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Post Evo Morales and Hugo Chavez, Compared
Created by John Eipper on 12/23/18 11:38 AM

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Evo Morales and Hugo Chavez, Compared (José Ignacio Soler, Venezuela, 12/23/18 11:38 am)

I enjoyed Gary Moore's post on Evo Morales and his "successful-looking socialism" (December 19th).

The parallels between Evo and Chávez are very illustrative to better understand the Venezuelan and Bolivian processes. I would like to contribute a different perspective to the analysis. There are great differences as well as similarities between the two regimes.

I believe the first step in this comparison would be the political thinking and profiles of both leaders. The second would be to describe the similarities and differences in the roads they took in social and economic development.

Both were of humble origin, Evo an indigenous peasant, unionist and communard, a social organizer; Chávez the son of elementary school teachers and a mediocre military officer. Their knowledge of socialist theory was very limited if any, and their adoption of this ideology came almost accidentally. Evo's political doctrine is based on a sort of nationalistic-indigenous claim, Chávez's doctrine on a sort of nationalistic and anti-capitalist-imperialistic credo. But likely their main "political" motivation was more social resentment instead of social justice or progressive social demands. They lack economic knowledge and socialist theoretical clarity. Theirs is an eclectic and pragmatic thinking, but very much anti-capitalistic and anti-imperialist as much as any average Latin American person of their generation.

They trusted nobody. Both had a charismatic personality, were religious in a non-devout manner, but spiritualist in their own particular way, superstitious, with strong conservative and traditionalist roots. Both had authoritarian, dominant and intolerant tempers, were very used to imposing their will with little dialogue or negotiation. They both needed confrontation and conflict as a way to strengthen themselves.  Dialogue and agreement were seen as weakening them.

More importantly in political terms, democracy was just a power instrument for them, not an end in itself. They were hardly democrats, and for that reason they would disrespect constitutions, laws or elections and referendums when necessary, all to please their ambitions of power. However, occasionally, their pragmatism might disguise their will for absolute power by giving concessions to the political opposition, economic or strategic decisions; in this last aspect perhaps Evo distinguished himself more than Chávez, as we will discuss now. Anyway it seems that socialist paradigms have been less present in everyday Bolivian life than in Venezuela, where it was an almost ubiquitous cliché under Chávez and presently with Maduro.

It seems obvious from the personality comparisons between Evo and Chávez that there are more similarities than differences. By the way, except for the first paragraph of this profile, the humble origin, the more I think about it I believe it could describe many other world leaders' populist personalities. For instance, could we imagine Trump fitting the description?

Now regarding the economic achievements of both presidents, there also are more similarities than differences in several macroeconomic and developmental aspects.

First it is important to consider the timeline and the framework of both processes. As I have mentioned in previous WAIS posts, when Chávez took power in 1998, Venezuela was a prosperous society, with high social mobility rate, a relatively low level of poverty, a high power of consumption and high GDP per capita, with a temporary crisis. It was a relatively industrialized country, and with mature oil and energy sectors, staffed by a highly trained and skilled personnel, fully nationalized since 1976. The Bolivian oil and gas sector, when Evo took power in 2006, was in the hands of foreign oil companies. The country was in a deep economic crisis, with an enormous poverty level, the largest underdeveloped and uneducated indigenous population (68%) in America, and a long history of social-political instability and turmoil. In summary, the frameworks for the two countries were very different.

As a direct consequence, Bolivia's achievements under the early years of Evo´s presidency were more spectacular and more distinguishable. It is easier and faster to move from a very low level of development to a higher one, than to move from an average level to an excellent one. Furthermore, Bolivia had the strong support of Venezuela's financial resources, oil technology and the assistance of experienced Venezuelan personnel, as well as strategic support from Cuba.

From 2006 until 2014, both countries greatly benefited from high oil prices, which gave them the resources to increase GDPs in a steady way. Bolivia increased its oil revenue and its GDP from US$1000 to almost US$4000 in only a few years. The increase has been steady for Bolivia until now, although the trend is slightly decreasing. In those first years and due to the enormous resources received, the country could implement huge infrastructure, energy and construction investments, and particularly abundant social expenditures, which reduced the level of poverty from 68% to 43% at present.

If only the first 12 years of Chávez are considered, from 1998 to 2010, the social and economic achievements were perhaps as spectacular as those of Evo in Bolivia. The main difference is that Chávez did not nationalize the oil industry and he did everything possible to destroy it by replacing technicians and experienced managers by corrupt loyalists. Moreover, he used oil as a platform to internationalize his revolution or other populist purposes beyond the objectives of the industry, as well as to destroy the private business sector in a more radical socialist fashion.

It seems that Evo did listen and rely on more experienced economists, managers and technicians to design and implement economic, monetary, and fiscal policies, and more importantly, to sustain the main source of Bolivian wealth, the gas and oil industry. Although both were suspicious, this apparent delegation of decisions to competent subordinates is a great distinction from Chávez, who was used to commanding in a military fashion. It was much harder for him to delegate authority.

Perhaps as a consequence of these policies, Bolivia's macroeconomic indicators--inflation, currency reserves, devaluation, employment, etc.--have been solid and sustained.

In summary, Evo´s "successful-miraculous" achievements have so far been based on:

1) Oil industry nationalization and market prices.

2) Huge public investments and social policies.

3) A strong fiscal discipline with a low public debt.

4) GDP growth based on increments of internal consumption.

5) Public savings in international reserves.

6) Monetary policies, control of inflation and devaluation.

7) Political and social stability through the integration of unions with political institutions and decision-making.

In spite of Evo´s pragmatism, the Bolivian development social-model may eventually be consolidated. Can these conditions maintained after the first 12 or 14 years?

Bolivia has started its development from a very low level and it was easy and fast to its present levels. It remains to be seen if it can be maintained. Bolivia might face pretty much the same risks as Venezuela after the first 12 years of Chávez´s regime; low gas and oil prices, mono productive dependence, strong dependence on the energy sector of an undiversified industry, corruption, a lack of funds to support social policies, the possible destruction of the private business sector, inflation and devaluation, the lack of legal certainty, low prices for Bolivia's export products and some other risks, all products of Evo's undemocratic attitudes and actions, particularly disrespecting the Constitution to stay in power and consolidate a dictatorship.

JE comments:  Another brilliant analysis, Nacho!  One feather in Evo's cap is #3 above:  strong fiscal discipline.  How has he managed to do this?  Populists of both right and left (but especially of the left) tend to give away the store--until there is nothing left to give.

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