Evo’s Challenge in Bolivia

Evo’s Challenge in Bolivia

Many Bolivians have faith in Evo Morales, the former coca farmer who became the first indigenous president in the country’s history last month. But will Morales be able to keep his promises to nationalize the energy industry and protect indigenous culture and the livelihood of farmers?



In a town square set amid the rolling green highlands of the department of Cochabamba, where campesinos scrape out a living growing bananas, peppers and corn they sell for a pittance at the local market, Bolivia’s president-elect, Evo Morales, last November offered a reason for hope. “You, the people who grow our food, deserve more respect,” the charismatic candidate told hundreds of Quechua farmers in the town of Cliza, as community leaders showered Morales with confetti and draped wreaths of locally grown produce and flowers around his neck. “And you deserve the help of the government,” he told the rapt crowd. “We will nationalize all of Bolivia’s natural resources,” he promised. “We will recuperate what is ours. We cannot give away what was given to us by Pachamama [Mother Earth].”

On its face, Morales’s stunning December triumph would seem to be a huge victory for Bolivia’s growing leftist and indigenous movement. In a country where more than 65 percent of the population proclaims itself indigenous, Morales is the first indigenous president in Bolivia’s 180-year history and the first leader to win more than 50 percent of the popular vote. That hands him a powerful mandate to join the growing number of Latin American nations that appear to be turning away from neoliberal economics to forge a path of their own.

The symbolic value of the election results cannot be overstated, in a country where symbols represent the intensifying passions of people mobilized to end what they see as 500 years of state oppression. Thus the wiphala–the checkered rainbow flag of indigenous resistance–flew from every Morales campaign vehicle; technocratic economic policy proposals about how the nation should manage its natural-gas industry became symbols of Bolivian “independence” and “self-governance”; and politicians called for the defense of Pachamama as they pressed their home-grown solutions for this cash-poor but resource-rich country and urged the rejection of the North American capitalistas.

Massive support for that rejection fueled widespread protests this past summer, when hundreds of thousands of Bolivians filled the streets of El Alto and La Paz, blocking roads, burning tires and throwing dynamite until then-President Carlos Mesa finally resigned–making him the second president forced out of office in as many years. (President Gonzalo Sanchez de Lozada was forced to flee in October 2003 after his army killed more than sixty protesters; he’s now living comfortably just outside Washington, DC.) So for the popular former leader of the coca growers’ union to have won the presidency by an overwhelming and closely monitored vote suggests the vitality of Bolivian democracy and the evolution of a new Latin American consensus.

But the question remains: Will Evo, as Bolivians fondly call him, be able to live up to his promises? The political, economic and legal pressure on developing countries to satisfy the interests of multinational investors–as well as opposition from the Bolivian Congress–could well undermine the real value of this historic democratic victory.

Evo’s campaign slogans pledged nationalization of oil and gas reserves, “recuperation” of natural resources for Bolivians and a renewed respect for campesinos and workers. Those sorts of promises went over well in the small farming pueblos, where women in their colorful eighteenth-century-style peasant skirts and shawls danced in the streets and waved their broad-brimmed straw hats as Morales rode by in his campaign caravan, the villagers eagerly reaching for the fliers he left in his path. After all, Evo’s supporters–poor indigenous farmers and laborers who make up the 40 percent of a country the World Bank labels “extremely poor”–have little other faith left to hold on to.

Years of Washington Consensus-style economic policies, first adopted in the mid-1980s under the label “shock therapy” and expanded in the mid-1990s when the country privatized its oil, gas, electric and other major industries, have done little to help Bolivia’s people, more than 65 percent of whom are still stuck below the poverty line. In fact, despite the country’s being the testing ground for much of this policy over the past twenty years, the average Bolivian is now poorer than his grandparents were fifty years ago. The privatization schemes, rather than bringing prosperity as promised, have left Bolivia the most impoverished nation in South America. They’ve also provoked a wave of anger against international financial institutions and the United States, a sentiment that was on display all over Bolivia in this presidential election.

The US government, for its part, has expressed deep fears about a Morales presidency, claiming that he is a protégé of Hugo Chávez and Fidel Castro–as revolutionary, and as unpredictable. But in many ways it’s the United States that has put Morales in the position he’s in today. In Bolivia the United States is not only a symbol of foreign capital but of the bitter “war on drugs,” which strong-armed Bolivia into accepting a US-financed coca eradication campaign that even the World Bank has admitted bears some responsibility for Bolivia’s current poverty. Like everything else in Bolivia, the coca leaf is a symbol: of a locally grown crop, of sacred rituals, of a way of life that allowed Bolivia’s peasants, by chewing on the bitter leaves that give energy and stave off hunger, to endure the harsh conditions in the silver and tin mines where they worked as slaves to the Spanish for some 300 years and where many still labor under perilous conditions today. As indigenous culture increasingly becomes a point of pride rather than a mark of shame in Bolivia and across South America, the symbolism of the coca leaf has gained even more importance–and the US war against it has stoked Morales’s popularity.

But the most potent symbol in this election for most Bolivians was natural gas, an ever more coveted resource as the international price of oil skyrockets. And the foreign oil companies that extract it–the transnacionales, as they call them here, almost spitting the word–represent to many just the latest form of foreign exploitation of Bolivia and its people. Thus every candidate in this election had to promise to “nationalize” the natural gas industry–a word that suggests expropriation of private company property and sets off alarm bells with foreign investors, but which actually means a range of different things in this ideologically charged political culture.

For the right-wing candidate Jorge Quiroga, it meant respecting existing oil and gas contracts but “nationalizing the benefits”–in other words, spending more to pacify the population. But for Morales it has meant forcing a conversion of existing gas contracts into ones in which the state gets 50 percent of the profits and retains control over how, to whom and at what price Bolivian gas is sold. Although that’s not what’s usually meant by expropriation, his plan still has foreign energy companies panicking. That’s because under their current contracts and the 1996 hydrocarbons law that privatized the industry, private companies have had virtually complete control over the production, sale and pricing of oil and gas, and have paid only 18 percent royalties and no taxes–a deal that even government and industry insiders who helped write the law and negotiate the contracts now privately admit is a bad deal for Bolivia.

Still, when the last government, under Carlos Mesa, tried to change the law to increase government revenues, almost every major oil company–including Spain’s Repsol, the French company Total, British Gas, ExxonMobil and Oklahoma-based Vintage Petroleum–threatened to bring a claim against Bolivia in international arbitration. Although so far they’ve agreed to hold off to see what the new government does, if Morales nationalizes the industry, under the terms of the bilateral investment treaties between Bolivia and the companies’ home countries, those companies could sue–in private, closed-door arbitration, without the safeguards normally provided by publicly appointed judges in an international court–not only for the approximately $3.5 billion private companies have already invested in the natural gas industry here but also for the loss of expected profits, which could total tens of billions of dollars. For a country like Bolivia, whose annual revenues are only a little more than $2 billion, that’s no small threat. “These processes could bring about requirements of indemnity against the Bolivian state that it cannot pay,” says Carlos Romero, executive director of Centro de Estudios Jurídicos e Investigación Social (CEJIS), a prominent human rights organization based in Santa Cruz. It’s for that reason–and a host of other ways the United States, the World Bank, the IMF and the Inter-American Development Bank can threaten to tighten the noose around Bolivia’s highly indebted neck–that an Evo Morales presidency may well remain largely a symbolic victory.

Nor can Morales do much to address the plight of coca farmers. Although he has said he’ll campaign to decriminalize the coca leaf on an international level, he knows that’s a long shot–and that he can do little to change the system at home. Indeed, he admitted as much in a recent interview. Seated at his campaign headquarters before a plate overflowing with coca leaves, he told me that “zero coca means zero cocaleros.” His affable manner had turned grave. Evo does not disguise his disdain for the old US-imposed policy of “zero coca.” But that policy, as he well knows, was already abandoned last year under Carlos Mesa’s government, with eventual US acquiescence. Since 2004, farmers in certain regions have been permitted to grow small amounts of coca for local traditional use.

Most cocaleros don’t consider that nearly enough to earn a living, but Morales knows that to completely decriminalize the coca leaf domestically–something he has never said he will do–would be a dramatic rejection of US policy that would likely lead not only to a loss of US aid but would require the United States, under US law, to vote against any Bolivian application for loans or grants from the World Bank, IMF or Inter-American Development Bank, all critical to Bolivia’s ability to finance its debt and fuel its economy. (Even more than the money itself, the credibility these institutions offer the country in the international financial markets is immeasurable.) In effect, any attempt by the new president to do exactly what Bolivians just elected him to do would marshal the forces of the international financial community against the government and doom the country’s already precarious financial stability.

“It’s OK, there are plenty of other countries, like China, that will be willing to help us,” Morales told me on a rare break from campaigning shortly before the election. Countries like China and Venezuela may be exactly where he turns, and their loans and investment would surely help. But despite having repeatedly described himself during the campaign as “Washington’s nightmare”–a phrase quoted repeatedly in the US press–Morales is not likely to buck the broader and wealthier US and European business community, and may well stick with a modestly reformed version of the status quo. That won’t satisfy the more radical Aymara Indian activists, who are intent on breathing life into the symbols of the increasingly powerful indigenous movement.

“The identity of people and of communities has become a very important issue in the country,” Pablo Mamani, a sociologist who teaches at the public universities in El Alto and La Paz, told me shortly before the election. “The Aymara will all vote for Evo, because we want to see an Aymara in the presidency. But if he is not really allowed to govern, the militant social organizations can create a scenario of very severe conflict between the people and the state.”

The nation’s right-wing movements, particularly those concentrated in Santa Cruz, Bolivia’s wealthiest department, where the energy and agricultural export businesses are based, may well encourage that. In the past year they’ve been waging a fierce campaign for autonomy–essentially, a separate local government that would shrink the central government’s power over the region and its ability to extract taxes. With Morales’s victory–which nonetheless failed to win his party control of the Congress–that battle will surely intensify.

“Bolivia is facing a big problem,” Carlos Rojas, the burly president of a leading association of agricultural producers, told me from his spacious Santa Cruz office. “We don’t accept Mr. Morales’s policy about land,” he said, referring to Morales’s support for redistribution of large idle estates, most of which are concentrated in Santa Cruz. “We will have a conflict with him…. The only way for the country to move up and get out of poverty is by working, every day and all the time. If the social movements go and block the roads, we cannot work. We believe it’s important to give Mr. Morales the opportunity to work for this country. But if he’s not effective, he’s going to be out–probably before the end of his term.”

Some Bolivians are already planning on that. “We believe MAS [Movement Toward Socialism, Morales’s party] won’t change anything,” said Abraham Delgado Mancilla, a soft-spoken and serious 28-year-old Aymara law student who helped organize the massive protests that ultimately brought down the last two Bolivian presidents. We were walking through the packed streets of El Alto–a burgeoning, impoverished city of homemade brick buildings in the Andean peaks rising above La Paz–where Mancilla lives and continues to organize students and neighbors. “The state doesn’t serve us with this system. So we must move forward. What happens in Bolivia is twenty years of reforms, and nothing changes,” he said. “We’re still poor. The only road to solving poverty is by nationalization and radical redistribution of land,” he added, his tone rising as he grew more agitated. “Evo will not be able to do what he says. His programs will change nothing. We’re waiting for him to fail. And if he does, the people will come out with even more force,” he said.

I asked him what that would mean. “I think what’s going to happen is there will be a civil war.”

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