Tuesday, August 12, 2008

Bolivia: Morales's Victory

Here is an excellent article and analysis of Morales's decisive (62% of the vote), yet not overwhelming victory in the Bolivian referendum. He now has a clear mandate, but still has his work cut out for him in terms of land reform and nationalization, particularly in Santa Cruz (though he won over 40% of the vote there, surprisingly). The wealthy, predominantly white minority will continue to block moves by Morales to grant some measure of social progress and equity to the overwhelming, impoverished indigenous majority.

I'm not an expert on Bolivian politics, but suffice it to say claims that Morales is a "leftist" are overblown melodrama - yes, he favors state control over some aspects of the economy, especially natural resources and some financial services/heavy industry - but these are policies that have worked to generate government revenue and provided the impetus for industrialization in South Korea, Taiwan, Thailand, Indonesia, Malaysia, China, and India. For that matter, land reform was a key aspect of generating an agricultural surplus in South Korea, Taiwan, and China as well.

Private enterprise is all well and good, but there needs to be sufficient government capital to provide social programs (e.g. education and basic health care) and public infrastructure. There also needs to be some sense of equal property distribution, at least to the point where there is enough demand to generate local consumption and ensure a market for locally-produced goods. Latin American Gini coefficients typically range from 0.6-0.7, compared with Asian and European Gini's in the 0.3-0.45 range (lower = more equal). Capitalism doesn't work without the prerequisites for a market, even neoliberals recognize that, and public control of commodities and finance can be an effective way of jump-starting industrial development - as the East Asian Miracle has demonstrated. Privatization, whether or not we like it, frequently needs to come later on in the process. Sometimes, what seems a "lefist" policy in an American context is simply pragmatic policy in another context (especially a development context).