Bolivia: between a rock and a hard place.

After a fleeting appearance in the world press last July (2002), the reporting of the recent election in Bolivia is likely to fall out of focus until some suitably newsworthy item gives it some prominence. Next time it could be a far more dramatic story. As one of those reports in The Economist suggests in its title, 'Progress or Collapse', Bolivia's future politics and the economy are finely balanced between a fundamental redrawing of political boundaries alongside an economy that has staked its future growth on the success of gas exports. (The Economist 10 August 2002).

As if to underscore this tension, the election results from 30 June last year resulted in a tight finish with no clear winners. Gonzalo Sanchez de Lozada, the new president, won with just 22% of the vote. Sanchez de Lozada was president between 1993 and 1997 and is a wealthy and experienced politician from the well-established centre-right Revolutionary Nationalist Movement. He only narrowly beat two other 'anti-system' candidates, Evo Morales and Manfred Rey. The 20.5% vote for Evo Morales, the socialist-inclined leader of the coca workers union was especially remarkable, since he won many more votes than the candidates of most other established political parties. In the 1997 election he had achieved just 3% of the vote. Many see the interference of the US ambassador in these elections as playing a significant part in galvanising support for Morales, the son of peasant Aymara Indian farmer. However, such an explanation fails to recognise the steady growth of 'anti-system' sentiments in Bolivia and the growing unwillingness of indigenous people to vote for traditional politicians. The political landscape does indeed appear to be on the move.

This report tries to capture some of these recent political and economic changes to the country and argue that after years of neo-liberal reforms the contradictions of these policies are starting to emerge in stark new forms, causing concern in Washington as to where the social dynamic in Bolivia may be leading. The rural peasantry and urban working class are increasingly unwilling to support traditional political parties since these have failed to stem growing poverty and inequality, and are looking far more radical ways in which to exert pressure on the political system and shape the future direction of their country.

Interventions and aid

Bolivia has a long history of external threats and interventions. Among the poorest countries in Latin America, it has waged war with several of its neighbours, most recently in the disastrous Chaco War with Paraguay in the 1930s. Earlier, in the 1880s, it lost its access to the Pacific Ocean, following the War of the Pacific with Chile. It also lost territory to Brazil in the north. These events have together left a sore which still impacts on policy making today. As recent commentators on the future of democracy in Bolivia have indicated, 'Bolivian nationalists had never forgotten nineteenth-century intrusions and annexations by both these neighbours and were highly sensitive about any risk--however speculative--of what was referred as polonizacion' (referring to partition of Poland at the end of the eighteenth century)'.

But warring neighbours apart, it is the US that has continued to cast the longer shadow over Bolivia. Like most Latin American countries, the US sees South America as its' 'backyard', an area where it prefers to set the rules. These 'rules' are reflected in the long history of interference in Latin America. In Bolivia, us intervention can be traced back well into the last century and in the Second World War, Bolivia attained a key strategic importance as its main source of fin. More recently US influence was starkly represented through the impact of the Cold War which, according to Crabtree and Whitehead (2002), 'polarised politics and destabilised civilian government all over South America. In Bolivia it contributed to the 1964 military coup and fuelled the subsequent cycle of instability. An example was Barrientos' recourse to US military help to defeat Che Guevara's guerillas in 1967'.

With an overriding concern to curb communism, the US used aid to encourage reforms that helped guarantee its interests. In the years after the nationalist 1952 revolution in Bolivia, aid flows represented 30% of government income in the 1960s, providing an important source of leverage. In Bolivia's case, this first meant propping up the post-revolutionary MNR (Movimento Nacionalista Revolucionario) governments, then a series of right-wing military dictatorships. It also meant counteracting the influence of the left-wing union movement and other strong local identities. The expedition of Che Guevara to Bolivia in 1967 highlighted Washington's concerns about Bolivia's geopolitical importance in the heart of South America and the consequent need to deal with issues of rural development.

US (as well as multilateral) aid aimed to modernise state structures and provide guarantees to US economic interests in Bolivia. In the 1980s, Washington also pushed for a modern democratic system of government to provide a new form of 'inclusive' politics, which would further weaken the radical union movement along with the revolutionary political tradition inherited from 1952. It would provide the US with a form of politics with which it could do business. In 1982, civilian democracy was restored, and in 1985 Bolivia initiated an experiment in economic liberalisation that would sharply reduce the extent of state intervention in the economy. In 1999, the World Bank could appraise the 'Bolivian model' as an 'inclusive and participatory' framework for development that other Latin American countries might like to emulate. Perhaps the 2002 elections, 50 years on from the 1952 revolution, has provided modest evidence of that 'inclusiveness'. Or has it?

Much of this history of intervention in Bolivia appears to be a play between overriding external pressures, blunted by local politics, local traditions and local geography. With a long history of popular revolt, in the face of apparently overwhelming odds, different groups of workers, peasants and indigenous groups have sustained important traditions of direct action. Faced by a relatively weak state, they have enjoyed considerable success. The blocking of roads by peasants, preventing food entering or people leaving the cities, is but a recent manifestation of this tradition driven by poor prices and low wages in the rural economy.

The changing ways by which opposition is organised reflects the changes that have taken place in the economy itself, forced to switch from reliance on the public sector to almost complete privatisation where the state plays a residual role. Old centres of power have been replaced, whilst the recent elections suggest that new groups are emerging to challenge the elite dominance, in so doing undermining the notion that popular risings are a thing of the past.

Reform and the instability of employment

Throughout much of the last 50 years, popular pressure of one sort or another has played a crucial part in reminding politicians in La Paz that they cannot completely ignore the country's poor. Elite families in La Paz typically used their maids to tell them if and when the popular movement was on the march. In the early days, in the wake of the 1952 revolution, it was the mineworkers' union (FSTMB) that provided the main focus for collective action, through the Central Obrera Boliviana (COB). Since most of the mines were privatised or closed down as a result of neo-liberal reforms of the mid-1980s, this organising role has passed to others, notably the highland peasants, the coca producers of the Chapare and 'informal' urban workers. These sectors represent substantial numbers of people, most of whom experience high degrees of poverty. Confrontations have tended to become increasingly bitter and violent. In the last four years there have been sixteen such confrontations between social movements and police and/or military, resulting in 54 dead and over 200 injured.

If 4-5% annual growth rates in the economy during the 1990s suggested overall improvements for the population at large, such figures masked a growth in the numbers of people living in poverty. The underlying impact of the economic reforms, tied to aid and external support, was to bolster existing elites and to accentuate inequality. The shrinking number of 'real jobs' in the economy heightened uncertainty and insecurity among workers. Labour market 'flexibility' was a consequence of the reforms enacted, which reduced the size of the formal economy and increased the problems of survival. The streets of La Paz are today filled from sunrise to sunset with traders selling anything from razor blades to fast food. With estimates that these 'micro-organisations' may account for 60% of the working population or more, a fundamental shift is taking place in the nature and distribution of work and employment. Looking at the distribution of such employment, estimates suggest that in retailing they account for 48% of the employment; in production 23%; in construction 10%; and in services, 20% (Skinner 2002). Often family enterprises, they are further evidence of the shrinking of the formal economy where sectors like manufacturing have been driven further into the shantytowns, like El Alto outside La Paz where no employment standards prevail. Women too have increased their presence in the labour market. The decline in public sector jobs has obliged increasing numbers of women into informal types of work too, which also provide sustenance to those forced through poverty to migrate from rural to urban centres.

What is interesting to note is that there has been a U-turn on the part of the government, from a position of total disinterest to one of more positive engagement. For some in government, the growth of micro organisations is seen as clear evidence of the beneficial results of the reforms to the economy. In 1997, then President Banzer, through the Ministry of Labour, organised a three-year plan that recognised the significance of the micro-enterprises (ME's), introducing training vouchers, establishing a system for registering these organisations, providing loans and setting up decentralised employment schemes (eg road maintenance gangs) around the country. The government felt it could not afford to leave this ever-increasing pool of unorganised labour to chance, since it could end up posing a major challenge to the established order. Rather than 'marginal workers', they are now often depicted as 'nascent entrepreneurs' and as evidence of the government's success in boosting new sources of income generation. This shift in the official discourse reflects a switch from thinking about social welfare to a more individualistic approach towards job creation, a project to integrate the poor into the market economy. Neo-liberal reform, supported externally, can thus be depicted in a positive and modernising light, adding legitimacy to government reforms.

'Clientelism' and reform

Bolivia has a long history of constitutional government reaching back in to the eighteenth and nineteenth centuries. At the same time, this constitutionalism has been elite-driven, excluding the mass of the population in a country divided by geography, poor communications, ethnic division and a split between urban and rural populations. The political establishment has remained pre-eminent, able to continue to determine government policy as it chooses. The outcome of the recent election appears to confirm this long-term trend.

The 1952 revolution saw a widening of the elite, and the incorporation of new actors as a new slate structure grew and became consolidated. However, political parties tended to represent sectional interests and operate along clientelistic lines and prone to graft and patronage. Jobs and positions were typically traded for political support. For the private sector this could result in lucrative projects being given to favoured companies, decisions based not upon 'best value' but networks of influence. Public money was wasted on schemes that were neither necessary nor achievable. The building of large smelter at Karachipampa in the 1970s was a classic case: there were insufficient ores to feed the smelter. Another was the construction of a soya processing plant in Santa Cruz where the supply of soya beans was inadequate. Development privileged an urban population at the expense of rural ones. With 90% of rural populations living in poverty, such failures simply widen the gulf between urban and rural populations.

In order to help rectify this imbalance, the first Sanchez de Lozada government in the mid-1990s sought to bring in a greater measure of administrative decentralisation, alongside a number of other liberalising reforms in the economic sphere. The 'Plan de Todos' had twin axes of decentralising political control and finance. For the purposes of fiscal distribution, 311 Organizaciones Territoriales de Base [OTB's] were introduced to administer health, education and other local services. These increased Bolivia's total municipal budget from $22 million in 1990 to $150 million by 1996. Municipalities were to be governed by elected councillors, overseen by 'public over-sight committees' composed of local representatives from grass roots organisations. This has meant that peasant political participation increased, as has that of indigenous communities. In the first municipal elections in 1995, peasant and indigenous councillors won seats in 210 municipal governments, around two-thirds of the total. The reforms provided an important foothold for opposition groupings. Most conspicuous were the coca producers of the Chapare and Carrasco regions, who under the Izquierda Unida [IU] banner, won landslide victories in 11 out of 12 coca-producing municipalities.

Despite the difficulty of meeting legal requirements for constituting a political party, the recent elections have shown the strength of the opposition movement to the dominant liberal paradigm. Although Sanchez de Lozada narrowly achieved most votes, both Evo Morales and Manfred Reyes staged campaigns that drew on popular disenchantment with neoliberalism. Even fourth-placed Jaime Paz of the Movimiento de la Izquierda Revolucionaria (MIR), under whose government (1989-93), the model was consolidated, campaigned on the failure to generate adequate levels of employment. Morales' capacity to extend his support from the narrow confines of the Chapare to most of highland Bolivia owed much on his ability to blend a pro-indigenous message with a rejection of US-supported economic policies. The intervention of the US ambassador to La Paz, berating the Bolivian population for supporting Morales, only added to his lustre. So the political reforms, initially supported by the US, now appear to be resulting in outcomes not anticipated and not likely to favour close ties with Washington.

Coca eradication and populist politics

The production of coca has been an integral part of Andean life through the ages. In Bolivia it has been grown for a number of uses that are firmly engrained in popular culture. Chewed by the miners and others at high altitudes, it helps stave off hunger and maintain energy levels. For those unused to altitudes, it is a palliative for altitude sickness. It is grown mainly in two areas the Yungas in La Paz and the Chapare in Cochabamba. The former covers some 12,000 acres where it is grown mainly for traditional uses. In the Chapare, where acreages are much larger, most production goes into the elaboration of cocaine. It is this area that has received most attention from the US Drug Enforcement Administration's attempts over the last 15 years to cut the supplies of cocaine at source.

Since the early 1980s, when Bolivia returned to democracy after a brief spell of being run by 'cocaine generals', the US has sought to push successive governments to take steps to eradicate coca. To this end it has used its position as the main source of foreign aid to put pressure on the administration. Indeed it has become the number one issue in US-Bolivian relations, and the reason why Washington maintains one of its largest Latin American embassies in an otherwise less important country.

After intense pressure on the Siles government (1982-85) Bolivia signed a series of secret agreements that called for a five-year coca eradication plan and the creation of a specialist anti-drug police force, the Unidad Movil Policial para Areas Rurales (UMOPAR). In return the US would provide a $14.2 million worth of aid. (Hargreaves et al, 1992).

Until the Banzer government (1997-2000), little headway was made. That it has taken so long to remove the production of coca can be understood when set against its economic importance, both as a source of hard currency and employment. In 1991, it was been estimated that exports of cola-cocaine were worth $600 million, or about 15% of GDP while aid from the US that year was worth $98.5 million. The industry generated important multiplier effects throughout the country, but was particularly important in and around Cochabamba. In the last few years, particularly under Banzer, the government pushed ahead aggressively with a 'zero-coca' programme, taking advantage of a fall in prices paid for coca. The forcible eradication of coca in the Chapare caused enormous resentment and anger among the farmers concerned, providing Morales with the support-base on which he was subsequently able to build so successfully. Flourishing in relatively poor soils and producing up to five harvests a year, the coca bush guarantees peasant farmers a regular income. Programmes to substitute coca with other crops, like palm hearts, black pepper, pineapples, citrus fruit and even coffee, have only had any success when coca prices are low. In recent years they have been increasing. Morales became a national figure--he was elected congressman in 1997--as the most visible leader of the 'cocaleros'. The US ambassador, Manuel Rocha, only confirmed Morales' credentials as the defender of Bolivian sovereignty against intrusion from Washington when, three days before polling in 2002 he said "The Bolivian electorate must consider the consequences of choosing leaders somehow connected with drug trafficking and terrorism ... I want to remind the Bolivian electorate that if they vote for those who want Bolivia to return to exporting cocaine, that will seriously jeopardise any future aid to Bolivia from the United States'.

The combination of such interference, coupled to an economic project that is widely perceived as 'made in Washington', has therefore helped revive a legacy of anti-Americanism that is as strong in Bolivia as anywhere in Latin America. It parallels similar reactions elsewhere, where even political elites are beginning to question Washington's stated commitment to the democracy and wellbeing of the hemisphere. In Bolivia, where road blocks and mass demonstrations are becoming the lingua franca of dissent, the new Sanchez de Lozada administration faces an uphill struggle to rebuild a sense of institutional order that commands widespread public support. Similar sorts of protests in neighbouring Argentina have been commented upon in an earlier edition of this journal, (Dinerstein 2001). The real issue is not coca but poverty. Until the latter is effectively addressed, Bolivia's elites are in for a stormy ride.

Contradiction and ambivalence

Bolivia will continue to come under pressure from Washington, on coca, on the economic model it adopts and even on the shape of its political institutions. In some ways it has become a testing ground for the new liberal model to cope with problems of social and political exclusion. Al Gore has announced that 'the entire world is marching on the Bolivian road' and putting 'Bolivia at the vanguard of social, economic and political reforms'. Yet it remains the poorest country in South America, economically dependent on coca and hard-pressed to curb the rising tide of impoverishment. Sanchez de Lozada remains wedded to maintaining the best possible relationship with Washington. But this could prove his undoing, particularly if--like Morales--more and more Bolivians come to the conclusion that the US, far from promoting a better future is in fact an impediment.

Notes

(1.) Since this article was written nine months ago, the political and economic situation in Bolivia has deteriorated and the 'suitably newsworthy item' reffered to at that time has already appeared in the press. Violent incidents between government soldiers and local police, and between government forces and local groups, represent the continuing instability in the country where the lack of economic development continues to leave the majority of the population in poverty and powerless.

The original article was intended to understand something of the back-ground to the elections in 2002, notwithstanding recent events, it still serves that purpose.

References:

Bellos A. (2002). 'Rise of populist who would be leader'. Guardian 15 July.

Campbell D. (2002). 'Bolivia's leftwing upstart alarms US'. Guardian 15 July.

Crabtree J and Whitehead L (2001) Towards Democratic Viability. The Bolivian Experience. Palgrave.

Dinerstein A.C. (2001): Against the Violence of Stability Roadblocks in Argentina. Capital & Class 74.

Dunkerley J. (1998). The 1997 Bolivian Election in Historical Perspective. University of London Institute of Latin American Studies. Occasional Papers No. 16.

Economist (2002). 'Politics in Bolivia. Progress or Collapse' August 10-16 p.46.

Hargreaves C. (1992) Snowfields. The War on Cocaine in the Andes. Rest of the World Zed Books. London.

Hellin J (2002). Rethinking the approach to coca eradication and alternative development in Bolivia. Unpublished paper presented at 'Bolivia in the 21st Century' one day conference. St. Anthony's College. Oxford

Lehman.K (1999). Bolivia and the United States. A Limited Partnership. University of Georgia Press. Athens and London.

Molina. G.G. (2002). Prospects for Economic Growth and Social Peace in Bolivia. Unpublished paper presented at 'Bolivia in the 21st Century' one day conference. St. Anthony's College Oxford.

Skinner.E. (2002). Opportunities or Excuses? The Politics of Microenterprise Development in Bolivia. Unpublished paper presented at 'Bolivia in the 221st Century' one day conference. St. Anthony's College. Oxford.

Peter Nicholls teaches sociology of work at Bristol Business School, University of the West of England.