part 4

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Posted by Sadie from D006033.N1.Vanderbilt.Edu ( on Wednesday, April 30, 2003 at 0:43AM :

In Reply to: part 3 posted by Sadie from D006033.N1.Vanderbilt.Edu ( on Wednesday, April 30, 2003 at 0:43AM :

After seventeen years of structural adjustment, Bolivia remains the poorest country in South America. The predicted foreign investment has arrived, largely in the form of multinational corporations taking control of privatized entities. But prosperity has not followed. Inflation is under control, and there has been modest economic growth, but its benefits have been concentrated among the wealthy, exacerbating a centuries-old problem of extreme inequality.

With the labor unions smashed, hundreds of thousands of workers have been thrown into what economists call “the informal sector,” which in Bolivia means sweatshops producing knockoffs of brand-name clothing, street peddling in the towns and cities, and coca farming. Peasant farmers, too, have found it increasingly difficult to make ends meet, as prices for their cash crops have fallen under the pressure of foreign competition. The outlook is bleak, as even Jeffrey Sachs, who continues to advise the Bolivian government, concedes. “Belt-tightening is not a development strategy,” he recently told the New York Times, criticizing the I.M.F. policy. Sachs is no fundamentalist. He is not, that is, a fantasist. Regarding Bolivia: “I always told the Bolivians, from the very beginning, that what you have here is a miserable, poor economy with hyperinflation; if you are brave, if you are gutsy, if you do everything right, you will end up with a miserable, poor economy with stable prices.”

It is also possible to march backward, though. Some privatizations succeed to improving service. But those that go badly can be catastrophic. Bolivia’s national railways were awarded, in a forty-year concession, to a consortium led by a Chilean multinational called Cruz Blanca to discontinue service on lines it found unprofitable. Accordingly, it soon closed a number of freight and passenger lines, including the line connecting Cochabamba, Bolivia’s third-largest city, to La Paz, the capital. (It was the only rail line connecting Cochabamba to anywhere.) Given Bolivia’s rugged terrain, and its awful roads, this was a serious blow to the national infrastructure. The closure, moreover, seemed to be indefinite. The Cochabamba train station was turned, willy-nilly into a vast marketplace, shanties were built over the track bed, and photos began to appear in local papers showing collapsed stretches of track in the mountains. Bolivia’s railroads were built a century ago, when superexploited labor made such monumental construction possible. Such railroads will not be built again. Cruz Blanca may abandon as many lines as it chooses, and non-maintenance for even a few Andean winters will render them irrecoverable. The latest Sanchez de Lozada government, elected in mid-2002, seemed to realize that a historic fiasco was in progress. Within weeks of taking power, the government announced that it planned to reopen the main line from La Paz to Cochabamba. The announcement contained no details, however, and it did not mention Cruz Blanca, and no on seemed to believe a word of it.

-- Sadie
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