[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]
U.S.-BOLIVIA RELATIONS: LOOKING AHEAD
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HEARING
BEFORE THE
SUBCOMMITTEE ON
THE WESTERN HEMISPHERE
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
MARCH 3, 2009
__________
Serial No. 111-3
__________
Printed for the use of the Committee on Foreign Affairs
Available via the World Wide Web: http://www.foreignaffairs.house.gov/
______
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COMMITTEE ON FOREIGN AFFAIRS
HOWARD L. BERMAN, California, Chairman
GARY L. ACKERMAN, New York ILEANA ROS-LEHTINEN, Florida
ENI F.H. FALEOMAVAEGA, American CHRISTOPHER H. SMITH, New Jersey
Samoa DAN BURTON, Indiana
DONALD M. PAYNE, New Jersey ELTON GALLEGLY, California
BRAD SHERMAN, California DANA ROHRABACHER, California
ROBERT WEXLER, Florida DONALD A. MANZULLO, Illinois
ELIOT L. ENGEL, New York EDWARD R. ROYCE, California
BILL DELAHUNT, Massachusetts RON PAUL, Texas
GREGORY W. MEEKS, New York JEFF FLAKE, Arizona
DIANE E. WATSON, MIKE PENCE, Indiana
California JOE WILSON, South Carolina
ADAM SMITH, JOHN BOOZMAN, Arkansas
Washington deg.Until J. GRESHAM BARRETT, South Carolina
2/9/09 deg. CONNIE MACK, Florida
RUSS CARNAHAN, Missouri JEFF FORTENBERRY, Nebraska
ALBIO SIRES, New Jersey MICHAEL T. McCAUL, Texas
GERALD E. CONNOLLY, Virginia TED POE, Texas
MICHAEL E. McMAHON, New York BOB INGLIS, South Carolina
JOHN S. TANNER, Tennessee GUS BILIRAKIS, Florida
GENE GREEN, Texas
SHEILA JACKSON LEE, Texas
BARBARA LEE, California
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
MIKE ROSS, Arkansas
BRAD MILLER, North Carolina
DAVID SCOTT, Georgia
JIM COSTA, California
KEITH ELLISON, Minnesota
GABRIELLE GIFFORDS, Arizona
RON KLEIN, Florida
VACANTFrom 2/10/09 through
3/12/09 deg.
Richard J. Kessler, Staff Director
Yleem Poblete, Republican Staff Director
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Subcommittee on the Western Hemisphere
ELIOT L. ENGEL, New York, Chairman
GREGORY W. MEEKS, New York CONNIE MACK, Florida
ALBIO SIRES, New Jersey MICHAEL T. McCAUL, Texas
GENE GREEN, Texas CHRISTOPHER H. SMITH, New Jersey
GABRIELLE GIFFORDS, Arizona DAN BURTON, Indiana
ENI F. H. FALEOMAVAEGA, American ELTON GALLEGLY, California
Samoa RON PAUL, Texas
DONALD M. PAYNE, New Jersey JEFF FORTENBERRY, Nebraska
JOHN S. TANNER, Tennessee GUS BILIRAKIS, Florida
BARBARA LEE, California
JOSEPH CROWLEY, New York
RON KLEIN, Florida
Jason Steinbaum, Subcommittee Staff Director
Eric Jacobstein, Subcommittee Professional Staff Member
Francis Gibbs, Republican Professional Staff Member
Julie Schoenthaler, Staff Associate
C O N T E N T S
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Page
WITNESSES
The Honorable Peter DeShazo, Director, Americas Program, Center
for Strategic and International Studies........................ 3
Ms. Kathryn Ledebur, Director, Andean Information Network........ 15
Mr. Ivan Rebolledo, President, Bolivian-American Chamber of
Commerce, Inc.................................................. 27
Jaime Daremblum, Ph.D., Senior Fellow, Director, Center for Latin
American Studies, Hudson Institute............................. 36
Mr. Marcos Iberkleid, Chief Executive Officer, Ametex, America
Textil S.A..................................................... 44
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Peter DeShazo: Prepared statement.................. 7
Ms. Kathryn Ledebur: Prepared statement.......................... 17
Mr. Ivan Rebolledo: Prepared statement........................... 30
Jaime Daremblum, Ph.D.: Prepared statement....................... 38
Mr. Marcos Iberkleid: Prepared statement......................... 46
The Honorable Eliot L. Engel, a Representative in Congress from
the State of New York, and Chairman, Subcommittee on the
Western Hemisphere: Prepared statement......................... 53
APPENDIX
Material Submitted for the Hearing Record........................ 67
U.S.-BOLIVIA RELATIONS: LOOKING AHEAD
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TUESDAY, MARCH 3, 2009
House of Representatives,
Subcommittee on the Western Hemisphere,
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:13 p.m. in
room 2172, Rayburn House Office Building, the Honorable Eliot
L. Engel (chairman of the subcommittee) presiding.
Mr. Sires [presiding]. Good afternoon, everyone. The
chairman is a little tied up and we will begin this hearing,
and I want to make sure I thank everybody that is here this
afternoon.
We have with us the Honorable Peter DeShazo, director of
Americas Program, Center for Strategic and International
studies; Ms. Kathryn Ledebur, director of Andean Information
Network; Mr. Ivan Rebolledo, president of Bolivian-American
Chamber of Commerce, Incorporated; Mr. Marcos Iberkleid--nice
to see you again--chief executive officer, Ametex, America
Textil; and Dr. Jaime Daremblum, senior fellow, director,
Center for Latin American Studies, Hudson Institute.
I just want to welcome you all. The chairman will be here
shortly. He will read his statement, and will get started. I
would like to offer the ranking member to say a few words.
Mr. Mack. Thank you very much, and I want to thank the
panel for being here as well, and the other members that are
with us today. We have got an interesting hearing and I am
looking forward to hearing your insight on our relationship
with Bolivia, and I guess the over-arching question is, is
there still hope for a better relationship with Bolivia or is
Evo Morales bound and determined to continue the stance that he
is in, and I really would like to, as each one of you in your
opening remarks go forward, I would like to hear your thoughts
on that.
Largely, though, I think this committee has a duty to
really explore what it is, what options there are. I think we
understand the problems in Latin America. We understand that
there are many, and I think it is time now we start looking for
solutions. So again, maybe in your opening statements you can
point out a few things that you think would help.
I would offer one of the things that the United States
needs to do a better job at is reaching our hand out to our
friends and allies that have supported us, who are our friends,
who are looking to the United States for leadership, and I
think there has been a void there, and I think the more we can
do that arena the better off we will, and in fact, the void
that was created is what has let Hugo Chavez and others kind of
fill that void, and I think it is important that, again, that
this committee begin to start formulating an overall arching
plan for Latin America, and I believe it has to speak directly
to the people of Latin America.
If we just do this government to government, the message
will not get through; that what we need to let the people of
Latin America know is that we stand with the; that we
understand the challenges that they are facing; that we want to
share in the responsibility in creating the hope and
opportunity for everyone.
So again thank you for being here. I look forward to your
opening statements.
Mr. Sires. Thank you, Congressman Mack. Anyone else have an
opening statement? Congressman Green.
Mr. Green. Thank you, Mr. Chairman, for holding this
hearing today, and I would like to welcome our panel. Last
spring I had the honor of traveling with Chairman Engel and a
few of our colleagues to Bolivia, and one of the things we did
while we were there was to visit Catholic University, a site
where we saw USAID dollars at work. We were in a rural part of
Bolivia and the students had computer labs and access to the
Internet, thanks to the USAID.
I also have served on the Telecommunications and Internet
Subcommittee of our Energy and Commerce Committee, and I know
our own challenges in trying to get broadband to our rural
areas, but I saw that outside the capital in Bolivia. I found
it great that our foreign assistance dollars are going toward
such useful efforts in Bolivia, and this is one of the great
things that USAID was doing with the university in a
partnership.
I also had the opportunity to visit textile workers and
small business owners while we were in Bolivia to see how the
Andean Trade Preferences have helped the Bolivian people.
Having seen firsthand these preferences, it seems very
beneficial to the Bolivian people.
We concluded our trip with a visit with President Morales,
and I was hopeful that our relations with Bolivia would
improve, but how times have changed.
Last September President Morales expelled the U.S.
Ambassador to Bolivia, which we spent a great deal of time
with, after accusing him of supporting opposition forces. I
have to admit we also met with some of the prefects from the
eastern part of the country while we were there.
Then in November, President Morales announced an indefinite
suspension of U.S. DEA operations in Bolivia after accusing DEA
agents of espionage. In response to this, President Bush
suspended the Bolivian Trade Preferences of the Andean Trade
Preferences Program.
Finally, just last month President Morales accused the CIA
of infiltrating a Bolivian state oil company. The U.S. Embassy
in Bolivia strongly denies this accusation.
When President Obama was elected, President Morales
indicated that he was open to improving relations with the
U.S., but his actions and rhetoric seem to dictate otherwise. I
am interested to hear from our panel and their recommendations
as to how and, even if, relations can be improved with Bolivia
with President Morales as President, and I know he was just
reelected and given an indefinite term. I believe in the
Bolivian people, and especially the opportunity the trade
preferences and our foreign assistance dollars can bring the
Bolivian people.
I also believe that partnering with Bolivia is important to
our counternarcotics strategy in the area. For the past several
years, Bolivia has been the recipient of U.S.--largest
recipient of United States foreign assistance in Latin America,
and how can we continue with this given the current state of
United States-Bolivian relations?
Mr. Chairman, again, I look forward to hearing from our
panel and I welcome each of them.
Mr. Sires [presiding]. Thank you, Congressman.
Congresswoman Lee, do you have an opening statement?
Congressman Klein?
Mr. Klein. Yes, Mr. Chairman.
Thank you, Mr. Chairman and Ranking Member, and thank you
to the guests today who will be testifying before us. We
understand the importance of relationship between our Latin
America neighbors. Those of us who live in Florida, Congressman
Mack and I, are particularly sensitive because what happens in
those countries, because of the family relationships, cultural
relationships, business relationships, are very important to
all of us, to make sure that they are stable.
There have been problems in recent years with the
leadership of Bolivia. There is a certain amount of foreign aid
and assistance that the United States provides to Bolivia. I
would be interested in your comments, if you can talk about
that aid, the nature of the aid, and the quantity of the aid,
and give some thoughts as to are we doing the right amount, are
we doing any amount that is appropriate, and the type of aid
that, as we revisit our USAID issues, it would be most
effective in reaching the people of Bolivia and to try to re-
establish a better working relationship.
It is an issue that I think is very important to the whole
region, and I think it is very important to our foreign policy
in Latin America. So with that, Mr. Chairman, I give the
balance of my time.
Mr. Sires. Thank you, Congressman Klein.
Ambassador DeShazo, will you please start? Try to keep your
opening statement within 5 minutes. Thank you very much.
STATEMENT OF THE HONORABLE PETER DESHAZO, DIRECTOR, AMERICAS
PROGRAM, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES
Mr. DeShazo. Thank you very much, Mr. Chairman,
distinguished members. I am delighted to be here. I ask that my
written statement be introduced into the record, and I will
give a brief resume.
Since the inauguration of Evo Morales as President of
Bolivia in January 2006, bilateral relations have deteriorated
seriously. Morales' campaign for President was peppered with
anti-U.S. references, vowing that if elected he would be a
``nightmare'' for the United States. This notwithstanding U.S.
policymakers pursued a course of seeking constructive
engagement while waiting to see how developments unfolded on
the Bolivian side.
By mid-2008, however, the pace of deterioration quickened
to the point where U.S. development personnel and the Drug
Enforcement Administration were forced to leave a major cocoa-
growing region of Bolivia, the U.S. Ambassador was declared
persona non grata, Peace Corps volunteers were withdrawn from
Bolivia, the United States suspended Bolivia as a recipient of
trade preferences, and President Morales expelled the DEA from
Bolivia altogether.
Looking forward, there is potential for repairing some of
the damage to the bilateral relationship, but there is also a
real possibility that it could deteriorate further. It is in
the U.S. interest that Bolivia be stable and democratic, able
and willing to meet its international obligation on matters
related to regional security, including narcotics, and pursuing
policies that lead to economic development and poverty
reduction. U.S. policy should be aimed at advancing these goals
and promoting a bilateral relationship based on cooperation and
mutual respect.
The inauguration of the Obama administration provides an
opportunity to reexamine the relations with Bolivia and attempt
to put them on a more positive track. For starters, however,
there must be a mutual desire to rebuild ties. The United
States may undertake any number of initiatives but
realistically there will be no improvement if President Morales
remains fixed in his negative outlook toward the United States.
Nonetheless, it behooves the United States to take a first
step. This could be done by a unilateral initiative aimed at
creating a positive environment and then by a series of further
measures. One such initiative on the part of the United States
could be to announce its intention to return Peace Corps
volunteers to Bolivia, of course after consultations with the
Bolivian Government to ensure that they would be welcome.
Another opportunity will come at the Summit of the
Americans meeting in April in Trinidad and Tobago where
President Obama could underscore directly to President Morales
the intention of the new U.S. administration to seek better
relations based on mutual respect and to urge bilateral
engagement.
Rebuilding the relationship beyond such steps will require
quiet diplomacy and patience. A key ingredient will be Bolivian
narcotics policy and its intersection with U.S. concerns.
Narcotics will continue to influence bilateral relations and
both countries should seek a common understanding in dealing
with it. A means must be found to work through the drug
impasse. The Government of Bolivia needs to demonstrate to U.S.
and international opinion that is prepared to take additional
steps to try to fill the gap in counternarcotics capability
left by the DEA's expulsion, and indicate a rekindled desire to
work with the United States.
Progress on the narcotics front could unlock the door to
restoring Bolivia's trade preferences under ATPDEA. That would
be a positive step that would help preserve thousands of jobs
in Bolivia, benefit working class, often indigenous families,
and strengthen Bolivia's perennially weak private sector. The
exchange of ambassadors between the United States and Bolivia
should come at a time when relations are clearly on the road to
improvement. Ambassador Goldberg was the target of baseless
accusations and his expulsion was unjustified. There is no need
to name a new U.S. ambassador only to face similar treatment.
Regardless of the outcome of the initiatives I have just
mentioned, the United States should maintain or better still,
augment its bilateral assistance to Bolivia through USAID and
other mechanisms. USAID programs in areas such as
infrastructure, health, nutrition, agriculture, sanitation, the
environment, democracy building, et cetera, have built bridges
between the peoples of Bolivia and the United States and
supported Bolivia's own development goals.
Other mechanisms exist for strengthening people-to-people
ties, including academic and professional exchanges programs,
and the Bolivian-American centers that exist and operate in
five Bolivian cities and teach English.
Bolivia will continue to be a country in flux. The
implementation of the new Bolivian constitution will present
many challenges to a political system in which confrontation
often trumps consensus, and deep ethic and religion and
regional divisions exist.
The Obama administration should approach Bolivia with
patience and realistic expectations, seeking constructive
engagement with its people and, to the extent possible, with
its government. The United States should work with Bolivia's
neighbors, Brazil above all, to encourage moderation on the
part of the Bolivian Government and an effective
counternarcotics effort.
The extent to which Evo Morales is able to overcome his
mistrust and dislike of the United States, or on the other
hand, the degree to which he might translate these views into
action, especially regarding Bolivia's international affairs,
will be key factors as the bilateral relationship evolves.
Thank you.
[The prepared statement of Mr. DeShazo
follows:]Peter DeShazo deg.
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Mr. Sires. Thank you very much, Mr. Ambassador.
Ms. Ledebur.
STATEMENT OF MS. KATHRYN LEDEBUR, DIRECTOR, ANDEAN INFORMATION
NETWORK
Ms. Ledebur. Thank you, Mr. Chairman.
I think that we are at an essential turning point in the
possibility for improvement in relations between Bolivia and
the United States. I disagree with Ambassador DeShazo in that I
feel that the reinstatement of ambassadors is the first logical
and essential step in order to promote a channel through which
productive policy dialogue can be carried out. Frequently U.S.
policymakers complain of statements and criticisms of the
Morales administration that are made to the press and not dealt
with diplomatically. At the same time Bolivians frequently
complain of U.S. criticisms, which they feel are unfounded, in
official documents such as the International Narcotics Control
Strategy Report.
Along with this reinstatement of ambassadors it is
important to engage in a frank, open, broad dialogue within the
framework of a very clear Obama administration policy. Without
the appointment of key Western Hemisphere officials this void
in decision-making and implementation has created difficulty
for legislators, advocates and the Bolivian Government to know
exactly with whom they should engage in the new administration.
At the same time, the Obama administration should move away
from programs that condition aid on anti-narcotics and seek to
de-narcoticize the relationship. This involves the
reinstatement of Andean Trade Preferences which, within a very
short time since their suspension, have led to the dismissal of
almost half the workers in small companies, and the failures of
small businesses in Bolivia as well as the United States. The
justification for the suspension through an anti-narcotics
determination was based on faulty and inaccurate information.
The certification statement made on February 27th of this
year also contained inaccurate information and internal
contradictions, making it difficult for us to understand the
basis for the suspension.
At the same time the Bolivian Government must engage
directly with the United States, seek to reestablish diplomatic
channels and assume with full responsibility the daunting task
of replacing the role of the Drug Enforcement Administration,
profoundly pursue relations with neighboring countries, Brazil
and Argentina, the destination of most of the cocaine that
passes through or is produced in Bolivia, and have the ability
to readjust or shift these policies if, in fact, they fail.
A focus and new opening for diplomatic relations at this
period of high tension is possible and both governments have
shown signs of willingness to do so. President Morales, soon
after President Obama's election, spoke very highly of
President Obama and made a visit to Washington in which he
sought out key legislators to begin an open and frank dialogue
about possibilities for change.
In this sense, I believe that time is of the essence and
that both governments must seek through diplomatic channels a
bilateral cooperative partnership, not based on conditioning or
anti-narcotics norms, but instead on a low level of cooperation
of transparent programs, especially in the area of USAID,
focusing on a mutual agenda of both governments--health,
poverty alleviation and education--and move away from some of
the programs that have created so much bilateral friction in
the past, such as democracy promotion or regional efforts,
within a framework where no legal guidelines exist in Bolivia
for transparency.
This low level of engagement until broader decisions be
made is essential in order to refocus diplomatic relations. At
this point in time, high levels of tension can be avoided and
we can move forward, but first the framework for trust and
understanding, and an ability to truly listen, instead of
engagement on both sides which degenerated into a begrudging
tolerance of mutual opinions, is essential.
It is important to note that although the Bolivian
Government has chosen not to work with the DEA in the Chapare
region or in the rest of the country or to work with USAID in
the Chapare, high levels of cooperation do remain on the anti-
narcotics front. The Narcotics Affairs Section, an agency three
times larger than the DEA in Bolivia, continues to collaborate
closely on interdiction and eradication issues. There is a high
level of dialogue and coordination on a variety of other policy
issues, and I think that these things that are missed often in
the higher levels of Washington or in the mainstream press,
where we choose to focus on the negative aspects or the areas
in which relations have in fact broken down.
Thank you.
[The prepared statement of Ms. Ledebur
follows:]Kathryn Ledebur deg.
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Mr. Sires. Thank you very much.
Mr. Rebolledo.
STATEMENT OF MR. IVAN REBOLLEDO, PRESIDENT, BOLIVIAN-AMERICAN
CHAMBER OF COMMERCE, INC.
Mr. Rebolledo. Good afternoon, Mr. Chairman, and members of
the subcommittee. Thank you for the privilege to be with you to
discuss a topic of such relevance this time of change both in
Bolivia and the United States. Mr. Mack, we congratulate you as
a new ranking Minority member.
In recent years, Bolivia has faced many challenges to its
stability and constitutional order that many observers have
wondered how Bolivia has avoided slipping into widespread
violent conflict. Bolivia has a highly divided society where
wide sectors of the population have been historically excluded
from the political arena. Presently it has very weak political
parties, if any at all, that have been unable to create
national coalitions, and its political apparatus has been
unable to effectively guarantee space for the resolution of
conflict within existing juridical structures. A combination of
these factors has contributed to the erosion of the legitimacy
of the state, further exacerbating inter-institutional conflict
and stability.
The nineties saw the strengthening of social movements that
acquired important political science and that demanded a
rethinking not only of how politics operated, but of the
configuration of public policy itself. Social movements took
their demands to the streets, staging massive protests that
frequently paralyzed the economy. These contentious tactics
were met with fear and disdain by the political establishment
which failed to effectively respond to their demands, and it is
in the backdrop of contesting political discourses and their
consequent tensions that Evo Morales won the Presidential
elections. His triumph is part of what has been referred to as
Latin America's turn to the new populous left after a wave of
the electoral contest clearly rejected the policies inspired by
the Washington consensus which had prevailed in the nineties,
and brought to power left-of-center candidates in Argentina,
Bolivia, Brazil, Chile, et cetera.
A tactical alliance with Venezuela and Cuba has provided
Bolivia with the resources and political support, respectively,
to allow Morales to move ahead with radial agendas without
compromising with the opposition.
Strong regionalism permeates social and political
relations. The questions deg. of local autonomy has
become a serious threat for the unity of Bolivia. The divide
between the center of political power in La Paz and the
economic prosperity in Santa Cruz has called into question the
strongly centralized government in Bolivia. The ethic divide
that accompanies this division has resulted in indigenous
population who live mostly in western Bolivia supporting
Morales's quest to retain that centralism as a feature of the
new constitution while the white and mestizo population of
eastern Bolivian states, the media luna, demand greater
autonomy from the center. Morales' agenda has been defined not
only by the opposition but also by the more radical sector of
his party, the MAS, which is quick to remind him of the
promises he made before and during the Presidential elections.
In 2008, a record fiscal surplus and robust monetary
reserves, resulting from increased taxation of hydrocarbons and
mining companies and the global commodity boom, have left
Bolivia with financial benefits. However, in 2009 and beyond
will be much more challenging. In addition, Bolivia is now
dealing with an 8.7 inflation rate, the fifth highest in Latin
America as per the World Bank. The 5.5 average growth in GDP
will likely not be maintained as the global financial crisis
affects Bolivia, creating a wide ranging slow-down.
The Bolivian Minister of Finance has confirmed that
Bolivian exports, including hydrocarbons, minerals, and soya
byproducts have already suffered an acute deceleration.
The 12 foreign companies that operate in Bolivia in the
hydrocarbon space, already rattled by the nationalization of
the country's gas and oil sector, are awaiting implementation
of the hydrocarbons law required by the new constitution, are
wary of getting more involved.
The only United States company operating in this sector in
Bolivia is Occidental. Exxon-Mobil pulled out a few years ago.
The electrical sector in Bolivia, which was a wash with U.S.
investors--Duke, Econergy, PPL Global--have dwindled to one,
plus a few European investors, and they are concerned that
their sector might be next in being nationalized.
The perception of the foreign direct investor is that
current government has no problem in not following contracts
and that the legal system is not up to normal standards.
For the past two decades, U.S. engagement in Bolivia and
the rest of the Andes has focused on security and counter-
issues--favoring unilateral over multilateral intervention. In
the final months of the Bush administration, U.S. relations
with Bolivia turned from bad to worse, including Bolivia's
expulsion of the U.S. Ambassador Goldberg, and the United
States expulsion of Bolivian Ambassador Gustavo Guzman, as well
as the subsequent expulsion of DEA.
There are lessons to be learned from the current crisis,
and there is hope that United States-Bolivian relations might
improve if the Obama administration is open to a new approach.
Obviously, Washington has more obvious priorities than Bolivia,
and the current environment in La Paz is no guarantee that
conciliatory overtures from the U.S. administration would
immediately be reciprocated.
All ``politicos'' in La Paz follows with the closest
attention any developments in Washington that could have an
impact on their country. The opposite is true in Washington.
United States relations with Bolivia rank far down in the
hierarch of foreign policy concerns. During the cold war
Bolivia had at least some limited leverage, based on the
possibility that La Paz might switch sides. But in the war on
terror Bolivia has limited importance, and even in the war on
drugs it is a second tier player.
On the flip side, a Morales administration that has limited
hope of securing construction relations with Bolivia may well
gain domestic political capital from pursuing the opposite
course since one result can be to cast rival political parties
and future candidates in the role of disloyal instructions of
an overbearing foreign policy.
As the current U.S. administration attempts to establish
its eroded international soft power and to repair its tarnished
reputation as a benevolent regional power, it is essential to
recognize that Morales also possesses similar assets and a
legitimate democratic mandate, which has been reaffirmed during
the recent referenda processes. U.S. policy measures designed
to discipline his government's conduct are more likely to
stiffen its resistance and to hurt the Bolivian people by
further reducing their desire for social progress.
Thank you.
[The prepared statement of Mr. Rebolledo
follows:]Ivan Rebolledo deg.
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Mr. Sires. Thank you very much.
Dr. Daremblum.
STATEMENT OF JAIME DAREMBLUM, PH.D., SENIOR FELLOW, DIRECTOR,
CENTER FOR LATIN AMERICAN STUDIES, HUDSON INSTITUTE
Mr. Daremblum. Thank you very much, Mr. Chairman,
distinguished members of the subcommittee.
Mr. Sires. Can you please turn the microphone on
Mr. Daremblum. Oh, I am sorry.
Mr. Chairman, Ranking Republican Member Connie Mack,
distinguished members of the subcommittee, I am honored to be
speaking with you today on the topic of U.S. relations with
Bolivia.
Since the election of President Evo Morales in December
2005, those relations have steadily deteriorated. Meanwhile,
political polarization on ethic tensions in Bolivia have
increased substantially. Bolivia suffers from extremely high
levels of poverty and inequality, and is divided sharply along
racial and geographic lines. Economic disparities, cultural
resentments and repeated attacks from democracy by the Morales
government have turned Bolivia into a bubbling caldron of
instability.
Morales seems bent on copying the authoritarian leftism of
Venezuelan President Hugo Chavez. His policies have triggered
political violence and raised the specter of large-scale
turmoil.
Bolivia has long been a fracture society. Indeed, it is
really two societies, one consisting of poor indigenous
Bolivians who are concentrated in the western highland
departments, the other made up of mixed-race mestizos and
whites who dominate the eastern lowland departments. Eastern
Bolivia is the more prosperous region and serves as the
country's economic engine even though most Bolivians live in
the west. A majority of the population is indigenous. Morales
is the first Indian to ever be elected President. Bolivia is
the poorest country in South America and the overwhelming
majority of its poor citizens are Indians.
Bolivia desperately needs a true national leader who can
repair its many riffs. Unfortunately, Morales is not that type
of leader. When he was first elected in 2005, a former cocoa
grower boasted fairly broad support across different racial and
economic groups. Yet he has pursued this discriminatory and
exclusionary policies designed to benefit Bolivia's Indians at
the expense of its mestizos and white.
Morales has made no serious effort to bridge the country's
severe social camps. In fact, he has done quite the opposite.
He has also eroded Bolivia's democratic institutions and
attempted to reduce both the political and economic power of
its wealthy eastern departments. Morales has nationalized a
significant portion of the Bolivian economy, including the
energy sector and is seeking to implement a far-reaching land
redistribution agenda. The result is that Bolivia today is more
divided and more polarized than it was when he first took
office. Corruption has grown widespread, and the government's
socialistic economic initiatives have spooked foreign investor.
Morales has embraced the political model that thrives on
conflict, on confrontation and on bullying. Much like Hugo
Chavez, he uses anti-Americanism as a political tool and spins
wild conspiracy theories about the United States.
Before leaving office, President George W. Bush responded
to Bolivia's lack of cooperation with U.S. anti-drug efforts by
suspending its privileged trade status under the Andean Trade
Preferences Act and Andean Trade Promotion and Drug Eradication
Act. Both require the beneficiary countries provide a certain
level of cooperation to U.S. counternarcotics activities. The
Bush administration was justified in suspending Bolivia's trade
benefits, a suspension that came after several warnings to the
government. No doubt his decision will have a considerable
economic impact on the South American country, and has been
used by Morales domestic propaganda purposes.
In economic terms, those trade preferences mean much more
to Bolivia than they do to the United States. Before they are
restored the Obama administration should insist that the
Morales government agree to a meaningful level of anti-drug
cooperation. This is what diplomatic engagement is all about. I
generally do not favor trade sanctions, but this is a special
case. The terms of the Andean trade legislation are quite
clear, and Bolivia is the world's third largest coca producer
and is a key front in the war on drugs.
U.S. interests in Bolivia go beyond counternarcotics
programs. The country has huge deposits of natural gas, and
under Morales it has boosted strategic ties with Iran, partly
to aid the development of its energy sector. At a time when
Tehran is expanding its influence across Latin America, its
emerging partnership with Bolivia is worrying. There is
evidence that Iran's warm relationship with Hugo Chavez, the
chief patron and ally of Morales, has allowed the Iranian-
backed terrorist group Hezbollah to establish a presence in
Venezuela. The Bolivia-Iran connection should not be overblown,
but it should be monitored intently.
In its diplomatic efforts to shore up Bolivian democracy
and build civil society, the United States should work closely
with democratic governments from Europe and South America. It
should also promote economic freedom and a more favorable
business climate in Bolivia. In its latest ranking, rankings of
the best business climates around the globe, the World Bank
ranks Bolivia 150th out of 181 economies. The only countries in
Latin America and the Caribbean that rank lower are Haiti and
Venezuela.
The United States should also address the plight of the
poorest in Bolivia by supporting NGOs working with the National
Endowment for Democracy, NED. This would help considerable to
dissipate the notion among the Indians, nurtured by President
Morales, that the United States is their enemy.
A final point: Thus far President Obama has disappointed
those in Latin America who hoped he would move vigorously to
boost U.S. engagement with the Western Hemisphere. Today, Iran,
Russia, China, all these countries are working to strengthen
relations with Latin America. If the United States does not
make its own hemisphere a priority, it risks losing influence
there, and that would be bad for the United States and bad for
Latin America.
Thank you very much.
[The prepared statement of Mr. Daremblum
follows:]Jaime Daremblum deg.
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Mr. Sires. Thank you very much.
Mr. Iberkleid.
STATEMENT OF MR. MARCOS IBERKLEID, CHIEF EXECUTIVE OFFICER,
AMETEX, AMERICA TEXTIL S.A.
Mr. Iberkleid. Mr. Chairman and members of the
subcommittee, thank you very much for the opportunity to
testify here today.
These are difficult times for workers and for private
industry in Bolivia because of the recent suspension from ATPA.
Ametex and other firms are on the brink of collapse. Others
have already closed and thousands of jobs have been lost. Worst
of all, hope is fading.
When we first began this journey, the future was very
bright. With the removal of Tariffs, Ametex and many other
textile firms were able to improve facilities, expand training
programs and hire more workers. Ametex stood as a beacon of
hope, especially to El Alto, our poorest and fastest growing
city where 50,000 people enter the job-seeking market each
year.
As high-end, low-volume producer, Ametex is a reflection of
our textile industry. The ability of our workers to process
orders quickly and at the highest level of quality and our
commitment to the rights of workers and working conditions has
earned Ametex an unparalleled reputation in the region.
Without ATPA, none of this would be possible. For this, we
owe a debt of gratitude to the American people. But ATPA has
been more than an economic boon, it has generated goodwill from
the people of Bolivia to the United States and its people. I
witness this attitude of working Bolivians who still look at
the U.S. for their hopes and dreams. The benefits of ATPA are
proven. They have harnessed the productive capacity of working
people and enabled the expansion of a business sector. Each of
these elements is recognized as essential to democratic
institutions in developing countries.
But lately the path to the future has narrowed. Before the
recent suspension, ATPA has been extended for short-term
periods only, creating an uncertain business climate. Under
these circumstances, we have barely been able to survive. We
have suffered layoffs, diminished revenues, and the migration
of our U.S. customers to more secure producers. Nowadays Ametex
is no longer seen as the vanguard for job creation, but as a
worsening proposition.
With the suspension of Bolivia from ATPA, we have
experienced the final heartbreaking blow. Since the suspension,
we have been forced to let go of 1,800 direct and indirect
workers from all areas of the firm. We have had to send the
remaining workers, nearly 1,000 employees, on paid leave
because there is no work. Our projected annual revenues from
the United States have been reduced by half, and we have lost
most of our U.S. customers.
It is true that Bolivian authorities have stated their
intention to secure other markets to replace those in the U.S.
that were lost as a result of the suspension. I have been told
that Venezuela is now in the process of establishing a
preferential trade benefit for Bolivia which would allow us to
export our goods to their market. But our relationship with
American brands is not easily replaced. We have become very
well suited to the U.S. market and its sophisticated customer
base. In contrast, the alternative markets are less demanding,
and therefore we are less competitive.
Chairman Engel, with all that happened last year I believe
the chairman and the members of the committee who visited us
last year would barely recognize the company they visited only
last February. If I could offer a recommendation for the Obama
administration, it would be for the United States to stay
engaged with Bolivia by reinstating the benefits and thereby
helping the private sector maintain the jobs that took us so
long to build.
With the price of commodities coming down, minerals and gas
no longer seem the solution they did for Bolivia only months
ago. We also see remittances being substantially reduced. With
manufacturing now limited due to ATPA's suspension, I foresee
more Bolivians migrating to illegal sectors that might bring
harm to both Bolivia and the United States.
I believe in the ability of the Bolivian people to build a
sustainable life. They have proven they are up to the
challenge. On this path, the United States has been our
greatest ally and champion and we, the workers of Ametex, yours
as well. My company and I stand at the ready and are willing to
whatever we can do to help.
Mr. Chairman and members of the committee, thank you for
your consideration.
[The prepared statement of Mr. Iberkleid
follows:]Marcos Iberkleid deg.
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Mr. Engel. Well, thank you. Thank you very much, and I
thank everybody for their statements and I apologize for not
being here. I had something that I could not help. I want to
thank Mr. Sires for stepping in. I do not want him to get too
used to the chair, but thank you for stepping in, and I know
that the testimony was very, very important.
I am going to ask some questions, but I just want to make a
couple of comments that I would have made had I opened the
hearing.
Mr. Iberkleid, as you know, I visited your business when I
was in Bolivia, the factory, and I was very heartened to see a
leading example of tens of thousands of jobs that ATPDEA had
created. In fact, it was at your factory that I became
convinced that this program was really helping the poor in
Bolivia. It is one thing to read about it. It is another thing
to actually see it, and I know that you are either the largest
employer in Bolivia or certainly one of the largest employers
in Bolivia.
Bolivia is the poorest country in South America, and it is
a country where 54 percent of the population lives in poverty
with a third earning less than $2 a day, and let us think about
that, $2 a day. So if you look at this program that we have,
ATPDEA, it has provided quality jobs to the country's poor,
including many indigenous women who are among the most
historically marginalized members of society in Bolivia and
throughout the Andean region. In fact, Mr. Iberkleid, we saw
some of these indigenous women when we visited your factory,
and, of course, when we spoke with Evo Morales, he made a point
to say that he wanted to do whatever he could to help the
indigenous and he is part of that group.
As everyone knows, Bolivia was suspended as an ATPDEA
beneficiary country this past fall, and I am told that since
that time, Mr. Iberkleid, you have been having tremendous
financial difficulties, and there have been massive layoffs and
you may even be forced to shut down.
Let me say that there is no one in the Congress more than
me who wants to see improved relations between the United
States and Bolivia, and the reinstatement of Bolivia's ATPDEA
benefits.
I have met with President Evo Morales twice: Once in La Paz
and the second time in my office right here in Washington, so
within the past year I have met with him twice face to face. My
message to him in our meetings has been consistent, please help
me to help you. I really want to be an advocate for Bolivia in
Washington, but President Morales' expulsion of the U.S.
Ambassador, the Israeli Ambassador, and U.S. Drug Enforcement
Administration agents, DEA agents, over the past 6 months make
it increasingly difficult for me to help.
In particular, our ambassador in Bolivia, Phil Goldberg, I
have known him for many years, even before he was ambassador of
Bolivia. So I know him personally. He is a fine career
diplomat, not a political appointee, and knows how to conduct
himself, and when I visited him, he told me that the Bolivian
Government was accusing him of everything under the sun, and
that these charges were all false and made up, and trumped up,
and I believe that the Bolivian Government's allegations
against him were completely unfounded. Both Bolivia and
Venezuela did the same thing, charged our career diplomats, who
were our ambassadors, with all kinds of nonsense, and then
expelled them.
I was particularly troubled also by President Morales'
statement at a Summit of Latin American Leaders in Brazil just
this past December, 3 months ago, and he said, and I want to
quote it because I just came back from the region and other
leaders have told me that he said this, and when we looked it
up, this is what we came up with. Morales said,
``We should give the new Government of the United
States a deadline in order to end the embargo on Cuba.
If a newly elected U.S. Government does not lift the
economic embargo, we will lift their ambassadors out of
our countries.''
So he is telling the other countries in Latin America that
if the United States doesn't lift the embargo against Cuba,
that everyone should break relations with the United States,
and he is still saying this. He is his own worst enemy. This
kind of rhetoric certainly does not help, especially as the
Bolivian Government now attempts to reach out to the Obama
administration and says it wants ATPDEA benefits, and yet on
the other hand every chance Morales gets to thrash the United
States he does it.
And I said to him when he came here, I said, what were you
thinking? You know, you throw out our ambassador, you throw out
our DEA agents, drugs are a problem, and then you want ATPDEA.
Well, you know, your actions have a reaction. It makes it
difficult for me to help you, even though I would like to help
you, but people say, well, is he not the guy who threw out our
ambassador and our drug agents, and now he is telling everybody
else to break relations with us?
So it is a problem. I mean, I would like to see both of our
countries move quickly to improve relations, but my message to
the Bolivian Government is that it takes two to tango. So I
would urge the Morales and the Obama administrations to
immediately initiate a high-level bilateral dialogue, and I
urge that, which would result in an exchange of ambassadors, a
renewed strategy for joint counternarcotics efforts, and in
turn the reinstatement of ATPDEA benefits for Bolivia.
But again, it takes two to tango, and I certainly recognize
that Bolivia is a sovereign country, and they are not required
to have our DEA agents present. I know that. But I also believe
that the way in which the agents were expelled is regrettable,
very regrettable. And as we look to restore relations and
reinstate ATPDEA we have to find a way to rebuild trust between
our leaders and our two governments, and we must move beyond
the constant suspicions, especially in La Paz, where the most
negative inference is drawn from every action and reaction. And
even if our two governments do not agree on every detail, there
are certainly enough intersections of our mutual interests to
allow more effective cooperation on counternarcotics and other
matters.
As I mentioned before, and then I am going to stop, Evo
Morales is Bolivia's first indigenous President and is
committed to lifting up impoverished people in his country. He
made it a point when we first met him to say that, and I
applaud him for that. I mean, those are great goals and he
should do that, and we should help him. I congratulated him for
his personal achievements, and his commitment to Bolivia's poor
each time we met.
I come from a labor background, my family, a working class
background, and I would certainly like to help President
Morales and other leaders in Latin America roll back poverty
and create jobs. Yet, I truly believe that President Morales'
commitment to Bolivia's poor could in part be shown by a
renewed effort from his government to improve relations with
the United States, which I believe would, in turn, lead to the
return of Bolivia's ATPDEA benefits.
So I want to thank you all for your testimony, and I know
Mr. Burton wanted to make a statement, so I am going to let him
make a statement now.
[The prepared statement of Mr. Engel
follows:]Chairman Engel deg.
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Mr. Burton. Thank you, Mr. Chairman. I will not speak for
very long, it will be very brief.
First of all, I want to apologize to our good friends whom
I have known for so long when I was chairman and then ranking
member for the problems that are being created there in
Bolivia. But President Morales and the President of Venezuela
seem to be committed to a Bolivarian kind of revolution which
will lead to a socialistic government and control of all of
Latin America, if they have their way.
I have mee deg.t with the Vice President of
Bolivia. We have talked face to face and heart to heart, and I
think they understand that the United States is for freedom,
democracy and human rights, and we are not for a socialistic
kind of economy that is going to destroy Bolivia, create more
unemployment and exacerbate the problems of poverty that they
have down there right now, and so I do not know if there is
anybody here from the press in Bolivia, but the United States,
in my opinion, at least from my perspective, cannot and will
not support that government down there when they are so
repressive as far as economic conditions of that country are
concerned, and their policies can only lead to more poverty and
more problems.
So I hope that message gets back to Mr. Morales. We would
like to work with him. I know the chairman feels that way and
the ranking member feels that way, but to support a government
that they are all trying to model on Cuba is not the answer,
and I for one will do everything I can to help the people of
Bolivia where we can, but to oppose the governmental policies
of Morales.
With that, Mr. Chairman, thank you very much.
Mr. Engel. Thank you very much, Mr. Burton.
Let me ask anyone who cares to answer from our witnesses:
The United States and Bolivia in the past have had close
relations, but obviously, as we have mentioned, the relations
have deteriorated. Our USAID programs, particularly those
dealing with alternative development in the Chapare region, and
democracy promotion have been under constant attack. Yet, at
the same time, Bolivia remains one of the largest recipients of
United States foreign assistance in Latin America. In Fiscal
Year 2008, Bolivia received an estimated $100 million. So let
me ask you this.
Should the United States cutback on foreign assistance to
Bolivia or should we maintain funding in spite of anti-U.S.
rhetoric and actions? Are there any particular areas of U.S.
assistance to Bolivia that should be cut? Are there any areas
that should be increased, and what type of assistance works
best in the current environment? Anyone who would like to
answer, I am happy to call on them.
Ambassador, why don't we not deg.start with you.
Mr. DeShazo. Thank you very much, Mr. Chairman.
As I mentioned in my remarks, I am very much in favor of
aid programs, that I think USAID has played a very important
role over the decades in promoting development in many areas in
Bolivia. I would very strongly support enhancements of those
programs, especially in areas that are most substantially
needed, including health, the environment, and particularly
agricultural programs on the Altiplano. There are programs that
help create jobs in indigenous areas, such as El Alto, that
have been very successful. In the past, there have been
important democracy-building programs conducted by USAID and a
very wide variety of other programs. I think the USAID program
in Bolivia has been successful over the years and deserves full
support. Thank you.
Mr. Engel. Thank you. Ms. Ledebur.
Ms. Ledebur. Thank you. It is my assessment that the USAID
funding and projects have become a point of contention in
Bolivia during the Morales administration. It is essential to
create a basis of trust and transparency within which both
governments can be comfortable.
I think that the amount of aid does not need to continue
without restructuring or refocusing that can be agreed upon by
both governments. I would suggest that programs that generated
a great deal of conflict--and I think it is important to note
that I have been in Bolivia for 20 years,and I have worked in
the Chapare region on the ground in the coca growing region and
evaluated USAID projects for the past 10 years--that it is
important not to just maintain a quantity of projects without
looking at their nature.
I do have concerns with the way that USAID projects work in
terms of the contractors and the flow of information that
reaches Washington. We do not necessarily have a precise view
here of exactly what happens as the information makes its way
up the bureaucratic channel.
I would propose that Bolivia and the United States arrive
at an agreement of a low level of cooperation through USAID,
with transparency measures incorporated, on issues that are of
concern of both the Obama and Morales administrations, such as
education, healthcare, and poverty alleviation. This is the key
to build trust through lower-level cooperation instead of
programs that have generated a great deal of friction,
including regional assistance to departmental governments, when
there are no transparency measures to regulate their
relationship with the central government, and democracy
promotion programs, which have also generated friction. I do
not perceive this as a punishment for Bolivia. I do not
perceive this as a result of friction with the Morales
administration, but I perceive this as a way to start forming a
new foundation, little by little, in a way that both
governments can feel satisfied and comfortable. I think that at
a point in time where there is a severe economic crisis within
the United States, that we should begin to focus our priorities
in a way that we can improve relations with Bolivia, but also
economize at home.
Mr. Engel. Thank you. When we were there, there was very
real talk about the possibility of Bolivia splitting in two
actually. Are any of you concerned about that or has that
subsided by now? Has that gone back a little bit? Anybody want
to take that on? Just wondering if anybody has a feel for that.
Yes.
Ms. Ledebur. I think that there has been friction as a
result of regional issues, but that lowland governments and the
governments that are seeking autonomy are most specifically
seeking a way to confront Morales to strengthen their power
base and regional power. They would actually have very little
to gain from seceding from Bolivia, and I assume that that is
something that would not happen in any case happen. In fact,
these hydrocarbon rich departments would have to export their
hydrocarbons through Bolivia to other nations in order to
achieve this.
I think it is important to understand the nature of
conflict in Bolivia and regional conflict, and the way that the
autonomy issue has been used to reestablish a balance of power
within the Bolivian state, but the prospect of real genuine
division would leave these departments without any leverage
against Evo Morales.
Mr. Engel. Let me ask one last question, and let me ask
this to Mr. Iberkleid, and then I will turn it over to Mr.
Mack.
If Bolivia were to be reinstated as an ATPDEA beneficiary
country, could your business recover? And what if Bolivia were
to be reinstated say half a year from now, 6 months to 1 year
from now, what are the circumstances? How long does it take to
go down the pipeline?
Mr. Iberkleid. Chairman, thank you very much.
It will take some time, the damage has been done. We have
lost most of our customers. It is a matter of seeing where the
market is. Right now there is a negative market. The market is
downsizing, and I believe an effort could be made but it will
take 1 year or 2 years to reestablish an acceptable size
market. It will not be immediate. It is not like a switch.
Mr. Engel. It does not move that fast.
Mr. Iberkleid. It does not move. It will not move that fast
now.
Mr. Engel. Thank you. Thank you.
Mr. Mack? I think he had a response.
Mr. Engel. Oh, Mr. Daremblum. I am sorry
Mr. Daremblum. Some of the issues that you have raised
before. I do not believe it is possible to look at trade
preferences or USAID or any type of cooperation independently
of basic diplomatic, modicum relationship, cooperation between
Bolivia and the United States. I feel, however, that we cannot
be optimistic in terms of what is going to happen in the
relationship between Bolivia and the United States, and, of
course, we will have to wait until we see that there is an
active engagement between the two of them.
But the dynamic that Mr. Morales has evidenced, not too
different from that of Mr. Chavez, it really runs against that
basic relationship with the United States as well as with
important sectors of his own society. I do not think we can be
optimistic about him in general, and I think that we have to
test whether or not it is possible to advance diplomatically
with Mr. Morales more than has been possible until today. Thank
you.
Mr. Engel. Thank you. Thank you very much.
Mr. Mack.
Mr. Mack. Thank you, Mr. Chairman. It is good to be here
with you again. I offered to take the chair when you were not
here, but for some reason your side was not too happy about
that. [Laughter.]
Mr. Engel. We can dream, Mr. Mack. What can I tell you?
[Laughter.]
Mr. Mack. It is good to be with you. Thank you.
You know, as I was listening a question kept coming to mind
as I listened to each one of you speak, that, you know, we have
heard about doing some low-level stuff to keep communications
open, but my question is, would we be better off, as you look
at Latin America as a whole, if Evo Morales does not want a
relationship with the United States, would we be better off to
take those resources and support our allies and others that may
be in a position, that want to have a relationship with us?
Because if it is so heated right now, maybe the best thing
to do is say, hey, look, let us take a timeout, let us have a
cooling off period, and we can take those resources and go
somewhere else where we might get more bang for the buck, where
we can start developing relationships with people, and then we
can come back and visit this, because, first of all, the idea
that somehow it is the United States is the bad guy in all of
this when it is clear that Hugo Chavez and Evo Morales and
Fidel Castro are all playing from the same playbook. I mean, it
is the steady drum beat. You know, it is predictable at this
point.
So the question is would we be better off looking at the
Western Hemisphere as a whole, to take those resources and
support our friends and allies that need it? Anyone? No one
wants to touch that?
Mr. DeShazo. I would be happy to respond. I think we have
long-term interests in Bolivia in reaching out to the people of
Bolivia regardless of their government. I believe that the
kinds of programs that the United States has engaged in over
time, especially related to addressing issues of poverty,
education, health, and governance, are matters that have long-
term importance for the United States, and therefore the
maintenance of them, I believe, promotes a positive image of
the United States among the people of Bolivia. We also have
other long-term interests that involve the counternarcotics
section of our Embassy and others that are there.
I think that maintaining a base presence of the United
States, a basic presence of support, or even enhancing that
support and looking for other ways to improve long-term people-
to-people relations with Bolivia is a very positive thing to
do. We may have short-term difficulties and controversies with
one government or another, but generally I think the policy of
long-term engagement is a good one. Thank you.
Mr. Rebolledo. Mr. Mack, thank you.
I think abandoning Bolivia at this point in time or
disengaging would be an enormous error. If we look at the
abandonment of Afghanistan in the early eighties--I am sorry?
Mr. Engel. The microphone?
Mr. Rebolledo. It is on.
Mr. Engel. It is on?
Mr. Rebolledo. Yes.
Mr. Engel. Pull it a little closer if you can.
Mr. Rebolledo. Okay. Sorry. So as I was saying, disengaging
with Bolivia at this point in time I believe would be a serious
error.
The primary issue between Bolivia and the United States as
I see it is our U.S. counternarcotics policy. I strongly
believe that we should slowly begin to migrate U.S. efforts in
this arena to the multilateral arena with institutions such as
the European Union and the U.N. Office on Drugs and Crime. They
are seen as much more neutral and could contribute to a better
bilateral relationship. This would obviously mean more funding
by the U.S. Government to U.N. Office on Drugs and Crime.
Having just come back from La Paz, I Had the opportunity to
meet with EU ambassadors, and they are all very concerned with
the departure of DEA, particularly the Brazilians where we are
beginning to see a flow--well, we have been seeing a flow of
cocaine smuggling through Brazil to Africa and to Western
Europe. But they also are beginning to come around to this idea
of perhaps giving a more important role to the multilateral
agencies and having this whole certification process fall to
them. Thank you.
Mr. Mack. Thank you, Mr. Chairman. Thank you.
Mr. Engel. Thank you. Mr. Sires.
Mr. Sires. Yes. Good afternoon. Thank you for your
comments.
I do not know who wants to take this, but with the
situation in the world like it is, you have a country like
Bolivia that depends on foreign investment, trying to promote
keep jobs and create for the people. You have Bolivia is
nationalizing. Why would I, if I am a foreign country, invest
in Bolivia when I see the relationship with Tehran, Venezuela,
Cuba? Why would I invest in a country with the rhetoric that is
coming out of Bolivia? Anyone want to answer?
Mr. Rebolledo. I will take a stab at it. I think it all has
to do with competitive advantage. So if you----
Mr. Sires. I am sorry?
Mr. Rebolledo. It all has to do with competitive advantage.
So if you look at the issue, for example, of lithium right now,
which is an integral part in batteries for hybrid-powered cars,
everyone is now interested in lithium reserves in Bolivia.
President Morales was just in France where he met with various
investors--Sumitomo of Japan, Mitsubishi, LG, a South Korean
company, Bollore, a French company. So in their vision the risk
is probably worth it.
But obviously for the rest of the private sector the lack
of transparency in the judicial system and the way the new
constitution deals with foreign direct investment is a major
problem.
Mr. Sires. Anyone else like to take a stab at it?
Ambassador?
Mr. DeShazo. Well, clearly the response to the Morales
administration has been a large drop off in foreign direct
investment. I think probably the key area here has been the
hydrocarbons sector, where foreign investment has tailed off
substantially, leading to problems with production, which
coupled with lower prices for natural gas, will mean a
difficult economic situation for the Morales administration as
it moves forward.
Bolivia has the second largest natural gas reserves in
Latin America. It was poised to be a gas hub for the entire
region, and now it cannot honor its contracts with some of its
foreign clients. So it has been an opportunity that up until
now has been lost, and it has been lost largely because of lack
of investment, and there is a tremendous potential there. Thank
you.
Mr. Rebolledo. I would like to add one more thing if I may.
It is interesting to see as well that President Morales is now
focusing on state-to-state investment in Bolivia. We are seeing
a possible GAZPROM investment, PDVSA (Venezuelan state oil
company) investments, the Iranian National Oil Company. So far
the only positive state-to-state investment that he has had and
that has thrived is Petrobras, and even that relationship is a
tenuous one. Thank you.
Mr. Sires. You know, somebody mentioned before that we
should be going away from an anti-narcotic relationship and
evolve into another relationship. What other relationship could
we get involved in other than--fine, I will let you----
Mr. Iberkleid. Our suggestion is to help Bolivians have a
better life, to create an opportunity for themselves.
Mr. Sires. We have been doing that all along though, have
we not?
Mr. Iberkleid. We have, but we have pulled the carpet under
the floor in the last couple of years because ATPA was a great
instrument to build that, and we no longer have an ATPA.
Mr. Sires. But that our reaction to an action.
Mr. Iberkleid. Yes. Yes. However, I must say that it is
through the private sector that we can build these
opportunities and it is the private sector who is hurting right
now because of these reactions. That is why we are asking for a
reconsideration of this policy change.
Mr. Sires. Anyone else?
Ms. Ledebur. I think it is essential to note that the
conditioned role of narcotics policy and the central focus on
counternarcotics in Bolivia has focused a great deal on the
elimination of the coca leaf and coca leaf eradication. I would
suggest that moving away from that, and looking at poverty
alleviation, education and health care is a way to stimulate
other economic opportunities to focus on something that is
viable for both nations.
It is important to note that, not only has the
counternarcotics focus created great friction, but it has also
impeded progress in many, many other areas. The certification
process and the way that it is carried out tends to generate a
great deal of friction throughout Latin America.
I also agree with Ivan. De-narcoticizing the relationship
and focusing on areas of common concern, a multilateral
approach, using European partners and the U.N. are important.
But also looking at the Andes as a region and how to deal with
things regionally, to not focus solely on coca production are
essential to improve relations. It is important to note that
while the relations have been focused on anti-narcotics, coca
production for the last 20 years has continued to rise in the
Andean region. We have not been meeting our goals and we have
not improved relations as a result of the policy that has been
implemented.
Mr. Engel. I think Dr. Daremblum----
Mr. Sires. Thank you very much.
Mr. Engel. Dr. Daremblum, I think, wants to answer
Mr. Daremblum. About private investment, the conditions
that exist seem to be in the immediate future in Bolivia are
not conducive to foreign investment in the country in terms of
certainty about the judiciary, certainly about the political
stability of the country itself.
I do not believe, and I have to go back to our initial
discussion, but prior to talk about stimulating private
investment and to helping in this and any other field in
Bolivia, it is important to establish a framework on what the
relationship of the United States with Bolivia is going to be.
The only way of creating that or agreeing on that framework,
which of course is a prerequisite of all the others, is
something that should be handled at the highest level and as
soon as the Obama administration is ready to engage in the
Western Hemisphere.
On the other hand, I do not believe that the United States
should not have a diplomatic presence in Bolivia. They are
friends of the United States. There are sectors in which the
United States can carry on an engagement, important sectors of
Bolivia society, and therefore I do believe that the presence
of the Embassy and a basic type of presence of the United
States in Bolivia continuing is very important. Thank you.
Mr. Engel. Thank you. Mr. Burton?
Mr. Burton. Thank you, Mr. Chairman. It is good being with
you again. I am sorry you were late. I understand you had a
little difficulty getting in.
Mr. Engel. I did, but I must say it seems strange not
having you in your usual seat.
Mr. Burton. Well, you have got a good man sitting next to
you. His dad and I were good friends. We watched Chariots of
Fire in my living room floor when he was a kid.
But let me start off by saying it is really nice being with
you guys, and I would love, I would love to be able to be very
optimistic about our relationship with Bolivia. When I was here
in the eighties and I remember the Communist and the Leftist,
Fidel Castro, and Nicaragua and everybody in the--the FLMN in
El Salvador was trying to move everything to the left, and
Ronald Reagan and his administration did everything we could to
create democracy in the Central and South America, and as a
result we saw democracy flourish all over Latin America and
Central America.
Now we have seen with Mr. Chavez everything is starting to
move to the left. He has taken an awful lot of his oil money
and used it not to enhance the lives and quality of life for
his people there in Venezuela, but he has used it to try to
cause revolution in South America and Central America, his
Bolivarian goals, and Mr. Morales is going along with him.
They have kicked out the DEA and our ambassador. They have
kind of roughed up, at least metaphorically speaking, our Peace
Corps people, and you know, they are moving to the left, and I
cannot understand, and I am very sympathetic to you and your
textile business and the kind of problems that you are
encountering. My gosh, you have been a good trading partner.
But the problem is not with you, it is with the government, and
when I see these countries moving to the left, as they did back
in the eighties, it seems like a repeat of an old movie, and I
do not want Raul Castro to emulate his brother, and I do not
want Chavez to be able to use the oil money to promote
revolution and move to the left and destroy democracies and
move toward socialism, and I want to see Mr. Morales, along
with Mr. Chavez and Mr. Ortega in Nicaragua continue to push
everything to the left because that is destructive not only of
their countries but of all of Latin America.
I understand what you are saying about we really need to do
something to help the people down there and we should do it
through USAID, but you have got to do that with the
government's help. You cannot do it with him opposing us on
everything that we are trying to do.
You know, those who do not profit from history are destined
to have the same result over and over again, and I have used
this comparison many times and I know it is not this severe,
but I remember when I was going to school, and we read about
Lord Chamberlain going to Munich to try to appease Hitler and
say, hey, we want to get along with you. What do we have to do
to get along? And we ended up with 50-60 million people being
killed.
Now that is probably not going to happen in Latin America,
but we could see an awful lot of additional poverty and strife
down there, and maybe more war like we saw in Nicaragua and El
Salvador if we continue to let these Leftist governments move
the way they are, the way they have been moving, and we ought
to be doing everything we can, in my opinion, to bring about
some positive change as they did during the Reagan years,
toward democracy, and allowing Mr. Chavez and Mr. Morales and
other countries down there that are moving to the left to
continue to be able to get what they want and to negotiate with
them on their terms is to encourage them and to encourage the
movement to the left that Fidel Castro was pushing so hard for
during his reign in Cuba.
I am just concerned about giving our money to governments
like the one of Mr. Morales. I am very concerned about working
with them when they are showing nothing but animosity toward
the United States. And you have talked about our economic
problems here in the U.S., and I believe we ought to be very
concerned about the U.S. economy first, and then be concerned
about the rest of the world. Charity begins at home, and then
we should help the rest of the people in this world that are
our friends, and the ones that continue to oppose us, in my
opinion, should get zip, and we should let them know that if
they want our help, if they want to work with us, we want to
work with them.
We will negotiate with them, we will talk with them, and we
will do everything we can to help them and their economies as
long as they are willing to talk, but when they kick our
ambassador out, kick the DEA out, bully our people that are
working in the Embassy down there and our Peace Corps
volunteers, I cannot see why in the world we should do
anything, and I apologize to the businesses down there that are
trying to flourish, but I do not know how to help them as long
as Morales has the attitude he has, and I am very sympathetic
to you, I really am. I wish the dickens we could do something,
but we cannot do it with that government in power unless they
are wiling to talk and negotiate with us.
Mr. Engel. Would you like anyone to comment, Mr. Burton?
Mr. Burton. You are welcome to comment.
Mr. Engel. If not--see, after Mr. Burton speaks everyone is
speechless. [Laughter.]
If not, we will ask Mr. Payne.
Mr. Payne. Thank you very much. It is really good to hear
your testimony. I think that it is a great tribute to Bolivia
that for the first time in its history they have elected an
indigenous person to lead the country, and I do believe that to
try to right wrongs of the past is not necessarily the worst
thing in the world to do. As a matter of fact, if we try to
accentuate the positive, the foreign minister, I think,
recently said that Bolivia wants to construct a positive
relationship with the United States, and we are talking about
reestablishing our ambassador, he said, and went on to
congratulate the U.S. for eliminating Guantanamo Bay base, and
said this is a step in the right direction.
As a matter of fact, even Senator Lugar, who is from
Indiana, good friend of Mr. Burton's, said that if our two
countries can continue to speak--and this was only about 3 or 4
weeks ago--continue to speak to one another respectfully, and
if we can each designate ambassadors, yet another step would be
taken to ensure that these developments represent a positive
new stage in the relationship between the United States and
Bolivia.
So I do think, in my opinion, that we can, with the new
administration, move toward perhaps a new beginning.
I do not think it is necessarily bad that a country moves
to the left. You know, France moved to the left at one time. We
did not stop relations with France. We see some countries have
elections that move to the right, the new elections in Israel
that moved to the right. That is fine. That is what the people
wanted. If the people in Bolivia wanted to move to the left,
then that is what they want. I think we need to learn to work
with countries and try to have some assistance.
Let me just finally say about the Peace Corps being
expelled, actually a Peace Corps volunteer admitted that he was
asked by the U.S. Embassy in Bolivia to basically spy, to see
whether there were Cubans or Venezuelan doctors or anyone else
in the country. He jus said the Embassy told him to do that.
So, you know, sometimes when these actions happen, I think
we have got to be fair about the way that we disseminate
information.
Now, I hope that Bolivia would be pro-democracy, love
America, do the right thing, but I do think too by the same
token that we have a responsibility to have the facts out
straight, and I think our goal should be to try to see if we
can forge relationships and to try to lower the rhetoric and
try to see where there can be ways in which our two countries
who for so many years have had a good relationship, can
continue to have a decent relationship.
So since we are going to have a vote soon, I will just kind
of conclude that I would hope that we can move in a positive
way to see--and the other thing is a lot of the money that we
are spending there, of course, is to try to eradicate the drug
problem, the coca problem, and I wish we could. However, there
would be no big market for it if Americans were not buying it
all. We are the ones with the money. It is everybody's problem
to work on this whole thing, and I would rather see us spend
money on education for Americans and other people using it, and
the deg.we do not need to waste a lot of money on
eradication. Thank you.
Mr. Engel. Thank you, Mr. Payne. Mr. Meeks.
Mr. Meeks. Thank you, Mr. Chairman, and I think I am late
getting here, but I heard you say that it takes two to tango,
and I agree, on both sides. Bolivia has to do its side and we
have to do our side.
I recently read where a quote of a person from Bolivia
says, ``With my humble vote, I am creating a little bit of hope
for my children.'' That is what Imira, an Indian woman, said
after voting in January for Bolivia's new constitution.
People are looking at, and I am one who has favored working
and trading with Bolivia, and I think we have to find a way to
do that, but on a different platform from which we have in the
past. When you look at the bright side of things, democracy
does live in Bolivia. The people voted. The people voted. That
is what democracy is all about. Not the United States to come
in and say, well, you did not vote the way we want you to vote,
or you are not moving the way we tell you to vote. People do
not want to be told. They want an honest answer, respect us.
The people of Bolivia talking. So why can't their vote be
respected? It is their country, and it is our job to figure out
how to work collectively with them.
Many of these individuals have never had an opportunity to
have a voice in government before. Now they have a voice. I
think that is a good thing. Democracy is not something that you
just throw around and jus say it happens. It took us a long
time to do it right here. I mean, I can recall that just a few
years ago, you know, it is not hard for me to remember that we
had to amend our constitution. It is called the Fifteenth
Amendment to the United States Constitution that prohibited
discrimination against voters, and it was ratified in 1870. But
even in this great country it was not until 1965, with the
Voting Rights Act, that African-Americans began to have true
freedom and exercise the right and responsibility to vote. As
we all say, we did not have a democracy.
There is a democracy going on in Bolivia. There is a
democracy going on in other places. If you talk to other
leaders on the hemisphere, that is what they like. You talk to
President Lula as I have. When he was in New York, he recently
said while he was sitting alongside President Morales that we
will not have lasting prosperity if all our South American
brothers do not have prosperity as well. That is what we should
wish for them. But we should not say that you come in and jus
do what I tell you to do because I am the United States of
America and I am bigger than you. I have more military power
than you.
I think that is why we are looked at in a bad way, and I am
hopeful that there is a new message that is being sent by the
new administration; that we are going to be moving in a
different direction. Foreign policy is not going to be
conducted the same as it has been for the last 8 years, and to
me that is a positive because when we work together, as we have
in the beginning until we get into these rhetoric
conversations, is beneficial for the Bolivians and it is
beneficial for the United States of America, and that is what
we have got to look at for that compromise. Down the middle. We
can talk to one another and figure out how we can do together.
I think, for example, when it comes to economic ties we
must figure out how to address the ATPDA with Bolivia. This
program has proven successful in Bolivia; has created jobs and
given hope to 1,000 of hard-working Bolivians. I look forward
to working with a new path on the ATPDEA and drug cooperation
this year.
But I conclude with a statement that was made by a little
boy. It was an article that I read just a few minutes ago on
the way here and reading. It was from a boy from a remote farm
in Bolivia where--and he was an indigenous boy, and he told
reporters, ``Now we can be equal to the others. Now there
should be no more discrimination.''
That young boy has hope for a better tomorrow because
people were able to participate in a democracy, and for the
first time individuals who for decades did not have a voice in
their own government finally has a voice. That is a good thing.
They are proud of the fact that they have an indigenous
President who not only represents them, but represents the old
country just as I am proud of the fact that in the United
States of America I have President Barack Obama who happens to
be an African-American but represents all of the people of the
United States. It is democracy at work, and we should applaud
that.
Mr. Engel. Thank you. Thank you, Mr. Meeks.
We have a vote so I am not going to prolong the hearing,
but I just want to throw out a couple of things, and these are
things to think about. President Bush, in September,
decertified Bolivia by adding it to the list of countries that
failed to live up to their obligations under the International
Narcotics Agreements, and one of the things we need to think
about is if President Bush decertified Bolivia, is it something
that we should negotiate now with the Bolivian Government to
see if they would change their policies and perhaps would not
be decertified.
The other thing is that President Obama has the authority
to unilaterally reinstate Bolivia as an ATPDEA beneficiary
country anytime, and so the question will be should he do it,
should it be without preconditions and immediately, or should
the reinstatement of ATPDEA be contingent upon either an
exchange of ambassadors and/or the return of U.S. Drug
Enforcement Administration, DEA personnel, and the
recertification of Bolivia, someone cooperating with us in the
fight against drugs. These are all questions that we are going
to have to look at, and hopefully will be answered in the not
too distant future.
I want to thank our guests for testifying. The testimony
was certainly very interesting. Obviously, this is going to
continue and United States-Bolivian relations are going to be
something that we can continue to monitor, and talk about.
I want to just say that when we are looking at the
decertification, ATPDEA, and the removal of our ambassadors, we
also ought to look at the Peace Corps. I think, was it Mr.
Payne who mentioned the Peace Corps, the Peace Corps
unilaterally, Peace Corps left Bolivia citing growing
instability, and announced the suspension of its operations in
Bolivia, and there was a removal of 113 U.S. volunteers that
came shortly after the expulsion of our ambassador, and the
question is was it tit for tat? Should it be tit for tat?
Should we use the Peace Corps as a tool in diplomacy, or was
this just something that really didn't have anything to do with
the removal of the ambassadors? That is also something that we
will continue to monitor and something that is very interesting
for us to follow.
So I want to thank our witnesses. I want to thank you very
much.
I want to announce that either on March 18 or March 19 this
subcommittee, in conjunction with Representative Cuellar, who
chairs a subcommittee on the Homeland Security Committee, will
be having a joint hearing on Mexico, and the problems with the
drug cartels and the ongoing violence and the increase in
violence in Mexico involving drugs. There is an article in
today's Washington Times on the front page which talks about
the drug cartels in Mexico having 100,000 soldiers that it
controls, and the Mexican Government only has a little bit more
than 100,000. So this is very, very serious when the drug
cartels have as many people as the entire Mexican Government in
terms of soldiers, and we look at the possible destabilization
of that country.
Our subcommittee just came back from a trip to Mexico where
we had discussions with President Calderon for a long, long
time. And so that will be on March 18 or 19. We are still
finalizing the time and the place, but that will be with
Congressman Cuellar, and it will be both our subcommittees, so
I hope people will come, and we can get to the core of the
problems in Mexico.
So, again, thank you for testifying----
Mr. Meeks. Mr. Chairman.
Mr. Engel. Yes, Mr. Meeks.
Mr. Meeks. I would like to submit my entire opening remark
for the record, without objection.
Mr. Engel. Without objection, so ordered. His entire
remarks will be part of the record.
Thank you, again. Thanks, Mr. Mack and all the witnesses
for testifying, and the hearing is now adjourned.
[Whereupon, at 3:45 p.m., the subcommittee was adjourned.]
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reprinted here but are available in committee records.]
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