, and could lead to improvements in governability.

Furthermore, the carrot of the Multilateral Debt Relief Initiative, which could lead to 100% debt relief from the IMF and the World Bank as early as next year, may provide sufficient incentive to maintain important aspects of Bolivia's macroeconomic framework and to respect property rights. The targeted 100% debt relief of IMF and World Bank Debt outstanding as of Dec. 31, 2004, would cut Bolivia's public sector debt by approximately US$2.1 billion, potentially reducing the sovereign's debt/GDP ratio to 54% by the end of 2006 from a forecasted 75% at the end of this year. (…)

In spite of a prolonged period of social unrest and political uncertainty, Bolivia's president-elect inherits a growing and stable economy due to a benign international environment and the government's efforts to tighten fiscal policy. Real GDP growth is likely to reach almost 4.0% this year, underpinned by exports of hydrocarbons and minerals. High international commodity prices and record export volumes also benefited Bolivia's external accounts, with export growth reaching 23% for the first 10 months of 2005, compared with the same period in 2004. International reserves have grown to US$1.7 billion, or almost six months of imports of goods and services, the highest level in Bolivia's history. For the first three quarters of 2005, the combined public sector balance reverted to a slight surplus from a deficit of 5.5% of GDP in 2004 (including grants). Fiscal consolidation and growth have been contributing to an improvement in Bolivia's debt ratios, while inflation remains in single digits. Nevertheless, private investment, particularly foreign direct investment, has declined significantly in recent years.

See Complete Press Release

UPDATE: International Monetary Fund Extends 100 Percernt Debt Relief to Bolivian

The executive board of the International Monetary Fund Wednesday made good on its promise to cancel about $3 billion of debt it is owed by 19 of the world's poorest countries. IMF Managing Director Rodrigo de Rato said this is an historic moment that allows recipient countries to reduce poverty. Debt cancellation has long been championed by anti-poverty advocates. And now 19 of the world's higly indebted countries, one of which is Bolivia have been condoned of their public debt to this institution.

See Press Release

Tag: Bolivia,Evo Morales,FDI,IMF

Ministers to be Appointed, non-Cocaleros need not apply

Today, Jornada published a note entitled: “Evo’s Ministers Must Have the Approval of the Federations" [2] scary indeed, since the specific quotation says “ministers will necessarily have to surge from the six federations…” Refering to the Six Federations of Coca Producers of el Chapare. So that effectively eliminates 99.9999 percent of the Bolivian population, and anybody who’s not a cocalero or anybody who’s not a coca syndicate boss. I hope that was biased editing from the part of the newspaper. Honestly.

Now seriously, tomorrow, president-elect Morales will be meeting with the upper echelons of the MAS party, the heads of the “social movements”, and other party’s representatives in the city of Cochabamba, with the objective of distributing all major government posts and offices. As it has always been the case, (with traditional parties as well) this is about the time when “pegas” are distributed.

I can’t resist the temptation of naming a few people who are sure to play an important part in the next cabinet, so be on the lookout for them:

• Iván Iporre. - He’s Evo’s Karl Rove, so you get the picture.

• Carlos Villegas Quiroga. - An economist, mostly known for his work as a director of San Andrés University doctoral program on development and his punditry in the gas export issue. As a matter of fact I spent the last half hour downloading papers he’s written on the subject. He’s set to occupy the Ministry of Economic Development post, which will determine a lot gas/oil policy.

• Juan Ramón Quintana. - A former army officer turned think-tanker, Quintana directs the Observatorio de Seguridad y Democracia (ODyS), and is your foreign press friendly go-to guy for military and police issues. He’s expected to be appointed Minister of Government.

• Gral. (r) César López. – A retired general, López has been a link between Evo and the corps; some point him out as the strategist behind our “missile crisis”, which was a huge propaganda boost for Evo. Old timer nationalist, with some leftist views, I don’t know much about what he plans in terms of rearmament and strategy.

That’s all so far, we’ll see if my guesstimantes are close, and now to close today’s posting a new feature of this blog:

Evo Quote of the Day [Protection With Exceptions]:

“El MAS protegerá la propiedad privada, excepto esas tierras ociosas e improductivas que tienen que revertirse en favor de quienes quieran trabajarla".

(translation) “MAS will protect private property, except those idle and unproductive lands, which have to be reverted in favor of those who what to work them”

Evo Morales [1]

[1] Evo Morales anuncia cambios en la política del gas y la coca. La Razón. December 20, 2005
[2] Ministros de Evo deben contar con el aval de las Federaciones Jornada, December 20, 2005

Cited in this Post [External Links]: ODyS

Tag: Bolivia,Evo Morales

Prefectural Elections Update

I have to correct myself from yesterday, not most but ALL prefectures are non-MAS. Matter of fact six out of nine are held by PODEMOS candidates, this fact, added to the almost-equal split of seats in Congress and Senate give PODEMOS the power of becoming a uniting force of the Bolivian centre-right and the anyboddy-but-MAS sector. Hopefully Tuto Quiroga will see this and not let his party disolve in dispair.

UPDATE:

I have to correct this once again:


Tags: Bolivia Tags: Bolivian Elections Tags: Evo Morales

Morales Wins the Presidential Election

It’s all but confirmed: Evo Morales has won the presidential election. In my view; fear, opportunism and intimidation had as much to do with his victory as his actual abilities of convocation. Quite probably, the majority of his voters genuinely supported him, but a lot of those who voted for him did so because they were afraid of the ruckus he would deliver should he lose and claim fraud. This is the same group that hopes there will be no more “bloqueos” now that the main “bloqueador” is in power. Unfortunately this will never be the case when dealing with leaders who are used to manage-by-chicote. Sample of this: El Alto’s FEJUVE and COR –core supporters of the MAS candidacy- have already given an ultimatum of 90 days for basically “all things to be solved” before they start blockading again. [see story here]

Many more MASistas saw personal benefit and a “peguita” in different levels of government. And now that meritocracy –be it academic, professional or otherwise- is practically abolished, I have no hopes MAS will distribute positions in accordance to capacity. Let’s just wait for the roster of senators, congress representatives and ministers to flow out of MAS, and we’ll dissect those biographies.

I’ll leave the data and percentages for tomorrow, but for now, in broad strokes: Most Prefectures are non-MAS, the Media-Luna (Santa Cruz, Pando, Beni and Tarija) voted as predicted and MNR is still alive and kicking. Tuto gave up without a fight, promises to stay as opposition though. The undecided quietly voted for MAS, seems that those elitists and oligarchs of the middle class were not convinced by the PODEMOS campaign. [note the sarcasm people!]

Tags: Bolivia Tags: Bolivian Elections Tags: Evo Morales

First Election Day Update

Just a short post to begin the day’s democratic festivities and point out some good sources of information to keep the reader informed:

• You can visit a time-delayed broadcast of ATB mid and evening news by visiting this website. I’m not clear on whether they will live-cast today’s elections.
• You can also see a live stream from Santa Cruz’s COTAS by using this feed.
• Radio Pan Americana and other stations will be broadcasting live as well.
• Finally, for foreign press articles in one site check the Inside Bolivia Aggregator.

As always, I recommend the fine Bolivian blogs listed in the Blogs of Note section, where I have added a couple more recently. Pay special attention to Eduardo’s Barrio Flores, he’s been participating in an “anonymous” candidacy campaign for the last weeks and blogging on the process. He may be chanting victory tonight...

As far as this blog is concerned, I just got out of Tally this morning and am now staying in much warmer quarters; internet access may be limited though.

Tags: Bolivia Tags: Bolivian Elections Tags: Evo Morales

Contemplating a Morales Presidency

With just a couple days away from presidential and prefectural elections, the international spotlight is certain to point to Bolivia -albeit briefly- as the country decides its future in a landmark election. We will face the choice of accepting very different world-views and philosophies of government, which will lead us for the next five years. A difficult decision, when major sectors of the population seem polarized between absolutes. One sector who perceives itself as being destitute, lead by individuals who want to return to an endogenous model of production, archaic methods of land distribution and oppose the inevitable force of globalization. The “others” represent the growing middle class, conservatives, business sectors and the traditional “elite”.

Much of the international coverage has focused in the candidacy of the “savior of the left” Evo Morales (if “the left” is in need of salvation is a matter of debate). Morales, who is seen as the agent of the poor, the indigenous and the “disenfranchised”, has consistently lead the polls and has so far, managed an excellent campaign. By refusing to debate his opponents, by appearing in equal step with the current leaders of the South American left and by courting the military and other strategic segments of the population; Morales has so far being very successful in his strategy.

However, one thing is campaigning or blockading effectively and a completely different one is governing effectively. If elected Morales will face a number of difficult issues:

• Governance. - Will Morales manage to create a sustainable alliance, and be able to govern without the traditional “neo-liberal” sectors? Should his victory occur, will he have effective control of the house and senate, or the newly empowered departmental (prefectural) governments? As head of the executive power Morales will face the situation he helped to create for the last decade: completely undermined authority of the executive power.

• “Nationalization” of oil and gas resources, production, refining and industrialization. - Which Mr. Morales has promised to his supporters, a complex issue given that they seem to understand nationalization as expropriation, that is, a takeover without compensation. This proposal is fundamentally flawed, given that in terms of ownership and control the oil and natural gas industry is already a “national” industry. Then we have the issue of how to compensate foreign firms, if indeed, the “intelligent nationalization” Morales proposes occurs, and after such depletion of funds takes place, how to enable industrialization and export of gas reserves. Please note, the moment nationalization is executed Foreign Direct Investment from traditional sources (read Europe and the United States) dries up.

• Departmental Autonomies. - This comes back to the issue of governance, given that following this election a “meso” level of governance will effectively be created [1] (creating a middle layer between national and municipal levels). The Santa Cruz and Tarija departments are sure to be carried -by a landslide- by autonomist parties. And given that Santa Cruz is the new entrepreneurial and productive axis of Bolivia, and Tarija the repository of the nations largest natural gas reserves, autonomist governments there will have significant say in enabling any of Mr. Morales plans.

• The Constituent Assembly. - Or as many have called it Asamblea del Pueblo V.2.0, where our Constitution is supposed to be redrawn. Issues of participation, effects and viability of this experiment are certain to shock any government that assumes its functions next week.

• Coca and cocaine production. - This issue wouldn’t be as important as the prior four if it weren’t because it has traditionally being a driving force for Morales and his Movement Toward Socialism (MAS). Every Bolivian citizen understands the negative effects of cocaine production and narco-trafficking and since the end of military rule every government has taken a firm stance in combating the drug trade. But Morales’s traditional supporters are precisely cocaleros, producers of the coca leaf and raw material providers to the drug trade. An agency problem, if there ever was one.

These are the nominal issues a Morales presidency would face, other than that we could ask how he plans to attract new foreign investment to a discredited country, avoid or stop violation of property rights (seizure of lands), handle foreign pressures, service debt and control the opposition. Will the Morales presidency become just another transitory government?

It all depends on how he handles the situation; the issues cited above and what variables enter into play. It’s easy to imagine a worst case scenario: a slippery slope into chaos: stimulated by broken promises and the action of fringe groups, which culminates sooner or later into a situation similar to “Octubre Rojo” only worsened by ethnic, economic and regional factors. That is the kind of scenario that officially inducts Bolivia to the “failed state” club – and invites in the blue helmets. Of course, that is the scenario we have to avoid at any cost.

Now, I'm not a pessimist, so I believe that another scenario is possible. An scenario in which -before the elections, or at least before Congress determines who will be president- the main parties sign a public agreement to enable governability. In which Morales promises to let go of his sindicalist past of authoritarian decision making and ruling by intimidation, and he promises not to "take 'the people' to the streets" when he doesn't have his way. And conversely, the other candidates promise not to excersise whatever power they have within their circles, or reasonably facillitate the passage of legislation. This second scenario is one that imagines cooperation and inclusion, of course, all antidemocratic acts that have plagued us in the past (ex. blockades or seizure of lands and property) and allows for system efficiencies (of our mixed economy) to take place.

[1] See Barrios Suvelza, El Estado Triterritorial (La Paz: Plural Editores)

Tags: Bolivia Tags: Bolivian Elections Tags: Evo Morales

A Major Movement in the Bolivian Financial Sector: Grupo BISA Takes Over Banco Santa Cruz.

Yesterday, the Bolivian financial sector was rattled by a major movement among its members: One of Bolivia’s largest private banks, (Banco BISA, a unit of Grupo BISA) acquired the majority stake -96.33 percent- of Banco Santa Cruz (BBV: BSC). Banco Santa Cruz, was controlled by Spanish Group Santander Central Hispano (Madrid: SAN, NYSE: STD) since 1998, the Group is one of the largest European financial entities.

The takeover bid reached € 31.7 million ($US 37.7 million), with this move, Santander Central Hispano continues its strategy of pulling out of most south American markets (it once operated in 12 American countries) and narrowing down its operations to countries such as Chile, Brazil, Mexico and Venezuela.

Financially speaking, Banco Santa Cruz (BSC) represents a 9.4 percent stake of total national banking system while, BISA represents 14.1 percent. BSC has 20 national offices and an agency in Miami, it’s geared towards consumer banking and has an outstanding account of $US 240 in credits and $US 433 million in deposits.

BISA is controlled by the Bolivian Grupo León Prado, an enterprise group invested in mining, oil and construction projects throughout South America. For the purpose of this particular acquisition the services of a financial group based in Panama -Angulo Abierto Internacional S.A were contracted. Banco BISA counts with the financial support of the World Bank, the International Finance Corporation, the Andean Development Corporation (CAF), the Nederland’s Development Finance Company (FMO) and Germany’s Investment and Development Company.

BISA, a bank traditionally geared towards corporate finance, insurance, and mutual fund administration has eight operating units, a patrimony -as of this writing- of $US 122 million, and assets of $US 813 million. BISA’s maverick President and CEO, Julio León Prado, seeks to consolidate BISA as the largest private bank in Bolivia. Mr. Prado’s prior activities include investments in Europe and the United States. In Bolivia, he is the founder of Banco Sol, a small-business lending institution; he was a pioneer in agribusiness and a promoter of free-trade zones and rural electrification.

Cited in this Post [external links]: Grupo BISA, Banco Santa Cruz, Grupo Santander Central Hispano, WB, IFC, CAF, FMO, DEG, Julio León Prado.

Tags: Bolivia

Comparing the Candidate's Economic Proposals

In Spanish, published by the CEPB (CONFEDERACION DE EMPRESARIOS PRIVADOS DE BOLIVIA) 35 page PDF file comparing the major economical proposal of the three favorite candidates (MAS, PODEMOS and UN).

Download the attachment by clicking HERE (right click "Save As")

In non-related news, please support Miguel A. Buitrago (MABB), Bolivian finalist of The 2005 Weblog Awards.

____________________________________________________

Descargue la Matríz Comparativa de Propuestas electorales, preparada por la CEPB (Confederación de Empresarios Privados de Bolivia) Es un archivo PDF de 35 páginas que contrasta las propuestas, principalmente en el área económica, de los principales candidatos para estas elecciones (MAS, PODEMOS, UN).

Descargue el archivo pulsando AQUÍ (Pulsar el Mouse derecho “Guardar Como”)

En noticias no-relacionadas, por favor apoye al "blogger" boliviano Miguel A. Buitrago (MABB) en las finales de los premios Weblog Awards 2005.

FDI: Five International Mining Companies Show Interest in El Mutún Iron Ore Project

According to a press release from the Bolivian Vice ministry of Industry, Commerce and Exports four companies have formalized interest in developing the El Mutún iron ore project in southeastern Bolivia, by purchasing official bid prospects from the governmental entity.


The Mutun Reserve is located near the border with Brazil

The companies mentioned were:

- Mittal Steel Group. - Mittal, a firm based in Rotterdam is the largest steel company in the planet, a market cap in the 20B and operations in every continent.
- Shandong Luneng Mining Group. – This Chinese LLC has raised a lot of interest in the Bolivian public, traditionally not used to receiving investment from Chinese firms.
- Jindall Steel & Power.- Also a major player in its local region, this Indian company has been seen with much interest as a non-traditional investor. It’s the latest to be added to the bidding
- EBX Siderúrgica Bolivia. - (Still looking for website) EBX is a Brazilian company (or perhaps “Sociedad Accidental”) apparently set up for the express purpose of this bidding.
- The Techint Group -SIDERAR.- Which is another society formed for this biding its composed by Argentina’s largest smelter and global engineering, construction firm Techint.

The Project is basically a Joint Venture lasting forty years, which will cover development, refining, industrialization and export of iron ore. The value of the project is estimated within $US 1.100 million and $US 5.300 by the Vice ministry. Participation of the state will be represented by the Empresa Sidregúrgica Mutún. The support structure for the project is also starting to be reinforced, recently the government of Korea announced it would finance a $US25.3 million project (financed by the Eximbank, and to be executed by the Korean contractor Sambu) for the construction of a bridge over Río Grande and Port of Pailas, - an essential railway crossing, necessary for the transport of refined ore products. Natural gas provisions for the project are also existent; however connection to the site itself will have to be built from the GTB Bolivia-Brazil pipeline.

The Mutún project represents a long-awaited project for development in Bolivia and the Santa Cruz Department; it’s expected to generate over 10,000 direct and indirect jobs during the length of the project. The site holds some of the continent’s largest iron ore reserves (at an estimated 40 billion metric tons of iron ore base, according to Jan 05, USGS survey) and will begin production at an impressive 1.5 million tons, and generate a tax base of $US 50 million yearly.

The bidding process will take place this month, and it’s scheduled to finalize December 22. The official text for the bidding can be found by visiting this link.

Tag: Bolivia

Tag: Mining

Tag: FDI

Too many expats at San Cristobal? (and then some politics)

Admittedly, it’s been way too long since I last posted, just busy in general, and I’ve been devoting my little spare online time to my other portal, the one I want to turn into a “think tank” of sorts way down in the future.

Anyhow, there is a news item I wanted to share with you:

It seems that some miner’s syndicates in Potosí have asked for an official review of Apex Silver’s hiring and staffing practices for the San Cristobal project, alleging that almost 40 percent of the current labor force is composed of foreigners (expatriates). The ministry of Mining and Metallurgy, Dionisio Garzón [profile link here, ES] has agreed to begin the official inquiry for this and the Kori Chaca gold project.

According to ERBOL’s press report, current regulations allows for only up to 15 percent foreign-born employee quota. With the additional requisite that such employees have specializations inexistent in Bolivia.

Now, if you ask me, 15 percent is a decent quota for foreign personnel, especially in mining. But when it comes to new and rather large projects such as San Cristobal I’d settle for a Saudi style policy, where foreign personnel numbers can start on over 35 percent of the labor force but are decreased at a constant rate (5 percent per year in this case) as the project progresses. This policy allows for training of the domestic staff to take place and creates managerial talent among local hires. As far as San Cristobal is concerned, I’ll try to find official figures to publish.

On the political realm, we’re just a few weeks away from election, and for your reading enjoyment, you may want to check out the different “Programs” the parties have presented, Miguel Centellas’ comments on why Evo Morales won't debate Tuto Quiroga, and finally a sample of “dirty war” –style TV spots (unfortunately only available at a site owned by some folks I don’t like too much), now that I think about it they pale in comparison to some of the stuff that floated around during the Bush/Kerry presidential race.

Tags: Bolivia

From The Mailbox: "Porqué Tuto debe ser presidente"

A brief, mass-email I got this morning. It seems it has been published by Bolpress since:

Porqué Tuto debe ser presidente
Carlos Benavides Gisbert

Seamos claros. Las próximas elecciones tendrán únicamente a dos contendores. Tuto y Evo. Sólo uno de estos dos llegará a la presidencia en enero próximo. Ahora bien, sin el ánimo de efectuar un análisis político muy profundo - porque analista político no soy - y simplemente haciendo uso del más común de los sentidos, el sentido común, comparto con ustedes cinco razones por las cuales creo que Tuto debe ganar estas próximas elecciones.

Primera. Porque Tuto Quiroga no es un líder sindical, es un líder político. Porque utiliza el razonamiento para discernir que le conviene mas al país. Porque tiene la suficiente prudencia para representarnos dignamente fuera del país. Porque su discurso no incluye gratuitas satanizaciones contra el neoliberalismo y la globalización -reacuérdese que sólo los países que se han abierto al comercio internacional han atenuado la pobreza-. Tampoco necesita repartir mensajes antiimperialistas ante las multitudes para lograr su aprobación. No se opone al ALCA por oponerse. No requiere insultar al FMI ni al Banco Mundial para quedar bien con nadie.

Segunda. Porque Tuto Quiroga tiene el expertis para administrar un Estado. Porque para administrar un Estado no basta haber logrado alguna popularidad. La administración de un Estado debe estar en manos de Estadistas o de personas que hayan tenido experiencia en el manejo de la cosa pública. Un dirigente sindical podrá manejar un gremio, más no un país.

Tercera. Porque Tuto Quiroga no tendrá que pagar facturas. Para empezar no tendrá que rescindir unilateralmente los contratos con las empresas petroleras y menos confiscar sus bienes, originando incalculables obligaciones para el TGN. No tendrá que legalizar la producción excedentaria de la hoja de coca, incumpliendo acuerdos internacionales suscritos por el país. No tendrá que entregar tierras a los "Sin Tierra", legalizando el avasallamiento. No tendrá que reducir los salarios de los burócratas públicos para equilibrar la balanza fiscal.

Cuarta. Porque Tuto Quiroga no impondrá un sistema económico centralista, en contra ruta con los sistemas de gobierno modernos basados en economías sociales de mercado. No eliminará el sistema de regulación. No devolverá al Estado el papel de asigandor de precios, echando por el piso todo lo avanzado en términos de mercado.

"Full disclosure": I half-heartedly support the PODEMOS candidacy; the text above captures many of the reasons why.

Of course, Tuto is not without a fault, during his vice-presidency with Banzer he did nothing to continue or build upon the liberalization policies set by the previous administration, in many cases he reversed or almost destroyed them (i.e Bonosol). During his short presidency after Banzer's death, he mismanaged the gas export issue, (doing such things in secrecy usually yields bad results) which became one of the elements fueling civil unrest later on. More recently, during the worst periods of political crisis, Tuto was nowhere to be found. He may have wanted to keep his image clean of associations with Sanchez de Losada or Mesa, but disappearing completely –not even sending a letter to encourage conciliation- seems extremely selfish to me. In any case, at this point – and seeing the alternatives – the good in Tuto overwhelms the bad. I’d vote for him.

Tags: Bolivian Elections Tags: Bolivia Tuto

Corporate Social Responsibility Taking Hold in Bolivia

During the past few years the concept of Corporate Social Responsibility (CSR) has been adopted by plenty of corporations in the United States and other developed countries. It used to be that only non-profits and special interest groups addressed issues such as poverty, sustainable development and other ethical aspects of doing business. Nowadays, some of the world’s largest firms can’t get away without making a CSR statement in their annual reports or adopting special measures in their daily operations. CSR is not about philanthropy; it’s about how companies earn their profits, rather than how they spend them in good works later.

In Bolivia, we’ve been dealing with sustainable development policies for some time now, primarily tied to government and international-cooperation programs. Private enterprise did not get into CSR or “Responsabilidad Social Empresarial” (RSE) as it’s called in Spanish until recently. However, there already are a handful of organizations that encourage CSR and seek to popularize it. Some of their accomplishments so far include generating a roster of members that consists of all major foreign oil and gas companies operating in Bolivia, and successfully launching two annual forums on CSR. (See the program for the most recent version)

Some Bolivian private organizations that encourage CSR practices are:

Concejo Boliviano de RSE (COBORSE). - A La Paz-based network, that seeks to become the main national promoter of CSR and sustainable development. COBORSE works with companies and other social actors in generating alliances and creating information networks. It currently has twenty-three members, the majority of which are business associations, non-profit organizations and foundations. Website: http://www.coborse.org/

Concejo Empresarial para el Desarrollo Sostenible (CEDES). - A foundation based in Santa Cruz, CEDES was began operating in 2003 and currently has around fifteen members, mainly energy and mining concerns. Its mission is to develop a network of enterprises that apply positive economic, social and environmental policies. Website: http://www.cedesbolivia.org/

FUNDES. - Which is really an international non-profit organization with operations in Bolivia; FUNDES provides support for small and medium enterprises (PyMEs) through consulting services and educational activities. Website: http://bolivia2.fundes.org/

Red de Desarrollo Sostenible y Medio Ambiente (REDESMA). - This non-profit group was founded in 1999 and is dedicated to linking organizations and creating an “ecological conscience” among private enterprises. It produces a good quantity of publications and hosts a number of events. Website: http://www.redesma.org/

Foro Boliviano del Medio Ambiente: FOBOMADE is a similar organization, but has a little more of a partisan and activist role. It leans towards preservation of the environment Website: http://www.fobomade.org.bo/

Some Bolivian governmental organizations that encourage Sustainable Development and CSR:

Ministerio de Desarrollo Sostenible (MDS). - The primary governmental institution when it comes to sustainable development, MDS generates national policies concerning the environment. It has legislative power over issues such as genetically modified crops, emissions control, water and forestry resources, industrial waste management, etc. Website: http://www.mds.gov.bo/

Fondo Nacional de Inversión Productiva y Social.- The National Fund of Productive and Social Investment allocates financial resources at micro levels of government (municipal) Website: http://www.fps.gov.bo/

Fondo Nacional de Desarrollo Regional (FDNR).- A similar institution, FNDR, allocates funds to regional development initiatives. Website: http://www.fndr.gov.bo/

As we can see, there is a good base of organizations encouraging Bolivian companies to adopt CSR policies. We should expect more and more companies to start introducing CSR measures, which is a positive turn of events given that traditionally; private enterprise in developing countries is seen as non-responsive to social inequalities or environmental conservation.

Tag: Bolivia

Tag: Corporate Social Responsibility

Today’s News Catch: November 8, 2005

Interview with Economist Dr. Augusto López Claros.

Sunday, La Razón published a great interview with Dr. Augusto López Claros, Chief Economist and Director of the Global Competitiveness Program of the World Economic Forum. Dr. López talks about entrepreneurship and competitiveness, I suggest you read it.

Dr. López, will be visiting Bolivia as part of the selection process of The Schwab Foundation for Social Entrepreneurship “Social Entrepreneur 2005” award. (Javier H. Mercado’s IRUPANA coffee company seems to be the only nominee). Dr. López will also dictate a conference titled “Economic Growth and National Prosperity”.

Read this Article (SP)

Development of San Cristobal is on Track

La Razón reports that new equipment has been arriving for the San Cristobal project. San Cristobal, the multimillion dollar silver mining project established by Apex Silver Mines Limited (AMEX: SIL) a few years ago will start operations in the second half of 2007. According to the companies’ press release “The mining contractor has begun commissioning mobile equipment to start pre-stripping activities by the end of September 2005. Main access roads to the two initial orebodies, the first waste dump and the primary crusher are now under active construction. Excavations in the grinding and flotation areas are well underway to commence construction of the milling facility in the third quarter of 2005.” (See this source)

San Cristóbal is the world’s second largest known reserve of silver and seventh for zinc. Once it starts operating at full capacity, it’ll become the third largest silver producer in the world. The San Cristobal project is fundamental source of tax revenue for Potosí.

Read this Article (SP)

Brazilian LCC Regional Airliner GOL begins operations in Bolivia

Los Tiempos reports: “la compañía brasileña Líneas Aéreas Inteligentes, GOL, comenzó a operar ayer en la ruta Santa Cruz-Campo Grande con el concepto bajo costo, baja tarifa y de esta forma consolida su plan de expansión en Sudamérica…”

Continue reading the article (SP) or visit GOL’s website

Bolivia's COMIBOL seeks conciliation to recover Huanuni tin mine

(Metalsplace.com Nov. 08, 2005) Bolivia's state mining company Comibol has taken steps to initiate a conciliation process with liquidators of failed metals trading house RBG Resources to recover control of the Huanuni tin mine in Oruro, a director for the company told Platts Monday. Grover Alejandro Gutierrez said that the company had sent documents to liquidators at the UK offices of Grant Thornton to begin a conciliation process under the auspices of the Chamber of Commerce in La Paz. "We are following the process set out in the rent contract with Allied Deals (the original name of RBG Resources)," he explained...

Read this Article (EN)

Tag: Bolivia

Inaugural Post

First of all, to the reader; welcome and thank you for visiting this website. I hope you find this blog useful, intelligent and enjoyable. If you don’t, let me know, because I did not start this site merely to entertain myself or others, but to provide a current, interesting and reliable source of information about a specific range of topics.

As of this writing there are about two hundred Bolivian “bitácoras” on the web, and the quantity is growing fast. The majority of these blogs are journal-type personal logs, and very few are dedicated to single topics or areas of interest. Of this rapid growing number of blogs there’s already a handful of Bolivian high-quality sites out there; and they lead the way when it comes post content and frequency of updates. I hope to join them by blogging about a topic that hasn’t been touch upon by any Bolivian blog that I know of (or is listed in the Bolivian Blogs Directory):

I’ll be blogging mainly about doing business in Bolivia. Sharing whatever I think I know about making money and my subjective opinions about enterprise, free markets, international trade, finance, etc. The politics part of the title is there because in most parts of the world there’s no differentiating one from another, and there's nothing you can do about it.

A couple caveats for the reader:

1. - This blogs’ primary language is English but I’ll be posting article excerpts in Spanish, linking to websites written in other languages and occasionally posting in Spanish only. So there you go; another reason to reconsider your language skills.

2. - I’m most definitely going to criticize certain public figures and their policies.

3. – I’ll be using Creative Commons and EFF guidelines; this stuff is copyrighted intellectual property people!

So there you go. Wish me luck.

PD: Layout is in the works, expect it to get better with time. For a couple laughs check this article by Maddox, I had second thoughts about starting this whole thing after reading it.