current political turmoil in Bolivia is part of a wider
movement in Latin America, of people rejecting not only
corrupt politicians, but also 'and more importantly'
the neoliberal economic policy paradigm that enriched
a few at the expense of the vast majority.
is the poorest country in Latin America, with more than
70 per cent of its population estimated to be living
below the official poverty line. In rural Bolivia the
incidence of poverty is reckoned to be as much as 90
per cent of the population, and there is almost no access
to basic amenities such as electricity and sanitation.
For most farmers in the country, until recently, the
only thing that stood between them and starvation was
cocaine cultivation, which was banned under pressure
from the United States. Urban areas have been impoverished
by massive job cuts because of privatisation and more
mechanisation in the mining industries.
Paradoxically, Bolivia is also one of the richest countries
in Latin America, in terms of its natural resources.
The huge natural gas reserves are second only to those
of Venezuela in the region, and the country also has
large deposits of tin, silver and gold. The story in
Bolivia, as in many other countries similarly rich in
natural resources, is of decades of plunder by a small
elite, ably assisted by multinational mining corporations
and watched over by US imperialism.
Again like much of Latin America, the economic reality
has its counterparts in social, political and even racial
divisions. The ruling elite is inevitably white, belligerently
right'wing and closely intertwined with imperialism,
as well as openly contemptuous of democracy when it
does not serve its own interests.
More than 60 per cent of the population, however, is
of ''indigenous'' origin, while another per cent can be
described as of ''mixed race''. These groups constitute
the political base of the increasingly more radicalised
left, which is currently making demands for public ownership
of natural resources and public responsibility for basic
services that strike at the very heart of the imperialist
To understand the current crisis, a little background
is necessary. Two crucial issues have dominated the
contested terrain in Bolivia, as indeed they are likely
to do in the world as a whole in the years to come:
energy and water. The neoliberal model was imposed in
a drastic form in Bolivia from around the mid'1980s
under the close supervision of the IMF and World Bank.
This involved not only the usual elements of fiscal
contraction and high interest rates, but also privatisation
of energy extraction and distribution but also of water
and other utilities, resulting in huge increases in
prices and disconnecting supplies to poor people who
could not pay.
However, around five years ago, social movements and
protestors, led among others by the indigenous peoples’
leader Evo Morales, began to reassert their position.
The Cochabamba Water War of 2000 became internationally
famous when several weeks of violent conflicts between
protestors and the military led to the expulsion of
a consortium controlled by the American transnational
corporation, Bechtel. The government of Bolivia has
been forced to pay heavy compensation to Bechtel.
Now there is another such war under way, in the shanty
town of El Alto close to the capital La Paz. From late
last year, similar protests against the privatization
of the public water and sewerage system paralysed the
city and led to the termination of the contract held
by the private consortium Aguas del Illimani on January
13, 2005. This was a particular blow to international
donors, who had actively pushed this contract as being
''pro'poor''. However, the issues is still not finally
resolved and the conflict has even intensified.
This is because there is still tremendous pressure upon
the Bolivian government from the World Bank, which became
an associate of Aguas del Illimani through its private
sector lending arm, the International Finance Corporation,
which owns 8 per cent of shares. If the contract is
cancelled, the Bolivian government will have to pay
a large compensation, and now the World Bank has direct
interest in guaranteeing the investment and will be
the judge of the likely forthcoming lawsuit through
its agency the International Centre for the Settlement
of Investment Disputes.
One of the major demands of the current struggle is
nationalization of the oil and gas extraction industry,
since the practice of the past and currently is to export
the country’s gas to the benefit of a small local elite
and the large MNCs. This was a promise made in the ''October
Agenda'' of former President Carlos Mesa, who took power
in 2003 after the hated and murderous regime of Gonzalo
Sánchez de Lozada was displaced by public uprising.
That Agenda also promised a new Constituent Assembly
providing for more regional autonomy and representation
to indigenous peoples. This immediately came up against
a strong rightwing reaction, especially from the region
of Santa Cruz which enjoys a massive concentration of
land and valuable natural resources in the hands of
a few. Now Mesa has himself been evicted by mass protests,
because of failure to keep to these promises.
The new Acting President Enrico Rodriguez is the former
head of the Supreme Court, who has so far been unable
to stop the chaos. He has promised fresh elections within
six months, and these are definitely likely to provide
more power to the Left, which now has several leaders
of rapidly growing public stature.
President Hugo Chavez of Venezuela has described the
current crisis in Bolivia as one more sign that the
"poisoned medicine" of free 'market democracy
imposed by the US is being rejected by Latin America.
But of course US imperialism, however, distracted it
may be by its travails in Iraq and Afghanistan, is unlikely
to let so much popular upsurge in its backyard go completely
unchallenged. What happens next in that region is of
great concern to everyone in the developing world, not
only for the ability to confront imperialism, but also
in terms of building feasible social and economic alternatives.