00:00This is a story of rebranding a country.
00:03Rodrigo Paz was elected president of Bolivia in November,
00:07marking a major shift for the country following two decades of socialist rule.
00:11Paz has a mandate of economic reform, closer relations with the United States,
00:16and increased foreign investment.
00:18But as our colleague David Gura found out,
00:21ideas and execution are sometimes very different things.
00:28The Salar de Ayuni in Bolivia is the country's crown jewel.
00:32It's a sprawling salt flat on the Andean Altaplano.
00:35So large, it's visible from space.
00:38We are at 3,650 meters above sea level, my friend.
00:44Very high.
00:45Very high.
00:48Bolivia's economy benefits from the tourists who flock to the Salar from all over the world.
00:52But what the country's leadership is banking on is what's underneath this snow-like layer of salt.
00:59So the lithium mining is just down on the salt.
01:02The idea of the government was, like, do some manufacturing batteries or electric cars, things like that.
01:09But, you know, it takes a long time, of course.
01:12And also we need some technology from outside, you know.
01:15We're standing on top of one of the largest lithium resources in the world.
01:20And President Rodrigo Paz says if the country can develop these reserves,
01:24it will transform Bolivia's struggling economy, improving the lives of some 12 million Bolivians.
01:30Perú, Bolivia y Chile son la mayor concentración de minerales en el mundo.
01:37Perú mueve 50 mil millones de dólares al año.
01:43Chile mueve 65 mil millones de dólares al año.
01:50Bolivia es la que mayor concentración de minerales tiene.
01:54Y solo movemos al año 6 mil millones.
01:58La pregunta es, ¿por qué queremos ser pobres?
02:24We were told to climb through barricades, part of a police perimeter that protected Bolivia's parliament building and presidential palace.
02:31We were told to wait in a cafe on a mostly empty plaza.
02:36And as the hours ticked by, we could hear protesters just a few blocks away throwing dynamite.
02:44Tear gas hung in the air.
02:48President Paz, we learned, was locked in tense negotiations.
02:52Just before midnight, we got word from one of his advisors the president would have to postpone our interview.
02:59One week later, we finally got our chance to talk with him.
03:02It's been a busy week.
03:04Three weeks.
03:05Three weeks.
03:05Many of these protesters are calling on you to resign, to step down.
03:10And I'm wondering if there's a point at which that will become something that you would consider.
03:14De aquí a cinco años, cuando finalicemos la gestión, Bolivia será un país avanzado sobre las bases de una modernidad
03:25necesaria en nuevas instituciones,
03:29una lucha frontal contra la corrupción, un déficit fiscal controlado,
03:36una opción clara de crecimiento de una economía abierta, con leyes claras,
03:44pero además un país donde las diferencias raciales, las diferencias regionales, las diferencias culturales
03:55no sean usadas para generar conflictos políticos, donde espero dejar un gobierno de participación plural.
04:03At a precarious moment for his presidency, Rodrigo Paz has gotten public support from the Trump administration.
04:11Secretary of State Marco Rubio said the United States stands squarely in support of Bolivia's government.
04:17Trump and his team have embraced Paz's new vision for Bolivia,
04:20as they've welcomed wins by other center-right politicians in Latin America.
04:24Me reuní con el presidente Trump.
04:27Hay una relación sobre la visión geopolítica y geoeconómica en el ámbito continental.
04:34La visión de Bolivia es muy clara, es pragmática.
04:38Todo aquello que sea funcional para el desarrollo de nuestra economía,
04:43de la economía de la gente, estaremos sentados para poder colaborar y ser parte de una visión global.
04:51I think that investors, in general, should have the patience to follow the situation
04:56and see, you know, how well he pulls it off.
05:00Hans Humes has spent his career investing in frontier markets.
05:05He's the chairman and CEO of Greylock Capital.
05:07The markets generally give a pretty positive tailwind
05:15when a right-of-center government comes in.
05:17So getting the enthusiasm, putting it out there, saying we're open for investment, great.
05:22And then tapping the markets when they did, raising a billion dollars,
05:25I think, you know, is a good signal.
05:27Everybody knows the Bolivia story.
05:29It's an incredibly, you know, commodity-wise,
05:34it's kind of hard not to see it as a really easy place to make money.
05:39It's just the sort of the ethnic tensions there that have always existed.
05:43And the fact that they have a tradition of going out in the streets,
05:46there's been a lot of turnover of governments.
05:47And as we're seeing now, it's pretty easy to sort of choke the economy.
05:53Doing business in Bolivia has not been easy.
05:55And there's been talk of harnessing its lithium for decades.
05:58Today, a lithium plant owned by the state is running at just 15% of capacity.
06:04And contracts that Chinese and Russian companies signed with Paz's predecessor
06:08haven't been ratified by Bolivia's Congress.
06:11In the near term, Bolivia wants to boost tourism as a source of revenue.
06:15But the longer-term vision is to do more with its minerals.
06:19The country's never been closed for business, right?
06:22There's always been foreign investors coming in.
06:26And there's always been the ability to do business.
06:29But there was always difficulties with the administration.
06:33Jorge Nchauste is a senior partner at the law firm Dentons, based in La Paz.
06:37And he spends a lot of his time working with foreign investors
06:40on deals involving Bolivia's natural resources.
06:43Foreign investors are a little weary and concerned, right?
06:48That their rights won't be respected, right?
06:50And they won't be able to carry out the project in the terms that they want.
06:54One of the main things in some strategic sectors was that you needed to be in an agreement with the
07:01government.
07:02And to the extent that you weren't able to have a security,
07:08that the government was going to actually, you know, comply with their side of the agreement.
07:13That was a complicated situation.
07:15If the government had too much of a say, right, and you were not in a position to, you know,
07:22make your rights upheld,
07:27then, of course, that gives everyone pause.
07:29The fact that Bolivia left the ICSIT convention and was reluctant to enter into international arbitration agreements,
07:38that gave a lot of investors pause.
07:40What needs to happen over the course of the next year?
07:44President Paz has a five-year term.
07:45But for Bolivia to get on track in the way that he wants it to, what needs to happen in
07:50a year's time?
07:51They need to see results of some sort, right?
07:54So some of those results have already been seen, right?
07:57We need to stabilize the economy.
08:00To do that, Bolivia has turned to the International Monetary Fund.
08:03It's in negotiations for a $3 billion package that Paz says would go towards social organizations,
08:10entrepreneurship, and economic development.
08:13But just six months into Preston Paz's term, many Bolivians seem to be running out of patience.
08:19Protests have followed his decision to cut fuel subsidies.
08:23And with inflation at 14 percent as recently as April, the pressure has mounted.
08:28But the calls for Paz to step down go beyond economics.
08:31Some opposition groups have sought to force him from office entirely.
08:35And the blockades they've erected are now causing shortages of food, gasoline, and medical supplies.
08:43Do you see any missteps, things he could have done differently or should have done differently?
08:47Pulling away subsidies, it's the right thing to do.
08:54It's a wrong thing to do if you don't manage it well.
08:57One of the problems that you see in a lot of these countries, whether it's Ecuador or Bolivia, is you
09:06want to head off people going into the street.
09:08So maybe he should have tried to have a bit of a negotiation on the timing of removing subsidies, slow
09:23walking it.
09:24He probably should have recognized it stylistically.
09:28He might have wanted to do Malay, but practically speaking, he didn't have, you know, he didn't have the national
09:38support that Malay did.
09:43I imagine there are investors outside the country who are watching what's unfolding in Bolivia and wondering how much has
09:49changed.
09:50If it's still status quo that there are protests and demonstrations and overarching uncertainty.
09:56What would you say to those investors or those prospective investors about what Bolivia is like today and how welcoming
10:01Bolivia is of outside investment?
10:03We promised 20 years of being possible to be a possible Suiza.
10:13That was the promise for 20 years ago.
10:1620 years later they left a broken economy without their natural resources like the hydrocarbures to export.
10:50President Paz is pushing for changes to Bolivia's legal framework to make the country more business friendly.
10:56He's still making his pitch to the Bolivian people and also to outside investors.
11:01The country just held its first dollar denominated bond sale in almost five years.
11:06What would it take for you personally to invest in Bolivia at this point in time?
11:10We own some of the bonds.
11:11I mean, we're already in there.
11:12We're bond guys.
11:13I'm not going to buy a lithium mine.
11:15I have friends who might be, you know, I just wouldn't know what to do with it.
11:18But yeah, I think the risk reward now, it's tricky.
11:21I'm not going to put 50% of the portfolio in it, but I think it's a good risk return.
11:26It's had a lot of bad headlines.
11:28I'm willing to keep the focus there because the macro story is a good one.
11:33Because the macro story is quite an interesting one.
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