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Homepage > Regions / Countries > Latin America & Caribbean > Andes > Bolivia > Bolivia’s Divisions: Too Deep to Heal?

Bolivia’s Divisions: Too Deep to Heal?

Latin America Report N°7 6 Jul 2004


Bolivia is in the midst of its most dangerous power struggle since the mid-1980s and still smarting from the violence of 2003, which left nearly 100 people dead and forced the resignation and flight of President Gonzalo Sánchez de Lozada after barely six months in office. A series of highly divisive issues, particularly over the extraction and export of natural gas, demand swift resolution. Unless the Mesa government, with sympathetic assistance especially from the U.S., can forge a new public consensus, the country's hard pressed democracy, and perhaps its continued unity will be in doubt.

The social contract underpinning that democracy is shredded and further violence is a constant threat. In addition to natural gas, polarising issues include the country's economic model; regional autonomy; demands by the majority indigenous peoples for greater representation; and reconciling respect for traditional coca practices with international mandates, pressed by the U.S., against illicit drug trafficking.

Contentious debates on all of these issues allow little room for mediation and reconciliation. If middle grounds cannot be defined and agreed, Bolivia is headed for tumultuous times. The country's direction could change overnight with the 18 July 2004 referendum on the gas issue, the elections for a constituent assembly that is expected to write a new constitution in 2005 or, in the worst case, through non-democratic means.

The growing split between Bolivia's regions has been amplified by the confusion and conflict over the ownership, sale, and beneficiaries of the natural gas reserves. Santa Cruz and other commercially-oriented lowland cities often prefer to ignore the politics of La Paz, but radical movements in the highlands are determined to stop them from exporting the gas located in their region. Business interests in Santa Cruz and Tarija have little choice but to go on the political offensive if they want to open export markets for the gas. Until now, their calls for secession have been more rhetorical than real. If the referendum turns current laws, contracts, and policies upside down, however, the rhetoric may lead to action.

Indigenous movements are gaining strength throughout the Andes, and the Bolivian movement has already shown the potential for violence. Populist movements are taking issue with the current political and economic rules of the game, which have largely been written by foreign interests and domestic elites. Animated and angry, they are clear about what they oppose -- economic policies that are at best trickle-down and at worst exacerbate income inequality -- but they are not offering practical alternatives, and are shedding more heat than light on the important economic and social issues.

The challenges for the Mesa government are enormous. Keeping a political course that satisfies all sectors of society seems impossible. A major effort at making policy more transparent, including an effective public explanation of the hydrocarbon industry's complexities, seems the only way to prevent Bolivia from coming to blows or breaking up over its newfound treasure. Addressing multiple economic, ethnic, and social problems requires political parties, social movements, and business associations to forge a new national consensus on how to use natural resources for the development of the entire nation and substantial poverty reduction.


To the Government of Bolivia:

1.  Invest political and financial capital in a nationwide grassroots communication effort to demonstrate to the Bolivian people how the production and sale of natural gas can be harnessed to jump-start economic development, and benefit the country's poorest citizens

2.  Create a high level commission on hydrocarbons management composed of recognised and respected personalities to:

a) supervise negotiations on gas issues, including exports, transparently;

b) ensure that all revenues are fully accounted for and not less than half are dedicated to social programs responsive to local needs, particularly in the highlands; and

c) the feasibility of, and the steps necessary for, using natural gas for domestic industrialisation projects.

3.  Promote political decentralisation by restoring popular participation in elected local governments capable of addressing local needs and able to obtain the resources (from federal revenue-sharing or local tax revenues) to finance their operations, but with mechanisms of transparency and accountability.

4.  Reach out to business groups from Santa Cruz, Tarija, and elsewhere, and demonstrate that their fundamental interests are not threatened by changes in national legislation that regulates the natural gas industry.

To the MAS Party:

5.  Play by democratic rules and publicly reject the possibility of coming to power by other means, strengthen internal party consensus democratically to establish a clear public position on core issues, such as natural gas, and shape the debate in rural and indigenous communities about what can realistically be done with that gas to promote both development and reconciliation.

6.  Open the party to democratic, grassroots participation, including in the selection of its leaders and candidates and determining its platform.

To the Catholic Church:

7.  Continue to promote dialogue and be available for mediation, reach out to extremist parties as well as the silent, moderate majority of Bolivians who desire peaceful and democratic solutions, and, if asked, join the high level commission on hydrocarbons management.

To the U.S. Government:

8.  Support an independent study to determine how much coca is required to meet legal demand.

9.  Ensure that USAID alternative development programs keep pace with coca crop eradication and complement support for Bolivian law enforcement and interdiction of drug trafficking, and Inter-American and United Nations drug control efforts, with greater emphasis on education and treatment programs to reduce domestic demand for cocaine and other illicit drugs.

10.  Respect the outcome of the 18 July 2004 referendum and work with the government and civil society to help implement the gas management alternative that Bolivians decide to be most conducive to integral development on behalf of the poor.

11.  Engage in dialogue with all parties  including the MAS  that respect democratic norms and reject violence.

To the IFIs (World Bank, IMF and IDB):

12.  Undertake, in conjunction with the government and civil society, a communications effort to enhance the transparency and effectiveness of IFI programs, and explore additional ways to promote greater investment in human development, more emphasis on poverty reduction, and reduction of inequalities as part of economic development policy reform and lending programs.

13.  Produce a rural poverty impact statement to help the international community and the government better understand the impact on the rural poor of proposed trade, macroeconomic, and natural resource policies; develop complementary programs; and encourage indigenous participation in the management of those programs.

14.  Assess the adequacy of the current rural development and rural poverty reduction strategies and, by the end of 2004, review what is needed to achieve a 50 per cent reduction in rural poverty by the end of the decade.

To the COB, CSUTCB, and COR Labour Organisations:

15.  Respect and work within democratic institutions, limit street protests to instances when other channels have been exhausted, and ensure that they are peaceful.

16.  Offer explicit and constructive alternatives, rather than general and negative rhetoric, to Mesa government policies.

To the Business Associations of Santa Cruz and Tarija:

17.  Work constructively with actors in other parts of the country to maintain national unity and to pursue policies that not only promote growth, but also respond directly to poverty reduction concerns.

Quito/Brussels, 6 July 2004

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