Jason Devitt

Evo Morales in his office, in front of a portrait of Che Guevara that is made out of coca leaves. Snatched from the AP, via the BBC.

Things are not going well this week for Evo Morales, the President of Bolivia. He is facing multiple strikes, a crisis at the assembly he created to draft a new constitution, and he had to send in troops to re-open the gas pipeline to Argentina after indigenous protestors sabotaged it.

Evo, as everyone calls him, has called capitalism the greatest enemy of mankind, and his party´s platform calls for the destruction of neoliberalism. His Vice-President is widely admired for having read Das Kapital before he was ten years old. He has allied himself with Hugo Chavez and praised Castro. And not surprisingly coca production appears to have increased dramatically since this former leader of the coca-growers took office. He is not getting an invitation to Crawford anytime soon.

But spare a thought for Evo and for Bolivia if you have time this week.

First a brief summary of the history of every country in Latin America from the Spanish conquest until at least 1980: one elite minority after another hijacked the state and enriched themselves at the expense of everyone else. There were a few brief intervals when well-intentioned governments got in, but most of the time it was military oppression, judicial murder and expropriation, bespoke constitutions, manipulation of both sides in the Cold War, and (even under benign governments) endemic corruption.

Bolivia fared worse than most, precisely because it is so rich in minerals. The indigenous people were effectively enslaved by the Spanish to work in Bolivia´s mines. Such were the stakes for both the Bolivians and the Spanish Empire that Bolivia was the first colony to declare independence but the last to get it. After that mining conditions improved - er, from slavery - but somehow the great mass of the people never got to benefit from the wealth.

In Bolivia the familiar Latin American class divide is deepened by race. The climate of the altiplano was too harsh for most of the Spanish and there was no silver or gold in the pleasant lowlands. The lowlands were fertile, but the Spanish thought that farming was beneath them and they did not allow other nationalities to immigrate to their colonies. Today 55% of the Bolivian population are of indigenous descent and only 15% are descended from the Spanish or other Europeans who arrived after independence (the rest are mixed-race). But guess who has most of the money.

And for the most part the races live separately, as Miss Bolivia explained during the 2004 Miss World pageant:

"Um… unfortunately, people that don’t know Bolivia very much think that we are all just Indian people from the west side of the country, it’s La Paz all the image that we reflect, is that poor people and very short people and Indian people … I’m from the other side of the country, the east side and it’s not cold, it’s very hot and we are tall and we are white people and we know English so all that misconception that Bolivia is only an "Andean" country, it’s wrong, Bolivia has a lot to offer and that’s my job as an ambassador of my country to let people know much diversity we have."

Condemned in the west, she was greeted by cheering crowds on her return to the east.

Last year Evo became the first President of indigenous descent in Bolivia´s history, with 54% of the vote. Many middle-class people of all races voted for him because they wanted a break with the corrupt past, but he owes his job to poor indigenous people who want social justice, and who will walk away from him if they are not happy with the pace or style of reform. Hence the new strikes, which include teachers protesting the idea of making indigenous languages compulsory in schools and bus drivers who are upset that Evo wants to start enforcing Bolivia´s existing traffic laws.

So in the light of all this, consider just two issues facing Bolivia: the nationalization of the gas reserves, and land reform.

On May 1st, Evo nationalized Bolivia´s gas fields and sent troops into the facilities of many foreign companies that had private contracts. To the international community, it looked like the Russian Revolution. But the TV images of troops on the move were mostly for domestic consumption, in a country where 94% of the people had voted in favor of nationalization in a referendum even before Evo was elected.

What the Bolivian government is actually trying to do is not to boot out foreign investors, but to renegotiate their contracts, which it claims were struck at a crazy discount to fair value by a previous corrupt administration and were never properly ratified by Congress. These are not unreasonable claims. They could have tried international arbitration, but it was faster, cheaper, and infinitely more popular to send in the army.

At the same time as nationalizing the oil fields, the Bolivian government has been negotiating new mining contracts with companies from the U.S. and India, and Evo sent his Vice-President to Washington to campaign for a renewal of Bolivia´s free-trade agreement with the U.S. And the company that has most to lose from Bolivia´s nationalization scheme is not Exxon but Petrobras, the state-owned oil company of Bolivia´s neighbor Brazil, which has a socialist goverment. My point is that things are not as clear-cut as they appear either in the Guardian or on Fox News.

Much less reported in the international press but much uglier within Bolivia is the debate over land reform. Put simply, previous administrations bought off powerful supporters in the rich eastern part of the country with vast grants of land, much of which remains undeveloped. Meanwhile, the poor try to eke out a living with no land at all or on small plots that get smaller with each generation as they are subdivided among children. Evo wants to take undeveloped land from the rich and give it to the poor. This may sound revolutionary, but as long as the landowners are compensated somehow, it is no different from the concept of eminent domain in the U.S. Constitution.

But it´s dangerous to talk about large-scale land reform without delivering anything concrete. Now peasants anticipating grants are squatting on farms and threatening landowners. Landowners are hiring armed guards. Some of the landowners do have legitimate title to their land for which they paid fair value; others have no intention of giving up what their families were given, no matter what the consequences, a militant form of the endowment effect. And how do you prove that agricultural land is undeveloped? It may be lying fallow. Congress has blocked all of Evo´s proposals so far, leading Evo to call for popular protests, which in turns lends credence to those who say he wants to take over the state.

The Constitutional Congress in Sucre is Evo´s attempt to bypass Parliament and the existing laws, but in the spirit of democracy. The delegates have a year to draft a new constitution which will then be put directly to the people in a referendum. But Evo’s party failed to win a majority of the delegates to the Congress, and now that seems deadlocked too.

I don´t claim to have any answers to Bolivia´s problems. I just don´t believe that Evo is another wannabe dictator, a megalomaniac in the mould of Chavez or Castro. But if Venezuela and Cuba are the only foreign countries that will support this (still) wildly popular and democratically elected leader, who seems genuinely motivated to redress centuries of injustice, then the western governments, narrowly focused on backing their own oil companies, will be fulfilling their own prophesies.

There are too many cars in Phnom Penh. As soon as we left the bus station, our tuk-tuk got caught in a traffic jam.

This is an economic observation, not just a grumpy complaint.

Motorbikes rule the streets of Saigon and Hanoi. We were told that ten years ago we’d have seen only bicycles. If the economy keeps growing, ten years from now most people will have cars. Beijing is further along; Bangkok has completed the transition. But today in Vietnam a Chinese motorbike starts at $400 - about six to nine months’ salary in the cities - and so right now a moto is the vehicle of choice.

Cambodia is much poorer than its neighbor. Average incomes are half those in Vietnam. Infant mortality is almost three times higher. Most people don’t finish high school. Most people don’t have bank accounts. (There were no ATMs in the country a year ago, and some people asked us how they worked.) Gas is often sold out of bottles by the curbside, even in the capital. The road from Ko Kong to Sihanoukville and on to Kampot is mostly dirt and even the road to Phnom Penh and on to Siem Reap was not completely paved. So how come so many people can afford cars?

I thought at first it might be the ugly face of capitalism: great inequality of income, urban wealth in a country where most people are subsistence farmers and there are still occasional famines. In other words, a lower average income than in Vietnam but a greater variance.

But in that case where is the middle class? The goods in the markets are very basic and there are no large stores. On Sisowath Quay, a pleasant riverside strip of bars, hotels, and restaurants, very few of the Cambodians that we saw were owners or even customers. If they weren’t employees they were beggars or touts. Outside the capital we saw no sign of any economic activity beyond agriculture, fishing, tourism, a little construction, and a lot of begging.

I am serious when I call begging an economic activity. Children are farmed. Modern Fagins rent or buy kids from their parents and organize them into teams with distinct territories. Women rent newborn babies to beg with, drugging them to keep them quiet.

You won’t notice any of this if you take your cue from "Why Is Everyone Going To Cambodia?" Spend four days at Sokha Beach in Sihanoukville - a four-star resort that will earn its fifth when they open their spa - and three days at The One Hotel in Siem Reap, which promises a cameraman and stylist to accompany you as you tour Angkor, and you’ll leave Cambodia thinking that it’s a rapidly growing market economy with charming, happy natives and a fab-u-lous heritage.

As the writer mentions in paragraph 156 or so, the reality  - and the answer to my original question - is that Cambodia is a totalitarian kleptocracy; a land ruled by thieves, where a weary population is trapped in poverty by a corrupt government that imprisons its opponents and rewards its supporters … with cars.

Teachers make $20 per month. Hotel staff make twice that. People who work for the government can afford brand new American and Japanese cars.

What moved me beyond moral outrage to educated self-interest is that they are stealing most of it from us. About half of the budget of the Cambodian government comes from foreign donors, mainly the US and the EU. You and I are paying for half the cars in Phnom Penh.

Now I believe in foreign aid and I’d like to see America’s paltry budget (in percentage terms) go up a lot. But foreign aid has turned Cambodia’s government upside down. In America the government get most of their revenue from us - the governed - through taxes (and fines and fees for services). In return they provides services that the majority of people want them to provide. Assuming that they want to stay in power and that we don’t want to pay higher taxes, the only way to keep improving services is to broaden the tax base: adopt policies that drive long-term economic growth so that there are more taxpayers and all of them are richer. Fail and we give someone else the job.

In Cambodia the government also get most of their money from us; they skim enough to buy off the smart people who can be bought, threaten the smart people who can’t be bought, and still have enough money to return more than a dollar in services for every dollar paid in taxes which, if you are not very smart, seems like a good deal.

We can’t give someone else the job, because there are no grounds for international intervention. We can reduce foreign aid in protest at the amount of corruption, but they can pass most of that reduction along to the general population without feeling much pain. And we can tell them that we think that this is a really, really bad way to run a country, and watch them ignore us.

Personally I would like to starve the beast, a Republican phrase that seems strangely appropriate. Let’s bypass the Cambodian government as much as possible and give more money directly to NGOs that represent local communities. Are there corrupt NGOs? Some, probably, and many more that are inefficient or wasteful. But we can cut off funds to an NGO completely and give the dollars to another one; there is only one government.

The real problem is how to decide which NGOs to fund and how to monitor their performance without wasting a lot of money on administration. I’ll return to this topic, but given my background it won’t surprise you that I think we should use the web.