Evo Morales’ First Year

Raul Zibechi, February 1, 2007

If the first year government is enough time to assess the course of an administration, the one-year anniversary of Evo Morales (who took office on Jan. 22, 2006) finds him in the midst of a path between change and continuity.

Oscar Olivera, director of the Cochabamba Water Coordinating Committee, describes the Morales government as one integrated by “a mixture of every type of current—traditional partisans, emerging social movements, and social climbers who made the cut at the last minute."[1]

Although it is still too soon to know how the four major Bolivian actors will evolve, the imprint of each one has already been established over the last 12 months. The task, then, is to track the evolution of the Bolivian state, now led by the Movement toward Socialism (MAS, for its Spanish initials), as well as the powerful business community based in Santa Cruz, foreign investors, and the social movements.

A Strengthening State

Although the Bolivian state continues to be as colonial as it was a year ago, it has gained legitimacy in the eyes of the population and stands to strengthen in the medium term. The legitimacy derives, in large part, from the fact that a good portion of those now in power—ministers, advisers, and parliamentarians—come from below, from those marginalized over the last five centuries. But this change does not mean that the way of conducting business has changed. In fact, all indications are that the model of rule-from-above continues, and in some cases, has actually deepened. The manner in which MAS is approaching the negotiations with the Constituent Assembly is an indication of this.

Nevertheless, the Bolivian state has managed to overcome some historical barriers. Thanks to the successful negotiation of new contracts with the 10 multinational oil companies operating in the country, the oil revenue the state receives will surpass the $282 million a year received from 1998-2002, to a total sum of $1.3 billion a year in 2006.[2] According to Evo Morales, this figure will reach $4 billion a year by 2010, which represents approximately 100% of Bolivia's annual GDP and will allow the MAS-led government to undertake ambitious social projects.[3]

In the long term, the issue becomes more complicated because in reality, Bolivia did not nationalize its hydrocarbons, nor did it expropriate the multinationals. Rather, it signed new contracts that increase royalties to the state, while investing similar amounts into companies with production levels above 100 million cubic feet of gas a day: 82% for the state, and 18% for private companies.[4] The problem with not nationalizing hydrocarbons is that the reformulation of the state-owned YPFB (Yacimientos Petrolíferos Fiscales de Bolivia) is not real. The new contracts require that YFPB not make investments or assume risks or responsibilities, but rather, act as an overseer for hydrocarbon companies. By carrying out a “nationalization without expropriation,” the state-owned company is left with no resources for competing in the market and critics rightly point out that “the government's discourse that nationalizing allows them to set prices, volume, and destination, is in fact false, since prices, volume, and destination are controlled by the global market, which is dominated by multinational oil companies."[5]

This is a key point because Evo's natural resource policy, which covers not only gas but also mining, “consolidates the primary exporter system,” leaving behind industrialization and the internal market, according to an analysis by CEDLA. The agreement signed with Argentina, which raises the price of gas supplied to this country, as well as the supply to Brazil, which makes up 30% of the energy used by the powerful San Pablo industrial belt, will provide a considerable boost to state revenue, but consolidate gas exports without industrialization. In practice, it will render large profits in the short term but create problems in the long run.

In spite of the fact that the Bolivian state is gaining legitimacy and strengthening, it should implement the objectives outlined during the convocation of the Constituent Assembly, namely, the effective reconstitution of the state, a critical step for the Evo administration on the path to real transformation. The current situation is one of political deadlock. The extreme polarization of the Santa Cruz elite has placed the country on the brink of breaking into open confrontation . The root of the problem, however, is that the style imposed by the Constituent Assembly mimics the traditional methods of Bolivian politics: party leaders make negotiations and agreements amongst themselves and hijack the debate from the public. The Constituent Assembly is the primary failure of the MAS government over the first year. The two issues mentioned above—“nationalization” of hydrocarbons and the failure to reconstitute the state—will create problems for the Evo administration in the medium and long terms.

Problems with the Santa Cruz Oligarchy

The only Bolivian social force capable of confronting the MAS-led government is the Santa Cruz oligarchy. Not only is it the most prosperous region of the country, but it is also home to the only powerful class with political interests that are distinct from the rest of Bolivia's, including the other elite from around the country.

A good portion of the oligarchy's power lies in the ownership of land that was obtained fraudulently during the series of military dictatorships that controlled the country. Agri-business is the primary source of wealth accumulation for the local elite, who are apparently involved in illicit businesses like drug trafficking and contraband. But it is also, along with Tarija, the richest area in terms of hydrocarbons. Politically, Santa Cruz is the most conservative region and has led a number of successful coups against the state, such as the one by Hugo Banzer in 1971, which received the open support of Brazil's military dictatorship.

The dominant classes in Santa Cruz are putting together a project for autonomy as a way to keep in check the social struggles around the country and prevent them from derailing the process of wealth accumulation. Some analyses point to the possibility of an impending internal separatist war led by the Santa Cruz oligarchy. Various independent news sources have reported the existence of training camps for paramilitary groups in Santa Cruz, as well as a Colombian mercenary presence. Clearly then, a portion of the dominant class in the region is preparing for war.

The crises in Cochabamba City and Province are also related to the conflict. Governor Manfred Reyes Villa, a former military officer and ally of the neoliberal Gonzalo Sanchez de Losada, was elected with close to 55% percent of the vote. In the conflict for autonomy, he sided with Santa Cruz, but in his province, more than 63% of the population rejected autonomy in a plebiscite last year. Social movements, in particular those of the coca growers and “irrigation” campesinos, historic allies of Evo Morales, shut down the city in early January of 2007 to demand the resignation of the pro-autonomy governor. Violent street battles carried out by young ultra right-wingers aligned with Santa Cruz reveal the existence of a strong movement toward militarizing the conflict, since these groups acted much like paramilitary gangs. The most pessimistic part of this series of events is the seed of civil war. However, Evo has partially diffused the situation by accepting a two-thirds vote to ratify the Constitution, a move seen as a concession to the Santa Cruz oligarchy . But at any rate, the swords are drawn, and the possibility of a radicalization of the conflict should not be ignored.

The situation is, however, not so simple. The increased income of the state will allow it to accede to some of Santa Cruz's demands for autonomy, which call for a portion of their tax payments to be returned to their province. The very fact that the state has fortified while social movements have become dispersed should pacify some of the sector's concerns. At the same time, the Santa Cruz-based social movements are strengthening and the dominant groups do not have their political hegemony assured, as evidenced by the success of the MAS in the Constituent Assembly elections, when they became the province's biggest vote-recipient.

Finally, international factors are at play and seem to diffuse the possibility of autonomy. It is not the United States that has the most influence over Bolivia, but rather, Brazil. The triumph of Luiz Inacio Lula da Silva in the second term last October permits the Morales administration to count on an ally—in spite of disputes over gas prices—that will help stabilize the region. The landscape indicates that the negotiations with the dominant classes of Santa Cruz to renegotiate the power structure could be productive, thus paving the way to governability and social peace.

Multinationals and Social Movements

Although the Bush administration is applying pressure to Evo Morales on issues like coca growing and other internal affairs in Bolivia, the United States does not have the same clout it did a few decades ago. The Brazilian-owned oil company Petrobras accounts for 20% of Bolivia's GDP alone and buys 46% of the country's hydrocarbon reserves, while Spanish-owned Repsol-YPF buys 23%. Bolivia's major resource—gas—is being sold largely to Argentina and Brazil—two countries that cannot go without Bolivia's energy to maintain their domestic and industrial consumption. In short, Bolivia's primary economic and political relationships are with countries in the region. This special relationship with its neighbors has been a triumph of the Bolivian people, which during a period of time called the “gas war,” prevented this natural resource from being sold to the United States via Chile.

The dominating perspective is that the international context is favorable for the current MAS-led government. It has managed to establish agreements with the large multinationals controlling Bolivia's hydrocarbons in which the companies accepted profit cuts in order to ensure long-term stability. A destabilizing policy such as the one the Bush administration appears to favor would only help the elite sector of Santa Cruz, which is bent on breaking the territorial integrity of the Bolivian nation. But if we look back on recent history, an undertaking of this sort would be very unlikely to succeed without the support of Brazil. For the moment, this seems unlikely. That's not to say, however, that the Santa Cruz elite will not continue their process of destabilization in order to leverage their negotiating power with La Paz.

Finally, the social movements that played a decisive role in the configuration of Bolivia's current political landscape will not be able to continue their role as before . It appears evident that the state from here on out will be co-administered by individuals coming directly from the movements, among them the president himself and his immediate advisors, as well as part of his Cabinet and the core leaders of MAS. On lower levels, this has required a large number of movement leaders to occupy institutional roles starting in 2006. Judging from the events in Bolivia since the 1952 National Revolution, as well as in other countries with similar situations, the consensus is that under the MAS government, the social movements will take a serious hit, particularly the rural movements (like those of the coca growers, “irrigation” campesinos, and commune members from the Altiplano).

But MAS is not having the same impact on each and every one of the movements. Oscar Olivera distinguishes what is occurring in rural areas from the urban: in the former, the support for MAS and Evo is massive and organic. In the cities, the situation is very different and from day one there has been criticism from below concerning the government's actions. This can change, however, if Evo finds his way and if his political project—funded in part by oil revenues—follows a similar course to that of Hugo Chavez's government.

In any case, the movements will not be like they were before. Some have been called to institutionalize, as happened with the campesinos after 1952; others can have more independence from the formal government (as happened in the past with the miners). Falling into the first category would certainly be the coca growers—for historical, political, even affective reasons—followed by a large number of movements that are already staunchly institutionalized, like the colonizing campesinos. The second category could be made up by the neighborhood councils of El Alto and the Water Coordinating Committee, along with the new urban movements associated with it. It is possible, but not certain. It appears clear that the most conflictive region will continue to be El Alto, but an eye should be kept on the goings-on of Santa Cruz (which has a strong migratory influence from the West), Cochabamba (where the discourse has turned for the first time to Indian roots and identity), and several other important cities.

As we can see, Evo's first year has both bright spots and dim ones. The latter are more serious than we could have predicted at the end of 2005. As a newly formed government, Evo should proceed with caution. At the risk of over repetition, everything depends on the actions of the movements, and the non-elite sectors that have taken decisive action in Bolivia ever since the uprising of Tupac Katari against the Spanish colonists in 1781.


1) Personal Interview with Oscar Olivera.

2) Federico Bernal, “La tercera es la vencedora,” ob. cit.

3) A good example is the implementation of the Bond “Juancito Pinto” (which will give 1.2 million students 20 euros each year, a considerable sum in Bolivia) using the resources generated from the “nationalization” of hydrocarbons. Drop-out rates have reached 46% overall; in urban areas, only 67% complete high school and in rural areas, only 43%.

4) Alfredo Serrano Mancilla, “La película de los hidrocarburos en Bolivia.” November 1, 2006, www.rebelion.org.

5) Econoticias, “Evo consolida la política neoliberal del gas,” ob. cit.


Translated for the IRC Americas Program by Nick Henry.

Raúl Zibechi is a member of the Editorial Council of the weekly Brecha de Montevideo, teacher and researcher of social movements at the Multiversidad Franciscana de América Latina, and adviser to social groups. He is a monthly collaborator of the IRC Americas Program (www.americaspolicy.org).


For More Information

Andrés Soliz, Rada, “Los hidrocarburos en el 2007,” January 3, 2007, www.bolpress.com.

CEDLA (Centro de Estudios para el Desarrollo Laboral y Agrario), “La estructura agraria se mantiene intacta,” www.bolpress.com.

Econoticias, “Evo consolida la política neoliberal del gas,” January 3, 2007, www.argenpress.info.

Federico Bernal, “La tercera es la vencedora,” Le Monde Diplomatique, Buenos Aires, December 2006.

Raúl Zibechi, Interview with Oscar Olivera, Montevideo, October 30, 2006.

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