Bolivia and the President Who Threatened to Leave — An Analysis

Bolivia has been back in the world´s eyes this week as the result of President Carlos Mesa´s dramatic Sunday night threat to resign. There has been a fait amount of international press and a flurry of email traffic among Bolivia watchers. Here is my analysis.

First, why now?

The timing is not a coincidence. Bolivian politics is at en and game on two important national issues, both of which are deeply entwined with the politics of globalization — the return of the El Alto-La Paz water system to public hands and the new national law dictating the terms for development of Bolivian gas exports.

On the El Alto-La Paz water issue. We have written on this extensively and links to our articles are included in my last Blog. The bottom line is that the people of El Alto demanded the return of their water to public hands, staged huge but peaceful civic actions to press that demand, and received a clear assurance from President Mesa that the company´s privatization would be reversed. Then Mesa got hit with a load of bricks from international donor agencies and foreign]governments and tried to weasel his way out of his proclamations. Would any reasonable person really expect the community to not be pissed and to not react with renewed protest?

On the gas issue, one The Democracy Center has studied extensively and one I spoke with Mesa about directly. Before privatization of the nation´s gas industry in the 1990s (under commands to do so from the IMF and World Bank) Bolivia split the product of its gas fields 50/50 with the foreign companies involved. Revenue from gas and oil constituted nearly 40% of all national government revenue.

Then the IMF, the Bank and the foreign companies sold Bolivia (or forced it) to take a hugely risky economic bet — cut the government´s take down to 18%, up the companies´take accordingly and they will be so pumped up (pardon the pun) to increase production that even though the Bolivian slice of the pie will be much smaller, the net profit for the government will be more.

Now the facts — the government´s net revenue went down, not up, even as increased production steadily drained at a nonrenewable resource at a faster rate. Bolivia ended up with higher budget deficits and then came under criticism from the IMF for those deficits.

Fast forward to 2005. The Bolivian Congress and President Mesa are at the end of the process to hammer out a new agreement on gas economics and the social movements want a return to 50/50 with the foreign companies, not exactly a radical demand. Guess who is opposed to that. In a corner, Mesa is aiming closer to 38% for the government.

What does all this mean now?

Backed into their own corner the country´s social movements have resorted to the tactics they always use, economic disruption — road blockades, general strikes and the like. Unlike past Bolivian Presidents Mesa has refused to respond with the bullet, to his credit. So we end up with a stalemate and Sunday night Mesa essentially said, I can´t govern this way,something has to give or I walk.

Did he mean it, probably not. It was more likely a negotiating tactic to provoke an expression of support for him. It is also hard to blame him for using that tactic, but easily to blame him for cowing to the international players. In contrast Argentina´s government recently said it would consider paying off its foreign debtors at 30 cents on the dollar. It is possible to demonstrate some ¨cojones¨with the players abroad, Mesa seems to lack them.

The social movements are in their own jam. I think most Bolivians back them on their demands on water and oil and gas, but the public is clearly very tired of the left´s tactics. This is not the Cochabamba water war where the public not only backed a citywide general strike but joined in on it. Taxi drivers, bus drivers, regular people lose a day´s wages when social movement tactics aim to shut down the economy and people are tired of it.

It is like the old saying, ¨When you have a hammer, everything starts to look like nail.¨ Unfortunately, for the social movements, every political battle has started to seem like another moment to block roads and disrupt the country and their are losing their broader base as a result.

Carlos Mesa this week has managed to collect a large part of that base, with public rallies coming to his side. Sadly, he seems intent to use that support to strengthen his connections with the traditional political parties who set the steady robbing of Bolivia in motion, in alliance with the¨policies of the World Bank and IMF. Bolivia seems headed toward a form of Goni-light¨, all the same economic policies without the army repression — for now.

The challenge now is for the social movements to articulate their economic demands in clear language and to make the case for why Bolivia needs a direction different one than the one demanded by the Bank and IMF. That is the easy part. The movements then need to devise a set of pressure tactics that can have a real effect without disrupting people´s daily ability to go out and make their small earnings.

That is Bolivia tonight. It is not the meltdown that some thought might come in the aftermath the President´s announcement Sunday night, but it is a turn in a more conservative direction in the country´s politics, and not one with great promise for increased justice and equality.