CONGRESSIONAL ECONOMIC COMMISSIONS' VIEWS DIFFER

UNCLAS LA PAZ 001131

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/AND LPETRONI
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH

E.O. 12958: N/A
TAGS: ECON PGOV BL
SUBJECT: CONGRESSIONAL ECONOMIC COMMISSIONS' VIEWS DIFFER
SHARPLY

REF: LA PAZ 1114


1. (SBU) Summary: While staff of the MAS-led Chamber of
Deputies Economic and Sustainable Development Commissions
look favorably on the initial performance of the Morales
administration, the president of the commissions'
opposition-led Senate counterpart believes the government has
acted erratically and even foolishly, undermining domestic
and foreign investors' confidence in the administration and
hurting Bolivia's chances for economic growth. The sharp
differences in commission views reflect broad political
divisions and rising popular frustration (reftel). End
summary.


2. (SBU) Staff of the MAS-led Chamber of Deputies Economic
and Sustainable Development Commissions told us April 5 they
believed the Morales administration was moving in the right
direction. They lauded Morales' desire to strengthen the
economy and expressed confidence he would fulfill promises to
create jobs, saying they expected the president and other GOB
officials to work to improve the lives of the poor. They
highlighted Morales' pledge to protect small producers and
the indigenous from the potentially harmful effects of free
trade and said they supported the government's efforts to
nationalize hydrocarbons and other natural resources, arguing
that these should be used for the benefit of the people.
Commission staff seemed confident the Morales administration
would effect meaningful change, both through its own policies
and through the upcoming Constituent Assembly - a key tool,
they said, for shaping Bolivia's future.


3. (SBU) These views differ sharply from those of Podemos
Senator Roberto Ruiz, President of the Senate Economic
Development Commission. Ruiz told us April 25 he believed
the government had acted erratically and even foolishly,
undermining domestic and foreign investors' confidence in the
administration and hurting Bolivia's chances for economic
growth. Ruiz said he was concerned by GOB officials'
inconsistencies and argued that frequent policy shifts made
it impossible to identify the government's objectives. He
also said Morales' stated intent to seek alternative trade
arrangements and nationalize Bolivia's natural resources had
increased investment risk and caused both domestic and
foreign firms to abandon or delay potential projects, taking
with them thousands of jobs. And with the Constituent
Assembly presenting more unknowns, Ruiz feared investors
would wait even longer to make decisions, further threatening
Bolivia's chances of realizing long-term economic gains.


4. (SBU) Comment: The sharp differences in commission views
reflect broad political divisions and rising popular
frustration (reftel). Social and private sector
organizations are increasingly lining up to support or oppose
the Morales administration's economic policies, with the line
between them ever more clearly defined. According to Senator
Ruiz, popular frustration with the government's failure to
fulfill myriad promises - particularly those emphasizing the
creation of new jobs and better living conditions - built up
at an historically rapid pace. This does not bode well for
the Morales administration's ability to act, as its hands
seem increasingly tied by conflicting demands for more money,
more jobs, and more power. End comment.
GREENLEE