White Gold Coup

White Gold Coup

On November 10th, 2019, Evo Morales was removed in a military coup in Bolivia.  Not only does the US not call it a coup, it praised the coup as a step towards democracy in the hemisphere. (1)  The OAS, the Organization of American States, whose membership consists of the United States and Latin American countries, most of which have subordinate relationships with the United States, accused Morales of manipulating the voting results. (2)  These claims fall apart under scrutiny, but the controversy is irrelevant as it relates to the developments in Bolivia, because Morales agreed to schedule a new election, and Morales was removed by the military prior to completing his previous term which didn’t expire until January. (3)  The controversy is relevant in the role of the OAS as an impartial election observer.  

1: Brett Samuels, 11/11/2019 “Trump Celebrates Resignation of Bolivia’s President”.  The Hill.  https://thehill.com/homenews/administration/469906-trump-celebrates-resignation-of-bolivias-president

2:  Guillaume Long, David Rosnick, Cavan Kharrazian, and Kevin Cashman, 11/2019 “What Happened in Bolivia’s 2019 Vote Count? The Role of the OAS Observer Mission. Center for Economic Policy Research. http://cepr.net/images/stories/reports/bolivia-elections-2019-11.pdf?v=3

3: Al Jazeera, 11/10/2019 “Bolivia’s Morales Calls for New Elections After OAS Audit”  https://www.aljazeera.com/news/2019/11/bolivia-morales-calls-elections-oas-audit-191110110329121.html

The most relevant point in the OAS audit of the election, is that 99.8% of the votes counted, matched the tally sheets at the polling stations, which were signed by polling workers, who were randomly selected from the public, in an environment that encourages and allows for any citizen, of any political affiliation to observe the tallies and the process.  What the OAS did not show, was what they asserted: systematic manipulation of voting results.  Systematic manipulation of results would include widespread discrepancies between the official count and the voting tallies.  Instead they made ambiguous accusations to support their conclusions about surges in votes for Morales that upset the trend, which Jake Johnstone points out is caused by Morales supporters being concentrated in rural areas, and the delay involved in submitting those results compared to urban areas.  A paper by the CEPR refutes the claim that the results broke with the projected trend.  The paper charts the progression of Morales’ margin of victory widening as a consistent trend, both the official tallies count as well as the electronic quick count.  CEPR goes on to graph the results of independent models that have Morales winning by an average margin of 10% in multiple scenarios. (4)

4: Jake Johnston, 12/12/2019 “Preliminary Analysis of the Findings of the Final Report of the OAS Audit”.  Center for Economic Policy Research. http://cepr.net/publications/briefings/testimony/preliminary-analysis-of-the-findings-of-the-final-report-on-the-oas-audit  

The election results are irrelevant to proving a coup took place since Morales was constitutionally the president for another 2 months from the previous election regardless of this election and agreed to schedule new elections.  The US position echoed by the flag waving media implies the military was fulfilling a constitutional duty, and is not true.  Not only was Morales forced to resign, but the next three elected officials the constitution prescribes to replace him were forced to resign, leaving senator Jeanine Anez of the Social Democratic Party, an opposition party, as the next one up.    

“It was a national and international coup d’etat,” said Morales. “I’m absolutely convinced it’s a coup against lithium. We as a state had begun industrializing lithium… As a small country of 10 million inhabitants, we were soon going to set the price of lithium. They know we have the greatest lithium reserves in the world of 16,000 square kilometers (over 6,100 square miles).” (5)

5:  Jake Johnson, 12/25/2019 “Evo Morales Says He is Absolutely Convinced US Led Coup in Bolivia to Exploit Lithium”. Common Dreams.  https://www.commondreams.org/news/2019/12/25/evo-morales-says-he-absolutely-convinced-us-led-coup-bolivia-exploit-lithium

Some of these statements are not entirely accurate.  Bolivia has the second largest store of lithium resources in the world and wouldn’t be in a position to set the price of lithium since the current market exists in the absence of any lithium exports from Bolivia.  Retaining state control over the resource would position the Bolivian people to benefit from the resource.  Bolivia did have an agreement with a German company to begin developing the resource which was canceled days prior to the coup.  

Matthew Eisler draws attention to fact that lithium has been over supplied and lost more than 50% of its value in the last two years falling from $25,000 a ton to $10,000 a ton.  He references an uncertain electric vehicle market as the reason why the price is unlikely to recover anytime soon.  The statistic itself is a little misleading, because the price peaked in 2017 at $25,000mt, but in 2014 lithium prices were only $6000mt. This means demand drove up the price, the market responded and over supplied, and the drop in price is the correction.(6) JP Morgan projects a surge not only in electric vehicles but also in hybrid vehicles which is consistent with nearly every other market prediction. (7)  Batteries for electric and hybrid vehicles are only one use for lithium, and demand will increase as nations seek to transition to renewable energy, where lithium is used for grid storage systems and many other products. 

6: Matthew Eisler, 11/15/2019 “Bolivian Lithium: Why You Should Not Expect Any White Gold Rush in the Wake of Morales Overthrow”.  The Conversation.  http://theconversation.com/bolivian-lithium-why-you-should-not-expect-any-white-gold-rush-in-the-wake-of-morales-overthrow-127139

7:  JP Morgan, 10/18/2018 “Driving Into 2025: The future of Electric Vehicles”. “The growth in electric vehicles (EVs) and hybrid electric vehicles (HEVs) is climbing and by 2025, EVs and HEVs will account for an estimated 30% of all vehicle sales. Comparatively, in 2016 just under 1 million vehicles or 1% of global auto sales came from plug-in electric vehicles (PEVs).”

Eislers’ article goes on to point out how the coup harms development of the lithium resource implying US support for the coup, and whatever role the US may have played in facilitating the coup is not motivated by lithium.  Lithium is a finite resource.  Elon Musk has plans to create about a dozen gigafactories, which are plants to assemble lithium batteries.  Musk estimates it will require 100 gigafactories to power the world with renewable energy. (8)  There are enough lithium resources on the planet to supply 100 gigafactories for about 70 years. (9)  Bolivia’s lithium resources are estimated to be about 16% of the world’s supply. (10)  The importance of lithium cannot be overstated in the next few decades.  

8: Sean O’Cane, 11/30/2018 “Tesla Will Live and Die by the GigaFactory”.  The Verge https://www.theverge.com/transportation/2018/11/30/18118451/tesla-gigafactory-nevada-video-elon-musk-jobs-model-3

9: Tam Hunt, 6/2/2015, “Is There Enough Lithium to Maintain the Growth of the Lithium-Ion Battery Market”?  Gtm Since this article was written, an additional 15 million tons of resources have been discovered (see note 10), which moves the projection from 50 years, into the neighborhood of 70 years with 100 gigafactories, which still speaks to the scarcity of the resource in consideration of its importance as an element required to store energy.  https://www.greentechmedia.com/articles/read/is-there-enough-lithium-to-maintain-the-growth-of-the-lithium-ion-battery-m

10: US Geological Survey, Mineral Commodity Summaries, February 2019.  https://prd-wret.s3-us-west-2.amazonaws.com/assets/palladium/production/atoms/files/mcs-2019-lithi.pdf  Bolivia’s lithium resources are estimated at 9 million tons, the world resources of lithium are estimated at 55 million tons.  Meaning Bolivia’s lithium resources represent about just over 16% of the worlds known resources.

The first step is the coup, the second step is electing a rightwing government, and from that point on, civil resistance to foreign investment or to the regime can be put down violently.  You need the first step because Morales intended to extract the material, refine the material, and manufacture battery components.  Meaning the people of Bolivia benefit from the processes of adding value, instead of allowing a multinational corporation to develop the resource, where the country doesn’t even get the profit of the commodity itself, instead it receives a royalty fee.  

Leaders like Morales create an obstacle to US influence in the region which undermines the advantage of US corporations, where independent development and regional cooperation causes global markets to be more competitive.  

Money is made in the value-added process.  Raw materials are obviously worth less than refined material used to make a component of a product.  Obviously, the component of the product isn’t worth as much as the finished product.  The value of the product sold wholesale isn’t as valuable as the product sold to the consumer.  The United States insists its corporations have access to the raw materials, not opportunity to purchase finished products or refined materials from foreign producers.

The multinational wants to refine the raw material into a workable material.  After the raw materials are refined into a workable material, the multinational wants to freely export that material to manufacturing and or assembly plants located in nations with the most desperate labor force.  After the product is finished it wants to sell that product in developed nations.  Morales had been and remained an obstacle to those paramount US interests.