Bolivia has a long,
rich history -- from its time as part of the Inca Empire through its Spanish
colonization to its fight for independence. But the landlocked South American
country’s last few decades are what really interest Brent Kaup.
In that short time, the country went from being a testing ground for
free-market ideology to a place pursuing radical alternatives.
Kaup, an assistant
professor of sociology at William & Mary, has spent the
last 10 years studying the country and recently published a book, Market Justice: Political Economic
Struggle in Bolivia, about
the country’s shift from neoliberal to counter-neoliberal policies and the
groups that have influenced those changes.
“It’s not only a
testing ground of free market ideology, it’s a testing ground of people pushing
back against it in an attempt to seek out potential alternatives,” said Kaup.
From solution to source of discontent
A term somewhat
unfamiliar to people in the global north, neoliberalism is an extension and
intensification of free market forms of rule, said Kaup.
“It entails the
privatization and commodification of goods that were previously insulated from
market mechanisms, things like water provision, or things like oil and natural
gas,” he said. “So neoliberalism or neoliberalization is the process of turning
these things into goods that are more easily bought and sold in the global
marketplace.”
Neoliberalism was
introduced in Bolivia in the 1980s when the country faced a hyperinflation
crisis. Proponents of neoliberal ideology were able to assume power and, in the
process of solving the hyperinflation crisis, introduced an array of policies
promoting free market ideology, said Kaup. These policies included the
elimination of the national minimum wage and the privatization of strategic
sectors, including the mineral sector in the 1980s and the oil and natural gas
sector in the 1990s.
“How did this
affect the people in Bolivia? For most people, it had quite deleterious
consequences,” said Kaup.
Many people in the
hydrocarbon sector lost their jobs due to downsizing, and people who used to
sell their agricultural goods in local markets could no longer compete with the
low prices that larger companies were able to offer. As a result, agricultural
workers began moving to the cities to seek work, and many miners moved back to
agricultural communities where their families lived. Both groups also began to
seek income through illegal means, including the growing of coca or cocaine.
Now facing common problems and living in close proximity, the two groups of
workers began joining together in ways they had not before, coming together as
one to face a common enemy: neoliberalism. At the same time, a conflict arose
between the mining and agricultural elite, leaving a power vacuum for the
masses to fill.
The backlash to
neoliberalism reached new heights in the late 1990s and early 2000s with what
became known as the “water war.” The International Monetary Fund and World Bank
recommended that Bolivia privatize the water supply in its largest cities. The
country did, and it led to a substantial increase in the price of water.
“So, what we saw
was that some of the most disadvantaged segments of Bolivian society were
paying up to 25 percent of their monthly income just to have access to clean
water,” said Kaup. “This creates a situation that is ripe for revolt, or that
is undesirable for many people, particularly given the high levels of
inequality prevalent in Bolivia.”
About five years
later, things once again came to a head with the “gas war,” which came about in
response to a plan to export Bolivia’s natural gas to the United States through
Chile The Bolivian masses discovered that transnational corporations were
making millions off of their natural gas while they were getting very little
from it. That fact, combined with the Bolivian’s standing distaste for Chile
and the United States, propelled the counter-neoliberalism movement forward,
said Kaup.
The masses called
for the nationalization of the hydrocarbon sector and finally, in 2003, forced
the president of Bolivia to resign. His vice president took over for a few
years before he, too, was forced out of office. A national election was held,
and Evo Morales was elected, becoming the first indigenous Bolivian to hold the
post in decades. On May 1, 2006, the new president nationalized Bolivia’s oil
and natural gas sector.
“Now, the
nationalization takes somewhat of a peculiar form,” said Kaup. “When we think
of nationalization, we think okay the state’s going to come in and just take
all of these people’s assets and not remunerate them and that’s it. But what
the Morales administration does is say that we still want investors to invest
here and we have financial constraints that we have to deal with, so all that
we want to do is become majority shareholders in the oil and natural gas in our
country.”
The Bolivian
government also reintroduced royalty fees and increased inflation rates for
hydrocarbons. That combined with becoming majority shareholders allowed the
Bolivian state to take in a substantial amount of money in a short period, said
Kaup. The money was used to reinvest in the industry, but it also funded a
number of social programs, including an old-age pension program, a program to
keep children in school and a pre- and post-natal care program to reduce infant
mortality.
Post-neoliberal paradox
With the Bolivian
state and transnational corporations both benefitting from the nationalization
of the hydrocarbon sector, a surprising paradox arose. Resistance to
neoliberalism did not equal resistance to transnational corporations.
“We usually think
that when a nationalization occurs and a self-proclaimed socialist becomes
president, all investment would flee and go elsewhere. But what’s happened is
there’s been this tacit, unacknowledged sort of alliance between the Morales
government – as the representative of the popular classes – and the
transnational corporations,” said Kaup. “While the transnational corporations
did have their royalties and taxes more than doubled, they still are making
money, so now we have both the transnational corporations making money and the
Bolivian state making money, and they have been able to mutually benefit.”
Although Bolivia
serves as an interesting case study, Kaup said that it should not be seen as a
model for other countries.
“I’m always
hesitant to say that there’s a Bolivian model, and that’s probably for two
reasons: We don’t know the long-term success or failure of Bolivia in this
process. … and to say that there is ‘a’ model is not what the Bolivians would
want … It may work for them, but it may not work for someone else. There isn’t
one model of development; there are many models of development.”
However, people may
still learn from the Bolivian case, said Kaup.
“We could say the
Bolivians have somewhat shown a way where they have challenged traditionally
powerful actors and have rearranged the benefits coming from their resources to
benefit the masses,” he said. “So if other people are trying to say that, ‘Oh,
could that work for us? Can we somehow glean more from the riches beneath our
feet?,’ the Bolivians have shown that yes, you can do that.
“Whether or not
they offer a model to do that is debatable, but they do show that it’s
possible, and I think that other places can perhaps learn from that, as well.”
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