Letter From Bolivia: Morales Moves (Page 3)

In a long, ornate drawing room in the presidential palace, I meet Vice President Álvaro García Linera, who is sometimes said to be "the brain of the government"--Evo is clearly its soul. Only 42 years old, García Linera has a résumé that already includes stints as a former guerrilla, ex-prisoner, powerhouse author and intellectual, and now one of the most important politicians in Latin America. Over coffee and papaya juice, he explains the economic logic of the new government.

"Transnational corporations are welcome in Bolivia, but they will not dominate the economy. They should expect to pay taxes and submit to reasonable environmental and social regulations. But they will still make profits," says the boyish VP. As García Linera sees it, all that the state can do at this stage is impose equilibrium and a minimal humanity on the savageness and chaos that is otherwise Bolivian capitalism.

Looking for the class war and panicking capitalists, I head to the offices of the National Industrial Chamber, but all I find is reasonableness. In retrospect, that makes sense, as this chamber of commerce represents 1,500 mostly small and medium-sized firms involved in textiles, food processing, furniture, metalwork and agriculture, all of which are threatened by free trade on US terms and none of which are oil companies.

"Evo had to nationalize the gas," says Daniel Sanchez, the chamber's president. "We had a referendum in July 2004 and nationalization won overwhelmingly. This is democracy." In two weeks of canvassing politicians, businesspeople and the social movements, I hear this sentiment again and again: Nationalization had to happen because of the July 2004 referendum. If Morales had been any more restrained, he would have faced the wrath of street mobilizations. Even some right-wing ranchers in Bolivia's lowland eastern province of Santa Cruz--where Morales won a stunning 33 percent of the vote--told me that though they disliked nationalization, it was inevitable.

"As an industrialist I think the new government is going to help us a lot," says Sanchez, who owns and runs two chemical factories that make products for water purification. "The government showed us part of their economic plan. It's very human-- they want to fight poverty. But there's also a heavy emphasis on national industry. They want to build the internal market."

According to Sanchez, many industrialists in La Paz have come around to seeing the virtues of the MAS growth strategy. Particularly popular is the idea of a new government bank to provide local industry with cheap credit. They also like proposed programs to support technology transfer: "So we can upgrade to cleaner, more efficient technology and compete better in regional markets." It's a simple equation but one that was for too long obscured in the ideological mumbo jumbo of the Washington Consensus. Having tasted the low-growth, austerity and multinational domination of neoliberalism, many Bolivian business owners finally get it: If poor people have more money, they'll buy more products from local industry.

Nowhere is the link between poverty reduction and the national market clearer than at the office of Cifabol, the industrial organization that represents most of Bolivia's twenty-two small pharmaceutical companies. About 5,000 people work in pharmaceutical manufacturing here, and none of the Big Pharma firms have plants in Bolivia.

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