[Marxism] ISR report from Bolivia

aaron amaral amaral1871 at gmail.com
Tue Mar 7 13:49:12 MST 2006


Hope and challenge in Bolivia
Will Evo Morales end neoliberalism?

TOM LEWIS reporting from Bolivia

WINNING THE presidential election in Bolivia last December with an
impressive 54 percent of the vote, Evo Morales joined Luis Inácio
"Lula" da Silva (Brazil), Hugo Chávez (Venezuela), Tabaré Vásquez
(Uruguay), Alejandro Toledo (Peru), and Néstor Kirchner (Argentina) as
part of Latin America's electoral backlash against neoliberalism.1
Morales, an Aymara Indian, assumed office January 22 as Bolivia's
first indigenous president. His government immediately symbolized hope
for the 60 percent of Bolivians who live in poverty and who, along
with the nation's coca farmers, form the base of support for Morales's
political party and movement, the Movement Toward Socialism (MAS).

The election campaign unfolded as a national referendum on
neoliberalism—the policies of privatization, austerity, and trade
liberalization that have wreaked havoc on Bolivias poor and oppressed.
Former president Jorge "Tuto" Quiroga, the candidate of the neoliberal
Poder Democrático Social (PODEMOS), finished a distant second to
Morales, receiving only 29 percent of the vote. MAS also won a
majority in the lower house of Congress and almost captured a majority
in the Senate. Three out of the nine state governorships went to MAS,
as did the mayoralties of all of the major cities with the exception
of Santa Cruz. The scale of MAS's victory sent a powerful message from
Bolivia's voters to the captains of international finance, industry,
and trade.

Initial steps in power

In the days following the election, Morales announced that he would
repeal Supreme Decree 21060, the 1985 law that opened the door to the
privatization of state enterprises and to measures imposing
"flexibility" on Bolivian labor. Some critics on the Left considered
the repeal of 21060 to be a merely symbolic gesture, since it has no
retroactive effect of re-nationalizing privatized enterprises. Yet
overturning the decree has topped the demands of Bolivia's social
movements since 2000.

This is because 21060's infamous Article 55, which introduced labor
flexibility, has served as the hammer with which the transnational and
Bolivian bosses have busted unions, persecuted organizers, fired
workers without cause, and spread fear among the rank and file,
deterring them from joining in a collective fight for workers' rights.
The repeal of 21060 represents an important measure in limiting the
ability of national and transnational capital in Bolivia to act with

In a further step, Morales indicated that he will use last May's
ruling by the Supreme Court—a ruling that invalidated existing
contracts with transnational oil and gas companies—to negotiate new
contracts on terms more favorable to Bolivia's treasury. These
contracts, which usually stipulate that transnational petroleum
corporations pay only 18 percent in royalties to the government, were
declared unconstitutional because the executive branch never submitted
them to Congress for ratification, as required by law.2 Using a
combination of royalties and more taxes, a new hydrocarbon law passed
in April 2005 requires a total contribution of 50 percent from the
transnationals. Morales will seek to replace the existing but invalid
contracts with new ones based on the 50 percent formula.

Morales hopes to use super-profits from natural gas to pay for
significant improvements in the living standards of Bolivia's workers,
peasants, poor, and unemployed. But Morales is not inheriting an
already nationalized and developed hydrocarbon industry. The need to
negotiate with foreign investors for development capital will limit
how far he can go toward full nationalization. His stated plan is to
nationalize only subsoil resources—the gas, oil, and minerals in the
ground—and to leave surface property and exploitation largely in
private hands.

When leaders in the national Coalition for the Defense and
Recuperation of Gas speak of "nationalization," however, they
mean—beyond the state's recovery of ownership of oil and gas
reserves—the participation of Bolivian workers and the state in all
aspects of production: exploration, extraction, industrialization,
refining, and marketing. "If it's only a law, it won't mean much,"
says Oscar Olivera, a spokesperson for the Gas Coalition and leader of
the successful fight to overturn the privatization of water service in
Cochabamba in 2000. "We will have to continue to push for a genuine

Despite continued dependence on foreign investment, Morales will find
himself in a relatively strong position for negotiating with the
transnationals. Natural gas prices have risen quickly—even faster in
percentage terms than oil prices—since the start of the Iraq War.
Should the European corporations that presently dominate Bolivia's
hydrocarbon industry and U.S. companies prove stubborn in negotiating
new contracts, China awaits its chance. And Venezuela's President Hugo
Chávez may be willing to contribute substantively toward financing the
development of Bolivian gas.

Other early measures taken by the Morales administration included
salary reductions of up to 58 percent for members of the executive and
legislative branches of government, including the president, vice
president, cabinet ministers, and elected representatives. He named a
cabinet in which fourteen of the sixteen ministers come from
indigenous groups and women hold the portfolios of Interior, Justice,
Health, and Economic Development. Some controversy, however,
surrounded the appointment of seven of the ministers because of their
past work with neoliberal governments.

Among the most important steps taken by Morales has been the
presentation to Congress of a proposal to call elections to a
Constitutional Assembly in July 2006, and for the assembly to begin
its work in August. The convocation of the Constitutional Assembly
stood out as the MAS's central campaign promise. The assembly's aim,
according to MAS officials, would be to "reestablish the nation on a
new basis" and formally "end neoliberalism." The "new basis" would
take into account for the first time the interests and aspirations of
Bolivia's majority indigenous population.

Morales also decreed a 7 percent increase in teachers' salaries as
well as the creation of 3,500 new teaching jobs. Bolivian teachers
were scheduled to receive a 3.5 percent increase under the budget
Morales inherited for the current fiscal year, but salary cuts for
other government officials made it possible to double the amount.
Morales said the existing budget did not enable him to satisfy the
teachers' demand for 8,000 new jobs at present.

At the same time as Morales repealed Supreme Decree 21060 and moved
toward nationalizing hydrocarbons in some form, he also took steps to
placate the conservative leaders of the oil- and gas-rich eastern
provinces, who want autonomy and who have threatened secession if
Morales goes too far in dismantling neoliberalism. Morales thus
approved private exploitation of the region's iron and manganese mine
in Mutún over the protests of environmentalists, unionists, and
peasant groups.

Morales also issued a statement guaranteeing protection of the private
property of big business and large landowners. And he reassured
foreign companies and investors that their presence is welcome as long
as their practices are "transparent"—meaning "incorrupt" and
"non-subversive." As a gesture of goodwill, and despite what many
consider irrefutable proof, Morales absolved Repsol, the
Spanish-Argentine transnational corporation, from allegations that it
trafficked in contraband hydrocarbons.

An early controversy between the new Morales government and groups of
Bolivian workers erupted in late January when officials apparently
reneged on a campaign promise to triple the minimum wage. MAS
literature circulating in the last ten days of the December campaign
contained a pledge to raise the minimum wage from its current 480
bolivianos ($60) per month to 1,500 bolivianos ($185) per month.
Morales's chief economic advisor, Carlos Villegas, was forced to make
a public statement in which he said no such promise ever came from an
authorized source.3

Promise or no, ordinary working Bolivians clearly expect to see an
improvement in their standard of living within the next twelve months.
This attitude was reflected in the reaction to Morales's 7 percent
salary increase for teachers. Union leaders rejected the offer and
urged instead that the increase match the promised 1,500 bolivianos
per month....

..for the rest and the analysis: http://www.isreview.org/issues/46/morales.shtml

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