RAY SUAREZ: Socialist Evo Morales is poised to become Bolivia's first Indian president after winning a clear majority in Sunday's election.
EVO MORALES (Translated): I want to reiterate our original indigenous movement does not exclude. It includes. That is our nature. Our government will end discrimination, xenophobia and the hate we have endured.
RAY SUAREZ: And it is from Bolivia's indigenous population -- more than 60 percent of the country's nine million people -- that Morales has gained his strongest support.
FACUNDA JAVIER (Translated): We have won. And now we're going to change this country, all the majority together. The people are finally in power.
RAY SUAREZ: Landlocked Bolivia is among the poorest countries in Latin America. Roughly two thirds of Bolivians live on less than $2 a day.
Bolivia has also suffered political instability. Popular uprisings have toppled two presidents in just three years.
Forty six-year-old Morales is a flamboyant speaker, often rallying antigovernment demonstrators. And one of his key promises -- to stop the U.S.-backed campaign to eradicate coca production -- pits him against the United States.
The local Indians chew coca leaves as a mild stimulant but Bolivia has also become the world's third largest cocaine producer.
The U.S. is spending about $150 million a year to help the current government combat cocaine production and trafficking.
EVO MORALES (Translated): This political tool for the sovereignty of the people -- legally called the movement toward socialism -- was born to defend this coca leaf, to defend our land and territory.
RAY SUAREZ: The State Department today had this cautious response to Morales' victory.
SEAN McCORMACK: We have congratulated him on his apparent victory and we've congratulated the Bolivian people on the kind of election process that they have run, and we hope with this election that they can begin to move beyond what has been a difficult period in Bolivia's political history.
The kind of relationship and the quality of the relationship between the United States and Bolivia will depend on the -- what kind of policies they pursue including how they govern. Do they govern democratically? And do they have a respect for democratic institutions?
RAY SUAREZ: Morales has called himself a nightmare for the U.S., asserting he will be an ally of both Cuba's Fidel Castro and Venezuela's Hugo Chavez.
At regional summits and in meetings with his fellow South American presidents, Chavez has developed into the most vocal opponent of U.S. economic and trade policies in the region.
If Morales's electoral victory is ratified by parliament, he will join a growing group of populist and leftist presidents across South America including in Argentina, Brazil and Uruguay. That number could increase as voters in nine other Latin American countries head to the polls in 2006.
RAY SUAREZ: For two perspectives on Bolivia's incoming president, and the rise of populist leaders in Latin America, we turn to Roger Noriega; he served in the Bush administration as an ambassador to the Organization of American States and as assistant secretary of state for western hemisphere affairs -- he's now at the American Enterprise Institute; and Mark Weisbrot, co-director of the Center for Economic and Policy Research, an organization that promotes debate on economic and social issues in the U.S. and abroad.
And, Mark Weisbrot, why did Bolivians throw out more conventional politicians and choose as their president -- and overwhelmingly -- a man who is the head of the coca farmers and helped engineer the demonstrations that have brought other governments toppling down?
MARK WEISBROT: Well I think you're seeing this across South America as you just showed on the map. What you have here is primarily the result of a 25-year economic failure. People here don't really understand or appreciate this. But you've had very little growth in all of Latin America over the last 25 years.
The total growth of income per person, which is the most basic measure that economists have to measure economic progress, has been only 10 percent.
Now if you look at the prior 20 years, 1960 to 1980, it grew by 82 percent. So you've had a 25-year period now; a whole generation-and-a-half of people in Latin America have really lost out on any chance to improve their living standards.
And this is really the primary issue that's driving these elections that we've seen in Argentina, in Brazil, in Venezuela, in Uruguay, in Ecuador and now in Bolivia.
And, of course, also the rhetoric that he has about, you know, what he says he's against imperialism, against U.S. imperialism, and he talks about that a lot. And of course in Argentina Kirschner talks a lot about the IMF.
Well, Bolivia is an example of that. They've been under IMF agreements almost continuously for nearly 20 years. And their income -- and they've done what they were told to do. They privatized even the Social Security system there. And their income today per person is less than it was in 1980.
So this is an economic failure that Latin Americans tie to the United States. And even more than the issues around drugs or the Iraq war or any other issues where they have disagreements with the current administration, it's this difference over economic policy that's driving the, I think, the conflict here.
RAY SUAREZ: Ambassador, is that what you see, a verdict on economic failure?
ROGER NORIEGA: Well I think anyone that knows anything about Latin America would hesitate to extrapolate using Bolivia as a model. The roots of the instability and ethnic polarity that exists in Bolivia go back 500 years and have very little to do with economic policy of the last three decades.
In point of fact though, economic progress has come to people of Bolivia in terms of the reduction in illiteracy and a decrease in infant mortality, Gross Domestic Product growing.
But we really should be focusing on the future. I think that Morales has achieved an important victory for people who have been on the margins of Bolivian society for 500 years. 60 percent indigenous majority now have a person that looks like them running that country.
And the question for him really is how he's going to take advantage of this significant mandate to extend economic opportunity and political power to his people. We hope that he does that through respect for democratic institutions, which, after all, delivered an important victory for him and for his followers.
RAY SUAREZ: Well, what are the major points in his platform? What is it that he wants to change about the way Bolivia is running to give hope to the indigenous that he was running on behalf of?
ROGER NORIEGA: Well, he talks an awful lot about a statist approach to the economic development of Bolivia. The problem with that is that those sort of statist solutions have a record of failure. They have an opportunity --Bolivia sits today on the second largest reserve of natural gas in the hemisphere, second only to Venezuela.
But to -- and that gas has been there for a thousand years and it will be there for a thousand more if you don't have capital to extract it.
I think what we hope that he develops is a program that uses -- that guarantees property rights, essential property rights, creates a transparent regime to attract international investment and then put those resources at the disposal of the Bolivian people, and consciously extend those resources to help attack the poverty that is really a shame in that country.
RAY SUAREZ: Well, Mark Weisbrot, the previous presidential administrations came to grief just over what was going to happen with that natural gas and how Bolivia, whether Bolivia was going to sell it. What is Morales going to do that's different?
MARK WEISBROT: Well, I think he's going to get a better deal from the multinational companies. He's threatened even to nationalize it, although I don't think that he necessarily will do that. But he's going to drive a harder bargain and make sure that Bolivians get something from their resources. And he's in a very good position to do so.
Even though the country is very highly indebted, you have really a very different situation in Latin America today than you had even five or six years ago. So, for example, in Argentina's case, they're getting right now a billion dollar loan from Venezuela. They also attracted investment from China so they don't necessarily have to do what the United States tells them anymore. And that's part of this kind of regionalist, nationalist rebellion that you're seeing in all of these countries.
And the fact that Argentina was able to, even after their economic collapse in 2001, they got -- they didn't get a dollar from anywhere, you know, from outside. And they recovered and they're growing, they've been growing 9 percent a year for three years now.
So I think Bolivia is going to have a chance. They're just going to have to break with the economic policies that Evo says he wants to break with. And I don't know what Roger considers to be a success but when your income per person is lower than it was 25 years ago, most economists would call that a failure, a terrible failure.
RAY SUAREZ: One of the first things Evo Morales said after his victory was assured was that he's going to pull Bolivia out of U.S.-backed coca eradication programs. Briefly, what does that mean for Bolivia?
ROGER NORIEGA: Well, it could mean turning the country over to not cocaleros -- people who grow coca for their own consumption, which is sort of an ancient part of the Bolivian culture -- but turning it over to those who want to use Bolivia has a bread basket for cocaine and ship it incidentally not so much to the United States as they do to Argentina and to Brazil and to Europe.
And what that risks is undermining the democratic institutions where if countries that have failed to prosecute an aggressive strategy to apply the rule of law against cocaine smugglers and criminal syndicates that move cocaine and heroin out of South America see their institutions attacked and the very institutions that he depended on to get elected and that he hopes now to use to govern in a responsible way would be undermined by lawlessness.
So by all means it is an important part -- coca is an important part of the Bolivian culture. Nothing that we do or want to do for that matter will change that. But what we hope he does not do is turn the country -- turn a blind eye to criminality because that's going to hurt the Bolivian people.
RAY SUAREZ: Is that a risk given that Evo Morales's political base is among the coca growers?
MARK WEISBROT: It's coca growers but not drug traffickers. And he said very clearly we're not going to have cocaine; we're not going to have drug trafficking. He just wants to legalize the coca leaf. And I think a lot of this --
RAY SUAREZ: But is there a way to do that legitimately?
MARK WEISBROT: I think so. But, more importantly, the issue for Latin Americans, you know, here our whole Latin American policy for many years now has been drugs and terrorism. But from the Latin American point of view, it's growth and development. That's what they need.
They need to create jobs. They need to raise people's incomes and living standards. And they used to do that. They haven't done that, I said, for the last 25 years. And that's what this government's priorities are going to be.
He's going to try and use immediately the natural resources of the country to benefit the poor as they did, for example, as they have done in Venezuela in the last few years.
RAY SUAREZ: Mark Weisbrot, Ambassador Noriega, thank you both.
MARK WEISBROT: Thank you.
ROGER NORIEGA: Thank you.