Bolivia: mass movement forces concessions from Parliament

Despite concessions, mass movement against neo-liberalism could have achieved more.

The last month has seen a new upswing in the struggle against neo-liberal policies including over natural resources in Bolivia. One and a half years ago, president Lozada was forced to resign after weeks of protests that left almost one hundred dead. His successor, Mesa, has also been confronted with massive protests and has threatened to resign and call early elections.

What triggered the protests against Lozada in October 2003 were the plans to export natural gas to USA. Once again the natural resources of the country were going to enrich foreign capitalists, at the same time that the majority of the country’s population lives in poverty. Bolivia is Latin America’s poorest country after Haiti, with 5.6 million out of a population of 8 million living below the poverty line. Three million don’t have access to electricity or clean water. During the colonial era the rich resources of silver were plundered. During the 1950’s it was tin and now it is the natural gas. Bolivia has the biggest reserves of natural gas after Venezuela. It value is estimated to $100 billion, 12 times the countries GDP and 16 times its foreign debt.

"The oil and gas industry is highly profitable in Bolivia: for every dollar invested the companies take out 10 dollars", admitted the CEO of Repsol/YPF in Bolivia recently, one of the companies with interests in the export of gas, according to Econoticias Bolivia. The oil and gas companies take in $1.4 billion a year, but the Bolivian state only gets $70-80 million in taxes.

Part of the neo-liberal policies of the former president was to lower taxes for the extraction of oil and gas, and to privatise the state oil company YPFB. The oil and gas companies paid 50 per cent in tax/royalty on the extraction before. That was lowered to 18 percent. In addition, the oil and gas companies have very low extraction costs. According to the "Global Upstream Performance Review 2003", the costs for extraction in Bolivia corresponding to one oil barrel for Repsol/YPF and Amoco amount to only $1, compared to an average of $5.6 dollars for all the 200 other companies in the review. The costs to find new wells were also amongst the lowest in the world.

Unbelievable logic

At the same time the prices for fuel in Bolivia are higher than internationally, a fact that made Lozada at one stage exclaim, "that’s unbelievable". But that’s the logic of his neoliberal policies.

One of the arguments used to justify deregulation, privatisation and lowering of taxes for oil and gas companies was to lure investments into the country, which would benefit all. However, according to the oil expert Álvaro Ríos, only 5 percent of the $5 billion dollars worth of investment since 1997 has benefited the country in the form of increased domestic consumption.

Another factor behind the opposition to the gas export was the fact that the gas would be transported via a new pipeline to a port in Chile. There is a hostility towards Chile which dates from the war in 1879-83, when Bolivia lost it’s coast to Chile. The war was about the saltpetre supplies at the coast, and the real winner was the British "saltpetre king" John Thomas North. The Chilean people will not benefit this time either, but British Gas, British Petroleum, Repsol/YPF and Sempra Energy (subsidiary to scandal-ridden Enron) that are behind the Pacific LNG consortium, will.

In the middle of September 2003 the resistance against the gas export escalated after the killing of seven people by the military at a roadblock. The roadblocks intensified, the COB (Bolivia’s TUC) declared a general strike and tens of thousands of indigenous people marched from all over the country to the capital, La Paz. Lozada resigned and fled to the US on 17 October. His vice-president Carlos Mesa was appointed president in his place. Mesa promised a referendum about the oil and gas, a constituent assembly to rewrite the constitution. He also promised to deal with corruption.

The main forces in the movement against Lozada were the COB, the left party MAS (Movement towards Socialism, led by Evo Morales) and the peasant union CSUTCB, led by Felipe Quispe). Despite the fact these organisations use radical methods of struggle and rhetoric, their leaderships lack a program for a takeover and abolition of capitalism. For example, during the "gas war" against Lozada, Evo Morales was in favour of the UN sending mediators! Until recently, Evo Morales, under the influence of Lula in Brazil, supported Mesa’s government, and for that reason he was expelled from COB last year. When Mesa announced the referendum last year Evo Morales gave his support, while COB and Felipe Quispe called for a boycott.

The five questions that constituted the referendum were ambiguous. A big majority was in favour of nationalising the oil and gas supplies, but a lot was left open to interpretation. When the result from the referendum was supposed to become concrete, in the shape of the new "carbon-hydrate law" the conflict escalated again.

There were three main issues behind the latest movement. In El Alto, the focus of resistance against Lozada in 2003, a struggle is raging against the water company Aguas del Illimani, subsidiary to the French Suez Lyonaisse des Eaux. A local general strike was declared on the 2 March demanding that the privatisation of water should be reversed. A similar struggle in Cochabamba in the year 2000 led to a victory. As a result the American company Bechtel (now doing profitable business in Iraq) was thrown out.

Indigenous peoples oppressed

Another demand is that a constituent assembly should be convened to rewrite the constitution. One key issue are the rights of the indigenous people, which constitute 62 per cent of the population. The proportion of indigenous MPs in the parliament has increased substantially, especially with the success of the MAS, that has it base among the Quechua people. Evo Morales, leader of the coca growers (and himself a member of the Aymara indigenous peoples) was only 45 000 votes behind Lozada in the latest presidential elections in 2002. The peasant union CSUTCB, led by Felipe Quispe, has its base among the Aymaras. A huge majority of the indigenous people live in poverty and face brutal discrimination.

The third issue was the "carbo-hydrate law". The demand from the MAS was that the royalty/tax on extraction should be increased from 18 to 50 percent, the old level. Mesa’s proposal was to implement a new production tax, at most 32 percent, with the right to different deductions. Mesa’s proposal would give much less in tax income to the Bolivian state, and was rejected by the mass movement.

All over the country roads were blocked, which brought the country to a halt. Many of the protestors demanded the nationalisation of the oil and gas. Mesa was afraid to use the military in the same way as Lozada, and ignite even further protests. Instead he played on the lack of alternative and handed in a letter of resignation to the parliament on the 6th of March, that was rejected by the parliament. After that he called for protests against the roadblocks and the "chaos", and managed to get some support from sections of the middle class. He also hinted the use of force, but the Justice department declared the roadblocks were legal, as a part of the right to demonstrate! Instead the protests escalated even more. The COB, MAS, CSUTCB, community organisations of El Alto, in total 60 different organisations, joined forces in a "revolutionary front". More roadblocks were set up and a general strike declared.

On 16 March, the lower house of the congress reached an agreement about the taxation of oil and gas, with the new production tax on 32 per cent, but with no rights to deductions. This compromise would give $600 million a year to the state, compared to $750 million which would have come in as a result of the MAS proposal. Mesa’s proposal, which would only be implemented on new contracts, would only have given $105 million. Mesa called the decision "irresponsible" and put forward the proposal that the elections should be called two years early, on the 28 August this year.

"The congress has blocked any possibility to implement the proposal (of a new carbo-hydrate law), the justice department has blocked my possibility to use the law (against road blocks) and the MP Evo Morales has blocked the country, and you ask me to govern, and I can’t do that", he said.

His proposal on early elections was turned down by the congress. Many deputies were not willing to risk their seats, even MAS was against new elections, calling them for a "manoeuvre". Once more Mesa could stay in the lack of alternative. The carbon hydrate law is now to be voted upon in the senate, after that president must sign the law for it to take effect.

After the decision in the lower house MAS and COB called off the roadblocks and strikes. Unfortunately this represented a conscious attempt to derail the mass movement, particularly by the leadership of the MAS. The COB leadership have been fallen in behind Morales – a diversions from the revolutionary traditions of struggle of the Bolivian trade union movement.

Given its scope and militancy, this mass movement is revolutionary in its foundation. Even Mesa complained in his resignation speech to Parliament that there had been 820 national demonstrations against him during the eighteen months he had been in office and this was simply unacceptable! This gives an idea of how the movement has grown and spread.

Bolivia shows elements of a pre-revolutionary situation. The state and the capitalist elite have repreatedly lost control of the country and been unable to hold the masses back. The working class and poor peasantry have shown a willingness to struggle to the end. The middle classes are split and divided, vacillating in their support between the government and the working class and peasantry.

Indefinite general strike

However, the only way to end the desperate poverty and exploitation is through a revolutionary struggle to overthrow the government, the President and the capitalist system.

This would require the setting up of committees of struggle throughout the country and at all levels: in the factories and cities, amongst the peasants and within the army. Such committees should be elected and subject to the instant right of recall. They should be linked up on a city-wide regional and eventually national basis to provide a coherent leadership for the revolutionary movements of the working class and peasantry.

But it would be the programme and tactics of such committees of struggle which would be vital. It would not just be enough to organise for the overthrow of capitalism – an alternative way of running society would have to be put forward.

The demand for an indefinite general strike to kick out the corrupt capitalist elite is inherent in the situation and a strategic goal for the Bolivian working class and poor peasantry. So is the demand for a workers and peasants government that would nationalise the main parts of industry and agro-industry under the control of the workers and peasantry as well as laying the basis for a socialist, democratic plan of production to transform the lives of the majority in the country.

However, the pressure from below still continues to have an effect on the leaders of the movement. Felipe Quispe was not ready to call off the protests yet. The community organisations in El Alto, according to Indymedia in Bolivia, voted on a resolution with a series of demands. They are in favour of new elections, "let them all go". Instead of a new tax they argue for the nationalisation and regarding the private water company they don’t rule out occupying its premises. They call for a boycott of water charges and for the organisation of defence of those threatened to have their water cut off.

At the same time the capitalists are increasing their pressure. The Repsol and the Brazilian Petrobras have announced that they call off their investment plans to put pressure on the congress. British Gas is threatening to go to the courts if the new tax is implemented on old contracts. This shows the issue of nationalisation, not only of the supplies, but also of the companies, must be on the agenda for the movement.

Bolivia’s workers and poor have again and again shown their willingness to struggle, but if the movement does not succeed in breaking the grip of capitalism, the movement will sooner or later recede temporarily. Bolivia is just one example how capitalism, in spite of the existence of vast natural resources, only has hardship and poverty to offer. On the other hand, a socialist break through in Bolivia would electrify the whole continent, which has seen so many important struggles against neoliberalism the last period.

Since the year 2000 popular movements in Ecuador, Argentina and Bolivia have removed neoliberal presidents. Under huge pressure from below, some politicians who previously supported attacks on the working class, have used more radical rhetoric and been elected. Other radical and populist figures like Hugo Chavez have come to the forefront and won elections in Venezuela. Unfortunately in all of these cases, these leaders have not broken fundamentally with capitalism. What is lacking are mass socialist and revolutionary parties, fighting for a socialist program that can lead the struggle to a conclusion – the abolition of the capitalist system and it’s replacement with a socialist society, where the production is run democratically and according to peoples needs, not for profit. Only then can the evil spiral of poverty, violence and oppression of the capitalist system be broken.

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April 2005