A Bizarre Beginning in Bolivia
JAMES PETRAS
Major trade union federations, the biggest neighborhood social movements (in
the combative city of El Alto) and rural landless movements are expressing
consternation and hostility over several of
newly elected President Morales' cabinet appointments and their initial policy
priorities, which go counter to the campaign promises of candidate Morales.
One of the worst predictors of most governments' policies is their campaign
rhetoric. This is especially the case of presidential candidates moving from
the left toward the centre. Much more reliable indicators of the actual
policies of a newly elected regime come in the form of the Cabinet ministers
appointed to key ministries.
President Morales has named sixteen Cabinet ministers, of which 7 have been
called into question by the mass movements which brought Morales to the
presidency. While overseas commentators and publicists praise the presence of
several "Indians" and four women in the Cabinet, the popular movements in
Bolivia are dismayed by the policies and past trajectories of nearly half of
the new ministers. Salvador Ric Riera, a conservative Santa Cruz businessman
and reputed multi-millionaire, accused by the local trade union leaders of
money laundering and other shady activities, has been appointed Minister of
Public Works and Services. In all previous regimes, Public Works was one of
the most notorious for its corruption, especially in allocating public highway
construction contracts. Given the importance that Morales has given to
fighting corruption, most activists were appalled by the appointment of Riera,
who was a last-minute financial contributor to Morales'
campaign. His appointment is seen as a concession to a section of the Santa
Cruz oligarchy.
The key Ministry of Mines was handed to Walter Villarroel who defected from
the rightwing UCS to jump on the Morales bandwagon. His appointment was
denounced by mining leader Cesar Lugo because of Villarroel's previous stint
in government in which he helped to dismantle the Bolivian Mining Corporation
(COMOBOL) and for privatizing one of the biggest iron mines in the world. He
has also been attacked for supporting previous neo-liberal President Carlos
Mesa and promoting private co-operatives rather than strengthening state
enterprises under worker control.
The Ministry of Defense was assigned to Walker San Miguel Rodriguez, a lawyer
and former director of Lloyd Bolivian Airlines (LBA), accused of covering up
the illegal privatization of the former state airlines. Currently the Pilots
Association has asked the state to intervene in the firm to investigate crimes
and irregularities. The new Minister of Defence is a long-time member of the
right-wing MNR and a former supporter of ex-President Sanchez de Losada, the
President who massacred scores of protestors in 2003 before he fled into exile
to the US. Hardly an "incorruptible" and proper selection to head up the
military!
The Teachers Confederation has rejected Morales' appointment of Felix Patzi
Paco as Minister of Education because he has no background in the profession,
has no knowledge of the field and is clearly unqualified to confront the
current crisis in education.
The Labor Confederation (COB) has strongly criticized the appointment of Luis
Alberto Arce to head the Finance Ministry. He has long been connected with
international financial institutions such as the IMF, World Bank and
Inter-American Development Bank. He is a long-term supporter of their
regressive structural adjustment programs. The Finance Ministry is responsible
for establishing the economic parameters for the rest of the ministries,
including investments, revenues and social expenditures.
The Foreign Ministry will be run by a former City Councilor for El Alto, David
Choquehuanca. He has been a close collaborator of corrupt neo-liberal
ex-President Jaime Paz Zamora. He can defend his free market policies in both
Spanish and Aymara.
Evo Morales' appointment of Abel Mamani to the Ministry of Water was strongly
contested by the leaders of the Federation of Neighborhood Councils (FEJUVE)
in El Alto, the key organization that ignited the insurrections that toppled
two former neo-liberal presidents and gave Morales a resounding 70 per cent
majority in El Alto. Morales and Mamani acted without consulting the popular
assemblies of FEJUVE despite the centrality of the water issue in El Alto.
Moreover, Mamani, a former leader of FEJUVE was criticized for mishandling
funds and failing to pursue the universal demand for nationalization of
foreign-owned water distribution rights in El Alto. The neighborhood
groups were less impressed by Mamani's facility in speaking Quechua than by
his lack of militancy and his abundant political opportunism.
The social movements praised Morales' appointments to Hydrocarbons (Andre
Soliz Rada) who promises to promote the nationalization of gas and petroleum,
Justice (Casmira Rodriguez Romerom) a leader in the Domestic Workers Union,
Labor (Alex Galvez Mamani) a former leader in
the Factory Workers Confederation. Regarding the rest of the Ministers, there
is neither serious opposition nor praise for the moment. However it should be
noted that Soliz Rada of Hydrocarbons was a former leader of the center-right
CONDEPA party which co-habitated with former neo-liberal presidents, even as
he polemicized against the illegal sell-off of state petroleum resources. The
head of Peasant and Agrarian Affairs is a Santa Cruz intellectual with no ties
to the major peasant movements in the Andes or Cochabamba. The key economic
posts are strongly tilted toward technocrats and liberals while the 'social
ministries' are in the hands of leftists. While this gives the
impression of diversity of representation, in fact it is the economic ministry
(Finance), which will establish the economic parameters for budget
allocations, which will profoundly influence any social changes.
In his inaugural address to Congress Evo Morales was categorical in his
defence of big plantation owners and his opposition to any redistribution of
fertile and productive lands. "I want to tell you, distinguished Congress
people, my policy toward land policy. I want to tell you that productive land,
whether it is producing or lends itself to a social economic use, will be
respected, whether it is 1000
hectares, 2000 hectares, 3000 or 5000 hectares. But those lands which are used
for speculative purposes will revert to the state in order to redistribute the
land to the people without land" (January 22, 2006). Morales also condemned
slavery in the Eastern regions of Bolivia.
Morales' exclusion of all the biggest landholdings, plantations and
latifundios fulfills his pre-election promises to the wealthy Santa Cruz
agro-business oligarchs, but it is a repudiation of his promises
of agrarian reform to the landless and peasant movements. Government-promoted
land settlements in remote public lands with precarious soil, distant from
markets, transport and credit facilities will doom recipients to failure, as
has occurred in the past.
In his address to Congress Morales highlighted "austerity" in government
salaries for legislators and himself. However personal morality was harnessed
to austerity in the state budget--a position
clearly articulated by his newly appointed Finance Minister Luis Arce. As soon
as Arce took office, he convoked a meeting of the heads of the Central Bank,
the Tax and Revenue Office, the Planning and Development Ministries and others
to announce that Bolivia would follow four 'axes' of policy: maintaining
macro-economic stability, generating a new tax-paying consciousness,
encouraging consumers to buy Bolivian-made products and encourage the use of
Bolivian currency instead of the dollar.
Arce's defence of the IMF-backed macro-economic stability pact is a guarantee
that government-sponsored social programs will be severely limited, that no
major or minor structural changes (expropriations of land, factories, banks
and mines) will be undertaken. Arce's four priorities exclude any
redistributive programs and favour trivial measures, which in absolute terms
will have zero impact in lessening inequalities or reducing poverty and--at
best -- only minimally increasing social services.
Encouraging consumers to "buy Bolivian" has been tried before and failed
because contraband provides a decent livelihood in the absence of large-scale
publicly funded job programs (which is unthinkable with Arce's fiscal
austerity strategy). Moreover without any substantial increase in the $50
dollar a month minimum wage, consumers will prefer cheaper contraband Chinese
goods to local manufactures goods. Finally given the enormous army of
'informal' street vendors who depend on selling cheap imports, anything short
of public investment in alternative employment will doom a "nationalist"
consumer campaign. The new Aymara-speaking Foreign Minister, David
Choquehuanca, had affirmed that Bolivia is open to discussing a free trade
agreement with the US , something previous neo-liberal regime were not able to
advance. As he took over at the Foreign Ministry, he declared "We do not
reject entering the Free Trade Area of the Americas".
He elaborated further "We are going to have relations with everyone, we have
to talk about free trade agreements, with various nations and analyze the
situation with the Andean Community, the Southern Cone Market (MERCOSUR),
blocs with which Bolivia has commercial accords." He went on to cite Morales'
overseas trip to several Latin American and European countries and South
Africa prior to his taking office. "When Evo traveled abroad he said he
learned how to do good business".
Indeed Evo's trip abroad and his conversations with the US Ambassador to
Bolivia ( David Greenlee) and US Assistant Secretary of State for Western
Hemispheric Affairs, (Thomas Shannon), were essentially to assure Europe and
the US of his economic orthodoxy, to encourage more and bigger investments in
the mineral sector and to secure their certification of good conduct.
While Morales' key cabinet appointments may appear to overseas observers
as "contradictory" to his campaign rhetoric, and his enthusiastic support
among Indian communities, it is in reality compatible with the less public
side of his political wheeling and dealing with established economic and
political elites prior to and during his election campaign.
President Morales has opposed many of the demands of the mass social movements
for the past several years, in fact since he first ran for the presidency in
2002. He did not support nor participate in the popular insurrectionary
movements which overthrew neo-liberal President Sanchez de Losada in October
2003, and the popular uprising, which ousted President Carlos Mesa in May-June
2005. He supported President Mesa's 2004 referendum in increasing the royalty
payments on
gas and petroleum, which explicitly excluded nationalization. During the
electoral campaign Morales expressed support for "nationalization" in mass
meetings, while assuring foreign oil and gas companies that he would guarantee
their assets, investments and profits on the condition that they increased
their royalty payments. On his trip to Brazil, Argentina, Spain and France he
reaffirmed his commitment to protecting existing investments in petroleum and
gas, and went further asking them to increase and expand their investments in
mineral exploitation and processing. His appointment of the liberal Walter
Villarroel to the Mining Ministry, over the vehement objections and threats of
job action from the mining unions (which brought him to power) is indicative
of his determination to pursue an orthodox foreign investment-based mineral
exploitation model.
Carlos Villegas, Minister of Sustainable Development and Development Planning,
upon taking office stated that Repsol (the Spanish MNC) and Total (French Gas
Giant) "had signalled they were willing to re-negotiate their contracts to
give a greater share of profits to Bolivia" (Financial Times 1/23/2006).
"Nationalization" according to the Morales administration is little more than
an increase in tax revenue and nothing more. Given Bolivia's commitment to
"maintaining macro-economic stability" that means essentially that more new
tax revenues will continue to flow into foreign and public debt payments, all
incurred by previous corrupt regimes and very little of which was ever
invested in productive activities.
Morales' overseas trip to Cuba and Venezuela and the promise of socio-economic
assistance served to provide him with 'leftist' legitimacy. His travels to
Spain, France, Holland, Belgium, South
Africa and Brazil to discuss political and economic agreements will lock
Bolivia into its conventional role as energy and mineral exporter. More
significant than his much-publicized travels abroad was
his meeting in La Paz with US Ambassador Greenlee at the Ambassador's
residence prior to his travel to Cuba and Venezuela. While no details of the
conversation were released it is understood by both sides that no significant
conflicts surfaced. Vice-President Garcia Linera announced the meeting was
cordial and the basis for future agreements.
One of the most lucrative mineral exploitation projects confronting the
Morales regime is the publicly owned iron and manganese mines of Mutun in
Santa Cruz, with 40 billions tons of iron deposits. The value of the raw iron
is estimated by Bolivian experts at $400 billion dollars at current prices;
converted to steel or iron construction rods, it is valued at $30 trillion
dollars, less the cost of
production and investment. Mutun is up for bidding, with several
multi-nationals competing. The bidding prior to Morales taking office was
based on excavating and exporting the raw iron ores with no intention of
adding value through conversion to steel. In order for the Morales regime to
"industrialize" raw materials to add value and increase national revenues, it
would require channelling natural gas toward fuelling the steel refineries.
That in turn requires nationalizing gas production because the Brazilian
multi-national, Petrobras, would certainly not co-operate, as the returns on
sale within Bolivia would be far below its prices in Sao Paulo.
Morales' claim to want to "industrialize" raw material production comes into
direct conflict with his policy of guaranteeing foreign ownership of
hydrocarbon resources in exchange for higher tax rates.
Morales uses a double discourse: his opposition to "neo-liberalism" is
contradicted by his support for orthodox "stabilization of macro-economic
policies"; his defence of budgetary austerity and his
Finance Minister's refusal to triple or even raise the minimum wage ("a raise
is being studied to see if it is compatible with stable macro-economic
policies" according to the Finance Minister) is in contradiction to his
promise to reduce poverty; his guarantees to the owners of vast plantations is
in contradiction to the demands of millions of landless and subsistence
peasants and his guarantees to the export-oriented multinationals' control of
hydrocarbons conflicts with national demands to harness energy to local
consumption and industrialization.
Sooner rather than later, polarized differences of interest between Morales'
foreign and local business allies and oligarchs and the masses who struggled
and sacrificed to elect him to power will lead to a new round of
confrontations and conflicts. Morales is riding two horses going in opposite
directions. The photogenic traditional Andean rituals, the colour and
pageantry of the electoral inauguration will quickly fade in the face of the
continuing poverty, inequality and gross concentrations of wealth. Over time a
profound disenchantment will spread with a President who spoke to the people
but works for the rich, including the foreign rich. For now the Bolivian
Workers
Confederation (Central Obrera Boliviana) and the leaders of all the major
mining, teachers and neighborhood movements have sent a clear and forthright
message to all their affiliates to prepare for direct action if Morales
reneges on three central demands of the people: nationalization of gas and
petroleum and expulsion of the multi-national petroleum companies; the
expropriation of the large landed estates and the redistribution of 25 million
acres of land to the landless peasants; and an immediate raise of the national
minimum wage. The great majority of movement leaders and activists (Indians
and Mestizos) are not impressed by the Indian rituals and the cultural theatre
organized by Morales entourage. They are prepared to re-launch mass
mobilizations when it become clear to the poor that Morales has embraced the
agenda of the bankers, trans-national corporations and agro-business owners.
Bolivia is not Brazil nor Argentina nor Uruguay nor Chile where the
centre-left regimes were in control of the trade unions and sectors of the
social movements. The most important trade unions are totally independent of
the state, Evo's party, the Movement to Socialist (or MAS) and his cabinet.
The transition from mass peasant leader to accommodating statesman for the
multi-national corporations will not be easy or a smooth operation: more
likely Evo will soon face the challenges and political instability which sent
his two predecessors into early retirement.
James Petras, a former Professor of Sociology at Binghamton University, New
York, owns a 50 year membership in the class struggle, is an adviser to the
landless and jobless in brazil and Argentina and is co-author of Globalization
Unmasked (Zed). His new book with Henry Veltmeyer, Social Movements and the
State: Brazil, Ecuador, Bolivia and Argentina, will be published in October
2005. He can be reached at:
jpetras@binghamton.edu
Feb 2006
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