Friday, November 17, 2006

Politics Is Pragmatic

The Financial Times discovers that even left wing regimes can be pragmatic. They seem surprised at the success of globalized capitalism which they have touted for so long.

Morales opts for a pragmatic Bolivia

The patients start to queue at Chacaltaya hospital at 3.30am. By the time the doctors arrive, at 8am, the line stretches all the way round Plaza German Busch. This grubby square is in Alto Lima, the poorest area of El Alto, a city of 850,000 that sits above La Paz, Bolivia.

Chacaltaya is the first medical facility in South America’s poorest country to treat patients for free. Its staff are part of a contingent of 1,200 doctors from Cuba who have treated more than 2.2m Bolivians so far this year, or 25 per cent of the population.

The hospital, which is widely believed to be funded by Venezuela, highlights the relationship that Evo Morales, Bolivia’s president, has built with allies in Caracas and Havana.

Yet in recent months La Paz appears to have been seeking greater independence from Venezuela and this radical Latin American axis.

Mr Morales, flush with energy revenues and a sense of importance from his position in the region, has shown signs of moving closer to more moderate regimes in the region, such as Brazil and Argentina, and of reaching out to long-time foes including Chile and the US.

One of the reasons for the shift is that the strength of the Bolivian economy gives Mr Morales much greater room for manoeuvre than his predecessors enjoyed.

Revenues from higher gas prices and gas tax increases imposed last year mean that the government is no longer strapped for cash. Debt payments have been reduced as the result of a debt forgiveness deal agreed by the World Bank and the International Monetary Fund.

The fiscal deficit, which peaked at 8.8 per cent of gross domestic product in 2002, fell to 1.6 per cent of GDP last year and this year is on course to run a fiscal surplus for the first time in three decades.

Vietnam rolls out red carpet for Bush
Still, Hanoi is keen to strengthen further its relationship with Washington, which is better than ever before. Although two-way trade is now at $9bn (€7bn, £4.8bn) – making the US Vietnam’s largest trading partner – “the potential re­mains huge between the two countries,” Nguyen Tang Dung, the Vietnamese premier, said. “It is the consistent policy of the government of Vietnam to move forward, and push relations with the Americans.”

Vietnam’s economic progress
Unlike their more ambivalent predecessors, Hanoi’s new generation of less-ideological, more market-savvy Communist rulers certainly sees foreign investors as important assets in the drive to transform the country into a regional powerhouse, and to generate job opportunities for the approximately 1m young people entering the labour force every year.


State Capitalism


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