* Bolivia enjoys growth, relative calm under leftist Evo
* Returns to global debt markets as commodities exports soar
* Shopping malls, cinemas open to meet new consumer demand
* Simmering unrest, poverty remain major challenges
By Helen Popper
EL ALTO, Bolivia, Nov 15 A chaotic sprawl high
in the Andes, the Bolivian city of El Alto has a fearsome
reputation for altitude sickness, poverty and violent uprisings
that topple governments. No wonder many businesses stayed away.
But years of economic growth and relative stability are
changing attitudes as well as fortunes in one of Latin America's
poorest and most volatile nations. Entrepreneurs are even waking
up to El Alto's potential.
Its first supermarkets, shopping centers and cinemas are
planned -- multimillion-dollar private sector investments that
would have been unthinkable almost anywhere in Bolivia a decade
Banks and pizza delivery stores have set up shop in the
city's stark, traffic-choked streets and its bare brick
buildings are climbing higher into the thin air as local
commerce thrives 4,050 meters (13,300 feet) above sea level.
"People hardly bought anything in the past. With this
government there's business," said Alicia Villalba, 33, selling
Brazilian-made aluminum pans at a twice-weekly market where
everything from livestock to second-hand cars is on sale.
"I just hope the economy keeps on growing so I'm able to
look after my family," she said as a woman wearing the
traditional dress of a wide pleated skirt and bowler hat bought
a full set of pots.
About $2 million changes hands at the market every day.
SIGNS OF CHANGE
Seven years since they helped elect leftist coca farmer Evo
Morales as Bolivia's first president of indigenous descent,
there are subtle signs of change among El Alto's mainly Aymara
Indian population too.
"El Alto was always where conflicts kicked off. Why? Because
people had nothing to lose. That's not the case today," said
Alejandro Yaffar, a prominent businessman who owns a new
fast-food court in El Alto and has two more retail projects
"People have opened their eyes to a new way of life," he
said in his office in the adjoining city of La Paz, Bolivia's
Much remains to be done, however. Heaps of garbage and packs
of stray dogs blight the bleak urban landscape. Water and
drainage are inadequate, and local businesses complain about
rising crime and scant policing.
Public infrastructure projects have struggled to meet the
fast-growing city's needs or the expectations of residents and
some are disappointed with Morales and the pace of change.
"Here in El Alto we all voted for him, myself included,"
said Nora Villeros, 65, her long braids streaked with gray, as
she sat in front of her busy store selling colorful bathroom
tiles and fittings.
"He promised us miracles but the first couple of years went
by and then he forgot about us," she said, complaining that
Morales had favored members of his Movement Toward Socialism
Many of El Alto's residents are self-employed and resist
efforts by authorities to increase tax revenue by cracking down
on contraband goods. That means protests and roadblocks are
still a regular occurrence.
'MORE WORK, MORE MONEY'
El Alto is not the only place that is changing in Bolivia, a
landlocked country of about 10 million that sits on South
America's s e cond-biggest natural gas reserves and rich deposits
of silver, tin, zinc and other metals.
In La Paz, which lies in a crater-like valley below El Alto,
low unemployment and affordable credit are fueling a
construction boom and consumers feel unusually well off.
"There's more work and more money around. I think people are
living better than they were six years ago," said Marco Arkaza,
33, a bank employee as he strolled in one of two new cinema and
shopping complexes in La Paz.
"People have greater purchasing power. Young people and the
middle class have enough money to come to places likes this
now," he said.
After seven years of economic growth averaging 4.7 percent a
year, Bolivia joined the World Bank's list of lower
middle-income countries in 2010. The ranking allows more credit
Government officials say up to a million Bolivians have
entered middle-class ranks under Morales. They credit policies
such as welfare payments for school children and pensioners for
lifting almost a million more out of extreme poverty.
In 2006, 38 percent of Bolivians lived in extreme poverty,
data from the state-run INE national statistics shows. That has
fallen to about 25 percent though nearly half of Bolivians are
still poor, according to the United Nations.
Some sectors have done better than others. Critics say a
disproportionate amount of public money has been poured into the
steamy Chapare region that is home to much of Bolivia's illegal
coca crops and a stronghold of Morales support.
Mining cooperatives have won significant political
concessions from Morales and a few have grown rich due to
soaring global metals prices.
In mining cities like Oruro and Potosi, famous for the Cerro
Rico (Rich Mountain) of colonial times, newspapers carry stories
of miners-turned-millionaires and fantastic earnings luring
fortune seekers from other parts of the country.
While most of the cooperative miners scrape a living working
in dangerous and precarious conditions, a few have become
wealthy enough to buy expensive cars and invest in real estate.
"This amazing mining boom has helped develop markets in
places no one ever would have imagined," said Christian Eduardo,
president of the CADECO construction industry chamber in La Paz.
Construction activity has been growing at an average of
about 10 percent per year since 2007, forcing the over-stretched
local cement industry to meet demand with Peruvian imports.
To the surprise of his detractors, Morales -- an ally of
Venezuela's Hugo Chavez who shares his penchant for fiery
leftist rhetoric -- has proved a fiscal conservative. The
country is expected to register its seventh-straight annual
fiscal surplus in 2012.
Morales, 53, has nationalized areas of the economy from the
vital natural gas industry to telecommunications companies and
tin smelters, but he has also let the central bank's foreign
reserves swell to record levels and warded off the scourge of
high inflation that battered Bolivia in the 1980s.
The economy is expected to grow more quickly than many of
its wealthier neighbors this year and should maintain a healthy
5 percent expansion in 2013, according to the latest
International Monetary Fund (IMF) estimates.
"Bolivia is no longer a country with a weak economy,"
Economy Minister Luis Arce said last month after the nation sold
its first global bonds in almost a century.
Most analysts said the interest rate of less than 5 percent
was low considering Morales' record of nationalizing companies,
often without prior notice or paying compensation, and it has
proved an unlikely public relations success for him.
"The interesting thing is that Bolivia sold the bonds at
half the rate paid by Venezuela. That's an important message to
the world," said Horst Grebe, director of La Paz-based research
"The problem is that Bolivia's biggest growth is in its
macroeconomic numbers. What we're not seeing is a transformation
of the productive economy that is sustainable in the long term."
Bolivia remains acutely dependent on exports of
non-renewable raw materials. Natural gas and metals accounted
for 87 percent of last year's record $9.1 billion export
earnings, said Gary Rodriguez of the Bolivian Foreign Trade
'DRUNK ON POWER'
But as Wall Street economists laud Morales' macroeconomic
policies as prudent, critics at home say he betrayed supporters
by watering down policy pledges and pandering to big business.
"Since the Spanish arrived 500 years ago we'd never had an
Indian president. It was the people's dream and we thought
things would be different. But six years on, he's dishonored
us," said long-time indigenous activist Felipe Quispe, known as
El Mallku, the "Condor" or "authority" in Aymara.
With six years and 10 months in the job, Morales has held
Bolivia's presidency for the longest unbroken period of any
elected leader. An opinion poll conducted last month by Ipsos
Bolivia put his approval rating at 53 percent in urban areas and
69 percent in the countryside.
But despite his continuing domination of the political
scene, Morales has lost his initial aura of invincibility since
some allies turned against him over an Amazon highway plan and a
fuel price hike two years ago.
Government critics from the left and the right would like to
see strong challengers emerge in time for a 2014 presidential
election in which Morales has hinted he may seek a third term.
"The government's made a lot of mistakes ... they've got
drunk on power," Quispe said, accusing Morales of seeking to
stifle media criticism and control the judiciary.
In El Alto, several large state infrastructure projects,
such as a $234 million cable car system and a double-lane
highway to Oruro, should be ready in time for the election. They
are unlikely to satisfy growing expectations, however.
"There's been a lot of investment in the city but it hasn't
been enough yet," said Javier Ajno, president of the powerful
FEJUVE neighborhood federation.
FEJUVE was a protagonist in the so-called Gas War that led
to the ouster of former President Gonzalo Sanchez de Lozada in
2003 and the protests that drove Carlos Mesa from office two
Ajno said El Alto's rebellious spirit was still very much
alive, but that for now there is broad support for Morales.
"El Alto has been the cradle of this process of change ...
we've carried an Indian to the presidency and people still
believe in this process," he said. "We've definitely still got a
long way to go, but in five or 10 years this will be the city of