Morales Embarks on Third Term in Bolivia

Country’s first indigenous leader sworn in to rule until 2020, as sliding commodity prices augur more turbulent presidency

Published by Anadolu Agency Jan 21

Bolivia inaugurated President Evo Morales for a third straight term Wednesday, as October’s landslide victory put him on course to become the country’s longest-serving leader.

The Andean nation’s first indigenous leader was “spiritually cleansed” in a ceremony as an Incan emperor at the ancient ruins of Tiwanaku by Lake Titicaca, 45 miles (72 kilometers) west of the capital of La Paz.

Morales, 55, will formally take the oath of office Thursday before Bolivia’s legislative assembly, with world leaders such as Brazil President Dilma Rousseff and Venezuela’s Nicolas Maduro set to attend.

Elected in 2006, Morales presided over a commodities boom, which tripled its economy and slashed poverty.

That powered the socialist’s leader Movement Toward Socialism (MAS) party to win a 61.3 percent majority in last year’s election, and gain two-thirds control of Congress.

But falling prices of chief export natural gas, which is indexed to the price of crude oil, darken the outlook for growth.

“The economy will be a big challenge,” said Raul Madrid, professor of government at the University of Texas in Austin, who focuses on Latin America.

“Morales has an unwieldy coalition of rural and urban interests, and it’s much easier to keep all happy when the economy is growing. What is a positive-sum game becomes zero-sum,” he said.

The International Monetary Fund sees Bolivia growing 5 percent this year, slowing from a heady 6.8 percent in 2013 as exports dwindle.

Sliding natural gas sales, which make up 30 percent of government revenue, could curb the expansion of popular cash transfer programs, according to Samuel George of the Bertelsmann Foundation, a think tank.

Those handouts contributed to poverty reduction, with moderate poverty falling from 63 to 45 percent from 2002 to 2012, according to the World Bank.

Crude prices have fallen about 55 percent since June, plunging well below the $80 a barrel yardstick Bolivia can weather, George said.

Though the effect of a commodity slowdown on Bolivia’s touted harnessing of lithium would be an “important part of Morales’ legacy,” George added.

The landlocked country is estimated to possess half of the world’s deposits of the light metal used in batteries, and is courting investors as it moves forward with extraction plans.

Though Bolivia’s foreign currency reserves – which ended at $14.4 billion in 2014 and the world’s highest relative to GDP – could be be drawn on to offset a raw materials dip, said Nicholas Watson of Teneo Intelligence, a New York-based political risk firm.

“Healthy reserves levels will provide a cushion against a sustained price drop,” Watson said.

Morales’ third mandate will not be judged solely on economic performance however.

Improving hospitals, schools and infrastructure, as well as tackling corruption is crucial in South America’s poorest country, where GDP per capita totals a meager $3,000.

As the former coca growers union head-turned-socialist leader – now nine years in power – embarks on a fresh five-year term, analysts question his intention to remain in power indefinitely.

In running for re-election, Morales skirted the country’s constitution, which bars leaders from governing for more than two terms, after a court ruled his first term ineligible following a constitution re-write in 2009.

The populist firebrand allied to the late Hugo Chavez of Venezuela and Ecuador’s Rafael Correa, reiterated this month that he will respect the young constitution, and instead planned to open a restaurant and tend to a farm when his mandate ends in 2020.

But MAS’ unassailable majority in Congress, which could be used to do away with term limits, and the lavish construction of a new $36 million presidential palace, raise concerns.

“Clearly he is not going to let an institutional barriers get in his way if he wants to stay on for another term,” Madrid said. “I think it’s up to him and what he thinks his prospects are.”

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