Bolivia under Evo Morales - At the Crossroads ?

Its been 6 months since Evo Morales, Bolivia´s first indigenous president took office. What progress has he made so far and what are the main obstacles he faces.

With 194 Governments in 181 years since independence, Bolivian politics has a long history of instability. Historically governments have been corrupt and their politicians out to line their own pockets as well as those of family and friends. Many recent governments have been weak coalitions where the balance of power is shared and its difficult to pass legislation and make real progress.

Many of the countries elite got rich from the rich mineral resources - notably silver and tin but more recently oil and gas have been a surer route to a quick dollar. The miners revolution of 1951 brought Victor Paz Estensorro to power under the MNR banner and although he promised to improve conditions for the miners and redistribute the countries wealth, in practice little was achieved. Although MNR were to dominate politically over the next few decades, the country reverted to type with ineffective corrupt politicians distributing the countries wealth amongst themselves.

American influence in the countries affairs began to increase rapidly after the second world war. It is often joked that the real president is the US ambassador, whose influence helps sustain America´s free market policies, with the threat of withdrawal of US investment when Bolivia refuses to toe the American line. Neoliberal US policies in Latin America, in particular those of the World Bank and the IMF, were one of the main causes of the 2001 economic crisis in Argentina. Whilst in Bolivia this process of Capitalisation has held development back and helped keep the country poor. In addition, most of the countries leading army officers are trained in US military academies and this helps to increase their leverage in Bolivian affairs.

Bolivia receives large amounts of foreign aid, it is always asking for more money, yet there is never enough investment put towards creating a self sustaining economy. When Evo Morales came to power, he stated that it would take time to reform the state institutions and that he felt padlocked in his palace, a prisoner of existing legislation. There are massive indigenous expectations from their new president but he will need to be careful not to anger the existing elite if he is to remain in power longer than his predecessors.

Until recently, foreign multinationals controlled the countries oil and gas resources, with most of the profits leaving the country or being siphoned off into the bank accounts of corrupt politicians - the multinationals have never been taxed fairly and this needs to change if Bolivia is to reap the rewards of these natural resources. The country is self sufficient in oil and has the regions second largest gas reserves (after Venezulea), but the problems arise when the talk turns to selling the excess gas overseas. Bolivia supplies a significant proportion of both Argentina and Brazil´s gas, but its Chile´s role in any potential future export which causes the most controversy. Landlocked Bolivia is heavily dependent on Chile´s northern ports, indeed the territory used to belong to Bolivia. The port dispute with Chile has been simmering for over 120 years with many Bolivians unhappy that gas could be exported this way through Chile and north to Mexico and North America.

Evo Morales´ Movement Towards Socialism (MAS) party, first became a serious political force during the elections of 2002. It was a close run affair with Gonzalo de Sanchez Lozado´s MNR narrowly defeating MAS. Goni formed a coalition with the NFR and MIR parties to maintain a conservative hold on power. Problems began in February 2003 with mass protests against the governments unpopular tax increases for workers. There were clashes between the police and army in Plaza Murillo with several casualties. Eventually the government was forced to back down on the tax hikes but in September trouble flared up again. The rising tide of indigenous protests centered around the poverty stricken city of El Alto above La Paz. The union structure is strong in El Alto and this together with its strategic position controlling the roads into and out of La Paz, meant their demands were soon having a powerful effect. Parties of the left, including MAS, helped to arrange road blocks to paralyse the country. The main issue on this occaision was the export of gas through Chile - the army was forced to break up the roadblocks with more casualties. The government then tried to censure the press but were rapidly losing control. Soon there were marches in every city and calls for Goni to resign. After 7 weeks of protests Goni eventually gave in, fleeing to the US and vice president Carlos Mesa took over. However, he was isolated from the start and was unable to make progress with a much weaker coalition. In June 2005, it was his turn to resign and Eduardo Rodriguez Veltze took over as a reluctant president for a 6 month term, with elections on the agenda.

The weakening of traditional parties left the way clear for two parties - Evo´s MAS on the left and former caretaker president Tuto´s PODEMOS on the right (despite him adopting the colour red and the communist star). Evo won the elections with 54% to Tuto´s 29%, in Bolivian terms a landslide victory. Morales was heavily backed by the indigenous majority but by now it was clear that his support ran much deeper.

Morales came to power on the back of rising disatisaction with the last few governments and the state of the economy. He promised to change the economic model with improvements in social infrastructure, especially in health and education, more state control over oil and gas and land redistribution from rich to poor. He said he would support the countries coca industry whilst attempting to clamp down on illegal cocaine production. There would also be benefits for foreign companies who helped create jobs in Bolivia. Taxes would increase for the rich but not for those in lower wage brackets and salaries of politicians and other government workers would be cut, including halving his own salary. He also campaigned for the extradition of Goni from the US to stand charges in Bolivia.

With strong links to Venezuela´s Hugo Chavez and Cuba´s Fidel Castro, Morales is certainly not a close friend of the current US administration. Chavez is widely seen as threat to US economic interests in the region. In his own country he has used profits from oil and gas sales to fund state institutions such as education and healthcare and is as popular as ever.

Another issue that is likely to be a thorn in the side of the US administration is coca - a crop which plays an important role in Bolivian culture. Morales, a former coca farmer, is keen to expand the legal market for the plant, which includes its use in tea, sweets, soap and shampoo products as well its medicinal uses. America spends 600 million dollars a year on the war against drugs in Colombia, Ecuador, Peru and Bolivia, destroying coca fields by aerial spraying. Attempts at crop substituion are widely regarded to have been unsuccessful. The drug cartels respond by moving their operations and planting more crops. Its not clear how Morales plans to reduce the proportion of coca turned to cocaine - much of the coca crop from the Chapare region is channeled toward this purpose.

True to his word, in May, the Bolivian state seized control of oil and gas installations and aims to buy back over 50% of the assets of companies involved. Morales announced - "the pillage of our natural resources by foreign companies is over". There are worries that this approach may scare off the foreign investment needed to help develop the industry. Brazil´s Petrobas were one of the companies not impressed with having to renegotiate their contract. These behind the scenes divisions do not fit well with Hugo Chavez´s grand plan to unite the continent against North American economic interference.

More recently, Morales announced that he plans to redistribute 5 million hectares of land over 5 years. This idle land, much of which was handed out to the rich over the years in exchange for political support, is often not used for agricultural purposes - and large areas are used as collateral for business loans. Santa Cruz landowners oppose the plan and say they will defend their land. The issue is perhaps the first real test of Evo´s Presidency - many see potential trouble ahead if troops will need to be sent in to seize control of the land.

The democratic revolution continues - this week, the Bolivian government announced an ambitous anti-poverty plan. Billions of dollars will be invested, with the aim of creating 100,000 jobs a year for 5 years, eliminating illiteracy and improving access to clean water. Money will come from the increased gas profits, now under state control and foreign lending and investment.

Most Bolivians I spoke to seemed to think Evo Morales was good for their country and his approval rating remains high. Few would doubt it will take a strong character to change South America´s poorest country for the better.



A MAS (Movimiento Al Socialismo) Education rally in Potosi - note the Che Guevara icongraphy. Che was executed in Bolivia after attempting to start a rebellion in the southern jungles - his image continues to resonate throughout the modern country. Evo Morales himself has installed a large portrait inside his presidencial office.