Mario Gustavo Guzmán Saldaña clearly remembers his first interview with Evo Morales in 2002. At the time, he was a columnist for Pulso — a left-leaning weekly newspaper in La Paz — and Morales was a rabble-rousing union leader intent on turning Bolivian politics upside down.

Both men considered themselves anti-imperialists, and Guzmán immediately took a liking to the firebrand orator, whom he interviewed several more times over the next few years. Then, in December 2005, Morales stunned Latin America and the world when he was elected president with 53.9 percent of the vote — becoming Bolivia’s first self-declared indigenous leader in the country’s 183-year history.

“In June 2006, Evo called me to the presidential palace and asked me to be Bolivia’s ambassador to the United States,” Guzmán recalls. “‘Compañero,’ I told him, ‘estas loco? [Are you crazy?] I’m not qualified for this job.’ He answered: ‘And how do you think I got to be president of the republic?’”

It was an offer Guzmán couldn’t refuse, and certainly not one he regrets two years after his arrival in Washington — especially now that Morales has the political mandate he needs to carry out the most sweeping, controversial political reforms in Bolivian history.

On Aug. 10, an estimated 63.5 percent of voters in this impoverished country of 9.2 million backed the Movimiento al Socialismo (MAS) party of Morales and Vice President Álvaro García Linera in a mid-term recall referendum whose results surprised even the president’s most ardent supporters.

“I was convinced the yes vote would be around 60 percent, but we got closer to 70 percent,” Guzmán says. Indeed, when all the numbers from outlying areas were counted, Morales garnered more than 67 percent of the vote. “The Bolivian people have clearly decided to support Evo Morales and his principle objective: to recover control of our natural resources, especially oil and gas. This now obligates the government and the opposition to find a solution to our problems based on dialogue.”

The “yes” victory allows Morales to complete his five-year term in 2010 as scheduled, while a “no” would have immediately opened his position for re-election. For this to occur, he would’ve had to have been rejected by a greater percentage of the electorate than initially voted him into office — so anything over 60 percent would have been considered a victory from the ruling government’s point of view.

Yet the referendum also strengthened the opposition, with voters in three of the four states supporting greater autonomy from the central government in La Paz, rejecting Morales and ratifying opposition governors in all four of those states. This includes Ruben Costas, the powerful governor of Santa Cruz, and three other opposition governors who have all pushed for greater autonomy for their resource-rich, pro-capitalist provinces.

Although Morales has offered to talk to his rivals for the sake of national unity, it appears that unity is becoming increasingly elusive. Less than two weeks after the referendum, leaders in five opposition-controlled states proclaimed a general strike, resulting in clashes between anti-government protesters and Morales loyalists in Santa Cruz and paralyzing a large chunk of this deeply fractured Andean nation. “The polarization will continue,” former Bolivian President Carlos Mesa predicted in the Miami Herald the day after the referendum. “So will the radical policies by both sides. Neither side has enough power to make the changes it wants on its own.”

Says Larry Birns of the Washington-based Council on Hemispheric Affairs: “Judging by the results, it seems as if the recall vote will not ease the divisive political tensions riveting the country, but instead may exacerbate them.”

Guzmán though says the referendum should not be used to further divide the nation. “The big landowners have always protested against our reforms,” he told The Washington Diplomat. “Autonomy has become the rallying cry of the opposition. But we think the referendum, the first in our country’s history, opens a dialogue for resolving our problems.”

The ambassador adds: “For the first time in Bolivian history, the core of decisions is being made by indigenous campesinos [farmers]. Until now, ours had always been a story of caudillos [strongmen] and political parties,” he explains. “We had 20 years of neo-liberalism — from 1985 to 2005 — and the country was governed the same as always. What was the result? A country just as poor as it was 20 years earlier. That’s why Morales was elected.”

In fact, Bolivia has the unlucky distinction of being the poorest country in South America. In 2007, the United Nations Development Programme ranked it 117th on its global human development index, putting it right behind Kyrgyzstan and just ahead of Guatemala. Annual per-capita income is about class=”import-text”>2008September.Bolivian Envoy.txt,200, though many indigenous families — especially in the country’s western, mountainous regions — get by on much less than that.

In addition, about 25 percent of Bolivian children under 3 years old are malnourished, while six out of every 10 Bolivians live below the poverty line — and four out of those six are among the indigenous inhabitants who comprise 62 percent of Bolivia’s population. Yet this doesn’t include Guzmán, a mestizo who speaks neither Quechua nor Aymara, the country’s two leading indigenous languages. Guzmán is most at home in Spanish — the language he used to speak to The Diplomat about his controversial president in a rare interview with the American media.

In a city known for stuffiness, the relaxed Guzmán, 51, hardly fits the stereotype of a typical ambassador. Like all good revolutionaries, he rarely wears a tie, and he keeps his shiny black hair tied back in a ponytail.

Guzmán is married to the former Adriana Amparo, with whom he has three daughters and a son. He studied economics and literature in La Paz, where he worked at the city’s cultural center and operated a graphic design firm. Bolivia’s unconventional man in Washington also spent 20 years in journalism and publishing — editing not only Pulso but two other newspapers, La Razón and La Prensa — before entering the diplomatic world “by an unexpected turn of fate,” according to his own official resume.

“My central mission is to contribute toward transforming the unequal relations between Bolivia and the United States into one of mutual respect and dignity,” he says.

To that end, Guzmán claims he has “good relations” with the U.S. ambassador to Bolivia, Philip Goldberg, despite the State Department’s decision to recall him for consultations in early June following violent anti-American protests in front of the U.S. Embassy in La Paz.

In justifying its decision to recall Goldberg, State Department spokesman Gonzalo Gallegos said “we are concerned by the recent statement of some Bolivian government officials that cast doubt on Bolivia’s commitment to fulfill its Vienna Convention obligations to protect diplomatic staff and facilities. Failure to fulfill these responsibilities would endanger both American citizens and the hundreds of Bolivians who work in the embassy.”

Not very friendly words, to say the least. But Guzmán counters that there’s been a long history of mutual suspicion and distrust between the two countries.

“Bilateral relations have to be based on confidence, though President Morales has very good reasons not to confide in the United States,” he argues. “Only six years ago, the U.S. ambassador advised Bolivians not to vote for him. Only three years ago, Morales appeared on a State Department list of terrorists. And before becoming president, Morales was considered a political enemy because he opposed the struggle against narco-trafficking.”

Guzmán confirmed that local authorities in the coca-growing region of Chapare have suspended their agreements with the U.S. Agency for International Development, which tried to get farmers to replace coca with other crops, though authorities in the equally important coca region of Yungas have not done so. (The traditional crop produces the main ingredient for cocaine.)

“For the past two and a half years, Bolivia has complied with its promises to the U.S. to eradicate coca. U.S. law demands respect for human rights, but after two and a half years, Chapare was a war zone,” Guzmán says. “Today it’s at peace.”

Indeed, according to a recent report in Time magazine, “Coca cultivation is under control and drug trafficking interdiction is up. The U.S. acknowledges the achievements, even as it remains skeptical of Morales’ policies on the industrialization of non-narcotic coca products. Still, Morales has managed to meet at least some of the goals of the U.S. on his own terms, without turning into an enemy of his own people.”

Yet the country — roughly the size of Texas and California combined — remains deeply divided because of long-standing cultural, economic and geographical differences.

“At least five of Bolivia’s nine departments are now being governed by prefects critical of the Morales administration,” according to a report by the Council on Hemispheric Affairs (COHA). “In fact, only one of the three prefects sympathetic to Morales — Mario Iporre from Potosí — managed to avoid defeat” in the Aug. 10 referendum.

“In one sense, Morales’ wide margin of victory should give him the leverage to pursue his populist agenda, which includes the redistribution of fallow landholdings, the nationalization of the country’s lucrative hydrocarbons sector, and the legal empowerment of Bolivia’s indigenous majority,” the report says.

On the other hand, the opposition was also bolstered by the vote. As COHA noted, Ruben Costas, prefect of the wealthy department of Santa Cruz, received a greater percentage of “yes” votes than any other incumbent. His department boasts Bolivia’s most developed capitalist economy, organized around large soybean plantations. Santa Cruz is also home to Bolivia’s most developed urban center and influential business interests. For these reasons, the area stands to lose more than any other if the president manages to push through his populist reforms.

Bolivia’s bright spot, of course, is its enormous hydrocarbon reserves. According to government statistics, the country has 54 trillion cubic feet of natural gas, with lucrative contracts now in place to sell that gas to neighboring Brazil and Argentina.

Thanks to a renegotiation of the contracts, according to Guzmán, Bolivia now receives 60 percent to 70 percent of the profits, which are distributed to the people, while foreign energy companies get the remaining 30 percent to 40 percent. Before Morales took office, it was the opposite.

“Today, incomes of the local governments and municipalities have quadrupled, in some cases quintupled, thanks to the renegotiation of contracts. This is indisputable,” declares the ambassador, pointing out that between 2004 and 2007, Bolivia boosted oil and gas revenues by class=”import-text”>2008September.Bolivian Envoy.txt.5 billion and signed nine exploration contracts with overseas companies.

“After 40 years, a company from India finally signed a .3 billion contract to exploit iron ore in Santa Cruz. No other government was able to achieve this,” Guzmán adds, though he admits that most of the recent jump in oil and gas revenues is due to rising commodity prices rather than actual new investment.

But Eduardo Paz, president of the Business Chamber of Santa Cruz and a leading opposition figure, adamantly disputes those claims, arguing instead that there’s been no investment at all in the oil sector since Morales became president.

“Oil companies say there’s a lot of opportunities, and they have capital to invest, but they don’t trust this government and I don’t blame them,” Paz said at a July 29 panel discussion on Bolivia sponsored by the Washington-based Hudson Institute, a conservative think tank.

“It’s very tough to trust a government that gives you so many surprises. I don’t see that changing, although we know that Argentina needs gas badly from Bolivia, Chile could use Bolivian gas, and Peru has an LNG [liquefied natural gas] project that we didn’t build ourselves,” said the businessman. “This government promised to modernize the gas sector, and we don’t see that happening. We are losing opportunities.”

The three things average Bolivians dislike most about Morales, according to Paz, are the bloated government bureaucracy, the president’s “confrontational approach” and overwhelming Venezuelan influence in their daily lives.

“He does the same thing Hugo Chávez does in Venezuela — he tries to isolate a small group of people and put a large mass of people against them. That’s how he builds power,” Paz charged. “Our president goes to different municipalities and hands out checks from the Venezuelan Embassy — and then talks about American imperialism.”

Guzmán bristles at suggestions that his hero is remaking himself in the image of Chávez, whom many U.S. officials consider to be Latin America’s single biggest threat to stability.

“The political process in Bolivia would have existed with or without Chávez. It has nothing to do with him,” Guzmán points out. “Our president is not a military officer, and he’s never participated in a coup. The difference between the Venezuelan and Bolivian processes is in the origin. Morales is the leader of a group of socialists.”

Chávez isn’t the only controversial head of state Morales has befriended.

Iranian President Mahmoud Ahmadinejad recently visited La Paz, pledging to invest class=”import-text”>2008September.Bolivian Envoy.txt billion in Bolivia’s oil and gas sector over the next five years. In a subsequent phone call to Morales, Ahmadinejad — who is defying the West by building up Iran’s nuclear capabilities — praised Bolivia for its “resistance against internal and foreign conspiracies” and invited the indigenous leader to visit Tehran later this year.

As far as Guzmán is concerned, this is strictly Bolivia’s business — and no one else’s.

“We don’t ask anyone to choose our friends, or our enemies. In the case of Iran, we understand Washington’s reasonable concerns and we have explained to congressmen and to the White House that our interests with Iran are exclusively to develop the oil and gas industry,” he says. “Bolivia is against the use of nuclear weapons, but we also have the right to develop, and we know that Iran can help us. The only thing that interests us is to be liberated from poverty.”

Paz isn’t buying that argument. “It doesn’t make very much sense when we see that Iran has the same problems as we do,” he said. “They have oil but not enough investment to get that oil out. We have gas and we don’t have enough investment. Even Venezuela isn’t investing enough. I think the anti-American sentiment of these regimes is what makes them look to Iran.”

Guzmán though is clearly fed up that opponents of Morales always talk about the president’s friendship with U.S. adversaries like Ahmadinejad, Chávez and Fidel Castro — and little else. “We have extraordinary relations with Brazil, Argentina and Chile too,” he says, “but the United States doesn’t want to see this reality.”

The ambassador declined to say though if he thinks the situation will change following the November 2008 elections. Asked whether he prefers Sen. John McCain (R-Ariz.) or Sen. Barack Obama (D-Ill.) in the White House, Guzmán deflected the question. “At this point, it’s not important who wins,” he says simply. “Relations must improve.”

UPDATE: On Sept 10, Bolivian President Evo Morales declared U.S. Ambassador to Bolivia Philip Goldberg persona non grata and ordered him to leave the country after Goldberg reportedly met with governors aligned against the leftist president. In response, on Sept. 11, the State Department declared Bolivian Ambassador Gustavo Guzman persona non grata as well, calling Morales’s declaration “unwarranted.”

About the Author

Larry Luxner is news editor of The Washington Diplomat.