Andes Alternative Development, the Reality

(International Relations and Security Network, 09/08/2006)


Editor's Note: This is the first in a three-part series on the impact of microfinance programs in one region of the Americas: Andes, Central America, and along the US-Mexican border, in northern Mexico.


Alternative development programs in South America's Andean countries have a long history of tension and conflict. Many examples of success stories exist, but the balance often tips in favor of poor implementation and distrust.


The reasons why alternative development economic programs succeed or fail rarely bubble to the surface. US officials compute statistics that may conceal very real concerns. Left behind in this process are the farmers surrounded by dead coca bushes and little by the way of real economic development to show for it.


Comparing the numbers from Washington with the state of disgruntled South American farmers creates a dichotomy that begs the question: do alternative economic development programs actually work? The answer points more to the policymakers and implementers themselves, rather than to coca farmers and others who participate in these programs.


In Bolivia and Colombia, the US government's alternative development organization known as USAID has long maintained the position that alternative economic development should be directly tied to coca leaf eradication. More eradication equals more money.


This approach seems to be a clear cut policy in the halls on Capitol Hill, but when put to practice in the rural areas of Bolivia, where coca farmers harbor deep mistrust of US government programs, or in Colombia, where coca farmer communities closely overlap with conflict zones, difficulties emerge. The real mission of USAID as the US government's principle development organization has been seriously questioned and its reputation tarnished.


Farmers rally against program


Against a backdrop of some 15 years of failed economic development programs in Bolivia, USAID along with the Bolivian government initiated a forced coca eradication program in April 1998. It ran until October 2004. During this period, Bolivian police and military implemented the program, which was a condition for receiving development aid.


In Bolivia's coca-growing region of the Chapare, located near the low-land city of Cochabamba, farmers had little choice but to take orders. They stood by as their only source of livelihood was destroyed. It was replaced by promise of livestock and agriculture programs that in some cases did not last longer than a week after the inauguration ceremony.


“We have infrastructure here in Bolivia of packing plants that were inaugurated and opened, and after two weeks never functioned again,” Kathryn Ledebur, director of the Cochabamba-based Andean Information Network, told ISN Security Watch.


“But on paper and to US tax payers this [plant] was shown as a success,” Ledebur explained, adding, “What was portrayed in Washington as a source of income was an abject disaster, and it upset the coca growers because [Washington] said ‘we've invested millions of dollars and the problem is [the Bolivians] are just not good farmers or they just don't want to do it.'”


As the conflict between USAID program implementers and coca growers escalated, two facts became clear. First, USAID would not work with municipalities that were run by coca growers. Instead, it set up parallel organizations whose members would have access to USAID funds. As coca growers began to speak out against this practice and other blatant discrepancies between reality and polished reports in Washington, eradication program directors hired individuals to gather information on those who were publicly complaining.


The second fact was that there was no evidence of a financial aid plan to help bridge the gap between when the farmers gave up their coca crops and when their alternative crops put food on the table. For pineapples, this period of time was two years, for citrus fruits eight years, and for trees much longer. Coca farmers protested because they had no means of financial support. Hunger is a powerful motivator. As a result, roads were blocked and there were regular protests.


“Pineapple producers we talked to said it was more expensive to market their fruit in Cochabamba as opposed to letting it rot in the field,” Ledebur explained.


Godofredo Reinicke, known in Bolivia as the “Defender of the Chapare People” and an active researcher in areas related to coca growing and human rights, has worked closely with coca farmers put through USAID's alternative development program process for over a decade.


In a recent interview with ISN Security Watch, Reinicke shared an anecdote about how coca farmers in the Chapare were unfairly compensated for their eradicated coca plantations.


“To give you an example, alternative development would compensate ten coca farmers who had eradicated some ten hectares of coca bushes at a value of US$25,000. Rather than receive cash, the farmers would receive, for example, cattle,” Reinicke explained, adding, “The head of cattle represented a cost two to three times higher than the cost of cattle on the [Bolivian] market. One cow could cost some US$500, while on the Bolivian market the same cow would cost US$150.”


The inflated value of the cows meant that the Bolivian farmers did not receive the entirety of the value associated with their eradicated coca fields. The farmers, however, had little choice but to accept the cattle and make the best of a situation that was out of their control. Again, they resorted to road blocks and demonstrations - anything to attract attention to the tough reality of alternative development.


Security, then development


Activists with development organizations in the Andes claim that alternative development programs in Colombia mirror those that have already occurred in Bolivia. USAID is active in both countries, and coca eradication has long stood as the top priority. Yet while conflict surrounding alternative development programs in Bolivia exists largely between coca farmers and the country's security forces, conflict directly linked with the drug trade overlaps heavily with many rural areas in Colombia that require the most attention from development organizations.


One international organization, ACCION, has worked in Colombia for years to implement micro-finance programs in conflict zones where young men and women have little option but enter the country's drug trade through coca farming or joining either the leftist Revolutionary Armed Forces of Colombia (FARC) or the paramilitaries, collectively known as the United Self-Defense Forces of Colombia (AUC).


Micro-finance, an alternative development industry with roots in Latin America, is emerging as an economically viable and scalable solution to poverty throughout the world. Since 1973, ACCION has worked in small communities in the developing world to provide access to credit and financial services to “micro” entrepreneurs - street vendors, bakers, seamstresses and others - who struggle to provide a better life for their families. Their 30 programs in 23 countries demonstrate that the working poor are in fact a good credit risk and can work themselves out of otherwise unrelenting poverty. In areas of constant conflict, lack of capital is the one of many obstacles for the working poor.


Martha Soyara Vargas, a director with ACCION in Colombia, told ISN Security Watch in a recent telephone interview that micro-finance programs often faced challenges in Colombia because credit alone was not sufficient and high levels of conflict prevented some loans from taking place.


“We have programs with 22 schools around the country, and every school is located in an area of consistent conflict,” Soyara said. In the Colombian department of Santander, where ACCION has worked for some four years, such conflict continues to be a problem. It has reached the point where the murder of program participants has created a situation where even micro-credit loans are not affordable.


Soyara explained that insurance exists to ensure loans are repaid, but when the cost of insurance is added to the loan, it becomes too expensive. “The purpose of [our] program is survival, but ongoing disputes are a major challenge,” she said.


The challenges faced by such alternative development programs provide a clear example of how a lack of security can impede development. As the country's rural regions continue to be steeped in conflict, it is difficult to clearly determine how effective USAID's bureaucratically operated programs can succeed when other organizations have met with the same challenges in the country.


An agreement and peace


As USAID's policies escalated conflict well into 2004, the new Bolivian administration under Carlos Mesa was faced with a tough decision. It either had to allow a limited amount of coca farming or face continued protests by farmers, which by early 2004 had been joined by labor syndicates, public transport workers, students and others.


An agreement between the Mesa administration and coca growers was signed on 7 October 2004. A nine-point document ultimately recognized the legal existence of 3,200 hectares of coca leaf production in the Chapare region.


The US Embassy was not happy, but was forced to recognize the agreement or deal with continued violence. The zero coca policy force fed to the Chapare, a region of Bolivia with a long history and tradition of growing coca for personal consumption and survival, was abolished.

It may be Carlos Mesa's greatest legacy to his country. He left office on 6 June 2005 and was eventually replaced by Bolivia's current president, Evo Morales.


An uncertain future


Commenting on the future of alternative development programs in the Chapare region, Reinicke pointed out that the leadership of Bolivia's Alternative Development Ministry was close to coca growers. He said the leadership knew what it would take to enact Morales' style of alternative development, which seeks to provide a “staggered, gradual approach” to development, as described by Ledebur.


The Morales administration wants to offer a style of alternative development neither contingent upon a zero coca policy nor constructed to leave coca farmers starving. His administration, observers claim, will promote policies that allow coca farmers to maintain a certain amount of coca to live on while they explore options for other sources of income. Such a policy will give coca farmers some incentive to take the risk associated with alternative farming techniques, explained Ledebur.


No one is sure how Morales' position will connect with USAID. The future of the relationship between Washington and La Paz will be determined, in part, by Morales' position that Bolivians have a right to grow coca. Some argue that Washington would do best to learn from the hard years of a zero coca policy and work with Morales' administration to support policies tailored to Bolivian farmers' real needs, not the ideals of officials in Washington.


Meanwhile, in Colombia, the future of alternative development programs remains bleak. Paths to increase security in the rural parts of Colombia most afflicted by violent conflict seem to go in circles. The disarmament program for Colombia's paramilitary forces has resulted in the transformation of large paramilitary units into tightly organized drug smuggling operations still willing to do what it takes to export cocaine. Peace talks with the FARC are not even on the horizon.


Until there is more security in Colombia, it is hard to see how alternative development could have a positive prognosis. Organizations, such as Foundation Sunrise, that work with ACCION have focused on schools and education because they see that if caught young enough, rural Colombians can learn that other options exist apart from growing coca or picking up a gun to earn a salary.


So far, observation of both countries reveals that Bolivia, after some 20 years of failed alternative economic development programs, might finally have a string of success in the future. If the statement that alternative development in Colombia mirrors that of Bolivia is true, Colombians are a long way from enjoying economic programs that take hold and last.


Trying to determine whether alternative development actually works ultimately leads, according to many experts, to a discovery of the reality of an enormous disconnect between policymakers in the halls of government and the farmers who must live with their policies. So far, alternative development policies in the Andes have been constructed by politicians interested only in coca eradication, using development as the justification for excessive coca eradication. Until recently, drug war warriors have constructed alternative development policies with relatively little input from development experts, and we've seen the results. There are plenty of proponents for allowing the development professionals take the lead.