The Past as Prologue in Bolivia?

In today's New York Times Larry Rohter describes an incident ten years ago in which the town of Potosí, a place once so rich that it was once a synonym for wealth in the Ibero-American world, vigorously campaigned against a proposal to bring in an American company to develop mines to extract the lithium from the region. Rohter contends that there more than a few similarities between what happened there 11 years ago and now. He also contends that there are more than a few regrets:

In Bolivia, history tends to repeat itself, as governments come and go in dizzying succession. Yet many of those who helped kill the earlier project now say they wish they had acted differently.

"We are in a deep and prolonged economic crisis, and we recognize that we would be in a different stage of development if the lithium plan had gone through," said Mario Rengifo, president of the Potosí Civic Committee, a community group that campaigned against the proposal. "If we ever get another opportunity, we will welcome it with open arms."

The lithium plan fell victim to the same social divisions that have just scuttled the gas export proposal, and exposed what is fast becoming the Achilles' heel of globalization, in parts of Latin America at least. Though political authority may have finally been democratized here after the end of military rule 20 years ago, economic power remains in the hands of a small Europeanized elite that the impoverished Indian majority does not trust.

"Part of the democratic process is assuring that people are going to get a piece of the cake, and that has been lacking in Bolivia," said Marta Lagos, a pollster and political analyst from Chile whose firm, Latinobarimetro, has done opinion surveys here. "Bolivians are suspicious of whoever is making the deal because they think, 'The elite always puts money in its own pockets, and we are left on the streets with nothing to eat.' "

The 1992 lithium dispute is a case in point. Opposition to the project was focused in Potosí, which has valid historical reasons for its suspicion of outsiders who want to exploit its resources. Known as the "treasure house of the Spanish Empire," because it had the richest silver mine in the world in colonial times, Potosí was also the center of Bolivia's tin industry until prices on the world market collapsed in the 1980's, state-owned mines were closed and thousands of miners lost their jobs.

That certainly seemed to go to the heart of the matter. There is a very interesting twist here, however:

But [recently resigned president] Mr. [Gonzalo] Sánchez de Lozada himself helped lead the campaign against the deal. A millionaire executive with extensive mining holdings, he was reportedly frustrated at having been had been left out of the project. So in the months before an election that he would eventually win, he capitalized on nationalist sentiment and helped scuttle the plan.

"A lot of petty politicking went on, and he was right in the middle of it," said Álvaro Rejas, who was minister of mines and energy at the time. "By the time they were finished interfering, it was like trying to resuscitate the dead, and the whole country had lost an opportunity to create the nucleus of a basic chemical industry."

As Mr. Rejas, now a mining consultant, recalled it, the lithium project would have resulted in improved roads and railways and the installation of electricity in an area known as Salar de Uyumi, where even now they hardly exist. It would also have offered the opportunity to process and export additional substances like borax, magnesium, potassium and other components of fertilizer for a hungry market next door in Brazil.

So much for any argument that he was an enlightened, selfless leader. Maybe it's just a karmic smackdown for Lozada, but for the people of the poorest province in the poorest nation in South America, I'm sure that's cold comfort:

Today, it is provinces like Tarija, where more than 80 percent of the natural gas deposits are located, and Santa Cruz, enjoying a soybean export boom, that are demanding autonomy. On Oct. 21, thousands of people marched in Tarija to oppose the new government's promise of a nationwide referendum on the gas export plan, which is expected to result in a negative vote. But to people like Mr. Rengifo, the Potosí community leader, the shouts have a hollow ring. "The paradox of our situation is that we have gone from being the richest to the poorest," he said.

"We want the natives of Potosí to be able to return home from abroad and from other parts of the country. But that can't happen without making Potosí prosperous and productive, and to get that growth we need the kind of investment and technology that aren't available in Bolivia and can only come from abroad."

And that is indeed the crux of the problem.