The Foreign Service Journal, April 2006

have awakened expectations for more jobs, quick improvement in the lives of Bolivia’s poor and higher standards of living that will affect his decision-making. Myriad political favors will be on his debit sheet, with sup- porters expecting government jobs in what Morales insin- uated would be a greatly-expanded public sector, high- lighted by the resurrection of the privatized state corpora- tions, including the state hydrocarbons corporation. At the same time, he claims to favor fiscal discipline and a tight lid on government spending. These goals are largely incompatible. Augmenting income to the state requires either political sacrifice (charging and collecting income tax, lowering subsidies, halting contraband, fight- ing corruption, increasing domestic fuel prices) or stimu- lating exports, especially in the hydrocarbons sector, where foreign investment plays a key role. If he over- milks the hydrocarbons cow, he risks drying up foreign investment and dooming the sector to stagnation. On one side, Morales’ own supporters and opponents to his left clamor for outright nationalization of hydrocar- bons. On the other, he must negotiate new contracts with international energy companies who regard the 2005 Hydrocarbons Law as contrary to their interests. These firms include Petrobras and Repsol-YPF. The govern- ments of Brazil, Spain, Argentina and others have a con- siderable interest in the outcome of this process. Drug policy. Morales’ original base of political sup- port was coca producers in the lowlands Chapare region of Cochabamba department, many of them out-of-work miners or, like Morales’ own family, impoverished campesinos from the highlands. With a tradition of polit- ical militancy behind them, the Chapare cocaleros pro- vided the shock troops for protests in the zone itself and elsewhere, and constituted a vocal lobby against eradica- tion of coca. Bolivian law allows the planting of 12,000 hectares of the crop in the tropical valleys of La Paz Department (Yungas) for “traditional” use (chewing, tea and ceremonial purposes). But in past years, production of coca leaf in the Yungas has reached levels more than double the legal limit. F O C U S A P R I L 2 0 0 6 / F O R E I G N S E R V I C E J O U R N A L 59 Interim Accommodations for Corporate and Government Markets Apartments, Townhouses & Single Family Homes “FOR THE EXECUTIVE ON THE MOVE” h finder5@IX.netcom.com Locations throughout Northern Virginia and D.C. Units fully furnished, equipped and accessorized Many “Walk to Metro” locations Pet Friendly 5105-L Backlick Road, Annandale, Virginia Tel: (703) 354-4070 Fax: (703) 642-3619 Executive Lodging Alternatives