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| Famous Place in Bolivia |
chapel in 1583, which was enlarged in 1619, the statue soon became famous throughout Bolivia and Peru as a miracle causing icon. The present cathedral, completed in 1805, is the most visited pilgrimage site in Bolivia and there are hugely attended festivals on the February 1-3, the saint’s day, May 23 (San Juan’s Day) and the first few days of August. The festival in August is extremely popular and Indian groups perform traditional dances accompanied by drums, flutes and pipes. During the festival periods a copy of the statue of Mary is adorned in colorful robes and precious jewels, and then take on processions around the town of
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| Famous Place in Bolivia |
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| Famous Place in Bolivia |
Bolivians regularly remark that their country is a poor man seated on a throne of gold. Bolivia is one of the poorest countries in South America, sitting atop disproportionate quantities of natural resources. Bolivia is famous for its mines, known to the Incas and later exploited by the Spanish, as well as the second largest natural gas field in South America after Venezuela. Furthermore, the mountain El Mutu'n houses huge reserves of iron and magnesium.
Several explanations have been proposed for the unsatisfactory performance of resource-rich countries. There are several external factors, among them changes in terms of trade and price volatility, as well as internal factors associated with the mismanagement of natural resource rents.
The prices of primary goods, such as the silver, iron, and oil that Bolivia relies upon, are more volatile than those of manufactured goods. Thus, heavy reliance on just a few natural resources, combined with state overspending during booms and property confiscations during busts, subjects the country to high levels of volatility. For example, in the 1980s, a collapse in the world price of tin precipitated hyperinflation and
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| Famous Place in Bolivia |
economic collapse in Bolivia. Another external problem is that natural resource export booms cause an appreciation in the exchange rate, which hurts the competitiveness of the manufacturing export sectors, causing stunted growth in these alternative sectors. When natural resource prices slide, the country is left with crippled alternative export sectors. The phenomenon is often referred to as "Dutch Disease."
But Bolivia's internal problems are serious as well. The availability of natural resource rents has diverted government efforts away from the process of productive wealth creation in Bolivia and into unproductive rent-seeking behavior, including corruption. Abundance of natural resources coupled with the high ethnic diversity and economic inequality has meant that the funds from natural gas are not invested in education or human capital development.
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| Famous Place in Bolivia |
When current Bolivian president Evo Morales won the December 2005 elections he promised to be Washington's "worst nightmare." (A title currently held by his friend Hugo Chavez). Nationalization of oil and gas was a key theme in Morales' election campaign. The revenues were to be used for improvement of living standards in South America's poorest country. And support for nationalization has been building steadily.
The Morales administration attempted to increase state control over natural gas companies, the country's largest resource. Bolivian officials revamped the defunct state-owned oil company, and acquired majority ownership of five gas production, transportation, refining, and storage companies. Plans are in the works to increase state control over other sectors as well, including mining, electricity, telecommunications, transportation and forestry. Nationalizing natural gas would give the government access to much needed funds and take them out of the hands of foreign investors. But this was a big gamble for Morales, because capital generally avoids governments which attempt to enslave it.
On May 1st 2006 Evo Morales nationalized the country's oil and gas resources. This came as no surprise to international investors. Nationalizing oil had been a major theme in Morales election campaign, and the announcement came a day after a meeting with Chavez and Cuban leader Fidel Castro to sign a trade agreement called the Bolivarian Alternative for the Americas. But petropolitics could prove risky for Bolivia, a tiny, poor country. Morales described the takeover as "historic", the reality may be less so.
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| Famous Place in Bolivia |
Despite the use of military to secure the oil and gas fields, many believe that the takeover was more a means to extract higher revenues from buyers and less of an actual takeover. Therein lies the risk. Bolivia may have the second largest natural gas reserves, but it lacks the resources and expertise to commercialize them. Alienating Brazilian and Spanish oil companies therefore may cut Bolivia off from its chief markets.
Presently Morales is toying with countries assumed to be his natural allies. Brazil's national oil company, Petrobras, has invested nearly $1 billion in Bolivia and is the country's largest national gas producer and customer. But on May 3rd 2005 Petrobras president announced the company was suspending all new investment in Bolivia, including proposed expansion of a Brazil-Bolivia pipeline.
Despite the risks, Morales is not alone in his movement towards resource nationalism, in Latin America this has been a response to failure in economic development, the persistence of widespread poverty and fatal attraction to populism. Bolivia may well choose to charge higher prices for its natural resources, but what it needs is a government with policies, as opposed to attitudes.
In the footsteps of his friend and supporter Chavez, Morales has chosen to concentrate his power by standing for re-election. Morales' party, the MAS (movement towards socialism) is rewriting the constitution. Under the new constitution it would not be re-election, but a new election, implying that Morales could seek a five year presidential term ending in 2018. While in office, he would be well advised to carefully consider the best mechanisms for allocating and monitoring the use of revenues derived from the current high natural gas prices. Fortunately, domestic Bolivian opposition to Morales is much more geographically concentrated and assertive than in Venezuela, where Hugo Chavez, Morales' ideological next-of-kin, has proven able to liquidate economic and political opposition. Morales, on the other hand, does not seem to have the political strength to perform a similar feat. He has also infuriated Brazil, his erstwhile ally, by attempting to confiscate the assets of Petrobras. Morales may be a pitbull, but political constraints have effectively caged him in a way that renders his "Chavista" tendencies relatively harmless.
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