Maybe it should not be surprising, then, that late last year Bolivia was able to sell bonds on the international bond market for the first time since 1917. The interest rate demanded by lenders was below five percent -- less than the rate being paid by Spain.
The oft-told tale of contemporary political economy concludes that market liberalization is the key to economic development, and that growing income inequality is an unfortunate but nearly inevitable byproduct. That story -- or at least the red-meat version that gained prominence in the last decade -- is now being tested in Latin America. On the one hand, the troubles dogging Venezuela suggest that the road to economic hell is still paved with populist intentions. On the other, Brazil's economic success (albeit modest success) is surely evidence that growth and economic justice need not be incompatible.
And where does Bolivia fit the schema? It's hard to say. Morales may talk the same talk as Hugo Chavez, but he doesn't walk the same walk. It's possible that Bolivian populism is living on borrowed time, that the leveling of global commodity prices, the alienation of foreign investors and the inherent inefficiency of state-owned industry will soon enough slow growth to a crawl -- and that competing claims to a dwindling economic pie will thereafter overwhelm and destabilize the government. But it's also possible that the empowerment of Bolivia's long-suffering indigenous majority will lead to a virtuous circle in which free enterprise can make a gradual comeback. History has a way of undermining conventional wisdoms.