Bolivia

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A nation of South America. Bolivia is a lower-income, landlocked nation bordered by Chile, Peru, Brazil, Paraguay, and Argentina.


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Historical Outline

  • 1879: War of the Pacific—Bolivia loses control of the Atacama desert, with its rich phosphate deposits and coastal outlet, to neighbor Chile. The war ends a short-lived federation with Peru.[1]
  • 1932: Chaco War—Bolivia's Pres. Daniel Salamanca Urey takes the nation to war with Paraguay to secure control of the Chaco. The war is a logistical disaster; Bolivia loses the contested territory, which which had been valuable for communication with the Paraná River. A hugely traumatic experience for the nation, it led to scorn for the old conservative oligarchy.[2]
  • 1952: National Revolution— Víctor Paz Estenssoro, elected president in absentia, takes power after popular uprisings oust the junta (which had suppressed his election). During his first term ('52-56), inflation averaged 276% annually; however, two thirds of the mines and oil reserves were nationalized. Subsequently, US aid ended the hyperinflation. Estenssoro served a second term, '60-64, during the economy again performed badly.[3]
  • 1964: Coup d'ètat ends civilian rule; eleven coups to 1982[4]
  • 1980: Cocaine Coup," 17 July—General Luis García Meza takes power in association with Cocaine kingpin Roberto Suarez and Nazi war criminal Klaus Barbie; the regime is shortlived and US CIA/DEA involvement is murky. [5]
  • 1982: October—García Meza resigns; succeeded by the president he supplanted in his coup. Pres. Siles Zuazo serves a truncated term (to Aug '85) despite three failed coup attempts.
  • 1985: Víctor Paz Estenssoro begins third term as president; like several other former populist leaders (e.g., Carlos Andrés Pérez Rodríguez Wikipedia_favicon.gif of Venezuela), his term in the '80's is marked by concessions to neoliberalism. [6]
    On August 29, 1985, Paz Estenssoro signed Decree 21060, one of the most austere economic stabilization packages ever implemented in Latin America. Hailed as the NPE, the decree sought to address the structural weaknesses in the state capitalist development model that had been in place since 1952. Specifically, the decree aimed at ending Bolivia's record-setting hyperinflation and dismantling the large and inefficient state enterprises that had been created by the revolution. Hence, the NPE represented a shift from the longstanding primacy of the state in promoting development to a leading role by the private sector.
    VPE is succeeded by his nephew, Jaime Paz Zamora (to '93).
  • 1997: Hugo Banzer, former dictator (1971-78) and coupmaker ('80-82), party leader and kingpin, is elected President as a result of extremely adroit political maneuvers. Unlike his predecessor, Jaime Paz Zamora, Hugo Banzer makes a stern effort against drug traffickers—breaking with his '80's ties with the drug lords, but winning massive US DEA support. US assistance triples within two years.[7]
  • 2001: Fall—Argentinean economy implodes; peso collapses, government defaults on debt. Four presidents resign in two months. In Paraguay and Bolivia, economies devastated.[8]
  • 2002: August—Pres. Gonzalo Sanchez de Lozada takes office; attempts a program of public works. The new president is chair of Minera S.A., a mining group responsible for 25% of the country's mineral exports; he is on his second term as president.[9]

Needless to say, this requires a lot of money that Bolivia's treasury does not happen to have, so Mr. Sanchez de Lozada tries trade agreements, natural gas exports, and sales of the nation's utilities. This touched off massive, bloody demonstrations by the nation's Indian population, most of whom are not urban, and many of whom were ruined by the coca extermination program.


  • 2003: February—income tax hike to fund "new deal" touches off massive demonstrations; 30 killed. Pres. Sanchez de Lozada withdraws the proposal. In September, Indian demonstrations erupt in La Paz as a result of the plan to export LNG to California via Antofagasta, Chile—the port lost in the 1879 War of the Pacific. This time, 80 are killed and cocaleros like Evo Morales—partisans of the Indian coca-growers—become major figures in the demonstrations.[10]
  • 2003: October—Pres. Sanchez de Lozada resigns and is succeeded by VP Carlos Mesa.[11]


"The Double Role of Drug Trafficking" (Samuel Blixen) is an outline of anti-narcotics operations in Latin American states; the operations are linked together through collaborations between oligarchic governments that are, inevitably enough, dominated by their urban populations. [12] The odd thing, for naïve readers, is how easily these anti-narcotics operations metastasize into pro-narcotics, anti-peasant operations.


The reason, of course, is that the peasants are being pushed deeper and deeper into the bush by population pressures, urban growth, and commercialization of agriculture. In the case of Bolivia, this has been influenced by population pressures from Brazil. At the same time, the urbanized economy is at a profound disadvantage with respect to trade partners, since terms of trade are terrible and Bolivia must import a growing list of items. This places pressure on the national government to spend ever more on social services and public works, so it is eternally in a budget crisis. Insurgencies not only become a bigger headache, they are costlier to fight since there is now a large cohort of Indians in the cities; in the past, genocidal tactics and scorched earth tactics, coupled with indentured servitude and military conscription, solved the problem.


It's facile to argue that the United States government—a main aid supplier, exporter, and importer for Bolivia, as for its neighbors—is maliciously conspiring to make matters worse. As we've seen elsewhere, these are dilemmas from which national governments must make unattractive choices, and for the most part the government of Bolivia has alternated between the populism of Paz Estenssoro and the technocracy of Sanchez de Lozada or Banzer. During the period immediately following WW2, substantial US aid flowed to Bolivia despite a radical populist government that nationalized much of the local economy. This aid probably did help the major urban centers of Bolivia absorb the massive influx of rural mestizo peasants. Several party factions hoped to bring quasi-Maoist or Marxist movements into the fold, and were thwarted by the October '64 junta; yet one has to wonder if fundamentally anti-urban rebellions could ever have been reconciled with the modern nation state.


Yet the machinery of the liberal-authoritarian state, waging war to defend its New Deal-like programs in the burgeoning cities, was not sustainable either and soon gave way to the minimalist praetorian state—a minimal state, overwhelmed by the increasing expense of even sub-standard levels of public works and social welfare programs, constantly regurgitating the rhetoric of privatization, deregulation, and labor market flexibility. This is why many of the most fiery critics of the neoliberal model in the '50's and '60's were obligated to submit to it in the '80's and '90's.


In the North, the narco-raffickers are—along with patriarchal heads of the mining combines like the two-term Pres. Sanchez de Lozada—the pillars of the economy. Ranchers dominate the local chambers of commerce with close familiar relations to the same men, like Roberto Suarez. These are the merchant bankers of the Bolivian economy, the sympathetic loan officers and grandfatherly patrons of the barrios. They do not suffer from the eradication programs, since these programs never have much hope of entirely eradicating the crop; and ironic as it may seem, the drug barons are usually quite interested in defeating the cocaleros, or activists for the coca-growing peasants and Indians. Eradication efforts, doomed as they are to fail, only succeed in destroying the accumulated wealth of the growers, preventing any sort of stable organization, or political activism. The eradication project floods the Andean economies with US aid and used military equipment, criminalizes the main rival of the rancher/drug baron for land and water, and thereby ensures a perpetuation of his political hegemony.


When a mist of glyphosate descends on an Andean hillside, the loss of coca doesn't affect the rancher/drug baron; his financial stake in coca inventories begins long after the crop is harvested. In regions like Putamayo, Colombia, processed cocaine is often used as money among the bush communities long after it is processed into a compact form. Afterward, it enters the narco-trafficker's inventory. When households are ruined by spraying of Roundup, they must cope in a variety of ways, such as emigrating to the city (leaving the land open to expropriation by the drug barons) or joining the guerrilla movements. Not surprisingly, movements like FARC and ELN have reacted by becoming obsessed with getting money, rather than effecting revolution.


The policy of drug eradication, as a part of the US government's DEA, is a terrible idea; the policy of defending it with massive military aid programs (MAP) is, however, too self-defeating to be dismissed as merely a bad idea. The ease with which the drug barons commandeer free helicopter gunships and the personnel of their governments' armies for use against the peasants and Indians, is obvious enough; one might arge that some fraternal respect has to be accorded to these governments—the USA cannot sneer at its neighbors as openly as that. But the fact is that the entire program of arming governments to wage a mjor war against a huge segment of their own populations, under pressure from Washington, with US-supplied equipment, is simply a formula for creating an enemy to fight.

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Natural Gas, Nationalism, and Narco-Trafficking

In the late 1960's, LNG became a major component of the Bolivian export economy; in the late '90's, it spiked upward relative to domestic consumption, creating an agreeable quandary of where to export the stuff. Unlike petroleum, for which transport is a negligible expense, LNG prices can vary tremendously precisely because it either must be liquefied and then shipped, or else it must be compressed and pumped by overland pipe. British Petroleum's Chaco Division operates the main CNG field; it would prefer to merely pay the royalties to the government and operate in peace. In the July referendum, where the government got a mandate to nationalize the entire process of recovering and liquefying natural gas, the outcome certainly seemed populist enough. But in fact there was a lot of leftist/nationalist outrage at the referendum, and demands that LNG exports be terminated entirely. This persisted long after the plan to export the gas through "unredeemed" Bolivian territory (viz., Chile's Atacama Desert) was scuppered.


If the Bolivian government were to be radicalized and end all exports of LNG, it would probably destroy the country's fragile soereign debt. As it is, the country's internal and external debts are huge and growing, with no end in sight. As is usually the case in such circumstances, it would become isolated. The urban middle class would face inflation as many imports, denominated in dollars, surged in price against the bolivar. They must know this. But the country's sovereign debt has traditionally been a weapon of the oligarchy against the rest of the population. With LNG exports flowing to Mexico, Argentina, or Brazil, the option of defaulting on the sovereign debt is largely removed. Nationalization of the recovery, liquefaction, and distribution enterprise imposes fixed costs on the state, which it can only meet through exports and taxes. If the people on the other end of the pipeline cannot pay, or if the world price declines, then Bolivia's taxpayers are stuck footing the bill for nationalization.


A majority of Bolivians obviously regarded this as the lesser evil. Another segment probably was opposed to nationalization for familiar liberal economic reasons. But another segment clearly felt that the Bolivian state had been bought out from under them. In the meantime, the militarization of the Bolivian state continues as part of Plan Colombia.


On the narco-trafficking angle, Mr. Blixen writes:

The establishment of a common enemy, transnational and dangerous, is vital for any strategy of hegemony. As with Communism before it, drug trafficking defined as the principal enemy of the democratic process tends to cover up the primary cause of destabilization in Latin America: the profound social injustices and insupportable levels of marginalization and poverty caused by neoliberal economic recipes. Just as "narco-terrorism" is a crude generalization to explain the social disruptions, rebellions, violence and uprisings, "narcotrafficking" provides an easy justification for the deployment of military strategies. In ...a wide spectrum of society that includes progressive parties, churches and social organizations, the definition of "drug-trafficking" as the main threat to democratic processes raises suspicions, in part because of the numerous precedents that link drug deals with the financing of undercover operations promoted by the CIA and other US agencies carrying out national security policies....Counterinsurgency strategies included the appearance of paramilitary groups, and the pursuit of political objectives.
These political objectives, for the Andean region, mean the urban cum commercial economy's property rights are respected, because of antecedent transactions are respected, whereas those of the rural/subsistence/aboriginal economy are not.


Blixen's article focuses on the role of Argentine military advisers throughout Latin America; but he points out the peculiar deception of narcotics trafficking in accumulating endless spending power for the oligarchies of countries like Bolivia. This spending power will, with the LNG boom, be augmented for a little bit longer.

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Notes

  1. ↑ "War of the Pacific"; from Rex A. Hudson & Dennis M. Hanratty, editors. Bolivia: A Country Study, Washington: GPO for the Library of Congress (1989)
  2. ↑ "Chaco War"; Rex A. Hudson & Dennis M. Hanratty (1989)
  3. ↑ "National Revolution"; Rex A. Hudson & Dennis M. Hanratty (1989)
  4. ↑ "Military Rule, 1964-82"; Rex A. Hudson & Dennis M. Hanratty (1989)
  5. ↑ "Transition to Democracy"; Rex A. Hudson & Dennis M. Hanratty (1989); Obituary: Hugo Banzer, Guardian
  6. ↑ "Democracy and Economic Stabilization"; Rex A. Hudson & Dennis M. Hanratty (1989).
  7. ↑ Just the Facts: Bolivia (CIPA, WOLA project)
  8. ↑ Roberto Frenkel, "Argentina: A decade of the convertibility regime," Challenge (July-August 2002)
  9. ↑ Daniel J. McCosh, "'Ores' fair in politics and business: Ex-Bolivian President Gonzalo Sanchez de Lozada finds himself in a survivor's role as the chairman of Bolivia's largest mining company," Latin CEO (Feb 2001)
  10. ↑ "Q&A: Bolivian gas protests," BBC (18 Oct 2003)
  11. ↑ "http://news.bbc.co.uk/2/hi/americas/country_profiles/1210487.stm Country profile: Bolivia]," BBC
  12. ↑ In '86, about a third of urban residents had been born in in a rural district, and urban migrants comprised about a sixth of the total population of Bolivia ("Bolivia - Urbanization", from Exploitz.com). The massive growth of Bolivian cities has been push-driven, as recent waves arrive from the Andean Altiplano region, rather than the previously mestizo populations from existing rural towns.

    This huge new Indian presence in the towns, the neglect and disregard they suffer from the older urban populations, and the crowded labor market they face, have spilled over into the rural communities back home. Naturally, these new immigrants are concerned with preventing further pressures on their extended families in the Altiplano, because if those pressures persist they will lose all claims to land and water rights, plus their segment of the crowded labor market will increase. Much of my reading comes from by Hernando de Soto, [The Other Path], Basic Books (2002), a book chronicling urbanization in Peru; but there are some compelling similarities.


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Also at this Site

A Word on Bolivia
Bolivia's President
Urgent Developments in Bolivia
On EDSA-Style Movements

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