Bolivia: Refounding the Nation

by Kepa Artaraz

Overview

The election of the Movimiento al Socialismo (MAS, movement towards socialism) to power in Bolivia in 2006 marked a historic break from centuries of foreign domination and indigenous marginalisation. Evo Morales, leader of the MAS, became the first indigenous president of Bolivia.

Kepa Artaraz looks at the attempt to 'refound the nation' which the new government has made as its goal. He shows how the mix of Marxism, indigenous liberation politics, anti-imperialism and environmentalism has made Bolivia one of the most interesting and unique political experiments of Latin America's 'red decade'.

As the historic left-turn in Latin America reaches a crossroads, Bolivia: Refounding the Nation guides us through the politics and ideas which have animated this popular movement, drawing out important lessons for progressive politics everywhere.

Product Details

ISBN-13:	9780745330891
Publisher:	Pluto Press
Publication date:	04/04/2012
Pages:	256
Product dimensions:	5.40(w) x 8.40(h) x 0.60(d)

About the Author

Kepa Artaraz is a lecturer at the University of Brighton where he teaches global social policy and politics. He is the author of Cuba and Western Intellectuals since 1959 (2009).

Read an Excerpt

CHAPTER 1

THE ECONOMIC BIRTH PAINS OF POOR COUNTRIES

'Refounding the nation' is an expression commonly used by the current Movimiento al Socialismo (MAS) (Movement towards Socialism) government of Bolivia to describe its political project. Refounding the nation is the national project for a government whose official political discourse mixes traditional Marxist language, indigenous liberationist concepts and anti-imperialist rhetoric to describe the situation of a country that suffered 500 years of colonialism and plunder. This plundering, the discourse goes, was carried out first by the Spanish conquerors, then in the twentieth century by the United States and the transnational corporations that represent the economic interests of a global capitalist elite.

This long night of oppression and Bolivia's marginal position in the family of nations are often blamed for the appalling socioeconomic inequalities that continue to dominate Bolivian society, the marginalisation and exclusion of large sectors of society, the country's historic chronic political instability and its lack of progress towards delivering minimum levels of well-being to the population at large. Only in recent times have we seen Bolivia emerging from this situation through a process often described as a 'revolution in democracy'. This political process is quite different from previous revolutionary situations in twentieth-century Latin America, including the 1952 Bolivian revolution. In addition, the current process of change can be seen as part of a much wider continental political turn to the left and contestation of dominant political and economic models.

This book attempts to make sense of the current process of change, which has been brought about by the MAS government since the historic election of Evo Morales as president of Bolivia on 18 December 2005. In his first speech as president, Morales hailed the 'end of the colonial and neoliberal era'. This book explores the meaning of this statement, and follows the country's social, political and economic changes in all their vicissitudes since the accession of MAS to power. In the first part of the book, Chapters 1 and 2 outline the origins of this process of change, origins that have to be found in the double failure, economic and political, to fulfil the promises that the formal return to democracy offered in 1982. The history of plunder of the country's resources and the poverty that followed is the history of Bolivia.

FIVE HUNDRED YEARS OF PLUNDER?

What was once called the 'imperial city' of Potosí sits in the Bolivian altiplano at over 14,000 feet. It is one of the poorest cities in the poorest department of Bolivia, itself one of the poorest countries of Latin America. One single economic activity, which began in the 1500s shortly after the arrival of Spanish conquerors, continues to dominate to this day: mining. The income gained through the exploitation of tin from the unnaturally perfect cone that is the Cerro Rico barely feeds a population of around 130,000 people today. But things were not always like this. At its height in the mid-seventeenth century, Potosí was one of the biggest cities in the world, with a population as large as London. The reason for this was the rich silver deposits that lay beneath the mountain, extracted in such quantities that some say it would have been enough to build a bridge of silver between the city and the centre of the Spanish empire that Bolivian silver fed for centuries. This is how Eduardo Galeano describes the city of Potosí in one of his best-known books:

The sword and the cross marched together in the conquest and plunder of Latin America, and captains and ascetics, knights and evangelists, soldiers and monks, came together in Potosí to help themselves to its silver. Moulded into cones and ingots, the viscera of the Cerro Rico – the rich hill – substantially fed the development of Europe.

If we believe Galeano, the history of Bolivia is very like the history of the rest of Latin America, and indeed of much of the poor Global South. In Open Veins of Latin America, Galeano effectively popularised the case made by the development of underdevelopment school, applying it to the Latin American continent. He described Potosí as the first link in the chain of exploitation imposed by the colonial masters in the sixteenth century, which would fund much of Europe's development for the next two centuries. Theories of development might be open to debate, but it is clear that Bolivia is a good example of a resource-rich country whose resources have made countless others rich, but have rarely benefited the population of the country as a whole.

The reasons for Bolivia's peculiar economic development (or underdevelopment) must be found in the country's history, and in the relations with other countries that have characterised it. The colonial experience of plunder vividly described by Galeano brought Bolivia to high levels of involvement in the global economy. When the country became independent in the nineteenth century, its role in the global economy was already well established, and subsequently Bolivia continued to pursue a model of development based on the export of raw materials, mostly mineral resources, as part of an enclave economy. In other words, its national economy played a role in a larger system which meant that although its activities were highly profitable, they did not deliver prosperity to the country as a whole, or even to rural communities geographically close to the mines.

This is apparent for example in the history of Bolivian rail transport. High levels of investment were made in building railways, including much private investment by mining companies themselves. The rail system that emerged effectively brought the mines closer to the seaports, and made mineral exports easier and cheaper. Bolivia's first railway line, completed in 1892, linked Oruro and Uyuni with the Chilean seaport of Antofagasta. The system was much less well suited to internal passenger transport. It did not provide effective links between Bolivia's cities, or constitute a good base on which to build a national rail network.

The large-scale mechanised exploitation of silver and tin deposits in mines like those near Potosí, and Siglo XX in the town of Llallagua, brought enormous wealth to a small class of capitalists. Simón Patiño, for example, was a Bolivian tin baron who became one of the world's richest men in the early part of the 1900s. But the country as a whole failed to benefit from this bonanza. Millions were squandered in the conspicuous consumption of imported luxury goods by a tiny elite. In the early 1900s imports included Oregon pine, German mining equipment, caviar, fine lace, cashmere wool, and basic foodstuffs. These used the transportation network that had been established to export minerals, and in the process they hindered the local production of agricultural and manufactured goods and the emergence of local markets. Following the neoliberal economic ravages of the mid-1980s, 'cooperativist' miners at Siglo XX have reverted to back-breaking manual methods for the extraction and refinement of minerals. Poverty reigns today, and the era of rich imports is long gone.

In these respects, the Bolivian economy was much like many others in Latin America. From the late nineteenth century onwards, these economies achieved a high level of integration into international markets which delivered an export model of growth. It was typically based on single type of commodity – in Bolivia's case, minerals – and as a result was prone to boom and bust cycles in response to fluctuations in international prices. In parallel with this export-led economic activity, most of Bolivia's rural majority at the time of independence and until the 1952 revolution was engaged in agricultural production, in the form of either subsistence agriculture or small-scale production in haciendas. In this Bolivia differed from most of Latin America, where the expansion of the hacienda system responded to the increasing demand for agricultural products from Europe and the growing value of land. Bolivia was very slow to insert agriculture into the export model of economic development, and 90 per cent of the country's exports in the 1960s continued to be in the form of minerals. However it shared with the rest of Latin America the phenomenon of indigenous communities continuing to suffer from the expropriation of the most valuable lands during the neocolonial period. Foreign domination and control of assets increased throughout the continent, making the United States the largest foreign influence in the region.

It would appear therefore that the accusation of plunder made by Morales at the beginning of this chapter has held true for a large part of Bolivian history. Plunder, by a small capitalist elite and the transnational corporations through which raw materials flowed and assets were controlled, was the characteristic note of an economic model that was based on the export of raw materials. Dependency theories grew in the 1960s to explain this process. Two clear strands can be detected in this body of literature. The first is a Latin American thesis, originated by authors like Raúl Prebisch, economist at the Economic Commission for Latin America and the Caribbean (ECLAC), who first noticed in 1950 a deterioration in the terms of trade between poor and rich countries. They argued that a measure of protectionism was necessary for poor countries to be able to make inroads into their next stage of development, which would entail a policy of import substitution industrialisation (ISI) to replace the trade and export model that had been dominant up to that point. Many other Latin American writers contributed in the following two decades to the dependency school, particularly with empirical evidence drawn from a number of case studies.

A second strand of dependency theory consists of Marxist analyses closely linked to the US journal, the Monthly Review. The contributors included Paul Baran, Andre Gunder Frank, and more recently authors associated with world systems theory, such as Samir Amin and Immanuel Wallerstein. Dependency theorists have long argued that wealth and resources tend to flow from poor countries in the periphery of the global economic system, to rich countries that constitute a core capitalist group. According to this body of theories, this global system of exploitation is responsible for the misery and poverty (exacerbated by underdevelopment) that accumulates in those countries with the largest natural resources at their disposal, Latin America being a prime example. Some commentators have gone beyond a purely economic argument. Frank, for example, influenced by the Cuban revolution of 1959, argued that the only possible way for poor dependent countries to reclaim national sovereignty and assert their independence was through armed revolutionary struggle, which could lead them out of this global system of domination. Arguably they could then develop a 'third way', an alternative that was not based on either the capitalist or the socialist models.

It would be difficult to claim that Bolivia's 1952 revolution delivered industrialisation in its broadest sense. In the case of mining, the debate about how best to industrialise this sector – introducing mineral refinement processes or creating smelting plants for example – continues to rage in Bolivian government circles today. A similar concern characterises debates about oil and gas processing. There was however some economic diversification and import substitution from the 1950s onwards. There was also a development in agricultural policy and production in this period, which involved the large-scale development of vast areas of the Bolivian lowlands, which until then had comprised forest and wilderness that official land policy makers perceived as uninhabited. (In fact, this territory was home to a sizeable population of indigenous people.) The aim was to develop agriculture on a more efficient medium and large scale. This policy of expansion had a mixed success, delivering greater levels of production but at a cost which included the displacement of the existing population and large-scale deforestation.

What is not in doubt is that the economic model during the three decades between 1952 and the return to democracy in the 1980s was based on the development of state capitalism. Essentially, this form of state capitalism represented an attempt to overhaul the pre-modern and pre-capitalist forms of production. The strategy included the wholesale nationalisation of mines and railroads. In addition, the 1952 government of the National Revolutionary Movement (MNR), led by Victor Paz Estenssoro, introduced radical land reform in the highlands. This affected the haciendas, which had operated using indigenous labourers who were effectively tied to the land.

The creation of joint labour–government management committees for the running of the nationalised mines, the enfranchisement of the indigenous population, and the land reform, made the 1952 government truly revolutionary in the eyes of the population. However, pressure from the United States soon made itself felt. It affected the role of workers in government, and the amount of compensation the government was forced to pay owners of those mines that had been expropriated. The United States also trained the Bolivian military, so it played a hand in the military takeover of power in 1964. The military did not relinquish their control until the 1980s.

In economic terms, the results of the nationalisation of mines and of the land reform were mixed. Informal economic activity increased in the cities, but there was stagnation in rural production in the highlands. In part this was because the land reform led to unproductive small landholdings (minifundios), which received little in the way of credit or technical assistance, and individual land titles which were unsuited to areas of the country where communal agricultural practices had traditionally provided better insurance against the possibility of crop failures. This had been a part of the basic principles of community life in Bolivia, which emphasised the values of solidarity and reciprocity. A process of semi-industrialisation did take place in the eastern lowlands. Finally, this period of state capitalism led to the creation of a large, salaried working class. There were high levels of unionisation, and some of today's indigenous social movements – such as the Confederation of Bolivia's Peasant Workers' Trade Union (CSUTCB), founded in 1979 – claim to have originated as part of the trade union movement. These levels of unionisation contributed to the expansion of insurance-based forms of social security such as pensions, and of workers' rights for a small percentage of the population in the cities and for a smaller percentage in rural zones. In summary, the period of state capitalism delivered a dual economy, comprising a small export-driven sector, and a majority of poor people with no cohesion and without social and employment rights.

ECONOMIC LIBERALISM REBORN

By the 1980s, ISI had run its course, and had delivered only to a modest extent against the long-term objectives of economic modernisation and increased well-being for the majority of the Latin American population. The formal return to democracy in Bolivia would be marked by the resurrection of some of the fundamental economic beliefs that had dominated the continent until the middle of the twentieth century. As with previous paradigm shifts in the continent, the new orthodoxy imposed itself rapidly in the corridors of power in Latin America, and its consequences changed the continent beyond recognition. Neoliberalism, it seemed, would finally deliver where previous approaches to economic development had failed. The reasons for this dramatic shift of economic policy direction are explored below.

(Continues…)

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Excerpted from "Bolivia"
by .
Copyright © 2012 Kepa Artaraz.
Excerpted by permission of Pluto Press.
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Table of Contents

Acknowledgements
1. The Economic Birth Pains of Poor Countries
2. Political Failures and Political Revival
3. Revolution in Democracy?
4. New Politics: In Search of a Working Relationship Between the State and Civil Society
5. New Citizens, Welfare and Wellbeing
6. New Economics: The Promise and the Limits of Post-Neoliberal Development
7. Bolivian-US Relations: Breaking the Stranglehold
8. Bolivia’s Place in Latin America
9. The Promise and the Limits of a Revolution in Democracy
Conclusion
Notes
Index

Editorial Reviews

'A timely resource for navigating the complex politics of contemporary Bolivia' - Benjamin Dangl, author of The Price of Fire: Resource Wars and Social Movements in Bolivia (2011) and Dancing with Dynamite: Social Movements and States in Latin America (2010).

From the Publisher