Struggles against Accumulation by Dispossession in Bolivia: The Political Economy of Natural Resource Contention - Part 1

Susan Spronk and Jeffery R. Webber

David Harvey suggests that, compared with struggles waged by traditional political parties and labor unions, struggles to “reclaim the commons” typically result in a less focused political dynamic of social action, which is both a strength and a weakness. While these social movements draw strength from their embeddedness in daily life, not all manage to make the link between the struggle against accumulation by dispossession and the struggle for expanded reproduction that is necessary to meet the material needs of impoverished and repressed populations. Social movements in Bolivia have framed their demands differently in the struggles against the privatization of natural gas and water depending on the different roles these resources play in the region’s political economy. Struggles against the privatization of natural gas pose a greater challenge to neoliberalism because of their macro frame and politics.

--------------------------------------------------------------------------------------------------

On June 6, 2005, Bolivia’s second gas war came to an end. After months of steady road blockades and protests demanding the nationalization of the country’s natural gas reserves, President Carlos Mesa offered his resignation to Congress, explaining that he was incapable of presiding over such a tumultuous country. This was one of many climactic points in a series of popular uprisings that have posed a fundamental challenge to the neoliberal model. Since the Cochabamba water war of 2000, Bolivia has seen the emergence of some of the most powerful social movements on the continent. While social movements are by no means new in Bolivia, a country with a long history of revolution and struggle, the latest protest cycle marks a renewal of militancy and growing success on the part of these movements in putting their demands on the political agenda that have potentially revolutionary implications (Hylton and Thomson, 2005).

Building on David Harvey’s (2003) concept of struggles against accumulation by dispossession, this article compares and contrasts the movements that erupted during key moments of this protest cycle—the water wars of Cochabamba in 2000 and La Paz–El Alto in 2005 and the gas wars of October 2003 and May–June 2005. During these events, diverse sections of the population were mobilized in massive actions against the government and concentrated their attention on foreign investment projects that were perceived to transfer the economic benefits brought by natural resources to transnational corporations. In contrast to the anti-International Monetary Fund (IMF) movements of the mid-1980s, these movements articulated a clear link between accumulated popular grievances and an identifiable set of government policies that was able to sustain coalitions of indigenous movements, workers, peasants, and the urban poor around a unitary national project (see Nash, 1992; Perreault, 2006). While the struggles are intimately connected and even involve many of the same participants, we argue that the fight for the nationalization of natural gas poses a more fundamental challenge to neoliberalism than the struggles around water because of the political-economic importance of the resource.

Privatization and Accumulation by Dispossession

The struggles against the privatization of the hydrocarbons and water sectors of the Bolivian economy provide exemplary demonstrations of the kinds of movements that have emerged in the neoliberal era to contest what Harvey calls “accumulation by dispossession.” For Harvey, Marx rightly highlights processes of capital accumulation “based upon predation, fraud, and violence” but incorrectly imagines them to be exclusively features of a “primitive” or “original” stage of capitalism (2003: 144). In the neoliberal era, privatization has become a fundamental strategy of accumulation by dispossession, which Harvey argues is a veritable “enclosure of the commons.” Privatization entails the release “at very low (and in some instances zero) cost” of a set of assets formerly owned by the state that can then be seized by private capital and used for profit (149). This latest phase of accumulation by dispossession was set in motion on an international scale largely under the tutelage of the U.S. imperial state and a neoliberal ideology that sought to redefine the role of all states and was implemented through international financial institutions such as the World Bank and the IMF. Accumulation by dispossession is not merely privatization of formerly state or public resources but their acquisition by transnational capital in the U.S. and other core economies.

Harvey (2003: 162–169) further argues that accumulation by dispossession gave rise to a multifaceted array of struggles that display some new characteristics. These struggles—ranging from the Ogoni people’s struggle against Shell Oil to campaigns for preserving biodiversity to the thousands of anti- IMF austerity riots of the 1980s—do not take place under a working-class or trade-union banner or with working-class leadership identified as such but rather draw from a broad spectrum of civil society. Given the wide range of social interests that participate in these struggles, he posits that they produce “a less focused political dynamic of social action” (168) than, for example, that of the revolutionary socialist movements that emerged throughout the developing world after World War II. He argues that, although these movements draw strength from their embeddedness in daily life, a “danger lurks that a politics of nostalgia for that which has been lost will supersede the search for ways to better meet the material needs of impoverished and repressed populations” (177). He nonetheless sees revolutionary potential in contemporary struggles to “reclaim the commons.” For Harvey, “it is often relatively easy to effect some level of reconciliation” between traditional socialist concerns and the latest wave of struggles against accumulation by dispossession when the connections are cultivated with “struggles within expanded reproduction” (177–179).

Harvey’s contribution to our understanding of the dynamics of contemporary resistance injects a much-needed focus on political economy into analyses of the social-movement struggles against neoliberalism in Bolivia. Existing studies of the gas and water wars in Bolivia have tended to focus on the strategies of the social movements, emphasizing questions related to the subjective self-understanding and self-representation of movement actors during these moments of popular struggle. Insufficient attention has been paid to the way in which structural factors shape collective action. In what follows, we aim to analyze the context in which the social movements struggling against the privatization of water and gas in Bolivia emerged and framed their demands in terms of the particular roles these resources played in the political economy.[1] We argue that in the gas wars the social movements produced a macro frame and politics based on the fact that natural gas is what Jan Selby (2005) has described as a “structurally significant” resource: an important input in industrial capitalist economies, unevenly and scarcely distributed in the world, relatively easy to establish oligopolistic control over, and a central source of revenue for economic development and state building. When social movements and the state negotiate over natural gas, they are effectively struggling over the future trajectory of the state. Resources that are not structurally important—such as water—are fundamentally important to the sustenance of human life but do not have the same economic importance in the contemporary capitalist system, measured in terms of their contribution to gross national income (GNI). Therefore, the micro frame and politics developed by the movements struggling over water focus on local democratic control rather than on national development and the construction of a different, distinctly non-neoliberal state. [2]

Natural Gas

Accumulation by dispossession

In the Bolivian context, natural gas is clearly a natural resource of structural significance, and its privatization in the 1990s is a clear illustration of accumulation by dispossession. The importance of natural gas in Bolivia’s economy is on a par with the significance of silver and tin historically (Chávez and Lora, 2005: 3).

The hydrocarbons sector of Bolivia’s economy generates between US$1.4 and US$1.5 billion annually. Of this sum, US$860 million stems from the exploitation of natural gas, US$106 million from liquid petroleum gas, and US$460 million from condensed petroleum and gasoline (Chávez and Lora, 2005: 3). To put these numbers in perspective, Bolivia’s GNI was US$8.3 billion in 2000, US$8.1 billion in 2003, and US$8.7 billion in 2004 (World Bank, 2005). New discoveries since 1997 put the country’s gas reserves at the second largest in Latin America. Demand for natural gas in the neighboring countries of Argentina, Brazil, Chile, and Uruguay has experienced sustained growth in the past 10 years and is projected to continue. The combination of substantial reserves and growing regional demand places Bolivia in the enviable position of being the only Southern Cone country with the capacity to meet this demand (Villegas Quiroga, 2004: 35–39) (Table 1). Natural gas exploitation is a defining component of Bolivia’s political economy and therefore subject to very high stakes in the struggles over accumulation by dispossession. With the Law of Capitalization and the Hydrocarbons Law of 1996, the Bolivian state, then under the first administration of Gonzalo Sánchez de Lozada (1993–1997), privatized the hydrocarbons sector, returning it to a type of management not seen since the 1920s (Miranda Pacheco, 1999: 242). For more than 70 years prior to 1996, “the oil industry was owned and controlled by the government. Foreign companies participated in petroleum exploration and production, splitting the benefits with the Bolivian government 50/50” (Shultz, 2005: 16). Capitalization in the case of hydrocarbons split the industry into activities of exploration and exploitation (production) and transportation with the goal of facilitating the entry of more foreign firms. Furthermore, through this legislation, wellhead royalties owed to the state by the transnationals were reduced from 50 percent to 18 percent in all “new” discovery sites.

Two specific facets of the hydrocarbons privatizing process deserve special mention because they match so perfectly Harvey’s accumulation by dispossession. First, immediately prior to its capitalization, the state company Yacimientos Petrolíferos Fiscales de Bolivia (YPFB) had been “on the verge of completing a contract to build a pipeline to connect Bolivian gasfields to Brazilian markets,” which would have increased its profits “by at least $50 million a year for 40 years. These earnings, instead, were largely transferred to private firms that borrowed capital from the same international institutions that had previously offered loans to YPFB” (Kohl, 2004: 904). Second, Sánchez de Lozada’s Hydrocarbons Law No. 1731, promulgated on June 26, 1996, manipulated the previous Hydrocarbons Law No. 1689—implemented just short of two months earlier, on April 30, 1996—to redefine “new” and “extant” fields of natural gas.[3] Production defined as new under both versions of the law would be subject to 18 percent wellhead royalties as compared with 50 percent in the existing fields. The 1996 law affected principally the major natural gas camps of San Alberto and San Antonio. Each was effectively moved from “extant” (both camps previously so defined because in each case the deposits were “proven” not simply “probable”) to “new” and therefore subject to the lesser royalty (Villegas Quiroga, 2004: 84–85). In Kohl’s estimation, this constitutes “a giveaway that could cost the nation hundreds of millions, if not billions, of dollars over the next 40 years” (2004: 904). The effect on the budget has been catastrophic (Kohl, 2003: 346). From 1997 to 2002, Bolivia’s budget borrowing increased from 3.3 to 8.6 percent of its GNI (Shultz, 2005: 16–17). As Shultz (2005) points out, privatization of the hydrocarbons sector was a key component in the World Bank’s and IMF’s overall plan for Bolivia. The IMF demanded that the budget shortfall be made up through cuts in social spending and increases in regressive taxes that hit poor Bolivians the hardest. Such a pathological economic model could not be sustained, and it would be yet another IMF demand to increase taxes against the poor—in order to reduce the deficit dramatically—that would set off the massive confrontations of Bolivia’s Febrero Negro (Black February) of 2003.[4] Thirty-four people were killed in two days, and the stage was set for the gas war of October 2003.

Resistance

Recognizing the strength of the reactionary forces with interests in gas, Oscar Olivera argues, “If six hundred thousand people had participated in the water war just to recover [the former public water company] SEMAPA and to preserve our traditional customs and practices, then all eight million of us Bolivians would have to mobilize to get back control of our hydrocarbons” (Olivera and Lewis, 2004: 179). Olivera’s statement is a clear reflection of the significance of the differing political economies of natural gas and water and their impacts on popular struggles.

For some, the gas war of September-October 2003 represents the culmination of a rising indigenous radicalism and the ultimate exposure of the racist cleavage that most fundamentally defines Bolivian social reality (Luis Gómez, interview, 2005; 2004; Mamani Ramírez, 2004a). For others, it signifies a convergence of the older “national-popular” traditions of the miner- and political-party-driven left and the new indigenous radical sectors (Hylton and Thomson, 2004). Finally, some see as its cause the social failure of the neoliberal model (Arze and Kruse, 2004; Escobar de Pabón, 2003). Virtually no one, however, contests that the future of natural gas in Bolivia was at the heart of the matter.

During Hugo Bánzer’s administration (1997–2001) a deal to export gas through a Chilean port to Mexico and the United States was initiated with Pacific LNG, a Spanish-British-U.S. energy consortium. In 2002 Sánchez de Lozada assumed the presidency, and, as Hylton and Thompson note, “his attempt to close the gas deal in 2003 sparked massive opposition to which he responded with blunt force” (2004: 18). The first major social force in the September-October insurrection was the largely Aymara indigenous peasantry in the altiplano and Lake Titicaca regions, which set up major road blockades (García Linera, 2004; Gómez, 2004; Mamani Ramírez, 2004a). These actions were met with the brute force of the state in a series of massacres in September, spawning outrage in the urban shantytown of El Alto, a city of close to 650,000 people 81 percent of whom identify themselves as indigenous (INE, 2001). These residents maintain strong familial and cultural connections to the countryside. The shantytown mobilized in a powerful, united fashion from October 8 to 17 and was met by fierce state violence. Miners from Huanuni marched to El Alto and joined in the popular struggle. The central mobilizing organizations in El Alto during this period were the Federación de Juntas Vecinales de El Alto (Federation of Neighborhood Associations of El Alto—FEJUVE-El Alto) and the Central Obrera Regional (Regional Workers’ Central of El Alto—COR-El Alto).

The struggle descended from El Alto to La Paz, with the popular neighborhoods of the latter joining forcefully in the revolt. Eventually, even middleclass residents of La Paz engaged in hunger strikes against the government. With an estimated 500,000 people in the streets (Hylton, 2003), Sánchez de Lozada and his closest supporters fled the country for exile in the United States on October 17. This left the vice president, Carlos Mesa, who had distanced himself publicly from the violence of the regime, to assume office following constitutionally defined procedures. Under Sánchez de Lozada, according to the highest figures, more than 80 people were killed in September-October 2003 and more than 400 were injured by bullets (Olivera and Lewis, 2004: 176). While its epicenter was clearly El Alto, the protest originated in the altiplano and around Lake Titicaca and radiated out to countrywide solidarity mobilizations and marches in a host of cities—Oruro, Cochabamba, Sucre, Potosí, and Santa Cruz.

A fundamental frame during the insurrectional episode of October 2003 was the call to nationalize gas. As Álvaro García Linera puts it, “There is a sort of collective intuition that the debates over hydrocarbons are gambling with the destiny of this country, a country accustomed to having a lot of natural resources but always being poor, always seeing natural resources serve to enrich others” (interview, April 10, 2005).[5] The “injustice” of the frame is clearly delineated: being poor in a resource-rich land. The “us” included the popular classes and indigenous peoples struggling for a socially just developmental model with a more equitable distribution of wealth. The structural significance of natural gas made the strategic frame materially plausible and accounted in large part for its wide resonance throughout the country. The macro characteristics of the frame and the politics it advocated are also salient. Comparing the uneven geographies of the Cochabamba water war in 2000 and the gas war of 2003, Perreault points out that the gas war was a more “national, and nationalist, uprising,” involving the central site of El Alto and the rural altiplano but fanning out across much of the country (2006: 165). The “them” identified included the transnational gas corporations that formed part of the transnational gas consortium Pacific LNG (Repsol-YPF, British Gas, and Pan-American Energy), the neoliberal model personified in the presidency of Sánchez de Lozada, and American imperialism writ large. Finally, the pathways of change advocated by the frame to overcome the injustice it evoked involved the ousting of the neoliberal president and, literally, the nationalization of gas.

The gas war in October 2003 did not lead to a revolutionary break with neoliberal capitalism. Indeed, Carlos Mesa adopted a neoliberal reformist style of governance with the support of the Movimiento al Socialismo (Movement toward Socialism—MAS), the largest left-indigenous party, for the first year and four months following the event. However, the issue of natural gas would not disappear. Mesa faced ongoing mobilizations and road blockades in January, February, March, May, and June of 2005, many focused on formulating a new hydrocarbons law that would wrest more control and profit away from the transnational petroleum companies and confer them on the Bolivian state. With Mesa unable to respond to popular discontent with repression—given the popular indignation that answered Sánchez de Lozada’s violence—the most reactionary elements of the Bolivian internationalized bourgeoisie, rooted in the petroleum and natural gas industry based in Santa Cruz, took matters into their own hands.

The main organization representing these interests was the Comité pro Santa Cruz (Pro Santa Cruz Committee). For weeks in January 2005 they mobilized hundreds of thousands of people—at their peak 300,000—under a right-wing populist set of demands called the “January Agenda,” which was pitted against what had by then become widely known as the popular “October Agenda” (Webber, 2005). Complementing the Comité pro Santa Cruz, the key organizations pressing for the January Agenda included the Cámara Agropecuaria del Oriente (Agricultural Chamber of Eastern Bolivia), the Federación de Ganaderos de Santa Cruz (Federation of Ranchers of Santa Cruz), and, most important, the Cámara de Industria, Comercio, Servicios y Turismo de Santa Cruz (Chamber of Commerce, Industry, Service, and Tourism of Santa Cruz— CAINCO). The Spanish oil giant Repsol-YPF, Brazilian state-owned Petrobras, and Enron are members of CAINCO’s board of directors (Ballvé, 2004). In the heat of a new state crisis, Mesa offered his revocable “resignation” to Congress on March 7, 2005. In his televised speech he made extensive use of imperial threats to support his new openly reactionary politics and to discredit the popular movements. For example, in response to MAS’s proposed hydrocarbons law, he complained, “Brazil has told us, Spain has told us, the World Bank, the United States, the International Monetary Fund, Great Britain, and all of the European Union: Bolivians, approve a law that is viable and acceptable to the international community.” He argued bluntly, “If the mechanisms of [international] cooperation with our country are cut, we cannot function.” Congress refused to accept his resignation (a fact that it seems he had counted on), and he abandoned his unofficial alliance with the MAS and moved decidedly toward the right. The reaction on the left was a brief but important nationwide union of various popular forces, primarily around issues of who would control natural gas and to what ends and therefore whose interests would predominate in the future political economy of the Bolivian state (Spronk and Webber, 2005). The short-lived “antioligarchic” social pact was signed by Evo Morales (leader of the MAS), Jaime Solares (the leader of the Central Obrera Boliviana [Bolivian Workers’ Central—COB]), Felipe Quispe and Román Loayza (leaders of the campesino union, the Confederación Sindical Única de Trabajadores Campesinos de Bolivia [Unified Syndical Confederation of Peasant Workers of Bolivia—CSUTCB]), Roberto de la Cruz (councilor of El Alto and former leader of the Regional Workers’ Central of El Alto [Central Obrera Regional—COR], who played a central role in the October rebellion), Alejo Véliz (leader of the Trópico de Cochabamba, an association of coca growers), leaders of the Bolivian Movimiento Sin Tierra (Landless Movement), Oscar Olivera (from the Cochabamba-based Coordinadora de Defensa del Agua y de la Vida [Coordinator for the Defense of Water and Life]), and Omar Fernández (from the irrigating farmers’ association in Cochabamba), among others. The popular struggles against accumulation by dispossession in the natural gas sector clearly played a large part in spawning a social rebellion with a macro frame and politics: in October 2003, 500,000 people assembled in the capital, and there were countrywide solidarity mobilizations culminating in the ousting of the president. The second gas war saw similar numbers in the streets to oust president Mesa in June 2005. Both moments represented serious ideological challenges to neoliberalism, even if thus far it has not yet been defeated. The October 2003 gas war generated a vicious state response, followed by Mesa’s use of imperial threats and the right-wing mobilization of Santa Cruz. It demonstrated that when social movements are able to aggregate their demands around a natural resource of structural significance, the struggle becomes intense, national, ideological, and political, even if it does not guarantee victory. The local and international capitalists with interests in gas recognize its value and respond with a corresponding viciousness, employing the repressive tools of the state.

Susan Spronk is a Ph.D. candidate in political science at York University. Jeffery R. Webber is a Ph.D. candidate in political science at the University of Toronto. This article was first published in Latin American Perspective March 2007

-------------------------------------------------

Notes

[1] We understand a “frame” to be an interpretive schema “that simplifies and condenses the ‘world out there’ by selectively punctuating and encoding objects, situations, events, experiences, and sequences of actions within one’s present or past environment” (Snow and Benford, 1992: 137).
[2] It is not our intention to provide in-depth analyses of these struggles; see, inter alia, Albro (2005), Assies (2003), Crespo Flores, Fernández Quiroga, and Peredo (2004), Gómez (2004), Hylton and Thompson (2004), Laurie (2005), Laurie, Andolina, and Radcliffe (2002), Mamani Ramírez (2004b), Postero (2005). Rather, our goal is to provide a rough sketch of the protests to provide a basis for comparison.
[3] The neoliberal economic logic at work is that in cases of “new” camps, in which the company invests to explore where there are probable but unproven gas deposits, the risks are higher. Therefore, reducing the royalties paid to the state in these “new” camps from 50 to 18 percent compensates the company for the risk assumed, and more foreign capital is attracted.
[4] For details and analysis of Black February see APDHB/ASOFAMD/CBDHDD/DIAKONA/FUNSOLON/RED-ADA (2004); Shultz (2005).
[5] At the time of this interview García Linera was a prominent sociologist and TV personality in Bolivia. Following the electoral victory of the MAS on December 18, 2005, he was elected vice president of the country.