The implications of the Cuban-Bolivian Tiff

Scott B. MacDonald reports for The Global Americans:

On January 25th Bolivia broke off diplomatic relations with Cuba, with the interim government of President Jeanine Áñez accusing Havana of showing “permanent hostility” toward La Paz.  While Bolivia and Cuba are not necessarily significant players in the global economies, the deterioration in relations between the two countries is worth noting as it reflects the Cold War-like atmosphere that is increasingly enveloping the Americas.    

From 2006 to 2019 Bolivia was led by President Evo Morales, a staunch socialist, who allied his Andean country with Latin America’s leftist camp, which at its height included Venezuela—powered by Hugo Chávez’s anti-U.S. rhetoric and oil wealth—Ecuador, Nicaragua, and Cuba, and signed his country up as a member of the Bolivarian Alliance for the Americas (ALBA). At home, Morales was relatively popular and used hydrocarbon revenues (mainly from natural gas) to embark upon an era of strong economic expansion and social spending, which even drew praise from the International Monetary Fund in its 2018 Article IV Consultation Report with Bolivia 

Although Morales was one of Bolivia’s more popular leaders, Bolivians narrowly voted “no” to his running for another term in a 2016 referendum. Indeed, since 2009 the constitution included a two-term limit for presidents. Despite this, Morales ran again in October 2019, helped by a pliable Constitutional Court that overturned the referendum results, leading to widespread protests after he was declared the winner amid allegations of vote rigging. A subsequent Organization of American States (OAS) investigation found “overwhelming evidence” of fraud that helped the President win in the form of forged signatures, a ‘parallel technological scheme’ of hidden servers, and evidence of wide-scale data manipulation.” 

When the country’s military refused to crush the demonstrations, the leading generals suggested Morales step down, which he did, leaving the country and obtaining temporary political asylum in Mexico, and later Argentina, nonetheless declaring that the military’s involvement was a coup. For their part, Bolivia’s military leadership had no desire to relive the events of 2003, when they followed then President Gonzalo Sanchez de Lozada’s orders to use force against protesters. In the ensuing violence, Bolivia underwent a period of profound political turmoil.

Although Morales’ departure left Bolivia in a state of political upheaval, cooler heads soon prevailed. Former opposition senator Áñez assumed the interim presidency. Áñez was a little known senator, but when Morales, his vice president, and the presidents of the Senate and lower house —all members of the same Movement for Socialism (MAS) party—also resigned, Áñez was left as the country’s highest-ranking official as the vice president of the Senate. 

On November 25, the Legislative Assembly called for new elections with unanimous approval for May 3, 2020.However, a considerable amount of work is needed to make the process work, a situation not helped by calls from Morales (still in Argentina) that “upon returning to Bolivia he will organize armed militias like in Venezuela.”

In the current Cold War-like environment creeping into the Americas, Argentina, Venezuela (with which Bolivia has recently broken relations), Cuba, and Russia (active in the energy business) would prefer their former ally in office than the current constitutional leader or another round of elections. 

China also has a stake in Bolivia’s development, as in 2019 its company TBEA was active in seeking the development of the Andean country’s lithium reserves, thought to be some of the world’s largest. China is the biggest global consumer of lithium, a mineral needed to support its booming electric car industry. Indeed, the China factor fueled leftist conspiracy conjecture that Morales’ ouster was a U.S. coup based on securing lithium. This, of course, ignores the fact that the U.S. already can and does access lithium from Australia and Chile, two allies and more politically stable countries than Bolivia. 

The new more right-wing nature of the interim Áñez government quickly brought a clash with Havana over its medical services program. It was revealed that the Bolivian government had spent around $147 million to fund the program but that 80 percent of that money went to the Cuban government, not the doctors. President Áñez also noted that most Cubans in the official program were not doctors. Cuba’s Foreign Minister, Bruno Rodríguez Parrilla, responded to Áñez’s statements on Twitter, saying they were “vulgar lies of the self-proclaimed coup plotter in Bolivia” and another example of “her servitude to the United States.” 

Considering the problematic nature of the Cuban economy due to its own mismanagement, tightened U.S. economic sanctions, a rigid unwillingness by the Communist Party elite to provide a consistent opening of the economy and set of rules, its dependence on external assistance—such as what is offered by China, Russia and Venezuela—Bolivia’s termination of the medical program hurts. This is especially the case since Brazil and Ecuador had already done the same when their own governments shifted right—it is estimated that Cuba raised about $6 billion in revenues from its medical services program in 2018. 

Bolivia has challenging days ahead. Beyond the upcoming election, it has a number of pressing economic problems, including weaker commodity prices, a large fiscal imbalance, rising debt, inefficient and money-hungry state-owned companies, and the need to diversify the economy as well as dealing official corruption and environmental pressures. At the same time, as reflected by the tiff with Cuba, Bolivia finds itself part of the new Cold War-like environment in the Americas. In this regard it has shifted sides, moving closer to the U.S. and the majority of democratically-elected Latin American governments. Bolivia’s next steps are worth watching as to whoever wins the next election has many difficult decisions to make, including which countries it is going to align with to achieve its own national interests.

Published by Bolivian Thoughts

Senior managerial experience on sustainable development projects.

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