[Marxism] Bolivia tries to establish itself as a trustworthy nation.

[Walter Lippmann]

(Another example of the process of Latin American integration or
Bolivarianism such as represented by the Bank of the South.)
==================================================================

WASHINGTON POST

A Changed World?
Bolivia tries to establish itself as a trustworthy nation.
By Marcela Sanchez
Special to washingtonpost.com
Friday, November 2, 2007; 12:00 AM

WASHINGTON -- A few years ago, Bolivia's dependence on Washington as
a source of cash was such that its ministers made frequent treks
begging for loans to meet the government payroll. They usually had no
trouble getting them because Bolivia could be counted on to follow to
the letter the economic prescriptions of the international financial
institutions located here.

Then in 2006, Bolivia broke with the International Monetary Fund and
signaled its desire for independence. Now this week the Andean nation
becomes the first country ever to withdraw from the International
Center for the Settlement of Investment Disputes, a World Bank body
that referees contract disagreements between foreign investors and
host countries.

Newfound revenue and a changing political environment have buoyed
Bolivia's confidence. The Andean nation believes it now has new tools
at its disposal to establish itself as a trustworthy nation.

Bolivia makes more money from its natural resources than ever before.
Like other resource-rich countries, it hit the commodity jackpot when
the Chinese economy took off, increasing demand. Oil prices have
reached the highest levels in a quarter-century while prices for
natural gas, zinc and tin (key Bolivian exports) have also been
breaking records.

Bolivia's oil and gas revenues have been the biggest story as its
renegotiation of contracts with foreign oil companies turned $284
million in royalties in 2005 into almost $1.4 billion last year. This
year hydrocarbons should yield $1.6 billion, according to Bolivian
officials.

The political change that made renegotiation possible -- the election
of President Evo Morales -- also spurred the severing of ties with
the IMF and the ICSID. Morales came to office believing he had been
given a mandate to reverse a long-running experiment with
market-friendly reforms that were meant to counter the foreign debt
crisis and triple-digit inflation of the 1980s.

Bolivia's changing relationship with the IMF is not a great source of
concern. It follows in the footsteps of Brazil and Argentina, both of
which paid off debts with the IMF at the end of 2005 and have not
looked back. Some former IMF officials view Latin America's
independent streak with pride. The countries' strong fiscal position
today is a result of having "adopted the fund's philosophy," argued
Claudio Loser, who until 2002 served as director of the IMF's Western
Hemisphere Department.

However that might be, Bolivia is charting new territory by
withdrawing from the ICSID. The ICSID has been a great source of
frustration for Bolivia, which claims that the center unfairly favors
corporations at the expense of governments. But in the eyes of
foreign investors, Bolivia's action is tantamount to eliminating
guarantees that their contracts will be respected.

Still, Bolivian officials are surprisingly optimistic that there are
other ways to build confidence in Washington. Bolivian Ambassador
Gustavo Guzman said in an interview that, with the exception of Sen.
Chuck Grassley, R-Iowa, and his specific opposition to extending
trade preferences to Bolivia, "we have not found a door conclusively
and definitely closed."

If anything, Guzman added, they've been finding new allies that serve
as "keys to opening doors in this city." Guzman was referring to
think tanks and nongovernmental organizations that have thrown their
support behind Bolivia's pursuit of alternative ways of reducing
poverty.

This "alternative Washington" has yielded real and unexpected fruit.
A month before Bolivia made official its intention to leave the
ICSID, two Washington-based organizations softened the withdrawal
with a study that found that 93 percent of the ICSID's cases were
against developing countries and that 70 percent of the time the
agency ruled in favor of the investor. Bolivia has also received pro
bono assistance from liberal Washington public relations firms to
facilitate a more convivial -- and less confrontational -- atmosphere
during visits of Bolivian officials to this city.

These organizations may help provide a level of legitimacy to
Bolivia's new approach, but if the day comes when the La Paz
government must raise funds for new development, to expand its gas
production, or worse, try to stanch an economic downturn, where will
it turn if it has sacrificed investor confidence?

"If the investment is not forthcoming, there are other sources," said
Mark Weisbrot, co-director of the Center for Economic and Policy
Research, a liberal Washington think tank. "Private investment can be
replaced by state investments, there are other countries: Venezuela,
China. ... It is a new world."

If Bolivia and its new allies are proved right, it certainly would be
a changed world.