Ambassador of Bolivia Jaime Aparicio Gas Line Project Is Exposing Boliviaís Woes by Larry Luxner Until a few months ago, mountainous Bolivia was pretty much a forgotten land tucked away in the Andesóits 8 million people considered among the poorest in South America. Then, in mid-October, the countryís worst violence in 30 years erupted when thousands of indigenous protesters blocked the streets and highways of the capital city, La Paz, demanding the resignation of President Gonzalo S·nchez de Lozada. The president eventually did resign but not before riot police had killed more than 80 demonstrators. Bolivia suddenly made headlines in U.S. newspapers, and the countryís ambassador in Washington, Jaime Aparicio, was thrust into the spotlight for the first time in his career. In a recent interview, Aparicio said the immediate reason for the protests was the former presidentís plan to export natural gas via Chile to the United States and Mexico. Boliviaís new leader, former television journalist and Vice President Carlos Mesa, has promised to hold a referendum on the controversial gas pipeline projec t. But that, Aparicio said, only scratches the surface of Boliviaís seemingly intractable social and economic conundrum. ìWhat happened was a cumulative process,î Aparicio told The Washington Diplomat. ìIn 1952, we had a social revolution that brought deep changes to the country. Since then, thereís been a deterioration of the social fabric, and in the last five years, weíve had an economic recessionónot only in Bolivia, but throughout the region. ìWe were affected first by the crisis in Asia, then Argentina and then in Brazil. After five years of recession in a country thatís already poor, with all the inequalities we have, added to that a drug eradication program without effective alternative development, and the result is great frustration.î Aparicio, 48, became ambassador to the United States earlier this year, after having served as Boliviaís envoy to France and Venezuela. A lawyer and career diplomat who has spent 22 years in his nationís foreign service, he speaks Spanish, English and French, and has a basic knowledge of Quechua, one of Boliviaís three indigenous languages (the others are Aymara and GuaranÌ). ìBolivia is a very poor country, and the great majority of people donít benefit from the political system,î Aparicio says, noting that 60 percent of the population considers itself indigenous. ìThe biggest inequality comes from the lack of opportunities,î he says. ìAnd we still have problems with our judicial system. Thatís one of the tragedies of Bolivia. People perceive that the political parties are totally corrupt. Thatís not the case, but itís true that people donít trust the government. We canít even collect taxes.î Bolivia covers an area the size of Texas and California combined, but it is landlockedóthe result of a devastating war with Chile 130 years ago that cost Bolivia its Pacific coast. Despite vast natural resources such as gold, silver, tin, zinc and natural gas, Boliviaís annual per-capita income is the lowest in South America and has actually dropped from $1,000 a decade ago to between $700 and $800 today. Aparicio concedes that this is the result of failed policies enacted by a succession of well-meaning governments, including that of S·nchez de Lozada, a 71-year-old millionaire who has taken up residence in Washington after being forced to flee the country in October. ìBolivia has done everything in the last eight years in terms of reforms,î the ambassador says. ìIt was one of the first countries to have popular participation in decentralization. When we became a democracy 20 years ago, we had one of the highest inflation rates in the worldóover 27,000 percent. We were able to go to single-digit inflation in a few months. But these reforms and sacrifices didnít translate into better living conditions.î A big part of the problem is that Boliviaís history is largely one of Spanish conquistadores and their white descendants exploiting the indigenous majority. For centuries, San LuÌs PotosÌóone of the worldís largest silver minesóenriched Spain but impoverished the locals, and today PotosÌ is a ghost town. ìThe mentality of the Bolivian people is this tragedy of all this national wealth leaving the countryófirst the silver, then the tin, the tungsten and the rubber. All these booms did nothing for the people,î says Aparicio. ìThey sense thereís no future, and when you have frustration and so many years of deterioration, obviously thatís the best scenario for radicalism to grow.î In Bolivia, radicalism takes the form of Evo Morales, a former coca grower whose populist rhetoric has made him one of Latin Americaís most famous politicians. Morales has been embraced by Venezuelaís Hugo Ch·vez, Brazilís Luiz Inacio Lula da Silva, Cubaís Fidel Castro and even Libyaís Muammar Qaddafi. Last year, he nearly defeated S·nchez de Lozada for the presidency. Morales is admired by indigenous people throughout the continent but despised by Boliviaís business class for his ranting against the United States, capitalism, globalization and the proposed Free Trade Area of the Americas. Morales has been leading the fight against Boliviaís plan to export natural gas to Mexico and the U.S. West Coast via a pipeline that would go through Chile. The project requires several billion dollars worth of foreign investment but could eventually turn Boliviaówhose gas reserves are second only to Venezuela in all of South Americaóinto a relatively prosperous country. ìOur biggest problem is information. People have to be informed,î Aparicio says, accusing Morales and his followers of spreading a disinformation campaign for political reasons. ìWe must find sustainability through gas exports, but radical groups donít want to export gas. They say foreign companies will come here and take Boliviaís gas and that the poor will have nothing, not even gas in their homes. But itís not true. Bolivia has 58 trillion cubic feet of gas reserves, enough to last more than 800 years.î Lingering bitterness against neighboring Chile also has a lot to do with objections to the gas project. The only practical route for the proposed pipeline is through the Chile, which like Bolivia was a military dictatorship for many years but is now the most prosperous nation in Latin America, thanks to its diversified, export-based economy and investment-friendly policies. ìOur problem with Chile is not rational, itís emotional,î says Aparicio. ìItís the collective psychology of being a landlocked country. Like many countries, we lost territory and became landlocked. No government can change that. But thereís been very deep resentment against Chile for many years. People feel theyíve lost their contact with the world, and they think itís Chile's fault.î The resentment is so deep, in fact, that Bolivia and Chile havenít had diplomatic relations for the past 30 years. Some Bolivians are demanding that Chile return Boliviaís Pacific coastlineóa demand that was publicly backed in late November by Venezuelaís Ch·vez. But Aparicio says he doesnít resent the Chileans; in fact, he admires them. ìChile has strong institutions that have credibility, and thatís a great lesson for us,î he says. ìI think we should have more creative ways of solving this problem. Look at how Europe achieved integration. We cannot continue these concepts of the 18th century in the 21st century.î Aparicio pointed out that not everything in Bolivia has been a failure. In the early 1990s, Bolivia pioneered the concept of ìcapitalizationî rather than privatization of state-owned companies. One of the most successful such capitalizations was that of Entel, the state phone monopoly. ìIt was a very inefficient system before. You had to pay $2,000 for a line, so nobody had phones. Now you see people everywhere with cell phones,î says the ambassador. ìWhen the oil company was state owned, all the income was transferred to the government, and there was no money for [research and development]. Today, thanks to $2 billion of foreign investment, Bolivia has gone from 3 trillion cubic feet of gas reserves to 58 trillion.î Aparicio said that 87 percent of Boliviaís foreign exchange now comes from energy and mining, but that these sectors employ less than 10 percent of the population. The answer, he argues, must come from the establishment of thousands of small- and medium-sized enterprises. ìWe need immediate short-term programs for creating jobs, and that will come only through production and exports,î he says, outlining 10 specific areas in which Bolivia can be competitive. These include textiles, leather goods, wood, furniture, jewelry, organic coffee and quinoa, a cereal used as a staple food by millions of indigenous people. ìOrganic coffee is doing very well now,î Aparicio says. ìFor example, some stores like Trader Joeís are already distributing Bolivian organic coffee, but this is not directly linked to coca substitution. These are more community-based organizations that are trying to develop jobs.î In Bolivia, anger from farmers and agricultural workers against the United States has been fueled by various U.S.-backed programs over the years to eradicate the countryís coca crop. Except for 12,000 hectares in the department of Yungas (for local use only), the cultivation of coca leavesóthe main ingredient in cocaineóis illegal. Most of Boliviaís coca leaves come from the department of Chapare, where 90 percent of the crop was destroyed under the administration of S·nchez de Lozada. The United States promotes ìalternative developmentî schemes under which coca farmers are encouraged to move onto other crops. But Aparicio says he has mixed feelings about these policies. ìYou can substitute coca with other products, but itís not enough. A lot of these people started growing pineapples and other products for export to Argentina and Brazil. But with the devaluations in those countries, exports dropped by 70 percent overnight. Nobody had a plan to give these people jobs.î Regarding the future, Aparicio says, ìBolivia has a very clear possibility of developing itself in the medium term. In five years, we could be receiving $400 [million] to $500 million a year in gas income. This money could be put into a trust fund, following some models like Norway and Alaska, in order to achieve our goal of reducing poverty by at least 50 percent.î Aparicio has spent much of his time lobbying in favor of the Free Trade Area of the Americas as well as Washingtonís Andean Trade Preference Act, under which Bolivia has seen its exports to the United States grow by 16 percent last year, mainly in jewelry, textiles and furniture. He also spends a great deal of time meeting with local Bolivians. The Washington, D.C., metro area is home to an estimated 100,000 Bolivians, making it the second-largest community of Bolivians in the world outside of Bolivia (the largest is Buenos Aires, home to around 1 million Bolivians). The immigrants in this area come mainly from the city of Cochabamba and work for the most part in the restaurant and construction industries. Although some are here for good, many others would like to return to Bolivia when and if conditions there improve. ìWe need a consensus-building process of what we want as a country,î Aparicio says. ìWhatís going to bring peace and calm is that we achieve consensus. From my point of view, economic growth that funds social investment like basic health and sanitation is the only way we can close this gap. We must achieve 4 percent annual [gross domestic product] growth in order to achieve these goals.î In the meantime, Mesa has officially declared that heíll remain in power until Aug. 6, 2007, as allowed under the constitution. ìThe president has a great opportunity now because most of the people in his cabinet are independent. They donít have political pressures,î Aparicio says, adding that ìthereís going to be an investigation into the use of forceî to establish responsibility for the killings during the October protests. ìAt this point, we are receiving immense support from the United States. The eradication program is going to continue, and weíre going to increase social investment,î the ambassador says. ìEverybody wants to see democracy prevail. Bolivia is a fragile country, and if we donít find immediate solutions, we will have more violence and radicalism.î Larry Luxner is a contributing writer for The Washington Diplomat.