Bolivia at a crossroads

What does the rise of Evo Morales as president of Bolivia mean for the average American? More than you might think. Less than you might be inclined to have nightmares about. Here are the core facts.

First, Mr. Morales is committed to legalizing coca growing, implicitly supporting cocaine and coca paste syndicates in rural Bolivia’s Chapare regions. If real, such a policy would accelerate coca growth all over the nation, upending longtime gains and U.S. policy. Bolivia’s tottering economy would face the sort of self-inflicted wound not seen in decades. It would last years.

Coca legalization, if really pursued, would be a major reversal of fortunes for a nation that dramatically reduced coca growth over the last five years, and saw rising incomes from legitimate crops, like pineapples, bananas, heart of palm, honey, cotton, corn and dairy products.

Criminal elements would prosper. Western investment scatter. The gut-punch to international confidence would slow alternative development, suffocate bilateral and multilateral lending, and — in a phrase — invite cocaine and heroin poppy producers, traffickers and regional terrorists to ravage a small, long-suffering and luckless ally.

Is Mr. Morales’s rise the latest domino in a push by Cuba’s Fidel Castro and Venezuela’s Mr. Chavez for more anti-U.S., anti-capitalist, anti-democratic nations in South America? Maybe, since the Castro-Chavez-Morales troika froths with enthusiasm for converting disenchanted electorates across the region — into a 21st-century version of warmed Soviet-style socialism.

Either way, this widening turn toward anti-Americanism is reason enough for more Bush administration attention to this often forgotten region.

Should we be worried? For Bolivia and her neighbors, yes. That worry is compounded by Mr. Morales’ nonsensical pledge to nationalize oil, gas and resource production, which together represent nearly $4 billion of long-valued foreign investment. That is no way to win friends or influence enemies, never mind keep folks employed.

Expect the obvious. Production would fall — or stop. Prices would rise. Wages would tumble, jobs end. A wave — economists call it the multiplier effect — of vanishing petro-dollars would throw dependent Bolivians into recession. Is that all? No. Taken together, these two policies would cause the economy to shrink faster than these workers could run to be noticed. Bolivia would return to the bad old days of hyper-inflation, unemployment, riots and rogues.

To these wounds, Mr. Morales had added another dash of salt. Risking internal class warfare, he moves toward intra- and interindigenous name-calling, intriguingly framed as rewriting the constitution to favor those who elected him.

Never mind the philosophical questions. How long does this sort of populist bumbling go on before chaos shatters the happy celebration? Answer: Not long. If these policies are pursued, the silver lining is already visible. Bolivia will become ungovernable, as it did a decade and a half ago, with avalanche speed. Human rights will come under the stabilization knife. Riots will spread in La Paz and elsewhere. The world will shake its head, and we will hear more than we wanted to about another postconflict area deserving special attention.

Sad to say, Brazil and others now drawing on Bolivian oil and gas will recoil, finding other suppliers. At the same time, cocaine traffickers can seek and gain a foothold in a country formerly reducing coca, interdicting drugs at record levels, and converting wholesale to other incomes.

We will be back to the future, only worse. Foreign investors will remember the wound, find other emerging markets and walk a wide circle around this risky nation.

As with Mr. Castro’s Cuba and Mr. Chavez’s Venezuela, new woes will be blamed on the old ally, the United States. This will be marketed to others as cause to flip and join a neo- socialist coalition of enlightened South American Neo-Mensheviks, or some variation of that generally unpleasant theme.

Is there another way? Yes: Bolivia’s new leaders could sober up. They could review the hard numbers. Delivering modest gains without alienating long time international supporters, in this hemisphere and globally, would be a good first step. Analyzing options for sustainable economic growth would befuddle critics and cause stir respect from unlikely quarters.

Resolutely opposing cocaine and heroin production, drug trafficking and drug-funded terrorism would send another self-preserving message to the world. Being proud of a strong indigenous vote without debunking the little institutional continuity Bolivia retains would help steady the boat.

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