Cablegate: La Paz Business Associations Remain Reluctant To

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STATE FOR WHA/AND LPETRONI
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E.O. 12958: N/A
TAGS: EINV ETRD ECON PREL PGOV BL
SUBJECT: LA PAZ BUSINESS ASSOCIATIONS REMAIN RELUCTANT TO
CRITICIZE

1. (U) Summary: In September 20 meetings, representatives of
La Paz business associations voiced concerns about the nature
of Bolivia's economy, the direction of GOB economic policies,
and the outcome of the Constituent Assembly. Despite their
worries, representatives remain reluctant to criticize the
Morales administration; their low profile approach hampers
their ability to effectively lobby policymakers. End summary.

2. (U) In September 20 meetings, National Chamber of Commerce
Vice President Oscar Medina expressed concern about the
nature of Bolivia's economy, telling Econoff he believed the
economy was viable - as evidenced by the export successes of
furniture manufacturers, textile and apparel firms, jewelry
makers, and soy and quinoa producers - but relied too heavily
on natural resources exports. Medina argued that the economy
lacks stability, pointing out that populist rhetoric,
threatened nationalizations, and political and economic
uncertainty raise business costs and discourage investment
from Bolivians and foreigners alike.

3. (U) Members of the National Chamber of Industries noted
that the Bolivian economy lacks not only stability, but also
judicial security and respect for the rule of law. Many
businessmen expressed concern about the direction of GOB
economic policies, worrying that the Morales administration
would seek to increase the state's economic weight and bring
gas, energy, mining, forests, and other "strategic" resources
under state control. Chamber representatives expressed fears
that poorly managed economic policies would hinder long-term
growth and delay much-needed economic development.

4. (U) Representatives of both associations, along with
members of the National Chamber of Exporters, also expressed
concern about the outcome of the Constituent Assembly, noting
that sharp departures from existing economic policies could
undermine rather than strengthen economic growth,
particularly if delegates abandoned free market policies,
pursued nationalizations, and disrupted exporters' access to
foreign markets. Exports, many said, are key to generating
sustained employment and long-term economic growth, but GOB
moves to limit trade could threaten success.

5. (U) Despite their worries, business association
representatives remain reluctant to criticize the Morales
administration, preferring instead to avoid calling attention
to the private sector. Their low profile approach hampers
their ability to effectively lobby policymakers, and many
lack access to influential GOB officials. In the absence of
coherent communications or lobbying strategies, business
associations make only slow progress, if any, in conveying
their concerns and shaping GOB policy.

6. (U) Comment: La Paz business associations may be concerned
about Bolivia's economic future, but they seem unwilling to
pressure the GOB to maintain investor-friendly policies.
Some not only refuse to criticize, but subtly align
themselves with the Morales administration, perhaps convinced
that relative silence and muted support are the best means of
protecting their interests. By keeping a low profile,
however, they make it easier for the GOB to do exactly what
they fear most: radically change the rules of the game. End
comment.
URS

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