Fred and Ernie’s Latin American Adventure

I doubt much of this has reached the US press but this is an extremely tense time in Bolivia. Evo Morales the first indigenous President of a Latin American country has come under extreme fire from the right. He was elected with an unheard of 53% of the vote in 2005 (with something like 10 candidates) and took office in 2006 amidst great hope for change. I think the hope was felt across many sectors of society except the extreme right and major business interests.

Bolivia had the record for most coups, dictators and presidents up until the 1980s. Since the 1980s Bolivia has been a stable democracy weathering a couple of presidential resignations forced by populace uprisings. Before the 1950 revolution Bolivia had one of the most stratified cast systems with the indigenous people completely left out of the political structure and treated as virtual slaves. The election of Evo Morales was a movement towards the greater inclusion of the indigenous peoples in all levels of society.

Through a succession of presidents the 1980’s and 1990s spelled a time of Bolivia’s subjection to the strictures of the World Bank and the IMF to gain access to international support. Bolivia was pointed to in the 1990’s as a miracle of neoliberal economics for the extreme measures taken to halt hyper inflation. In this period the state sold off nearly all of the industries the state had owned and managed including the oil and gas industry, a monopoly telecommunications company, the national airline, a national dairy operation and many more. These operations were nearly all bought by foreign concerns. The government was also forced to reduce social services to an extremely poor population.

The infamous Cochabamba Water Wars is a prime example of international pressures from the World Bank and the IMF and the results on local poverty. In order to attain international grants and financing the Bolivian government was forced to privatize the water system in Cochabamba in 2002. The new owner, a subsidiary of Bechtel raised the rates for water over 300%. In a subsistence situation with extreme poverty this made water unattainable for much of the population. The resulting riots (and death of a teenager) forced the government to back down. Bechtel was expelled from the country and has since tried to sue in international courts.

After 20 years people decided that the neo-liberal economic requirements of the international banking communities didn’t do much to alleviate poverty or provide living wage jobs. The result was the election of Evo Morales and the promise of a new way. In the same way that Argentina, Brazil and Venezuela have all repudiated the actions of the World Bank and the IMF as agents of foreign control for foreign business interests, Bolivia has withdrawn from many of the international agreements where multinational corporations can sue countries over internal actions that may damage their business interests. In turning their back on the international financial markets (and because of the current political situation) Bolivia has also suffered the lowest investment rate from abroad in all of South America.

Another of Evo Morales’ promises was to rewrite the constitution to benefit the indigenous peoples. The new constitution has been extremely controversial. The manner in which many of the decisiona on the constitution have been made has wrought with accusations of purposefully leaving out the opposition parties who tend to be rich businessmen. The constitution was planned to be voted on in March. But the court that regulates elections ruled that the process was flawed and not enough time given before the vote. Thus the vote was delayed. At the same time the state of Santa Cruz arranged a vote for autonomy. The same court that ruled the vote on the constitution delayed ruled that Santa Cruz did not have the authority to take such a vote and ruled it unlawful. That hasn’t stopped the state from proceeding and the vote will take place this Sunday.

The state of Santa Cruz has 100% of the soy production and 75% of the oil and gas production in Bolivia. They are the larges state land wise and currently the richest state. They want more control over local decisions and especially over tax dollars. There are legitimate arguments for autonomy and the new constitution actually has provisions for increased autonomy. But the state of Santa Cruz (and four more states following their lead - there are a total of nine states in Bolivia) is pursuing their own autonomy, outside the realms of the current constitution (there are no provisions for increased autonomy in the current constitution).

The Organization of American States, the UN, neighboring countries and the church have all said the vote in Santa Cruz is outside the law. There will be no regulating bodies (neither the national government of Bolivia or international organizations) overseeing the vote because it is not considered legal.

There is no question that the state will vote in support of autonomy. The question is what the state will do with that vote. Will they try and not pay the taxes to the government in La Paz? Will they raise their own police force and military? And what will the government in La Paz do in response?

Many people here have stock piled food. I have been told not to travel around this time. One of the big concerns is that the indigenous peoples of Santa Cruz (who are not indigenous to the state but have migrated there for work) will rise up and march on the city.

I was at a presentation by the Democracy Center (check them out on the web http://democracyctr.org/index.php , the have a great blog) which included the presentation of a new book by Naomi Klein called Shock Doctrine. Jim Shultz, who is a North American and the force behind the Democracy Center, which came out of the Cochabamba Water Wars, explained that the riots that occurred in Cochabamba a little over year ago where initiated by youth of opposing sides and resulted in the death of yet another teenager. Even a calm populace can be dragged into the fracas by some rowdy youths throwing taunts at each other.

There are many people in the world watching and hoping for what they consider a Bolivian experiment. In their minds Bolivia is struggling against a continued colonial structure which today manifests itself in neo-liberalism forcing third world countries to subscribe to neo-liberal monetary policies in order to gain access to much needed financial assistance and international investment. This has so far left most of the poor in these countries poor and with governments unable to care for them.

The argument is that after the privatization of the national companies in the 80’s and 90’s the government lacked resources to invest in the people and the country. The multinationals that did invest in the country (in the form of buying the privatized companies) did not return their profits to the country but expatriated them to their respective homes abroad.

This last week Morales finalized the nationalization of the oil and gas companies and surprised everyone by (re) nationalizing the largest telecommunications company, Entel, which had been privatized in the 80’s. This may be the news that reached the US. It affects corporations outside of Bolivia and likely registered on with the international media.