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Op-Ed Commentary

Scott Sullivan:
Why does China continue to support Morales?


Many friends of China are asking why China continues to support Evo Morales.
To read most of China's press coverage of Bolivia's recent referendum on
constitutional reform and regional autonomy is to move into a fantasyland.
China's press portrays this vote as a triumph for Morales. The reality is
quite different. Morales is the big loser, as time will tell.

Morales deserves to lose. To put this point in a Chinese context, Morales
does not bring anything new to the political reform agenda. Rather, he
resembles two detested figures in recent Chinese history, the Dalai Lama,
and Chiang Ching, neither of which would receive a moment's hearing in the
new China.

The Dalai Lama above all worships a mythical golden era before Tibet was
corrupted by contact with the outside world, and wants to return Tibet to
that reality. He not only plays this card against China, which is bringing
Tibet into the global system, he plays the race card. The Dalai Lama refers
to the Chinese in the same terms as Morales refers to the Yankees, the
Gringos, and even on occasion to the non-indigenous Latin Americans - i.e.
foreign imperialist exploiters. In a word, Morales wants to turn Bolivia
into an indigenous Tibet.

Morales is also very much like Chiang Ching, Mao's ex-wife and leader of the
Gang of Four. The Gang of Four were Chinese ultra-leftists, that is - to use
China's own parlance -- they "waved the Red Flag in order to oppose the Red
Flag." One look at influential Morales supporters like Felipe Quispe and
Jaime Solares is convincing evidence as to the ever more radical direction
of the Morales revolution. These two ultra-ultra-leftists are the very ones
who will drive Morales to the ultra-ultra left position, now that he has
been defeated by the governors of four states (which contain 90% of
Bolivia's energy resources) in the vote on autonomy.

What is China thinking when it supports Morales? To again borrow Chinese
terminology, a "two line struggle" is underway in Latin America. On one
side are the forces of progress and global capitalist integration (the very
path that China itself has chosen). On the other side are the
isolationists, ethnic warriors, ultra-leftists and tinpot Hitlers like Hugo
Chavez, whose best friend and closest ally, Iran's Ahmadinejad, enjoys
pontificating that "Germany has nothing to apologize for in World War II."
Really? And how about Japan? Japan says the Nanking massacre never
happened, and that Japanese entry into China was a benevolent gesture. Does
today's China agree?

In short, the struggle for Latin America's future is intensifying in
Venezuela, Mexico, and, yes, especially Bolivia. The downfall of Morales,
which is now inevitable and closer than many think, is a cause for rejoicing
because it will accelerate the decline of Chavez and Obrador. China, above
all, will want to get this one right.

Scott Sullivan
6 July 2006


Latin America Drifts East
Evo Morales Stakes Bolivia's Future on China

By Marcelo Ballvé, New America Media

Bolivia and other Latin American governments are using new ties and
investment with China to gain greater political and economic independence
from the United States.

BUENOS AIRES, Argentina - Jan 4, 2006 - Evo Morales, a former coca farmer
and Aymara Indian, is hoping Chinese capital will help him develop Bolivia's
natural gas resources, which he has vowed to exploit for the benefit of the
country's poor indigenous majority. In one of his first actions as Bolivia's
president-elect, Morales skipped the United States and scheduled a two-day
visit to Beijing.

To Latin American analysts, Morales's choice of China as he angles for
investment is the latest evidence of a trend: The region, once firmly in the
U.S. sphere of influence, is slowly but surely drifting East.

Andrés Oppenheimer, hemispheric affairs columnist for the Miami Herald and
El Nuevo Herald, writes that 2005 will go down in history as "the year in
which the United States lost much of its once almighty influence in Latin
America, and (China) began to play a modest but rapidly growing role in
hemispheric affairs."

Charles Shapiro, U.S. Deputy Assistant Secretary of State for the Andean
Region, told a congressional committee that "China is an important new
investor in the region as it searches for resources." He said China's
imports from Latin America ($22 billion worth in 2004) are growing,
increasing 16 percent in the first half of 2005 alone.

It may be too early to say that China is threatening to supplant U.S.
influence in a region that Washington, D.C., has long treated as its own
bailiwick. But as China's star rises, Latin America is increasingly looking
to Beijing for guidance and investments.

China has become a blockbuster market for Latin America's mineral and
agricultural exports-including Chilean copper, Argentine and Brazilian
soybeans and the region's ores and gas resources. China also has
demonstrated a desire to invest in infrastructure projects that Latin
America needs to export more efficiently and reorient itself toward Asia.

China's interest in Bolivia is motivated by the desire to secure global
natural gas resources. Morales, eager to exploit the second-largest natural
gas reserves in Latin America, would welcome investors like the Chinese, who
understand his desire for a partially nationalized energy sector and are
willing not to meddle in Bolivia's internal affairs.

The Bolivian news blog MABB, written by economist Miguel A. Buitrago, notes
that Asia's demand for natural gas will rise 220 percent by 2030, according
to the World Energy Outlook Report. "This should have a direct impact on
Bolivia," he writes, "whether Bolivians want it or not."

Buitrago continues: "The world's appetite for NG (natural gas) is insatiable
and will devour anything that remotely resembles NG ... China alone is
expected to drive that demand ... China has even been to Bolivia offering
huge amounts of investments in order to secure much needed resources ... The
challenge is whether Bolivians can take this opportunity and use their
resources to achieve development."

In fact, when reporters asked Morales how he would confront U.S. displeasure
with his policies, such as his desire to decriminalize the coca plant, he
quickly snapped back that there were other governments willing to help him
-- and immediately cited China.

In neighboring Argentina, booming soybean exports to China, nearly $2.5
billion dollars worth, helped it accumulate enough cash reserves to make a
surprise move -- in the first days of 2006 Argentina paid off its $9 billion
debt to the International Monetary Fund in one lump sum. This freed it from
onerous economic prescriptions (often dictated by the United States, the
IMF's dominant shareholder).

Brazil, Latin America's largest economy, is also aggressively pursuing the
Chinese market.

"We've increased our exports to China a great deal in the last two years,"
Brazil's Minister of Planning, Ivan Ramalho, told the China's official
Xinhua news agency in late 2005. Soybeans and iron still account for half of
Brazil's exports to China, but some of Brazil's biggest industrial players
-- including state-run aircraft manufacturer Embraer -- are establishing
plants in China in partnership with Chinese entrepreneurs.

Of course not all is rosy in China-Latin American relations. The Mexican
economy, tied to low-skill manufacturing, has suffered from Chinese
competition. China take a huge share of all foreign investments, leaving
other emerging markets like Latin America without important capital.
Finally, there is the risk that by selling raw materials to a booming China,
which processes them into finished products, Latin America will perpetuate
its status as an underdeveloped, second-tier player in the world economy.

The Ciencia Maldita economics news blog in Argentina warns: "(Argentina)
should not rest on its laurels, or rather, on its soybean shoots ... "
Selling soybeans to booming markets like India and China is fine, he writes,
but Argentina needs to use its soybean windfall to develop high-tech,
high-value sectors like software to stay competitive in the long-run.

For now, the U.S. volume of trade and investment with Latin America, not to
mention its cultural influence, still dwarfs Chinese involvement. But in the
current political moment, China's ascendancy is offering a window for Latin
American economies to at least marginally reduce their economic dependence
on the United States, and enjoy greater political maneuverability as a
result. For Bolivia's Morales, stronger ties to China may mean he can follow
through with promises to suspend the drug war and nationalize the economy,
over U.S. objections.


Scott Sullivan is a former Washington government employee. Petroleumworld not
necessarily share these views.

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Petroleumworld 07/07/06

Copyright ©2006 Scott Sullivan. All Rights Reserved.


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