Bolivia and Brazil: Don’t spook the horses

So should we hail the arrival of a new and better model for economic growth and social justice? Unfortunately, no.

Gwynne Dyer

To nobody’s great surprise, Bolivia’s President Evo Morales has won a third 5-year term by a landslide majority. It’s no surprise because Bolivia’s Gross Domestic Product (GDP) has tripled since he took office in 2006. The number of people living in poverty has fallen by a quarter, even the poorest now have the right to a pension, and illiteracy has fallen to zero. Of course he won.

What has happened in Bolivia seems as miraculous as what happened in Brazil, where another left-wing president, Luiz Inacio “Lula” da Silva, took office in 2003. The economy started growing at 5 percent a year, unemployment fell steeply, and some 40 million Brazilians, almost a quarter of the population, were lifted out of poverty. Lula’s former chief of staff and successor as president, Dilma Rousseff, is also likely to win another term in office.

Is there some secret they share? Many other South American economies have been growing fast too, but without the dramatic change in the distribution of income that has happened in Brazil and Bolivia. Even the late Hugo Chavez’s “Bolivarian revolution” in Venezuela, for all its anti-imperialist rhetoric and despite the country’s great oil wealth, has not delivered a comparable transformation in the lives of the poor.

Evo Morales has another claim to fame, too. He comes from the poorest of the poor: “Until I was 14, I had no idea there was such a thing as underwear. I slept in my clothes… (which) my mother only removed for two reasons: to look for lice or to patch an elbow or a knee,” he wrote in his recent autobiography. He spent only a short time in school, and he did not become fluent in Spanish until he was a young adult.

Morales grew up speaking Aymara, one of the languages spoken by Bolivia’s indigenous peoples. They are a two-thirds majority of the country’s population, but in almost 200 years of independence Morales is the first indigenous Bolivian to become president (all previous presidents were drawn from the 15 percent white minority). And his government passed a new constitution in 2009 that entrenches indigenous rights in politics and in law.

So should we hail the arrival of a new and better model for economic growth and social justice? Unfortunately, no. The only economic secret that Lula, Dilma and Evo all share is that if you want the economy to grow, you must not frighten the horses.

The international markets got ready for a meltdown when Lula, a self-taught former trade union leader with a penchant for radical rhetoric, became president of Brazil, but he turned out to be the very soul of fiscal responsibility. And although Morales nationalised a large part of the Bolivian economy — oil, gas, tin and zinc mining and key utilities — he negotiated deals that compensated foreign investors and kept the markets happy.

All the rest of it — things like Morales calling Barack Obama “an imperialist” at the UN General Assembly meeting in New York last month, and Rousseff cancelling a scheduled state visit to the United States last year after Edward Snowden revealed that the US National Security Agency had been spying on her emails — simply doesn’t worry serious investors so long as the numbers come out right and the financial and fiscal environment is predictable.

So Morales has not been punished by the markets for being a “socialist”, and neither has Rousseff. Both still have strong support at home, too. Unlike Morales, Rousseff didn’t get enough votes in the first round of the presidential election earlier this month to avoid a run-off on 26 October, but she will probably win again even though the Brazilian economy is now teetering on the brink of a recession.

Despite all the similarities, however, comparing Brazil and Bolivia is rather like comparing apples and oranges here. Brazil has a very large and diversified internal market (fourth largest car-maker in the world, for example), and has twenty times as many people as Bolivia.  The latter has an economy that is almost totally dependent on the export of commodities, mainly oil, gas and minerals.

Bolivia’s soaring GDP of the past decade, and the modest prosperity it has brought to what was South America’s poorest country, is mostly fairy gold. What goes up usually comes down again eventually, and what drove Bolivia’s GDP up was almost entirely rising commodity prices. When they come down again, so will the GDP, the government’s income, and its ability to support even the sketchiest outline of a welfare state.

In the meantime, Morales has spent the extra money wisely, and it will be very hard for any successor to abandon this kind of “social spending”. He has also made it normal for Bolivia’s indigenous majority to have a big say in policy decisions at the national level, and that too will be almost impossible to roll back. He has even built up big financial reserves to cope with falling commodity prices. But he has not really transformed the economy.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Winston Blackmore (left) and James Oler (right) were sentenced on separate charges of polygamy this week in Cranbrook Supreme Court.
No more charges expected in Bountiful investigation, special prosecutor says

Special prosecutor says mandate has ended following review of evidence from Bountiful investigations

Masks are now officially mandatory in all City of Campbell River facilities. (Black Press File Photo)
Interior Health reports 49 new COVID-19 cases overnight

302 cases remain active; two in hospital

Cranbrook City Hall. File photo.
Council passes, adopts new bylaw to allow legal secondary suites

Cranbrook has formally adopted a secondary suites bylaw that will allow secondary… Continue reading

Cranbrook City Hall.
Council postpones land use discussion for proposed overnight shelter

An application for an overnight shelter will be presented at a forthcoming… Continue reading

Crisis line
Mental health crisis lines are busier than ever

The number of calls and the intensity of calls has increased. But the community is stepping up to help

Provincial health officer Dr. Bonnie Henry updates B.C.’s COVID-19 situation at the B.C. legislature, Nov. 23, 2020. (B.C. government)
B.C. daily COVID-19 cases hits record 941 on Tuesday

Further restrictions on indoor exercise take effect

(Ashley Wadhwani/Black Press Media)
Refuse to follow B.C.’s mask mandate? Face a $230 fine

Masks are now required to be worn by all British Columbians, 12 years and older

BC Teachers' Federation President Teri Mooring is asking parents of school-aged children to encourage the wearing of masks when possible in schools. (THE CANADIAN PRESS/Chad Hipolito)
LETTER: Teachers union encourages culture of mask wearing in B.C. schools

BCTF President Teri Mooring asks parents to talk with children about wearing masks in school

Prime Minister Justin Trudeau speak to the media about the COVID-19 virus outside Rideau Cottage in Ottawa, Friday, Nov. 20, 2020. THE CANADIAN PRESS/Adrian Wyld
Canada’s inability to manufacture vaccines in-house will delay distribution: Trudeau

First doses of COVID-19 vaccine expected in first few months of 2021, prime minister says

(Pixabay)
All dance studios, other indoor group fitness facilities must close amid updated COVID-19 rules

Prior announcement had said everything except spin, HIIT and hot yoga could remain open

B.C. Liberal interim leader Shirley Bond speaks to reporters from Prince George via Zoom conference, Nov. 24, 2020. MLAs are being sworn in for the legislature session this week, many of them also by video. (B.C. legislature)
B.C. Liberal leadership contest will wait for election post-mortem

Interim leader set to face NDP on payments for COVID-19

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Product Care offers more than <a href="http://link.mediaoutreach.meltwater.com/ls/click?upn=pDYyTceU0YgTDdsd92GohdQJsmSiPFEkcB4MdMM0Qkoqb1aJA-2By5aWklKJXV6QRdyTteNjr2FccUOVLUe4t5Zw-3D-3D1ds-_KVyBcpjXADXifSWVpM8nQcAzSm9-2B6fEFnjVrTsOcu31irDHDxi5k0QTOIWCqMXUxaNbrf0yRzXSSpROCkfx3NkUtbr65Dkcw1J0by-2F-2BDdDiJGbcfhtjHWYSs66NwakeCCLYkj20e9ICIZsLcedqNZKBhsN0sGgBsInpdzsddYikUZkmQvFdxLJhakpgAA6aAJ5ScUoWR6vO9sM819vRB-2F6x7dsdfIaWa4ZgHxR4G7hauxgSJCsNI2bP5J62EFfM0aiDqRPwUPUjt7i5-2FMqpdJxrEBewnLky-2B3lE0JAmi5UsJBkJejuLOjsndZz4b7dNgbvt6KyewKuF0sxU2rpYgkAO9YAKc9STuFJd28Qn7jE0-2FqlB8HKOvpW150NHS-2BOMBcK5rkZ8YAuPqJy11k-2BgndiKB-2FWl2icAfbWtRGJPb8fM-3D" target="_blank">150 free drop-off locations</a> in B.C. (Pixabay.com)
Recycling broken or burnt string lights can reduce holiday landfill waste

In 2019, Product Care Recycling diverted more than 11.6 million light bulbs from landfills

Most Read