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Down from the mountain: Bolivia's new leader can make indigenous people happy, or investors, but probably not both.

Latin America's indigenous groups, which haven't wielded much power since the Spanish conquest, have been increasing their clout. Their political presence is suddenly being felt in Mexico, Ecuador and Peru. Most recently, in Bolivia, indigenous protesters toppled President Gonzalo Sanchez de Lozada.

This should be no surprise. Centuries of exploitation by and corruption among European descendants have marginalized most indigenous peoples, who make up about 8% of Latin America's 519 million inhabitants and routinely rank among its poorest. As free-trade pressures rise, indigenous protesters have risen to challenge them.

The genesis of the Bolivian rebellion was a US$5 billion pipeline to export liquid natural gas to the United States and Mexico. Natural gas is the nation's main source of wealth and most indigenous communities saw the project as just another grab for their natural resources by the political elite and the foreign companies behind the project, Spain's Repsol YPF and British Gas. Many blame their impoverished state on free-market policies, which date back to 1985, and on U.S.-sponsored eradication of coca plants that once sustained some 50,000 families.

In Bolivia, as elsewhere in Latin America, there are two worlds--the "haves" of urban whites and mestizos and the "have-nots" of rural Indians. Two-thirds of the nation's 8.8 million live in poverty and more than 60% of the population is Aymara and Qucchua. Not surprisingly, many have embraced indigenous politicians who are stridently against globalization. Congressman Evo Morales, a cocalero union leader who heads the Movement Toward Socialism, came within 42,000 votes of winning the last presidential election. Some predict he could win the next one.

Indians "no longer want to watch Bolivia from the mountains," wrote commentator Manfredo Kempff in the La Paz daily, La Razon. "They want to watch it from the balcony of the government palace."

New President Carlos Mesa, a respected historian descended from European elites, has an almost impossible job of simultaneously satisfying indigenous leaders and foreign investors. Bolivia relies heavily on foreign aid and loans to pay off the budget deficit, now more than 9% of its gross domestic product.

"He has an untenable situation," says Eduardo Gamarra, a Bolivia expert who heads the Latin America and Caribbean Center at Florida International University near Miami. "He must not only balance social demands and regional issues but listen to international creditors who are saying you had better deal with the deficit."

Mesa appears to be making the right moves by creating a ministry of indigenous affairs to analyze laws deemed unfair and by pushing for a new constitution with input from the indigenous majority. But he must convince Washington, which subjects all aid to progress on drug eradication, to loosen restrictions on growing coca leaves.

Coca in central to indigenous life and has been used in religious ceremonies for centuries. It is also chewed to ward off cold and hunger and to combat altitude sickness. Sanchez de Lozada's get-tough measures made immediate enemies. If Mesa nationalizes coca production for the legal market, he would win immediate allies.

Mesa also must mollify Morales and Felipe Quispe, the latter a charismatic Aymara union leader who advocates armed struggled against the government. Both are threatening to topple Mesa if he doesn't meet their demands within the next few months.

One way to steal their thunder would be to insist that new foreign partners give Bolivia more than 18% royalties from the now-defunct gas pipeline project and then vow to spend the profits on improving health, education and bringing running water and electricity to rural areas.

Most importantly, Mesa needs time and must play what Gamarra calls "the Lula card." Bolivia's future is absolutely tied to Brazil, not the United States, says Gamarra. Brazil's President Luiz Inacio Lula da Silva, a former labor leader and government critic, has the political credentials to convince Morales and Quispe to be patient and follow the same insider mute that he did.

If this fails, Bolivia could suffer a crushing collapse of its fledgling democracy and descend into chaos.
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Article Details
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Title Annotation:Carlos Mesa, political leadership, strategies and limitations
Author:Epstein, Jack
Publication:Latin Trade
Geographic Code:3BOLI
Date:Mar 1, 2004
Words:670
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