[Mayworks-org] 'A Movement Towards or Beyond ‘Statism'? Bolivia in 2006,' March 28, 2007

[The Bullet]

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A Socialist Project e-bulletin .... No. 47... March 28, 2007
_______________________________________________________

A Movement Towards or Beyond 'Statism'? Bolivia in 2006

Susan Spronk

It is now more than three decades since neoliberal economic and
political ideas began to supplant Keynesian orthodoxies within the
treasuries and finance ministries of Western governments and in the
policy-making centers of development agencies and financial
institutions. Bolivia was one of the first Latin American countries to
adopt a neoliberal approach back in the mid-1980s. State-owned
companies were sold off for peanuts. Government spending and
regulation was scaled back. Foreign capital was courted. All done with
the promise of a new dawn of development. Twenty years later the
average Bolivian is worse off than before and the gap between the rich
and poor has yawned wide open.

Evo Morales's MAS (Movement Toward Socialism) was elected on a
campaign promise to reverse the damage wrought by twenty years of
neoliberalism. He has followed through on many of his election
promises foremost among them the promise to "decolonize" the state.
Many of the ministers are self-identified indigenous and activists
from social movements.

While there is broad agreement that the MAS has made progress on the
indigenous front, there is more debate on the left in Bolivia about
how to characterize the MAS's development policy. In a recent
assessment, Bolivian sociologist Lorgio Orellana Aillon argues that,
at this point, the MAS is "neither nationalist nor revolutionary." But
Orellana goes further to accuse that the MAS's development plan is
also "neoliberal." This contention begs the question, however, what is
"neoliberalism"? As Orellana points out, it is more than more than a
set of economic policies. Neoliberalism is a form of class rule that
emerged as a response to the crisis in western capitalism in the
1970s.

I suggest that while at this point the MAS is neither nationalist not
revolutionary, at least not yet, it does not mean that it is
"neoliberal" by default. To the contrary, I argue that the MAS is
attempt to build what Bolivianists have called "state capitalism,"
comparable to that which prevailed after the national-popular
revolution of 1952. Similar to the period from 1952-1964, the course
the MAS takes depends on the regional balance of power and the ability
of social movements to push the MAS beyond the limits of statism and
prevent the project from being crushed by the right in Bolivia.

The Social Movements' Demands

It deserves recalling that the MAS is responding to social movements'
calls for "nationalization" and "social control." These demands have
been voiced loudly in a series of conflicts and protests over land,
water, and natural gas since 2000. The social movement leaders making
these calls have learned from past successes and failures in their
search for new models. The demand for "social control" in the water
and energy sectors, for example, draw from the 1950s experiment with
"worker control" in the state-owned mines, that were nationalized
following the national-popular revolution of 1952. 

Worker control was a power-sharing arrangement between social
movements and the state that was institutionalized during a brief
period between 1952 and 1956. Under this arrangement, known as
"co-government," the revolutionary Bolivian Worker Central (the COB)
was allowed to appoint representatives to key ministries such as
petroleum and mining, transportation, and labour. Rank-and-file
workers in each state-owned mine elected a controller who had "voice
and vote" on the management board, which made decisions on the
day-to-day aspects of life in the mining community. The arrangement
was abandoned by the workers' movement when the reformist ruling
party, the National Revolutionary Movement (the MNR), accepted the
terms of an IMF stabilization package in 1956. It took until 1961,
when the second structural adjustment package was imposed for the
COB's leadership to follow and sever ties with the government.

While there were many problems with co-government, one of its more
serious limitations was the fact that workers did not have enough
power within a non-worker state to make decisions about investment.
Over the years, the MNR used profits from the state mining company
COMIBOL to fund exploration for petroleum deposits. This eventually
de-capitalized the mines. The demands today for re-nationalization of
oil and gas companies draw on popular memory of the sacrifices made by
the miners and express a desire for "social control" over what is
widely regarded as Bolivia's patrimony.

Contemporary social movements have learned from these experiments.
They are trying to find ways not to repeat the mistakes of the past.
In his wonderful book on Cochabamba's water war, trade union militant
Oscar Olivera reflects on the lessons learned from past episodes of
nationalization. He argues that in their search for alternatives,
social movements must find a way to counter "both forms of
privatization—the private property of the transnationals and the
private property of the state—with forms of social, economic, and
political organization. It is a question of organizing working people,
ordinary people, and people who do not live off the labor of others
and having them take into their own hands the control, use, and
ownership of collective and communal wealth." 

Olivera's statements reflect the radical current within Bolivian
social movements that aims to create a "different kind of state" based
upon ideas of collective property and popular empowerment. These
elements of Bolivia's left, which include the COB and the
Coordinadora, are fiercely critical of the MAS. In this view, the MAS
is pursuing a project that more closely resembles the MNR's statist
development rather than a socialist project "from below." 

Hydrocarbons: "Nationalization without Expropriation"

In a highly theatrical display, Evo Morales announced that that
government would "nationalize" hydrocarbons resources on May 1. As
expected, nationalization did not mean "expropriation without
compensation" but instead the re-negotiation and authorisation of
contracts for foreign oil corporations. The critics in the
corporate-controlled media squawked that the decision would be "bad
for development" and predicted capital flight. In fact, however, the
"nationalization" policy is not particularly radical in comparison to
the demands made by states such as Norway, where social democracy has
been built on a stack of oil revenues. Norway demands 90 percent of
well-head royalties, while Bolivia has demanded a more modest 82
percent.

Since Bolivia is believed to have the second largest natural gas
reserves on the continent, none of the companies are particularly
eager to leave. The smaller companies "regularized" their contracts
shortly before the expiry date of November 1, but some negotiations
have yet to be completed with the Bolivian-controlled Petrobas, which
controls the largest natural gas deposits in Bolivia. With the
proceeds, the MAS is slowly recapitalizing the state-owned company,
Yacimientos Petroliferos Fiscales Bolivianos (YPFB), which was
stripped down to a regulatory agency following the neoliberal reforms
of the mid-1990s, although there is a lot of work to be done. For
example, as the former hydrocarbons minister, Andres Soliz Rada (who
was forced to resign by the government in September because he thought
the government's strategy did not go far enough) points out, the
multinational "partners" still count the full estimated value of
Bolivia's gas reserves as their assets on the stock exchange, when it
should be listed as the property of the YPFB. 

The increase to oil and gas taxes has been an important boost to the
government's revenue. The May 1 decree also raised the price of gas
shipped to Argentina by 48 percent, which help off-set some of the
losses that these companies would experience as a result of the higher
taxes that have accompanied "nationalization." A recent report
prepared by Mark Weisbrot of the Centre for Economic and Policy
Research notes that according to IMF data, the amount of government
revenue from the hydrocarbons sector increased by 6.7 percent of GDP
over the past two years. 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. The government is expecting these revenues
to triple over the next four years. Unlike the neoliberal
administrations before it, the MAS government ran a surplus budget.
Morales announced that this money will be used to fund health,
education, and social programs. Upon signing the decree, public
schools teachers received 10 percent pay raise and the government has
increased pension payments.

Mines: More of the Same

The Bolivian government is also preparing a mining code which it
hopes will accomplish similar results, that is, more national control
with investment by multinationals to increase tax revenue. The first
opportunity for recuperating the mines has already been lost. The
Mutun mine, estimated to contain over 40 billion tons of iron ore
reserves, was granted a concession to an Indian-based multinational in
June. Reform of the mining sector is long-overdue as indicated by the
rising tensions among different workers, which produced the bloodiest
conflict of 2006. From 1985 until the late 1990s, many of the formerly
state-owned mines temporarily shut their doors when COMIBOL dismissed
over three-quarters of its workforce in the first round of neoliberal
'reform' in the mid-1980s. Some of the miners who remained formed
small cooperatives. They continued to mine under worse conditions,
paying a small fee to COMIBOL for every tonne of mineral extracted. 

The creation of cooperatives might sound like a creative solution to
the problem of unemployment similar to the experiments in the
recuperated factories in Argentina. But the cooperativists function
like private businesses in which a privileged sector contracts other
workers to do the dirty work under extremely exploitative conditions.
While the privileged cooperativists are organized into a powerful
association, FENCOMIN, several cooperativist workers working on
contract have been fired for attempting to organize unions. According
to one report, there are now estimated to be 63,000 cooperativist
miners, while before October COMIBOL employed only a few thousand
miners. 

As commodity prices started to pick up in the 1990s, many of these
mines were sold in concession to multinational companies as part of
President Sánchez de Lozada´s privatization program. The mining
sector is now a confusing mish mash of state-owned and privately-owned
mines, worked by a mix of employees of multinational companies,
cooperativists, and state-employees. The same mine may be worked by
different groups at various levels thus exacerbating conflict among
workers facing very unequal conditions of employment. 

Such is the case in the Huanuni mining complex located 280 km south
of La Paz. The Pokosoni deposit was granted to a British-controlled
consortium in the late 1990s. But it was returned back to COMIBOL when
the company declared bankrupcty in 2000. This started a scuffle
between the cooperativists and the state-employees over the future of
the mine. The cooperativists want the state to increase the number of
"shared risk" contracts between the cooperativists and multinational
companies. Both the waged and cooperativist miners backed the MAS in
the December 2005 elections. Given the MAS's penchant for statist
development with the participation of foreign capital, it chose to
appoint a cooperativist miner, Walter Villarroel, as the Minister of
the Mines. This inspired the cooperativists to deepen their demands.
In September 2006, the 1500 state-employees who work the Huanuni
deposits affiliated with the militant state-employed miners' union,
the FSTMB, erected a road blockade demanding more jobs in the mine. In
retaliation, the cooperativists attacked the state-employees in early
October 2006. The situation exploded, leaving 17 miners dead and many
more wounded. 

The government has been heavily criticized for failing to intervene
in the conflict to prevent these needless deaths and for favouring the
cooperativist sector in place of the militant state-employed,
organized miners. As Mario Ronald Duran Chuquimia of Argenpress put
it, the problem confronting the MAS is a classic problem created by
state-sponsored corporatism, "the central problem of the Evo Morales
management is that the leadership of the social movements, converted
into the heads of ministries, offer preferences to satisfy the demands
of their sector before giving solutions to the problems faced by
society as a whole." A resolution of such conflicts will require more
than a new mining code. It will require that all miners be given the
right to organize trade unions. Following the conflict, the government
made a move in the right direction by absorbing 5,000 cooperativist
workers into COMIBOL. Responding to social movement demands,
Villarroel was sacked and replaced with Guillermo Dalence Salinas, a
former leader of the FSTMB.

The Santa Cruz Oligarchy 

The most serious threat to the MAS's statist project is the Santa
Cruz oligarchy of Bolivia's eastern region. This is where the
country's most fertile land and natural gas and oil deposits are
located. Santa Cruz's bandits and corporate oligarchs are not at all
thrilled about the change in direction in state policy. In the 1970s,
the oligarchy gained control over the state apparatus under dictator
Hugo Banzer (1971-1978). He channelled public money and international
loans towards the region in his own state-building project. The Santa
Cruz oligarchs weathered the storm of neoliberalism because their main
economic activities are in agro-export, drug trafficking, and
contraband, which flourished under corrupt neoliberal administrations.
Their greatest productive asset is land, a great deal of which was
acquired through fraud. So far, the MAS has appeased their worst fears
by not threatening to expropriate productive land in their first wave
of agrarian reform hammered through Congress in November. 

The decision not to expropriate the Santa Cruz oligarch's land is a
calculated move. First, the regional agro-capitalists produce soy, one
of Bolivia's more valuable exports. Second, the oligarchs have
something to gain from the re-alignment of the Bolivian state toward
the Bolivarian axis. The agro-exporters face fierce competition from
American-grown soy, especially in its largest market, Colombia, which
just signed a "free trade agreement" with the US. But Venezuela and
Cuba have both agreed to accept Bolivia's soy to compensate for this
loss of market. Venezuela also provides much-needed finance and advice
in many areas of policy, including defence. Rumours of a right-wing
sponsored coup swirl, and recall the US-sponsored coup that attempted
to derail Chavez's state-building project in 2002. 

The Constituent Assembly 

The national Constituent Assembly (CA) has served as an open stage
for this regional showdown. The oligarchy drew their guns when the MAS
proposed late this fall that all articles written for the new
constitution being designed by the assembly be approved by simple
majority instead of by a 2/3 vote. Before election of delegates on
July 2, the MAS made a concession to the right by designing the voting
rules so that no political party or faction could achieve 2/3 needed
to approve articles before they go to national referendum. The MAS won
the maximum number of seats allowed -- 54 percent -- the rest going to
traditional political parties, including those of the Santa Cruz
oligarchs. But the process by which articles would be approved has
been left vaguely-defined. 

Predictably, the CA entered a deadlock, and tensions spilled out onto
the streets in December. In the first wave of protests in early
December, the Santa Cruz oligarchs claims that there were one million
people on the streets waving banners in support of "2/3," "democracy,"
and "autonomy" in retaliation against the "authoritarian" nature of
the MAS government. Clashes between the oligarchs and poor peasants in
a town near Santa Cruz left several dead.

Similar tensions flared up again a month later in Cochabamba, where
the militant pro-MAS organizations of small farmers who were
instrumental in the 2000 water war surrounded the office of the
pro-autonomy governor, demanding his resignation. This time, clashes
in the streets resulted in one casualty for each side. The MAS
government defended the Mayor arguing that popular social movements
and their leaders have to learn to respect democracy, and conceded to
the 2/3 rule, so the painful process of re-writing the constitution
can begin. 

At one point, social movements pinned their hopes that the CA would
re-found the nation. Now it will be difficult to make radical changes
to the constitution with the balance of power tipping towards the
right. While the form of the CA appears to be the MAS's largest
blunder so far, it is not certain how much it really matters. After
all, post-apartheid South Africa adopted one of the most progressive
constitutions in the world, but it is far from being the world's most
equal society. As Marx famously put it, "between two equal rights,
force decides. Real political power in Bolivia, as elsewhere, lies
largely outside of parliamentary bodies. As is, the CA certainly
distracts the right, and prevents it from investing all of its energy
in other counter-reform initiatives that are potentially much more
dangerous. 

Beyond Statism?

The MAS's state-building project is not immune from criticism. But
the label "neoliberal" does not apply in this case. The MAS government
has clearly changed course from the kinds of economic policies imposed
by the IMF that dominated economic-policy making in the region for
more than two decades. Indeed, the Morales government let the IMF
agreement expire in March 2006, giving it more freedom over
economic-policy making than has been possible in the past twenty
years. We may not have yet entered a "postneoliberal" age. But if
every government on the continent including the MAS is labelled
"neoliberal" we risk diluting its meaning entirely. A more realistic
assessment suggests that the MAS is pursuing a statist project thus
far. This project will create new kinds of contradictions and provide
the basis for new political divisions and new alliances.

Diverse groups within the working classes of Bolivia were able to
build a successful common front against neoliberalism between 2000 and
2005. Now they may find themselves increasingly in competition with
each other as MAS policies creates space for some groups and not
others. This has further politicized the state and politics. It
remains an open question whether the social movements and the dynamics
of class struggle -- both in Bolivia and the region -- will push MAS
beyond the limits of statism. We on the left would be wise to try to
understand these new contradictions and the forms of struggle to which
they will give rise. 

Susan Spronk is at York University and has spent the last few years
researching and living in Bolivia.

==================================

Relay #16 March-April, 2007

http://www.socialistproject.ca/relay

~~~ Table of Contents ~~~

** Student Movement **

~ The Day of Action and the Politics of Student Organizing -- Petra
Veltri

~ Student Movement Stalled in the Mid-90s -- Jenn Watt

~ The Quebec Student Strike and Rebuilding the Left -- Xavier
Lafrance

** Canada **

~ Who Benefits from Dismantling the Canadian Wheat Board? -- Ken
Kalturnyk

~ Third Annual Israeli Apartheid Week a Great Success -- Zac Smith

~ The Ugly Canadian -- Yen Chu

http://www.socialistproject.ca/relay/relay16_chu.pdf

** Capitalism and Resistance **

~ Development and Resistance to the Empire of Capital -- John Saul

http://www.socialistproject.ca/relay/relay16_saul.pdf

~ In From the Margins: The Dutch Socialist Party -- Bryan Evans

~ Confronting the Climate Change Crisis -- Ian Angus

** Culture Front **

~ Prose Poems -- Joe Rosenblatt

~ Pan's Labyrinth: Ofelia in Fascistland -- Sam Gindin and Schuster
Gindin

** World Social Forum and Africa **

~ Youth Activists at the 2007 World Social Forum -- Rachel Brewer and
Ewa Cerda

~ The Long Journey of the World Social Forum -- Carlos Torres

~ South African Democracy and the Zuma Affair -- Carolyn Bassett and
Marlea Clarke

** Latin America **

~ Where is Cuba Going? -- Harold Lavender

~ Latin America Solidarity Committee-Toronto: Moving Forward -- LASC

~ Continental Struggle for Decent Wages -- Richard Roman and Edur
Velasco

~ A Movement Towards or Beyond 'Statism'? Bolivia in 2006 -- Susan
Spronk

http://www.socialistproject.ca/relay/relay16_spronk.pdf

~ Corn Crisis and Market Discipline -- Hepzibah Munoz Martinez

http://www.socialistproject.ca/relay/relay16_martinez.pdf

~ The Costs of Rising Tortilla Prices in Mexico -- Enrique C. Ochoa

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