A Revolution Without Borders: Reappraising Bolivia’s Crisis

Samuel Grove and Pablo Navarrete, 16 December 2008

Bolivia, a country used to being ignored by the western media, has hit the headlines in recent months due to the marked increase in violence among opponents and supporters of the government. Back in December 2005 Bolivia, a country in which 62 per cent of the population identify themselves as indigenous, elected its first indigenous president, Evo Morales, on a mandate of radical reform. This has met with fierce opposition among Bolivia’s wealthy, predominantly white elite.

Particularly controversial has been the issue of land reform; Bolivia has one of the most unequal concentrations of land ownership in the world, with one per cent of landowners owning two-thirds of the country's farm land. It is no surprise, then, that Morales’s proposed reforms have provoked the ire of Bolivia’s landed elites. In the richer provinces, these elites began orchestrating violence against indigenous people in alliance with crypto-fascist paramilitary youth mobs. Among their demands are regional autonomy and a greater share of oil and gas profits - concessions that Morales is unwilling to give. At the time of writing, the worst of the violence seems to have subsided and talks between the government and opposition have resulted in Bolivia's Congress approving the holding of a referendum on a new constitution early next year.

This crisis would seem typical of politics in ‘third word countries’ and far removed from our own concerns here in Britain. However there is much we can learn from events in Bolivia which we ignore at our peril.

Conflict of Interests

In Civil War is not a Stupid Thing, political economist Christopher Cramer critically reflects upon the prevailing ideology surrounding conflict in the ‘third world’. He argues that historically the West has looked upon conflict in these places as a ‘deviant… aberration from a more normal world of liberal peace, best exemplified by Northern prosperity and stability.’ For Cramer, in the last few years this prejudice has been integrated into a neoliberal analysis that emphasises the immediate economic costs to societies of conflict; with these two assumptions combining to support the notion that conflict is 'development in reverse'.

A cursory look at the British media’s reporting of the crisis in Bolivia supports Cramer’s thesis. Both the Guardian and the Independent observed that Bolivia was beginning to resemble a ‘failed state’. The Daily Telegraph’s Daniel Hannan chided the Bolivian government for placing ideology before compromise, accusing ‘Morales's palaeo-socialism’ of ‘shrinking the economy’, thereby having the effect that ‘Bolivians are poorer, angrier and more violent than I have ever known them - they deserve better than this’. The Financial Times, meanwhile, harboured doubts about the ability of ‘increasingly politicised institutions to support entrepreneurialism and economic growth’. The message is clear: conflict is antiquated, a distraction from the more civilised business of money making. While there is nothing particularly new about the media’s condescending attitude to poor countries, in dramatising the gulf between them and us they conceal some important connections.

Historical Symmetries

It would be ironic if the West’s detached attitude to events in Latin America were to be explained in part by neoliberal presuppositions, given that the current global neoliberal order had its bloody birth in Latin America - in Chile in 1973. In the wake of the US- sponsored coup that overthrew Salvador Allende’s democratically-elected government, economists from Milton Friedman’s Chicago School rammed through radical neoliberal reforms. Chile served as a laboratory for radical ideas that would later be adopted by the West, with Margaret Thatcher, an infamous admirer of Pinochet’s ‘restructuring’ of Chilean society.

The symbiotic relationship between events abroad and at home can also be seen if we look closely at the modern history of Britain and Bolivia. For instance, both countries’ post-war eras were shaped by popular democratic governments that vastly expanded the public realm. In Britain, the Labour government of Clement Attlee nationalised Britain’s major industries and founded the NHS. In 1952 in Bolivia, the left-wing National Revolutionary Movement (MNR) of Victor Paz Estenssoro nationalised the mines and established national education and healthcare systems. In both countries these reforms remained largely unchanged until the mid-1980s.

Buoyed by victory in the Falklands War and a landslide victory in the 1983 election, Thatcher set about privatising the industries that had been nationalised under Atlee. These new reforms continued under John Major (the railways) and Tony Blair (the Post Office and welfare services). Bolivia embraced neoliberal reforms in 1985, following the re-election of the MNR - once again headed by Paz. This time, Paz promptly reversed the reforms of 1952, floating the peso, cutting public sector salaries and eliminating food subsidies, price controls and restrictions on foreign commerce. As in Britain, the neoliberal revolution continued through the 1990s with the privatisation of the oil, gas, tin, telecommunications and railway industries.

War on Democracy

In Bolivia in particular, the manner in which these reforms were instituted was profoundly undemocratic. Paz had run on a mandate of fiscal responsibility and an allegiance to his ‘nationalist revolutionary’ past. Once in power, though, the New Economic Policy (NEP) was instituted as a presidential decree. The idea was to pass the reforms before trade union and civil and peasant groups had a chance to react. React they did, however, calling a general strike (just as Britain’s unions did in response to Thatcher’s reforms). However, as Naomi Klein notes, Paz’s response ‘made Thatcher’s treatment of the miners seem tame’. He declared a state of emergency and rounded up the top 200 union leaders, loaded them on to planes and flew them to remote jails in the Amazon.

The similarities between Britain and Bolivia’s political trajectories are not all that surprising. The turn to neoliberalism has been a common theme of the last 30 years in much of the world - to the extent that we can now speak of a neoliberal global economic order. In large measure this global revolution has relied upon circumventing national democratic processes. Democratic concerns surrounding neoliberalism’s implementation tell only part of the story, for is it not fair to argue that neoliberalism is in itself, an affront to democracy? ‘Privatisation’ and ‘liberalisation’, in reality, amount to technical terms for removing critical economic decisions from the realm of public accountability. Democracy is further undermined when national democratic decisions can be vetoed by capital flight as a consequence of international free trade. This is something John Maynard Keynes recognised when he warned that ‘nothing less than the democratic experiment in self-government [is] endangered by the threat of global financial forces.’

At approximately the time that Keynes was warning us about the tyranny of global free trade, George Orwell was reflecting upon the lack of democracy in England. In a profound, possibly prescient but largely ignored essay The Lion and the Unicorn Orwell observed that the Labour Party would prefer to ‘go on drawing their salaries and periodically swapping jobs with the Conservatives’ than bring about democratic change. Left-wing politics, he lamented, had become ‘a variant of Conservatism’. Orwell was writing about Britain in the interwar period, however his words are just as poignant today. With the rise of New Labour, the party fully embraced its conservative core. In this year’s conference speech Gordon Brown stated that ‘[we] are and will always be a pro-enterprise, pro-business and pro-competition government.’ This has taken its toll on equality and social justice. Under New Labour the gap between the rich and the poor has grown significantly and Britain has the most rigid class system in Western Europe.

In Bolivia, neoliberalism was initially hailed as an enormous success. Prior to Paz’s reforms, inflation had skyrocketed to over 14,000 per cent. Within two years of the reforms it had been brought down to 10 per cent. But as inflation came down, unemployment went up. Bolivia experienced massive lay offs, including 22,000 from the state mines alone, rising to 45,000 by 1991.

Unemployment took its heaviest toll on Bolivia’s fragile industrial sector. Without state backing, factory closures led to 35,000 people losing their jobs. Those that remained in employment did not fare much better, with real wages dropping by 40 per cent. Not only did neoliberalism fail to create jobs, but the dismantling of the central bureaucracy undermined the government’s ability to respond to the damaging effects of joblessness. Many who lost jobs migrated to the east of the country to grow coca, which by the 1980s was Bolivia’s most profitable export.

While ultimate responsibility for the NEP lies with Paz and his ‘emergency team’ of technocrats and business leaders, the reforms were also largely a product of the aggressive influence of international financial institutions, particularly the IMF and World Bank. The NEP was largely designed to court their approval, while the waves of privatisations in the 1990s were on the explicit instructions of the IMF – in fact, the IMF was so impressed with the results that Bolivia was ‘held up as a model for Less Developed Countries around the World’.

The Bolivian government’s pandering to the demands of the IMF in the 1990s can be interpreted as a consequence of the devastation wrought on Bolivia’s democracy by the NEP. Having been shut out of the sphere of governance, the public had limited means with which to press the government to act in its interests. The result was a return to an imperial arrangement whereby Bolivia’s elites auctioned off their country’s land and resources to the highest foreign bidders.

The looting of Bolivia reached its nadir in 2000 when the World Bank facilitated the privatisation of the water supply in the city of Cochambamba to a foreign multinational consortium led by London-based International Water Limited (IWL). In exchange Bolivia would receive $600 million of debt relief. The consortium immediately raised water rates by 35 per cent, and in the drive for profit maximisation a law was even briefly passed prohibiting people from collecting rainwater. For the majority of Bolivians, their patience had run out.

Democracy Returns

While in Britain we are left to ponder Orwell’s observation that ‘no one genuinely [wants] any major change to happen’ and that ‘revolutionary politics’ is a ‘game of make believe’, Bolivia dared to have a real democratic election.

In voting for Morales and his party in 2005, the Movement towards Socialism (MAS), Bolivians voted for democracy. Morales was elected on a platform of facilitating popular participation in the running of the country and the economy through the widening of the public sphere, the representation of social movements in executive office and the introduction of indigenous rights. Nationalisation of key industries ensured that profits stayed in Bolivia and the government had the capacity to govern.

However Morales’s victory was much more a victory of Bolivian democracy rather than for it; or as Forrest Hylton and Sinclair Thomson elegantly put it, ‘the election of Evo Morales did not bring about a revolution. It was a revolution that brought about the government of Evo Morales’. Prior to the 2005 election, popular mobilisation had already brought down two presidents and vetoed the accession of a third. The toppling of these governments was not led by MAS; rather the MAS leadership trailed a popular mobilisation led by indigenous groups, trade unions and federations of coca growers.

It was out of this coalition that the proposals for nationalisation, constitutional reform and economic and political restructuring emerged. MAS itself was a political organisation founded by civil groups in the 1990s to articulate popular demands. In his inauguration speech Morales appealed to these groups saying ‘Control me. If I can't advance, push me, brothers and sisters. Correct me constantly, because I may err.’

Morales was reliant on these groups during the crisis. That Morales’s supporters continue to resist the opposition’s campaign of violence is testament to their overwhelming national support and ability to mobilise to defend their the government’s legitimacy.

While the British media openly discussed the possibility of a civil war, Morales’s popularity has risen since the 2005 election, including in the richer provinces. It is this support that pressured opposition members in Congress to ratify a new draft of the Bolivian constitution on 21 October. A national referendum on whether or not to make the document official is scheduled for 25 January next year.

It is significant that Bolivia’s latest crisis coincided with the 35th anniversary of the coup in Chile. It is also worth reminding ourselves that it is doubtful whether the coup in Chile would have succeeded without international complicity. The parallels have not gone unnoticed in Latin America as neighbouring countries have queued up to pledge support to Morales and condemn the violence. Argentinian president Christina Kirchner warned, ‘If we don’t act now, in thirty years we may be watching documentaries [about Bolivia] like those we see today about Salvador Allende.’ Her statement contained a veiled reference to the US government, whose shadow looms large over the crisis. In September, relations between the US and Bolivia became openly hostile when Morales expelled the US ambassador, accusing him of subverting Bolivia’s democracy by colluding with opposition groups.

A Revolution Without Borders

In the 1980s, the US waged a war against a democratic revolution in Nicaragua. During the revolution, Tomas Borge, a founding member of the Sandinistas, stated his desire for a ‘revolution without borders’. What he meant was that he hoped the revolution could serve as a model for other societies. In the context of the Cold War, the US government and its backers in the media did not need to resort to a sophisticated neoliberal analysis to distort the meaning of Borge’s words; it was enough merely just to report that Nicaragua was intent on spreading a permanent ‘Soviet style’ revolution across the western hemisphere.

The reality is that the distortion was intended to conceal something far more threatening - what Oxfam rather shrewdly described at the time as ´the threat of the good example’. Bolivia’s experiment with democracy is an example for all of us. At a time in which neoliberalism has hollowed out our democracy while simultaneously propelling us down a path of economic and ecological disaster, the stakes could not be higher. The importance of showing solidarity with Bolivia at this time is undoubtedly important for the people there. It might be just as important for us.

[Republished from Upside Down World. This is the original and longer version of the article entitled 'The threat of the good example' that appears in December/January 2008 issue of Red Pepper].

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